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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): December 11, 2023
EVOFEM
BIOSCIENCES, INC.
(Exact
name of registrant as specified in its charter)
| Delaware |
|
001-36754 |
|
20-8527075 |
(State
or other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(I.R.S.
Employer
Identification No.) |
7770
Regents Road, Suite 113-618
San
Diego, California 92122
(Address
of principal executive offices)
(858)
550-1900
(Registrant’s
telephone number, including area code)
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under
any of the following provisions:
| ☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
|
| ☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b)) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of each class |
|
Trading
Symbol(s) |
|
Name
of exchange on which registered |
| Common
stock, par value $0.0001 per share |
|
EVFM |
|
OTCQB |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging Growth Company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01. Entry into a Material Definitive Agreement.
On
December 11, 2023, Evofem Biosciences, Inc. (“Company”) entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with Aditxt, Inc., a Delaware corporation (“Parent”), Adicure, Inc., a Delaware corporation and a wholly-owned
Subsidiary of parent (“Merger Sub”), pursuant to which, and on the terms and subject to the conditions thereof, Merger Sub
will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the “Merger”).
As
consideration for the Merger, the Parent will (i) issue 610,000 shares of Parent common stock (“Parent Common Stock”) (ii)
exchange the Company’s preferred stock Parent preferred stock (“Parent Preferred
Stock” and together with Parent Common Stock, the “Merger Shares”) (iii) execute an assignment agreement by and between
Baker Brothers Life Sciences, L.P. and the Parent for the certain secured and unsecured promissory notes aggregately
valued at $18,000,000. In addition, Parent has agreed to issue up to an aggregate of 89,126 shares
of preferred stock to the holders of the Company’s currently outstanding unsecured notes, purchase rights, certain warrants, and
preferred stock. The closing issuance of Merger Shares may be adjusted pursuant to procedures set forth in the Merger
Agreement, in connection with the finalization of exchange ratio of the Company and Parent shares.
Each
stock option of the Company that was outstanding and unexercised
immediately prior to the effective time of the Merger (the “Effective Time”) will be cancelled as of the Effective Time without the right to receive any consideration.
The
Merger Agreement is subject to certain closing conditions and contains customary representations, warranties and covenants.
The
consummation of the Merger is conditioned upon, among other things: (i) the Company and Parent Shareholder approval shall have been obtained
in accordance with applicable Law; (ii) no governmental entity having jurisdiction over any party shall have issue any order, decree,
ruling injunction or other action that is in effect restraining the Merger; (iii) the registration statement on Form S-4 shall
be declared effective by the U.S. Securities and Exchange Commission (“SEC”); (iv) a voting agreement shall have been
executed and delivered by the parties thereto; (v) all Company preferred stock shall have been converted to Company common stock except
for the Unconverted Company Preferred Stock (as defined by the Agreement); (vi) the Company shall have received agreements from all
of the holders of the Company’s warrants, duly executed, containing waivers with respect to any fundamental transaction, change
in control or other similar rights that such warrant holders may have under any such Company warrants and exchange such Company warrants
as they hold for an aggregate of not more than 551 shares of Parent Preferred Stock; (vii) the Company shall have cashed out any other
warrant holder who has not provided a warrant holder agreement, provided, however, that the aggregate amount of such cash out for any
and all other warrant holders who have not provided a warrant holder agreement shall not exceed $150,000; (viii) the Company shall have
obtained waivers from holders of Company convertible notes of the original principal amount thereof with respect to any fundamental transaction
rights such Company convertible note holders may have under any such Company convertible notes, including any right to vote, consent
or otherwise approve or veto any of the transaction contemplated by this Merger Agreement; (ix) Parent shall have received a compliance
certificate from the Company certifying Company complied with all its representations and warranties in the Merger Agreement;
(x) Parent shall have received a certificate certifying that no interest in the Company is a U.S. real property interest, as required
under U.S. treasury regulation section 1.897-2(h) and 1.1445-3(c); (xi) Company shall have received from Parent a compliance certificate
certifying that Parent has complied with all its representations and warranties in the Merger Agreement, that Parent Common
Stock included in the Merger Shares have been approved for listing on the Nasdaq, and Parent shall have regained compliance with
the stockholders equity requirement in Nasdaq listing rule 5550(b)(1).
The
Company will prepare and file a proxy statement with the SEC and, subject
to certain exceptions, the Company’s Board of Directors (the “Board”) will recommend that the Merger Agreement be adopted
by the Company’s stockholders at a special meeting of the Company’s stockholders (the “Company Board Recommendation”).
However, subject to the satisfaction of certain terms and conditions, the Company and the Board, as applicable, are permitted to take
certain actions which may, as more fully described in the Merger Agreement, include changing the Company Board Recommendation and entering
into a definitive agreement with respect to a Company Superior Proposal (as defined in the Merger Agreement) if the Board or
any committee thereof determines in good faith, after consultation with the Company’s outside legal and financial advisors and
after taking into account relevant legal, financial, regulatory, estimated timing of consummation and other aspects of such proposal
that the Board considers in good faith and the Person or group making such proposal, would, if consummated in accordance with
its terms, result in a transaction more favorable to the Company Shareholders than the Merger. The Company would be required to pay
the Parent a termination fee of $4,000,000 in connection with the Company accepting a Company Superior Proposal.
The
foregoing description of the Merger Agreement in this Item 1.01 and the transactions contemplated thereunder is not complete and is qualified
in its entirety by reference to the Merger Agreement, a copy of which is hereby filed as Exhibit 2.1 to this Current Report on Form 8-K
(this “Current Report”) and incorporated herein by reference. The Merger Agreement and the foregoing description thereof
have been included to provide investors and stockholders with information regarding the terms of the Merger Agreement. They are not intended
to provide any other factual information about the Company. Investors and stockholders are not third-party beneficiaries under the Merger
Agreement. Accordingly, investors and stockholders should not rely on such representations, warranties and covenants as characterizations
of the actual state of facts or circumstances described therein. Information concerning the subject matter of such representations, warranties
and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the
parties’ public disclosures.
The
Board has (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable and in the best interests of the Company and its stockholders, and declared it advisable for the Company to enter into the Merger
Agreement, (ii) approved and declared advisable the execution and delivery by the Company of the Merger Agreement, the performance by
the Company of its covenants and agreements contained in the Merger Agreement and the consummation of the Merger and the other transactions
contemplated by the Merger Agreement upon the terms and subject to the conditions contained therein, (iii) directed that the adoption
of the Merger Agreement be submitted to a vote at a meeting of the Company stockholders and (iv) resolved, subject to the terms and conditions
set forth in the Merger Agreement, to recommend that the Company stockholders adopt the Merger Agreement.
The
foregoing description of the Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement,
a copy of which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.
The
Merger Agreement has been attached to provide investors and stockholders with information regarding its terms. It is not intended to
provide any other factual information about the Company, Parent or Merger Sub. In particular, unless specified otherwise in the Merger
Agreement, the assertions embodied in the representations and warranties contained in the Merger Agreement have been made solely
for the benefit of the parties to the Merger Agreement and are qualified by information in confidential disclosure schedules provided
by the Company and Parent in connection with the signing of the Merger Agreement. Moreover, certain representations and warranties
in the Merger Agreement were used for the purpose of allocating risk between the Company and Parent rather than establishing matters
as facts. Accordingly, the representations and warranties in the Merger Agreement should not be relied upon as characterizations of the
actual state of facts about the Company or Parent.
No
Offer or Solicitation; Important Information About the Merger and Where to Find It
This
Current Report on Form 8-K is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities
or in respect of the Merger and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of Company
or Parent, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation, or sale
would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. No offer of securities
shall be made, except by means of a prospectus meeting the requirements of Section 10 of the Securities Act or an exemption therefrom.
The
Company expects to file a proxy statement with the SEC relating to the Merger Agreement. The definitive proxy statement will be sent
to all Company stockholders. Before making any voting decision, investors and security holders of the Company are urged to read the proxy
statement and all other relevant documents filed or that will be filed with the SEC in connection with the meeting proposals as
they become available because they will contain important information about the Merger Agreement and related transactions and the meeting
proposals to be voted upon. Investors and security holders will be able to obtain free copies of the proxy statement and all other
relevant documents filed or that will be filed with the SEC by the Company through the website maintained by the SEC at www.sec.gov.
Item
1.02 Termination of Material Definitive Agreement.
As
previously announced, on August 22, 2023, the Company had entered into a non-binding letter of intent (the “LOI”) with a
publicly-traded entity on a national stock exchange (“Public Entity”). The LOI had expired on November 30, 2023, upon
which the Company verbally delivered notice to the Public Entity that it would not continue negotiations on the LOI
nor agree to enter into a definitive agreement with such Public Entity.
Item
5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
On
December 11, 2023 the Company filed a Certificate of Designations creating a new series of preferred stock designated
as “Series F-1 Preferred Stock.” The Certificate of Designations, which forms a part of the Company’s Amended
and Restated Certificate of Incorporation, specifies the rights, preferences and privileges of the Series F-1 Preferred
Stock.
The
Certificate of Designations authorizes a total of 95,000 shares of Series F-1 Preferred Stock. The Series F-1 Preferred Stock has a stated
value of $1,000 per share, which is convertible into shares of common stock at a rate determined by dividing (i) the stated value
of such Series F-1 Preferred Stock shares plus any declared and unpaid dividends on such shares by (ii) the conversion price of $0.0635
per share, subject to adjustment as provided in the Certificate of Designations. The Certificate of Designations also provides that
in the event of certain “Triggering Events,” any holder may, at any time, convert any or all of such holder’s Series
F-1 Preferred Stock at an alternate conversion rate equal to the product of (i) the Alternate Conversion Price (as defined below)
and (ii) the quotient of (x) the 25% redemption premium multiplied by (y) the amount of Series F-1 Preferred Stock subject to
such conversion. “Triggering Events” include, among others, (i) a suspension of trading or the failure to be traded or listed
on an eligible market for five consecutive days or more, (ii) the failure to remove restrictive legends when required, (iii) the Company’s
default in payment of indebtedness in an aggregate amount of $100,000 or more, (iv) proceedings for a bankruptcy, insolvency, reorganization
or liquidation, which are not dismissed with 30 days, (v) commencement of a voluntary bankruptcy proceeding, and (viii) final judgments
against the Company for the payment of money in excess of $100,000. “Alternate Conversion Price” means the lowest of (i)
the applicable conversion price the in effect, (ii) 80% of the volume weighted average price (“VWAP”) of the common stock
on the trading day immediately preceding the delivery of the applicable conversion notice, (iii) 80% of the VWAP of the common
stock on the trading day of the delivery of the applicable conversion notice and (iv) 80% of the price computed as the quotient of
(I) the sum of the VWAP of the common stock for each of the three (3) trading days with the lowest VWAP of the common stock
during the fifteen (15) consecutive trading day period ending and including the trading day immediately preceding the delivery of
the applicable conversion notice, divided by (II) three (3). Further, the Certificate of Designations provide that if on any of the thirtieth
(30th), sixtieth (60th), ninetieth (90th), one hundred and twentieth (120th), and one hundred and eightieth (180th), as applicable, calendar
day after the initial issuance date of the Series F-1 Preferred Stock, the conversion price then in effect is greater than the market
price then in effect (the “Adjustment Price”), on such date then the conversion price shall automatically lower to the Adjustment
Price. Each holder of Series F-1 Preferred Stock is entitled to receive dividends paid exclusively in the form of common stock
(the “Dividends”) payable to the holders of the Series F-1 Preferred Stock on a monthly basis.
The
holders of the Series F-1 Preferred Stock will not have the right to vote on any matter presented to the holders of the Company’s
common stock but, the Company may not take the following actions without the prior consent of the holders of at least a majority of the
Series F-1 Preferred Stock: (i) alter or change adversely the powers, preferences or rights given to the Series F-1 Preferred or alter
or amend the Certificates of Designation, (ii) amend the Company’s certificate of incorporation in any manner that adversely affects
any rights of the holders of the Series F-1 Preferred Stock, (iii) increase the number of authorized shares of Series F-1 Preferred,
or (iv) enter into any agreement with respect to any of the foregoing.
There
is no established trading market for the Series F-1 Preferred Stock, and the Company does not intend to list the Series F-1 Preferred
Stock on any securities exchange or nationally recognized trading system. Without a trading market, the liquidity of the Series F-1
Preferred Stock may be extremely limited.
The
foregoing summary description of the Certificate of Designations is not complete and is qualified in its entirety by reference to the
full text of the Certificate of Designations, which is incorporated herein by reference and filed as Exhibit 3.1 to this Current Report
on Form 8-K.
Item
7.01 Regulation FD Disclosure
On
December 12, 2023, the Company issued a press release announcing the above referenced Merger Agreement. A copy of the press release
is furnished as Exhibit 99.1 to this Current Report.
The
information set forth under Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto,
is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. The information in Item 7.01 of this
Current Report, including Exhibit 99.1, shall not be deemed incorporated by reference into any filing under the Securities Act of 1933,
as amended, or the Exchange Act, regardless of any incorporation by reference language in any such filing, except as expressly set forth
by specific reference in such a filing. This Current Report will not be deemed an admission as to the materiality of any information
in this Current Report that is required to be disclosed solely by Regulation FD.
Forward
Looking Statement
This
Current Report includes “forward-looking statements” within the meaning of the safe harbor for forward-looking statements
provided by Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995
including, without limitation, statements related to the parties’ ability to close the proposed Transaction, including the ability
of both companies to secure all required regulatory, third-party and shareholder approvals for the proposed Transaction; availability
of cash to meet Aditxt’s obligation to pay noteholders under the Agreement and other near-and longer-term obligations under the
Agreement; Aditxt’s expectation that shares of its common stock will remain listed on the Nasdaq Stock Market; the anticipated
timing to close the Transaction; the anticipated financial performances of Aditxt and Evofem both before and after the proposed Transaction,
anticipated benefits of the proposed Transaction including synergies to Aditxt’s business following the proposed Transaction, the
degree of growth in the non-hormonal birth control market anticipated by third-party market researchers; Aditxt’s ability to leverage
Evofem for subsequent product acquisitions and license agreements subsequent to the Transaction; Evofem’s ability to maintain requisite
regulatory approvals; Evofem’s costs related to the transaction; and changes to the potential market size and the size of the patient
populations utilizing Phexxi®. You are cautioned not to place undue reliance on these forward-looking statements, which are current
only as of the date of this Current Report. Each of these forward-looking statements involves risks and uncertainties. Important factors
that could cause actual results to differ materially from those discussed or implied in the forward-looking statements are disclosed
in the each company’s SEC filings, including Aditxt’s Annual Report on Form 10-K for the year ended December 31, 2022 filed
with the SEC on April 17, 2023 as amended April 28, 2023 and July 12, 2023, Quarterly Report on Form 10-Q for the quarter ended September
30, 2023 filed with the SEC on November 14, 2023, and any subsequent filings, and Evofem’s Annual Report on Form 10-K for the year
ended December 31, 2022 filed with the SEC on April 27, 2023, Quarterly Report on Form 10-Q for the quarter ended September 30, 2023
filed with the SEC on November 14, 2023, and any subsequent filings. All forward-looking statements are expressly qualified in their
entirety by such factors. The companies do not undertake any duty to update any forward-looking statement except as required by law.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
| |
EVOFEM
BIOSCIENCES, INC. |
| |
|
|
| Dated:
December 12, 2023 |
By: |
/s/
Saundra Pelletier |
| |
|
Saundra
Pelletier |
| |
|
Chief
Executive Officer |
Exhibit
2.1
EXECUTION
AGREEMENT
AND PLAN OF MERGER
among
ADITXT,
INC.,
ADICURE,
INC.
and
EVOFEM
BIOSCIENCES, INC.
Dated
as of December 11, 2023
TABLE
OF CONTENTS
| |
Page |
| ARTICLE
I CERTAIN DEFINITIONS |
2 |
| |
|
|
|
|
| |
Section
1.1 |
|
Certain
Definitions |
2 |
| |
Section
1.2 |
|
Terms
Defined Elsewhere |
2 |
| |
|
|
|
|
| ARTICLE II THE MERGER |
4 |
| |
|
|
|
|
| |
Section
2.1 |
|
The
Merger |
4 |
| |
Section
2.2 |
|
Closing |
4 |
| |
Section
2.3 |
|
Effect
of the Merger |
4 |
| |
Section
2.4 |
|
Organizational
Documents |
5 |
| |
Section
2.5 |
|
Directors
and Officers of the Surviving Company |
5 |
| |
|
|
|
|
| ARTICLE
III EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE COMPANY AND MERGER SUB; EXCHANGE |
5 |
| |
|
|
|
|
| |
Section
3.1 |
|
Effect
of the Merger on Capital Stock |
5 |
| |
Section
3.2 |
|
Payment
for Securities; Exchange |
8 |
| |
|
|
|
|
| ARTICLE
IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
12 |
| |
|
|
|
|
| |
Section
4.1 |
|
Organization,
Standing and Power |
12 |
| |
Section
4.2 |
|
Capital
Structure |
13 |
| |
Section
4.3 |
|
Authority;
No Violations; Approvals |
14 |
| |
Section
4.4 |
|
Consents |
15 |
| |
Section
4.5 |
|
SEC
Documents; Financial Statements; Internal Controls and Procedures |
15 |
| |
Section
4.6 |
|
Absence
of Certain Changes or Events |
16 |
| |
Section
4.7 |
|
No
Undisclosed Material Liabilities |
17 |
| |
Section
4.8 |
|
Information
Supplied |
17 |
| |
Section
4.9 |
|
Company
Permits; Compliance with Applicable Law |
17 |
| |
Section
4.10 |
|
Compensation;
Benefits |
18 |
| |
Section
4.11 |
|
Employment
and Labor Matters |
20 |
| |
Section
4.12 |
|
Taxes |
20 |
| |
Section
4.13 |
|
Litigation |
22 |
| |
Section
4.14 |
|
Intellectual
Property |
23 |
| |
Section
4.15 |
|
Real
Property |
24 |
| |
Section
4.16 |
|
Material
Contracts |
25 |
| |
Section
4.17 |
|
Insurance |
26 |
| |
Section
4.18 |
|
Environmental
Matters |
26 |
| |
Section
4.19 |
|
Brokers |
27 |
| |
Section
4.20 |
|
State
Takeover Statute |
27 |
| |
Section
4.21 |
|
Investment
Company Act |
27 |
| |
Section
4.22 |
|
Related
Party Transactions |
27 |
| |
Section
4.23 |
|
FDA
Regulatory. |
27 |
| |
Section
4.24 |
|
No
Additional Representations |
30 |
| |
|
|
|
|
| ARTICLE
V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB |
30 |
| |
|
|
|
|
| |
Section
5.1 |
|
Organization,
Standing and Power |
31 |
| |
Section
5.2 |
|
Capital
Structure |
31 |
| |
Section
5.3 |
|
Authority;
No Violations; Approvals |
32 |
| |
Section
5.4 |
|
Consents |
33 |
| |
Section
5.5 |
|
SEC
Documents; Financial Statements; Internal Controls and Procedures |
34 |
| |
Section
5.6 |
|
Absence
of Certain Changes or Events |
35 |
| |
Section
5.7 |
|
No
Undisclosed Material Liabilities |
35 |
| |
Section
5.8 |
|
Information
Supplied |
35 |
| |
Section
5.9 |
|
Parent
Permits; Compliance with Applicable Law |
36 |
| |
Section
5.10 |
|
Compensation;
Benefits. |
36 |
| |
Section
5.11 |
|
Labor
Matters. |
37 |
| |
Section
5.12 |
|
Taxes |
38 |
| |
Section
5.13 |
|
Litigation |
40 |
| |
Section
5.14 |
|
Intellectual
Property |
40 |
| |
Section
5.15 |
|
Real
Property |
42 |
| |
Section
5.16 |
|
Material
Contracts |
42 |
| |
Section
5.17 |
|
Insurance |
44 |
| |
Section
5.18 |
|
Brokers |
44 |
| |
Section
5.19 |
|
State
Takeover Statute |
44 |
| |
Section
5.20 |
|
Investment
Company Act |
44 |
| |
Section
5.21 |
|
Ownership
of Company Capital Stock |
44 |
| |
Section
5.22 |
|
Business
Conduct |
44 |
| |
Section
5.23 |
|
Related
Party Transactions |
45 |
| |
Section
5.25 |
|
No
Additional Representations |
47 |
| |
|
|
|
|
| ARTICLE
VI COVENANTS AND AGREEMENTS |
48 |
| |
|
|
|
|
| |
Section
6.1 |
|
Conduct
of Company Business Pending the Merger |
48 |
| |
Section
6.2 |
|
[Intentionally
Omitted] |
51 |
| |
Section
6.3 |
|
No
Solicitation by the Company |
51 |
| |
Section
6.4 |
|
Indemnification;
Directors’ and Officers’ Insurance |
54 |
| |
Section
6.5 |
|
Preparation
of Joint Proxy Statement and Registration Statement |
55 |
| |
Section
6.6 |
|
Shareholders
Meetings. |
57 |
| |
Section
6.7 |
|
Access
to Information |
58 |
| |
Section
6.8 |
|
Reasonable
Best Efforts |
59 |
| |
Section
6.9 |
|
Employee
Matters. |
60 |
| |
Section
6.10 |
|
Parent
Loan. Prior to January 31, 2024, |
60 |
| |
Section
6.11 |
|
Shareholder
Litigation |
60 |
| |
Section
6.12 |
|
Public
Announcements |
60 |
| |
Section
6.13 |
|
Control
of Business |
61 |
| |
Section
6.14 |
|
Transfer
Taxes |
61 |
| |
Section
6.15 |
|
Notification |
61 |
| |
Section
6.16 |
|
Use
of Company’s Cash Receipts |
61 |
| |
Section
6.17 |
|
Takeover
Laws |
62 |
| |
Section
6.18 |
|
Listing |
62 |
| |
Section
6.19 |
|
Delisting |
62 |
| |
Section
6.20 |
|
Obligations
of Merger Sub and the Surviving Company |
62 |
| |
|
|
|
|
| ARTICLE
VII CONDITIONS PRECEDENT |
63 |
| |
|
|
|
|
| |
Section
7.1 |
|
Conditions
to Each Party’s Obligation to Consummate the Merger |
63 |
| |
Section
7.2 |
|
Additional
Conditions to Obligations of Parent and Merger Sub |
64 |
| |
Section
7.3 |
|
Additional
Conditions to Obligations of the Company |
65 |
| |
Section
7.4 |
|
Frustration
of Closing Conditions |
66 |
| |
|
|
|
|
| ARTICLE
VIII TERMINATION |
66 |
| |
|
|
|
|
| |
Section
8.1 |
|
Termination |
66 |
| |
Section
8.2 |
|
Notice
of Termination; Effect of Termination |
68 |
| |
Section
8.3 |
|
Expenses
and Other Payments |
68 |
| |
|
|
|
|
| ARTICLE
IX GENERAL PROVISIONS |
69 |
| |
|
|
|
|
| |
Section
9.1 |
|
Disclosure
Letter Definitions |
69 |
| |
Section
9.2 |
|
Survival |
69 |
| |
Section
9.3 |
|
Notices |
70 |
| |
Section
9.4 |
|
Rules
of Construction |
71 |
| |
Section
9.5 |
|
Counterparts |
72 |
| |
Section
9.6 |
|
Entire
Agreement; Third Party Beneficiaries |
73 |
| |
Section
9.7 |
|
Governing
Law; Venue; Waiver of Jury Trial |
73 |
| |
Section
9.8 |
|
Severability |
74 |
| |
Section
9.9 |
|
Assignment |
74 |
| |
Section
9.10 |
|
Affiliate
Liability |
74 |
| |
Section
9.11 |
|
Remedies;
Specific Performance |
75 |
| |
Section
9.12 |
|
Amendment |
75 |
| |
Section
9.13 |
|
Extension;
Waiver |
75 |
| Annex
A |
Certain
Definitions |
A-1 |
AGREEMENT
AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER, dated as of December 11, 2023 (this “Agreement”), by and among Aditxt, Inc., a Delaware corporation
(“Parent”), Adicure, Inc., a Delaware corporation and a wholly-owned Subsidiary of Parent (“Merger Sub”),
and Evofem Biosciences, Inc., a Delaware corporation (the “Company”).
WHEREAS,
the Company, Parent and Merger Sub wish to effect a business combination through a merger of Merger Sub with and into the Company, with
the Company being the Surviving Company (the “Merger”), upon the terms and conditions set forth in this Agreement
and in accordance with the Delaware General Corporation Law (the “DGCL”);
WHEREAS,
the board of directors of the Company (the “Company Board”) has unanimously (i) determined that this Agreement and
the transactions contemplated hereby (collectively, the “Transactions”), including the Merger, are in the best interests
of the Company and the Company Shareholders, (ii) adopted and approved this Agreement and declared that the Transactions, including the
Merger, are advisable, (iii) directed that this Agreement and the Transactions, including the Merger, be submitted to the holders of
Company Common Stock for their approval at the Company Shareholders Meeting and (iv) resolved to recommend that the holders of Company
Common Stock approve this Agreement and the Transactions, including the Merger (such recommendation made in this clause (iv), the “Company
Board Recommendation”);
WHEREAS,
the board of directors of Parent (the “Parent Board”) has unanimously (i) determined that this Agreement and the Transactions,
including the Merger and the issuance of the equity of Parent contemplated by this Agreement (the “Parent Stock Issuance”),
are in the best interests of Parent and the Parent Shareholders, (ii) adopted and approved this Agreement and declared that the Transactions,
including the Merger and the Parent Stock Issuance, are advisable, (iii) directed that the Parent Stock Issuance be submitted to the
holders of Parent Common Stock for their approval at the Parent Shareholders Meeting and (iv) resolved to recommend that the holders
of Parent Common Stock approve the Parent Stock Issuance (such recommendation made in this clause (iv), the “Parent Board Recommendation”);
WHEREAS,
Parent, in its capacity as the sole stockholder of Merger Sub (the “Merger Sub Sole Stockholder”), has by written
consent (i) determined that this Agreement and the Transactions, including the Merger, are in the best interests of Merger Sub and the
Merger Sub Sole Stockholder and (ii) adopted and approved this Agreement and declared that the Transactions, including the Merger, are
advisable;
WHEREAS,
in connection with the execution of this Agreement, Parent, the Company, Baker Brothers Life Sciences, L.P. (“Baker”),
667, L.P. (“667”), and Baker Bros. Advisors LP as their designated agent (the “Designated Agent”),
are entering into that certain Assignment Agreement, dated December 11, 2023 (the “Assignment Agreement”),
whereby Baker and 667 are assigning the existing debt they hold against the Company to Parent (the agreements representing such existing
debt, “Original Loan Documents” and such existing debt, the “Original Loan Amount”);
WHEREAS,
simultaneously with the execution of the Assignment Agreement and in consideration for the assignment of the Original Loan Amount to
Parent, Parent is issuing to Baker and 667, as consideration therefore (i) certain Secured Promissory Notes, dated December 11,
2023, by Parent, in the original aggregate principal amount of five million dollars ($5,000,000); (ii) certain Secured Promissory Notes,
dated December 11, 2023, by Parent in the original aggregate principal amount of eight million dollars ($8,000,000), and (iii)
certain Unsecured Promissory Notes, dated December 11, 2023, by Parent in the original aggregate principal amount of five million
dollars ($5,000,000) (the “Baker Royalty Note”); and
WHEREAS,
the parties desire to make certain representations, warranties, covenants and agreements in connection with the Merger and the Parent
Stock Issuance and to prescribe various terms of and conditions to the Merger and the Parent Stock Issuance.
NOW,
THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained in this Agreement,
and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Parent, Merger Sub and the Company
hereby agree as follows:
ARTICLE
I
CERTAIN
DEFINITIONS
Section
1.1 Certain Definitions. As used in this Agreement, the capitalized terms have the meanings ascribed to such terms in Annex
A or as otherwise defined elsewhere in this Agreement.
Section
1.2 Terms Defined Elsewhere. As used in this Agreement, the following capitalized terms are defined in this Agreement as referenced
in the following table:
| Definition
|
|
Section
|
| 667 |
|
Recitals |
| Agreement |
|
Preamble |
| Articles
of Merger |
|
2.2(b) |
| Assignment
Agreement |
|
Recitals |
| Baker |
|
Recitals |
| Baker
Royalty Note |
|
Recitals |
| Book-Entry
Shares |
|
3.2(b)(i) |
| Business
Employees |
|
4.11(a) |
| Cancelled
Shares |
|
3.1(b)(iv) |
| Certificates |
|
3.2(b)(i) |
| Closing |
|
2.2(a) |
| Closing
Date |
|
2.2(a) |
| Code |
|
Recitals |
| Company |
|
Preamble |
| Company
Affiliate |
|
9.10(a) |
| Company
Board |
|
Recitals |
| Company
Board Recommendation |
|
Recitals |
| Company
Change of Recommendation |
|
6.3(b) |
| Company
Common Stock |
|
3.1(b)(i) |
| Company
Contracts |
|
4.16(b) |
| Company
Disclosure Letter |
|
Article
IV |
| Company
Material Adverse Effect |
|
4.1(a) |
| Company
Permits |
|
4.9 |
| Company
Plans |
|
4.10(a) |
| Company
SEC Documents |
|
4.5(a) |
| Company
Shareholders Meeting |
|
4.4 |
| Delaware
Department |
|
2.2(b) |
| Designated
Agent |
|
Recitals |
| DGCL |
|
Recitals |
| Effective
Time |
|
2.2(b) |
| End
Date |
|
8.1(b)(ii) |
| Exchange
Agent |
|
3.2(a) |
| Exchange
Fund |
|
3.2(a) |
| Exchange
Ratio |
|
3.1(b)(i) |
| Exchanged
Option |
|
0 |
| FDA
Permits |
|
Section
4.23(b) |
| GAAP |
|
4.5(b) |
| Joint
Proxy Statement |
|
4.4 |
| Letter
of Transmittal |
|
3.2(b)(i) |
| Material
Company Insurance Policies |
|
4.17 |
| Material
Parent Insurance Policies |
|
5.17 |
| Merger |
|
Recitals |
| Merger
Consideration |
|
3.1(b)(i) |
| Merger
Sub |
|
Preamble |
| Merger
Sub Sole Stockholder |
|
Recitals |
| Non-Disclosure
Agreement |
|
6.7(b) |
| Original
Loan Amount |
|
Recitals |
| Original
Loan Documents |
|
Recitals |
| Parent |
|
Preamble |
| Parent
Affiliate |
|
9.10(b) |
| Parent
Board |
|
Recitals |
| Parent
Board Recommendation |
|
Recitals |
| Parent
Contracts |
|
5.16(b) |
| Parent
Disclosure Letter |
|
Article
V |
| Parent
Equity Plans |
|
5.2(a) |
| Parent
Material Adverse Effect |
|
5.1(a) |
| Parent
Permits |
|
5.9 |
| Parent
Plans |
|
5.10(a) |
| Parent
SEC Documents |
|
Section
5.5(a) |
| Parent
Stock Issuance |
|
Recitals |
| Pdf |
|
9.5 |
| Potential
Product |
|
Section
4.23(c) |
| Registration
Statement |
|
Section
4.8 |
| Surviving
Company |
|
2.1 |
| Terminable
Breach |
|
8.1(b)(iii) |
| Transaction
Litigation |
|
6.15 |
| Transactions |
|
Recitals |
ARTICLE
II
THE
MERGER
Section
2.1 The Merger. Upon the terms and subject to the conditions of this Agreement, and in accordance with the DGCL, at the Effective
Time, the Merger Sub shall be merged with and into Company, with the Company surviving the Merger (the Company, as the surviving company
in the Merger, sometimes being referred to herein as the “Surviving Company”). As a result of the Merger, the Surviving
Company shall be a wholly-owned Subsidiary of Parent. The Merger shall have the effects provided in this Agreement and as specified in
the DGCL.
Section
2.2 Closing.
(a)
The closing of the Merger (the “Closing”), shall take place at 9:00 a.m., New York, New York time, on a date that
is two Business Days following the satisfaction or (to the extent permitted by applicable Law) waiver in accordance with this Agreement
of all of the conditions set forth in Article VII (other than any such conditions which by their nature cannot be satisfied until
the Closing Date, which shall be required to be so satisfied or (to the extent permitted by applicable Law) waived in accordance with
this Agreement on the Closing Date) by means of a virtual closing through the electronic exchange of signatures, or such other date and
place as Parent and the Company may agree to in writing. For purposes of this Agreement, “Closing Date” shall mean
the date on which the Closing occurs.
(b)
As soon as practicable on the Closing Date, Parent and the Company shall (i) cause the Merger to be consummated by filing with the Secretary
of State of the State of Delaware (the “Delaware Department”) a certificate of merger (the “Certificate of
Merger”) in connection with the Merger, in such form as is required by, and executed in accordance with, the DGCL, and (ii)
the parties shall make all other filings or recordings required under the DGCL in connection with the Merger. The Merger shall become
effective at the time of filing of the Certificate of Merger with the Delaware Department, or at such later time as may be designated
jointly by Parent and the Company and specified in the Certificate of Merger (such date and time the Merger becomes effective, the “Effective
Time”), it being understood and agreed that, unless otherwise agreed to by the parties in writing, the Effective Time shall
occur on the Closing Date.
Section
2.3 Effect of the Merger. At the Effective Time, the Merger shall have the effects set forth in this Agreement and the applicable
provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all of the property,
assets, rights, privileges, immunities, purposes, powers and franchises of each of the Company and Merger Sub shall vest in the Surviving
Company without transfer, reversion or impairment and all debts, obligations and liabilities of each of the Company and Merger Sub shall
become the debts, obligations and liabilities of the Surviving Company.
Section
2.4 Organizational Documents. At the Effective Time and by virtue of the Merger, the Organizational Documents of the Surviving
Company shall be amended and restated set forth in Exhibit A and Exhibit B hereto, until thereafter amended in accordance with their
respective terms and applicable Law.
Section
2.5 Directors and Officers of the Surviving Company. From and after the Effective Time, the sole officer of the Surviving
Company is Saundra Pelletier and the director or directors of the Surviving Company shall be as set forth in Section 2.5 of the
Parent Disclosure Letter and such directors and officers shall serve until their successors have been duly elected or appointed and qualified
or until their death, resignation or removal in accordance with the Organizational Documents of the Surviving Company. The Parent and
certain members of Company management are to enter into a mutually agreeable voting agreement (the “Voting Agreement”)
on the Closing Date as hereinafter provided.
ARTICLE
III
EFFECT
OF THE MERGER ON THE CAPITAL STOCK OF THE COMPANY AND MERGER SUB; EXCHANGE
Section
3.1 Effect of the Merger on Capital Stock. At the Effective Time, by virtue of the Merger and without any action on
the part of Parent, Merger Sub, the Company, or any holder of any securities of Parent, Merger Sub or the Company:
(a)
Capital Stock of Merger Sub. Each issued and outstanding share of Merger Sub Common Stock shall be canceled and retired and shall
cease to exist. Immediately following the Effective Time, the Surviving Company shall issue to Parent a number of shares of common stock,
par value $0.001 per share, of the Surviving Company equal to the number of shares of Merger Sub Common Stock outstanding immediately
prior to the Effective Time upon payment by Parent to the Surviving Company of an amount equal to the product of (x) the number of shares
of the Surviving Company issued to Parent and (y) the par value of such shares.
(b)
Capital Stock of the Company.
(i)
Subject to the other provisions of this Article III, all shares of common stock, par value $0.0001 per share, of the Company (“Company
Common Stock”), issued and outstanding immediately prior to the Effective Time (excluding any Cancelled Shares), shall automatically
be converted into the right to receive from Parent, on a pro rata basis, an aggregate of 610,000 shares of Parent Common Stock (the “Common
Merger Consideration”). As used in this Agreement, “Common Exchange Ratio” means the number of shares of
Parent Common Stock received for each share of Company Common Stock pursuant to the foregoing calculation, as adjusted in accordance
with Section 3.1(c).
(ii)
Subject to the other provisions of this ARTICLE III, (x)_the holders of the Company’s Series E-1 Preferred Stock issued and outstanding
immediately prior to the Effective Time (excluding any Cancelled Shares) (the “Unconverted Company Preferred Stock”),
shall automatically be converted into the right to receive from Parent, on a pro rata basis, an aggregate of 2,422 shares of Parent Preferred
Stock have substantially the rights, powers and preferences set forth in the form Certificate of Designation attached hereto as Exhibit
C (“Exchanged Parent Preferred Stock”) (the “Preferred Merger Consideration” and, together
with the Common Merger Consideration the “Merger Consideration”).
(iii)
All such shares of Company Common Stock, and Unconverted Company Preferred Stock when so converted pursuant to Section 3.1(b)(i)
and Section 3.1(b)(ii), shall automatically be cancelled and cease to exist. Each holder of a share of Company Common Stock that
was outstanding immediately prior to the Effective Time (other than Cancelled Shares) shall cease to have any rights with respect thereto,
except the right to receive (A) the Common Merger Consideration and (B) any cash to be paid in lieu of any fractional shares of Parent
Common Stock in accordance with Section 3.2(h), in each case, to be issued or paid in consideration therefor upon the surrender
of any Certificates or Book-Entry Shares, as applicable, in accordance with Section 3.2. Each holder of a share of Unconverted
Company Preferred Stock that was outstanding immediately prior to the Effective Time (other than Cancelled Shares) shall cease to have
any rights with respect thereto, except the right to receive the Preferred Merger Consideration, in each case, to be issued or paid in
consideration therefor upon the surrender of any Certificates or Book-Entry Shares, as applicable, in accordance with Section 3.2.
(iv)
All shares of Company Common or Preferred Stock held by Parent or Merger Sub or by any wholly-owned Subsidiary of Parent, Merger Sub
or the Company immediately prior to the Effective Time shall automatically be cancelled and retired and shall cease to exist as of the
Effective Time, and no consideration shall be delivered or deliverable in exchange therefor (collectively, the “Cancelled Shares”).
(c)
Adjustment to Merger Consideration and Exchange Ratio. Each of the Common Merger Consideration and the Preferred Merger
Consideration, respectively, and the Common Exchange Ratio and the Preferred Exchange Ratio, respectively, shall be equitably adjusted,
without duplication, to reflect the effect of any stock split, reverse stock split, stock dividend (including any dividend or other distribution
of securities convertible into Company Common Stock or Unconverted Company Preferred Stock, respectively), subdivision, reorganization,
reclassification, recapitalization, combination, exchange of shares or other like change with respect to the number of shares of Company
Common Stock, Unconverted Company Preferred Stock, Parent Common Stock or Parent Preferred Stock outstanding after the date hereof and
prior to the Effective Time and thereafter all references to the Common Merger Consideration and Preferred Merger Consideration, respectively,
and the Common Exchange Ratio and the Preferred Exchange Ratio, respectively, as applicable, shall be deemed to be the Common Merger
Consideration and the Preferred Merger Consideration, respectively, and Common Exchange Ratio and Preferred Exchange Ratio, respectively,
as so adjusted. Nothing in this Section 3.1(c) shall be construed to permit the Company, Parent or any of their respective Subsidiaries
to take any action with respect to its securities that is prohibited by the terms of this Agreement.
(d)
Company Options. Upon the terms and subject to the conditions set forth herein, at the Effective Time, by virtue of the
Merger and without any action on the part of any party hereto, any Company Optionholder or any other Person, each Company Option that
is outstanding and unexercised as of immediately prior to the Effective Time shall, whether or not vested, be automatically extinguished
and canceled without the right to receive any consideration (with no payment being made hereunder with respect thereto). Prior to the
Effective Time, the Company shall take all actions necessary and sufficient in accordance with applicable Law, the Company Option Plans
and the Company Options including obtaining necessary consents and passing necessary resolutions of its board of directors) to: (A) give
effect to the actions contemplated by this Section 3.1(d), and (B) terminate, as of the Effective Time, the Company Option Plans,
all agreements pursuant thereto and all Company Options thereunder, such that as of the Effective Time, no Person shall have any right
to purchase shares of Company Common Stock or any right to receive Company Common Stock or any other equity security of the Company thereunder.
The Company shall take all actions necessary to effect the transactions contemplated by this Sections 3.1(d), including, but not
limited to, any actions as may be required under the applicable Company Option Plans and all Company Options, including, if required
by the Company Option Plans or Company Options, delivering a notice of the terms of this Agreement to all holders of Company Options.
Any materials to be submitted to holders of Company Options shall be subject to review by Parent.
(e)
ESPP. As of the date of this Agreement, no employee of the Company is participating in the ESPP, and there are no ongoing offering
periods under the ESPP, and the Company shall not permit any new offering period following the date of this Agreement. As soon as practicable
after the date of this Agreement, the Company shall take all action that may be reasonably necessary to terminate the ESPP, subject to
consummation of the Merger, no later than no later than five Business Days prior to the anticipated Closing Date. As soon as practicable
after the date of this Agreement, the Company shall take all action that may be reasonably necessary to provide that: (i) no new Offering
Period shall commence under the Company’s 2019 Employee Stock Purchase Plan (“ESPP”) following the date of this
Agreement, (ii) participants in the ESPP as of the date of this Agreement may not increase their payroll deductions under, or make separate
non-payroll contributions to, the ESPP from those in effect on the date of this Agreement; and (iii) no new participants may commence
participation in the ESPP following the date of this Agreement. Prior to the Effective Time, the Company shall take all action that the
Company determines to be reasonably necessary to: (A) cause any offering period or purchase period that otherwise would be in progress
at the Effective Time to be the final offering period under the ESPP and to be terminated no later than five Business Days prior to the
anticipated Closing Date (the “Final Exercise Date”); (B) make any pro-rata adjustments that may be necessary to reflect
the shortened offering period or purchase period, but otherwise treat such shortened offering period or purchase period as a fully effective
and completed offering period or purchase period for all purposes under the ESPP; (C) cause each participant’s then-outstanding
share purchase right under the ESPP (the “ESPP Rights”) to be exercised as of the Final Exercise Date; and (D) terminate
the ESPP as of, and contingent upon, the Effective Time. On the Final Exercise Date, the funds credited as of such date under the ESPP
within the associated accumulated account for each participant under the ESPP shall be used to purchase shares of Company Common Stock
in accordance with the terms of the ESPP (as amended pursuant to this Section 3.2(c)), and each share purchased thereunder immediately
prior to the Effective Time will be canceled at the Effective Time and converted into the right to receive the Common Merger Consideration
in accordance with Section 3.1(b), subject to withholding of any applicable income and employment withholding Taxes. Any accumulated
contributions of each participant under the ESPP as of immediately prior to the Effective Time shall, to the extent not used to purchase
shares in accordance with the terms and conditions of the ESPP (as amended pursuant to this Section 3.2(c)), be refunded to such
participant as promptly as practicable following the Effective Time (without interest). No further ESPP Rights shall be granted or exercised
under the ESPP after the Final Exercise Date. The Company shall provide timely notice to participants of the setting of the Final Exercise
Date and the termination of the ESPP in accordance with the terms thereof.
Section
3.2 Payment for Securities; Exchange.
(a)
Exchange Agent; Exchange Fund. Prior to the Closing Date, Parent and Merger Sub shall enter into an agreement with the Company’s
transfer agent to act as agent for the holders of Company Common Stock and the Unconverted Company Preferred Stock in connection with
the Merger (the “Exchange Agent”) and to receive the Merger Consideration and cash sufficient to pay cash in lieu
of fractional shares pursuant to Section 3.2(h) and any dividends or other distributions pursuant to Section 3.2(g), to
which such holders shall become entitled pursuant to this Article III. On or prior to the Closing Date and prior to the Effective
Time, Parent or Merger Sub shall deposit, or cause to be deposited, with the Exchange Agent, for the benefit of the holders of shares
of Company Common Stock and Unconverted Company Preferred Stock for issuance in accordance with this Article III through the Exchange
Agent, the cash (solely as it relates to payments in lieu of fractional shares) and number of shares of Parent Common Stock issuable
to the holders of Company Common Stock and the number of shares of Exchanged Parent Preferred Stock as provided in Section 3.1
issuable to holders of the Unconverted Company Preferred Stock, in each case outstanding immediately prior to the Effective Time pursuant
to Section 3.1. Parent agrees to deposit with the Exchange Agent, from time to time as needed, cash sufficient to pay any dividends
and other distributions pursuant to Section 3.2(g) and to make any cash payments in lieu of fractional shares pursuant to Section
3.2(h) and, in the event there are insufficient funds to make the payments contemplated by this Article III, additional cash
in an amount which is equal to the deficiency in an amount required to make such payments in full. Parent shall instruct the Exchange
Agent to, pursuant to irrevocable instructions, deliver the Merger Consideration contemplated to be issued in exchange for shares of
Company Common Stock and Unconverted Company Preferred Stock, respectively, pursuant to this Agreement out of the Exchange Fund. Except
as contemplated by this Section 3.2(a), Section 3.2(g) and Section 3.2(h), the Exchange Fund shall not be used for
any other purpose. Any cash and shares of Parent Common Stock or Exchanged Parent Preferred Stock deposited with the Exchange Agent (including
as payment for fractional shares in accordance with Section 3.2(h) and any dividends or other distributions in accordance with
Section 3.2(g)) shall be referred to herein as the “Exchange Fund.” The Surviving Company shall pay all charges
and expenses, including those of the Exchange Agent, in connection with the exchange of shares of Company Common Stock and Unconverted
Company Preferred Stock, respectively, for the Merger Consideration and cash in lieu of fractional shares. Any interest or other income
resulting from investment of the cash portion of the Exchange Fund shall become part of the Exchange Fund.
(b)
Exchange Procedures.
(i)
Parent shall instruct the Exchange Agent to, as soon as practicable after the Effective Time, but in no event more than two Business
Days after the Closing Date, mail or otherwise deliver to each record holder, as of immediately prior to the Effective Time, of (A) a
certificate or certificates that immediately prior to the Effective Time represented shares of Company Common Stock or Unconverted Company
Preferred Stock (the “Certificates”) or (B) shares of Company Common Stock or Unconverted Company Preferred Stock
represented by book-entry (“Book-Entry Shares”), in each case, which shares were converted pursuant to Section
3.1 into the right to receive the Merger Consideration at the Effective Time, (1) a letter of transmittal (“Letter of Transmittal”),
which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Exchange Agent or, in the case of Book-Entry Shares, upon adherence to the procedures set forth in the Letter
of Transmittal, and which shall be in a customary form and agreed to by Parent and the Company prior to the Closing (it being understood
that the forms of Letter of Transmittal to be mailed to the holders of Company Common Stock and Unconverted Company Preferred Stock may
vary in certain respects due to differences in the respective securities) and (2) instructions for use in effecting the surrender of
the Certificates or, in the case of Book-Entry Shares, the surrender of such shares, for payment of the Merger Consideration set forth
in Section 3.1.
(ii)
Upon surrender to the Exchange Agent of a Certificate or Book-Entry Shares, together with the Letter of Transmittal (or, in the case
of Book-Entry Shares, by book-receipt of an “agent’s message” by the Exchange Agent or such other evidence, if any,
required to be obtained by the Exchange Agent in connection with the surrender of Book-Entry Shares), duly completed and validly executed
in accordance with the instructions thereto, and such other customary documents as may be reasonably required by the Exchange Agent,
the holder of such Certificate or Book-Entry Shares shall be entitled to receive in exchange therefor (A) the Merger Consideration pursuant
to the provisions of this Article III (which shares of Parent Common Stock and Exchanged Parent Preferred Stock shall be in uncertificated
book-entry form) and (B) a check or wire transfer in the amount equal to the cash payable in lieu of any fractional shares of Parent
Common Stock pursuant to Section 3.2(h) and any dividends and other distributions pursuant to Section 3.2(g). No interest
shall be paid or accrued for the benefit of holders of the Certificates or Book-Entry Shares on the Merger Consideration payable in respect
of the Certificates or Book-Entry Shares. If payment of the Merger Consideration is to be made to a Person other than the record holder
of such shares of Company Common Stock or Unconverted Company Preferred Stock, it shall be a condition of payment that shares so surrendered
shall be properly endorsed or shall be otherwise in proper form for transfer and that the Person requesting such payment shall have paid
any transfer and other Taxes required by reason of the payment of the Merger Consideration to a Person other than the registered holder
of such shares surrendered or shall have established to the satisfaction of the Surviving Company that such Taxes either have been paid
or are not applicable. Until surrendered as contemplated by this Section 3.2(b)(ii), each Certificate and each Book-Entry Share
shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the Merger Consideration
payable in respect of such shares of Company Common Stock or Unconverted Company Preferred Stock, and cash in lieu of any fractional
shares of Parent Common Stock to which such holder is entitled pursuant to Section 3.2(h) and any dividends or other distributions
to which such holder is entitled pursuant to Section 3.2(g).
(c)
Termination of Rights. All Merger Consideration, any cash in lieu of fractional shares of Parent Common Stock pursuant to Section
3.2(h) and any dividends or other distributions with respect to Parent Common Stock or Exchanged Parent Preferred Stock pursuant
to Section 3.2(g), in each case paid upon the surrender of and in exchange for shares of Company Common Stock or Unconverted Company
Preferred Stock, respectively, in accordance with the terms hereof shall be deemed to have been paid in full satisfaction of all rights
pertaining to such Company Common Stock and Unconverted Company Preferred Stock, respectively. At the Effective Time, the stock transfer
books of the Company shall be closed, and there shall be no further registration of transfers on the stock transfer books of the Company
of the shares of Company Common Stock or Unconverted Company Preferred Stock that were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates or Book-Entry Shares are presented to the Exchange Agent or the Surviving Company for
any reason, they shall be cancelled and exchanged for the Merger Consideration payable in respect of the shares of Company Common Stock
or Unconverted Company Preferred Stock, respectively, previously represented by such Certificates or Book-Entry Shares (other than Certificates
or Book-Entry Shares evidencing Cancelled Shares), any cash in lieu of fractional shares of Parent Common Stock to which the holders
thereof are entitled pursuant to Section 3.2(h) and any dividends or other distributions to which the holders thereof are entitled
pursuant to Section 3.2(g), without any interest thereon.
(d)
Termination of Exchange Fund. Any portion of the Exchange Fund that remains undistributed to the former Company Shareholders on
the 365th day after the Closing Date shall be delivered to the Surviving Company upon demand, and any former Company Shareholders
who have not theretofore received the Merger Consideration to which they are entitled under this Article III, any cash in lieu
of fractional shares of Parent Common Stock to which they are entitled pursuant to Section 3.2(h) and any dividends or other distributions
with respect to Parent Common Stock or Exchanged Parent Preferred Stock to which they are entitled pursuant to Section 3.2(g),
in each case without interest thereon, shall thereafter look only to the Surviving Company and Parent for payment of their claim for
such amounts.
(e)
No Liability. None of the Surviving Company, Parent or the Exchange Agent shall be liable to any holder of a Certificate or Book-Entry
Share for any Merger Consideration, or other amounts properly delivered to a public official pursuant to any applicable abandoned property,
escheat or similar Law. If any Certificate or Book-Entry Share has not been surrendered prior to the time that is immediately prior to
the time at which the Merger Consideration in respect of such Certificate or Book-Entry Share would otherwise escheat to or become the
property of any Governmental Entity, any such shares, cash, dividends or distributions in respect of such Certificate or Book-Entry Share
shall, to the extent permitted by applicable Law, become the property of the Surviving Company, free and clear of all claims or interest
of any Person previously entitled thereto.
(f)
Lost, Stolen or Destroyed Certificates. If any Certificate (other than a Certificate evidencing Cancelled Shares) shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or
destroyed and, if reasonably required by the Surviving Company, the posting by such Person of a bond in such reasonable amount, pursuant
to the policies and procedures of the transfer agent for Parent, as the Surviving Company may direct as indemnity against any claim that
may be made against it with respect to such Certificate, Parent shall instruct the Exchange Agent to issue in exchange for such lost,
stolen or destroyed Certificate the Merger Consideration payable in respect of the shares of Company Common Stock or Unconverted Company
Preferred Stock, respectively, formerly represented by such Certificate, any cash in lieu of fractional shares of Parent Common Stock
to which the holders thereof are entitled pursuant to Section 3.2(h) and any dividends or other distributions with respect to
Parent Common Stock or Exchanged Parent Preferred Stock, respectively, to which the holders thereof are entitled pursuant to Section
3.2(g).
(g)
(i) Distributions with Respect to Parent Common Stock. No dividends or other distributions declared or made with respect to shares
of Parent Common Stock with a record date after the Effective Time shall be paid to the holder of any Certificate or Book-Entry Shares
not surrendered with respect to the whole shares of Parent Common Stock that such holder would be entitled to receive upon surrender
of such Certificate or Book-Entry Shares and no cash payment in lieu of fractional shares of Parent Common Stock shall be paid to any
such holder, in each case until such holder shall surrender such Certificate or Book-Entry Shares in accordance with this Section
3.2. Following surrender of any such Certificate or Book-Entry Shares, there shall be paid to such holder of whole shares of Parent
Common Stock issuable in exchange therefor, without interest, (i) promptly after the time of such surrender, the amount of any dividends
or other distributions with a record date after the Effective Time theretofore paid with respect to such whole shares of Parent Common
Stock to which such holder is entitled pursuant to this Agreement, and (ii) at the appropriate payment date, the amount of any dividends
or other distributions with a record date after the Effective Time but prior to such surrender and with a payment date subsequent to
such surrender payable with respect to such whole shares of Parent Common Stock. For purposes of dividends or other distributions in
respect of shares of Parent Common Stock all whole shares of Parent Common Stock to be issued pursuant to the Merger shall be entitled
to dividends pursuant to the immediately preceding sentence as if such whole shares of Parent Common Stock were issued and outstanding
as of the Effective Time.
(ii)
Distributions with Respect to Exchanged Parent Preferred Stock. No dividends or other distributions declared or made with respect
to shares of Exchanged Parent Preferred Stock with a record date after the Effective Time shall be paid to the holder of any Certificate
or Book-Entry Shares not surrendered with respect to the whole shares of Exchanged Parent Preferred Stock that such holder would be entitled
to receive upon surrender of such Certificate or Book-Entry Shares until such holder shall surrender such Certificate or Book-Entry Shares
in accordance with this Section 3.2. Following surrender of any such Certificate or Book-Entry Shares, there shall be paid to
such holder of whole shares of Exchanged Parent Preferred Stock issuable in exchange therefor, without interest, (i) promptly after the
time of such surrender, the amount of any dividends or other distributions with a record date after the Effective Time theretofore paid
with respect to such whole shares of Exchanged Parent Preferred Stock to which such holder is entitled pursuant to this Agreement, and
(ii) at the appropriate payment date, the amount of any dividends or other distributions with a record date after the Effective Time
but prior to such surrender and with a payment date subsequent to such surrender payable with respect to such whole shares of Exchanged
Parent Preferred Stock. For purposes of dividends or other distributions in respect of shares of Exchanged Parent Preferred Stock all
whole shares of Exchanged Parent Preferred Stock to be issued pursuant to the Merger shall be entitled to dividends pursuant to the immediately
preceding sentence as if such whole shares of Exchanged Parent Preferred Stock were issued and outstanding as of the Effective Time.
(h)
(i) No Fractional Shares of Parent Common Stock. No certificates or scrip or shares representing fractional shares of Parent Common
Stock shall be issued upon the surrender for exchange of Certificates or Book-Entry Shares and such fractional share interests will not
entitle the owner thereof to vote or to have any rights of a shareholder of Parent or a holder of shares of Parent Common Stock. Notwithstanding
any other provision of this Agreement, each holder of shares of Company Common Stock exchanged pursuant to the Merger who would otherwise
have been entitled to receive a fraction of a share of Parent Common Stock (after taking into account all Certificates and Book-Entry
Shares delivered by such holder) shall receive, in lieu thereof, cash (without interest) in an amount equal to the product of (i) such
fractional part of a share of Parent Common Stock multiplied by (ii) the average of the daily volume weighted average prices of
one share of Parent Common Stock for the five consecutive trading days immediately prior to the Closing Date as reported by Bloomberg,
L.P. As promptly as practicable after the determination of the amount of cash, if any, to be paid to holders of shares of Company Common
Stock exchanged pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of Parent Common Stock
(after taking into account all Certificates and Book-Entry Shares delivered by such holder), the Exchange Agent shall so notify Parent,
and Parent shall instruct the Exchange Agent to forward payments to such holders of fractional interests subject to and in accordance
with the terms hereof.
(ii)
Fractional Shares of Parent Preferred Stock. Any fractional shares of Parent Preferred Stock shall be paid as fractional shares
of Parent Preferred Stock in lieu of any cash consideration therefor.
(i)
Withholding Taxes. Notwithstanding anything in this Agreement to the contrary, Parent, the Surviving Company and the Exchange
Agent shall be entitled to deduct and withhold from (i) the consideration to be paid by Parent, the Surviving Company or the Exchange
Agent hereunder and (ii) any other amounts otherwise payable pursuant to this Agreement, any amount required to be deducted and withheld
with respect to the making of such payment under the Code or any other provision of state, local or foreign Tax Law. Before making any
such deduction or withholding (other than with respect to amounts payable pursuant to this Agreement that are treated as compensatory
for Tax purposes or in respect of a failure to deliver any necessary tax forms), the withholding party shall provide the chief executive
officer of the Company with reasonable advance written notice of the intent to make such deduction or withholding, including a description
of the legal and factual basis in support of any such deduction or withholding, and the withholding party shall cooperate with any reasonable
request from the chief executive officer of the Company to reduce or eliminate such deduction or withholding (on behalf of the applicable
individual or entity) to the extent permitted by Law. Any such amounts so deducted or withheld shall be treated for all purposes of this
Agreement as having been paid to the Person in respect of which such deduction or withholding was made.
(j)
Dissenters’ Rights. No dissenters’ or appraisal rights or other rights of objecting shareholders shall be available
with respect to the Merger or the other Transactions.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except
as set forth in the disclosure letter delivered by the Company to Parent and Merger Sub on or prior to the date of this Agreement (the
“Company Disclosure Letter”) and except as disclosed in the Company SEC Documents filed or furnished with the SEC
and publicly available on EDGAR at least two (2) Business Days prior to the date of this Agreement (including all exhibits and schedules
thereto and documents incorporated by reference therein, but excluding any forward-looking disclosures set forth in any “risk factors”
section, any disclosures in any “forward looking statements” section and any other disclosures included therein to the extent
they are predictive or forward looking in nature), the Company represents and warrants to Parent and Merger Sub as follows:
Section
4.1 Organization, Standing and Power.
(a)
Each of the Company and its Subsidiaries is, as applicable, a corporation, a trust, general or limited partnership or limited liability
company duly organized, validly existing and, where relevant, in good standing under the Laws of its jurisdiction of incorporation or
organization, with all requisite entity power and authority to own, lease and, to the extent applicable, operate its respective properties
and to carry on its respective business as now being conducted, other than, in each case, where the failure to be so organized, validly
existing, in good standing or to have such power or authority would not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on the Company (a “Company Material Adverse Effect”). Each of the Company and its Subsidiaries
is duly qualified or licensed to do business and, where relevant, is in good standing in each jurisdiction in which the business it is
conducting requires such qualification or license, other than where the failure to so qualify, be licensed or in good standing would
not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company has heretofore made
available to Parent complete and correct copies of its Organizational Documents.
(b)
Section 4.1(b) of the Company Disclosure Letter sets forth an accurate and complete list of each Subsidiary of the Company, together
with (i) the jurisdiction of incorporation or organization, as the case may be, of such Subsidiary, (ii) the type and percentage of interest
held, directly or indirectly, by the Company in such Subsidiary, (iii) the amount of its authorized capital stock or other equity interests
and (iv) the amount of its outstanding capital stock or other equity interests.
(c)
Section 4.1(c) of the Company Disclosure Letter sets forth an accurate and complete list of Persons, other than the Subsidiaries
of the Company, in which the Company or any Subsidiary of the Company has a direct equity interest and a description of such interest.
Section
4.2 Capital Structure
(a)
As of December 10, the authorized capital stock of the Company consists of (i) 3,000,000,000 shares of Company Common Stock and
(ii) 5,000,000 shares of Company Preferred Stock. At the close of business on November 13, 2023: (A) 10,730,210 shares of Company Common
Stock were issued and outstanding; (B) 1,800 shares of the Company Series E-1 Preferred Stock were issued and outstanding; (C) 9,535
shares of Company Common Stock were reserved and available for issuance pursuant to the Company 2014 Equity Incentive Plan; (D) 609 shares
of Company Common Stock were reserved and available for issuance pursuant to the Company’s 2018 Inducement Equity Incentive Plan;
(E) 509 shares of Company Common Stock were reserved and available for issuance pursuant to the Company’s 2019 Employee Stock Purchase
Plan; (F) 449,643,423 shares of Company Common Stock were reserved for issuance in connection with the conversion of the Company Convertible
Notes; (F) 32,639,382 shares of Company Common Stock were reserved for issuance in connection with the exercise of the Company Warrants;
and (G) 278,137,667 shares of Company Common Stock were reserved for issuance in connection with the exercise of the Company Purchase
Rights. Except as set forth in this Section 4.2, at the close of business on November 13, 2023, there are no other shares of outstanding
Company Capital Stock issued, reserved for issuance or outstanding.
(b)
All outstanding shares of Company Capital Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject
to preemptive rights. All outstanding shares of Company Capital Stock have been issued and granted in compliance in all material respects
with applicable state and federal securities Laws, the DGCL and the Organizational Documents of the Company. The Company owns, of record
and beneficially, directly or indirectly, all of the issued and outstanding shares of capital stock of, or other equity interests in,
the Subsidiaries of the Company, free and clear of all Liens, other than Permitted Liens. As of the close of business on December 7,
2023, except as set forth in this Section 4.2 and the Organizational Documents of the Company, except for stock grants or other
awards granted in accordance with Section 6.1(b) and except for the Company Warrants and Company Convertible Notes, there are
no outstanding: (i) shares of Company Capital Stock; (ii) Voting Debt; (iii) securities of the Company or any Subsidiary of the Company
convertible into or exchangeable or exercisable for shares of Company Capital Stock or Voting Debt; (iv) contractual obligations of the
Company or any Subsidiary of the Company to repurchase, redeem or otherwise acquire any shares of Company Capital Stock or capital stock,
membership interests, partnership interests, joint venture interests or other equity interests of any Subsidiary of the Company; or (v)
subscriptions, options, warrants, calls, puts, rights of first refusal or other rights (including preemptive rights), commitments or
agreements to which the Company or any Subsidiary of the Company is a party or by which it is bound, in any case, obligating the Company
or any Subsidiary of the Company to (A) issue, deliver, transfer, sell, purchase, redeem or acquire, or cause to be issued, delivered,
transferred, sold, purchased, redeemed or acquired, additional shares of Company Capital Stock, any Voting Debt or other voting securities
of the Company or (B) grant, extend or enter into any such subscription, option, warrant, call, put, right of first refusal or other
similar right, commitment or agreement. Except as set forth in the Organizational Documents of the Company, there are no shareholder
agreements, voting trusts or other agreements to which the Company is a party or by which it is bound relating to the voting of any shares
of the Company Capital Stock.
(c)
All dividends or other distributions on the shares of Company Capital Stock and any material dividends or other distributions on any
securities of any Subsidiary of the Company which have been authorized or declared prior to the date hereof have been paid in full (except
to the extent such dividends or distributions have been declared and are not yet due and payable). As of the date of this Agreement,
there are no declared and unpaid dividends with respect to any shares of Company Capital Stock or declared and unpaid material dividends
with respect to any securities of any Subsidiary of the Company (including any material dividends payable to the Company from a Subsidiary
of the Company).
Section
4.3 Authority; No Violations; Approvals.
(a)
The Company has all requisite corporate power to execute and deliver this Agreement and to perform its obligations hereunder, subject,
with respect to the consummation of the Merger, to clauses (i) through (ii) below. The execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the Transactions, including the consummation of the Merger, have been duly and
validly authorized by all necessary corporate action on the part of the Company, subject, with respect to consummation of the Merger,
to (i) receipt of the Company Shareholder Approval and (ii) the filing of the Certificate of Merger with, and acceptance for record by,
the Delaware Department. This Agreement has been duly executed and delivered by the Company and, assuming the due and valid execution
of this Agreement by Parent and Merger Sub, constitutes a valid and legally binding obligation of the Company enforceable against the
Company in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization, moratorium and other
Laws of general applicability relating to or affecting creditors’ rights and to general principles of equity regardless of whether
such enforceability is considered in a Proceeding in equity or at law (collectively, “Creditors’ Rights”). The
Company Board, at a meeting duly called and held, (A) determined that this Agreement and the Transactions, including the Merger, are
in the best interests of the Company and the Company Shareholders, (B) adopted and approved this Agreement and declared that the Transactions,
including the Merger, are advisable, (C) directed that the Merger and the other Transactions be submitted to the holders of Company Common
Stock for consideration at the Company Shareholders Meeting and (D) made the Company Board Recommendation. As of the date hereof, none
of the foregoing actions by the Company Board have been rescinded, withdrawn or modified in any way. The Company Shareholder Approval
is the only vote of the holders of any class or series of the Company Capital Stock that is necessary to approve the Merger and the other
Transactions.
(b)
Except as set forth in Section 4.3(b) of the Company Disclosure Letter, the execution and delivery of this Agreement does not,
and the consummation of the Transactions will not (with or without notice or lapse of time, or both) (i) assuming that the Company Shareholder
Approval is obtained, contravene, conflict with or result in a violation of any provision of the Organizational Documents of the Company,
(ii) result in a violation of, or default under, or acceleration of any material obligation or the loss of a material benefit under,
or result in the creation of any Lien upon any of the properties or assets of the Company or any of its Subsidiaries under, any provision
of any Company Contract to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries
or their respective properties or assets are bound, or (iii) assuming the Consents referred to in Section 4.4 are duly and timely
obtained or made and the Company Shareholder Approval has been obtained, contravene, conflict with or result in a violation of any Law
applicable to the Company or any of its Subsidiaries or any of their respective properties or assets, other than, in the case of clauses
(ii) and (iii), any such contraventions, conflicts, violations, defaults, acceleration, losses, or Lien that would not reasonably
be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section
4.4 Consents. Except as set forth in Section 4.4 of the Company Disclosure Letter, no Consent from any Governmental
Entity is required to be obtained or made by the Company, any of its Subsidiaries or any of the Persons set forth in Section 4.1(c)
of the Company Disclosure Letter in connection with the execution and delivery of this Agreement by the Company or the consummation
by the Company of the Transactions, except for: (a) the filing with the SEC of (i) a joint proxy statement in preliminary and definitive
form (including any amendments or supplements, the “Joint Proxy Statement”) relating to the meeting of the Company
Shareholders to consider the approval of this Agreement, the Merger and the other Transactions (including any postponement, adjournment
or recess thereof, the “Company Shareholders Meeting”) and the Parent Shareholders Meeting and (ii) such reports under
the Exchange Act and the Securities Act, and such other compliance with the Exchange Act and the Securities Act and the rules and regulations
thereunder, as may be required in connection with this Agreement and the Transactions; (b) the filing of the Certificate of Merger and
any other required filings with, and the acceptance for record by, the Delaware Department pursuant to the DGCL; (c) such filings as
may be required under the rules and regulations of NASDAQ; (d) such filings and approvals as may be required by any applicable state
securities or “blue sky” Laws or Takeover Laws; and (e) any such Consent that the failure to obtain or make would not reasonably
be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section
4.5 SEC Documents; Financial Statements; Internal Controls and Procedures.
(a)
Since December 31, 2021, the Company has filed or furnished with the SEC all forms, reports, schedules and statements required to be
filed or furnished under the Securities Act or the Exchange Act, respectively (such forms, reports, schedules and statements, as amended,
collectively, the “Company SEC Documents”). As of their respective filing dates, or, if amended prior to the date
hereof, as of the date of (and giving effect to) the last such amendment made prior to the date hereof, each of the Company SEC Documents
complied as to form in all material respects with the applicable requirements of the Securities Act or the Exchange Act, as the case
may be, and the rules and regulations of the SEC thereunder applicable to such Company SEC Documents, and none of the Company SEC Documents
contained, when filed or, if amended prior to the date of this Agreement, as of the date of such amendment with respect to those disclosures
that are amended, any untrue statement of a material fact or omitted 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.
(b)
The consolidated audited and unaudited interim financial statements of the Company included or incorporated by reference in the Company
SEC Documents, including all notes and schedules thereto, complied in all material respects, when filed or if amended prior to the date
of this Agreement, as of the date of such amendment, with the rules and regulations of the SEC with respect thereto, were prepared in
accordance with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis
during the periods indicated (except as may be indicated in the notes thereto or, in the case of the unaudited statements, as permitted
by Rule 10-01 of Regulation S-X of the SEC) and fairly present in all material respects in accordance with applicable requirements of
GAAP (subject, in the case of the unaudited interim financial statements, to normal year-end audit adjustments) the consolidated financial
position, results of operations, shareholders’ equity and cash flows of the Company and its Subsidiaries, as of the respective
dates thereof and for the respective periods indicated therein (subject, in the case of unaudited interim financial statements, to absence
of notes and normal year-end adjustments). To the knowledge of the Company, as of the date hereof, none of the Company SEC Documents
is the subject of ongoing SEC review and the Company does not have outstanding and unresolved comments from the SEC with respect to any
of the Company SEC Documents. As of the date hereof, none of the Company SEC Documents is the subject of any confidential treatment request
by the Company.
(c)
Except as set forth in Section 4.5(c) of the Company Disclosure Letter and other than any off-balance sheet arrangements disclosed
in the Company SEC Documents filed or furnished prior to the date hereof, neither the Company nor any Subsidiary of the Company is a
party to, or has any contract to become a party to, any joint venture, off-balance sheet partnership or any similar contractual arrangement,
including any off-balance sheet arrangements (as described in Instruction 8 to Item 303(b) of Regulation S-K of the SEC) where the purpose
of such contract is to avoid disclosure of any material transaction involving, or material liabilities of, the Company in the Company’s
published financial statements or any Company SEC Documents.
(d)
The Company has established and maintains disclosure controls and procedures and a system of internal controls over financial reporting
(as such terms are defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act) as required by the Exchange Act. From January 1, 2023,
to the date of this Agreement, the Company’s auditors and the Company Board have not been advised of (i) any significant deficiencies
or material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely
affect in any material respect the Company’s ability to record, process, summarize and report financial information or (ii) any
fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal
controls over financial reporting, and, in each case, neither the Company nor any of its Representatives has failed to disclose such
information to the Company’s auditors or the Company Board.
Section
4.6 Absence of Certain Changes or Events.
(a)
From January 1, 2023, through the date of this Agreement, there has not been any event, change, effect or development that hasn’t
been publicly disclosed, and that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material
Adverse Effect.
(b)
From January 1, 2023, through the date of this Agreement, except for events giving rise to, and the discussion and negotiation of and
other actions taken in connection with, this Agreement, the Company and each of its Subsidiaries have conducted their business in the
ordinary course of business in all material respects.
Section
4.7 No Undisclosed Material Liabilities. There are no liabilities of the Company or any of its Subsidiaries of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or otherwise, other than: (a) liabilities reflected or reserved against
on the consolidated balance sheet of the Company dated as of December 31, 2022 (including the notes thereto) contained in the Company
SEC Documents filed or furnished prior to the date hereof; (b) liabilities incurred in the ordinary course of business subsequent to
December 31, 2022; (c) liabilities incurred in connection with the preparation, negotiation and consummation of the Transactions; (d)
liabilities incurred as permitted under Section 6.1(b)(xi); and (e) liabilities that would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
Section
4.8 Information Supplied. None of the information supplied or to be supplied by the Company for inclusion or incorporation
by reference in (a) the registration statement on Form S-4 to be filed with the SEC by Parent pursuant to which shares of Parent Common
Stock issuable in the Merger will be registered with the SEC (including any amendments or supplements, the “Registration Statement”)
shall, at the time the Registration Statement becomes effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading or (b) the Joint Proxy Statement shall, at the date it is first mailed
to the Company Shareholders and to the Parent Shareholders and at the time of the Company Shareholders Meeting and the Parent Shareholders
Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under which they are made, not misleading; provided, however,
that no representation is made by the Company with respect to statements made therein based on information (i) supplied by Parent or
Merger Sub specifically for inclusion or incorporation by reference therein or (ii) not supplied by or on behalf of the Company and not
obtained from or incorporated by reference to the Company’s filings with the SEC.
Section
4.9 Company Permits; Compliance with Applicable Law. Except as set forth in Section 4.9 of the Company Disclosure Letter,
the Company and its Subsidiaries hold all permits, licenses, franchises, variances, exemptions, orders and approvals of all Governmental
Entities necessary for the lawful conduct of their respective businesses (the “Company Permits”), except where the
failure to so hold would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The
Company and its Subsidiaries are in compliance with the terms of the Company Permits, except where the failure to so comply would not
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Neither the Company nor any Subsidiary
of the Company is in violation or breach of, or default under, any Company Permit, nor has the Company or any Subsidiary of the Company
received any claim or notice indicating that the Company or any Subsidiary of the Company is currently not in compliance with the terms
of any Company Permits, except for violations, breaches and defaults, and failures to be in compliance with the terms of any Company
Permits that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The businesses
of the Company and its Subsidiaries are not currently being conducted, and at no time since January 1, 2022, have been conducted, in
violation of any applicable Law, except for violations that would not reasonably be expected to have, individually or in the aggregate,
a Company Material Adverse Effect. As of the date of this Agreement, no investigation or review by any Governmental Entity with respect
to the Company or any of its Subsidiaries is pending or, to the knowledge of the Company, threatened, other than those the outcome of
which would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Notwithstanding
anything to the contrary in this Section 4.9, the provisions of this Section 4.9 shall not apply to matters addressed in
Sections 4.10, 4.11 or 4.12.
Section
4.10 Compensation; Benefits.
(a)
Set forth in Section 4.10(a) of the Company Disclosure Letter is a list, as of the date hereof, of all of the Employee Benefit
Plans sponsored, maintained, contributed to, or required to be contributed to by the Company or any of its Subsidiaries or with respect
to which the Company or any of its Subsidiaries has, or could reasonably be expected to have, any material liability (such Employee Benefit
Plans, and whether or not material, the “Company Plans”). True, correct and complete copies of each of the Company
Plans (or, in the case of any unwritten Company Plan, a written description thereof) and any amendments thereto and, as applicable, the
most current versions of any related trust agreements, insurance contracts or other funding arrangements, favorable determination or
opinion letters, and the most recent report on Form 5500 and summary plan description with respect to each such Company Plan, in each
case, have been furnished or made available to Parent or its Representatives.
(b)
Each Company Plan has been administered, funded (if applicable) and maintained in compliance with its terms and all applicable Laws.
(c)
Each Company Plan that is intended to be a “qualified plan” within the meaning of Section 401(a) of the Code has received
a favorable determination letter, or may rely on a favorable opinion letter, issued by the IRS, and to the knowledge of the Company,
no events have occurred that would reasonably be expected to result in any such letter being revoked or in the loss of the qualified
status of any such Company Plan.
(d)
As of the date of this Agreement, there are no actions, suits or claims pending (other than routine claims for benefits) or, to the knowledge
of the Company, threatened against, or with respect to, any of the Company Plans, except for such pending actions, suits or claims that
would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(e)
All material contributions required to be made to the Company Plans pursuant to their terms have been timely made.
(f)
There are no material unfunded benefit obligations with respect to any Company Plan that have not been properly accrued for in the Company’s
financial statements or disclosed in the notes thereto in accordance with GAAP.
(g)
None of the Company, any of its Subsidiaries, or any of their respective ERISA Affiliates, contributes to, has an obligation to contribute
to or otherwise has any liability (actual or contingent) with respect to, and no Company Plan is, a plan subject to Title IV of ERISA
(including a multiemployer plan within the meaning of Section 3(37) of ERISA), Section 302 of ERISA or Section 412 of the Code.
(h)
Except for continuation coverage to be provided, and for no longer than continuation coverage is required to be provided, pursuant to
Section 4980B of the Code or any similar state Law for which any director, officer or employee (including any former director, officer
or employee) is responsible for the full cost of such coverage, neither the Company nor any of its Subsidiaries has any current or projected
liability for, and no Company Plan provides or promises, any post-employment or post-retirement medical, dental, disability, hospitalization,
life or similar benefits (whether insured or self-insured) to any director, officer or employee (including any former director, officer
or employee) of the Company or any of its Affiliates.
(i)
Neither the Company nor any of its Subsidiaries has any obligation to gross-up, indemnify or otherwise reimburse any current or former
service provider of the Company or any of its Affiliates for any Tax incurred by such service provider under Sections 409A or 4999 of
the Code.
(j)
Except as contemplated by this Agreement, the execution and delivery of this Agreement and the consummation of the Transactions will
not (either alone or in combination with another event), (i) result in any payment or benefit from the Company or any of its Subsidiaries
becoming due, or increase in the amount of any compensation due, to any current or former officers, employees or consultants of the Company
or any of its Affiliates, (ii) increase any benefits otherwise payable under any Company Plan, (iii) result in the acceleration of the
time of payment (including the funding of a trust or transfer of any assets to fund any benefits under any Company Plan) or vesting of
or otherwise trigger any compensation or benefits payable to or in respect of any current or former employee, director or consultant
of the Company or any of its Affiliates or (iv) limit or restrict the right of the Company or any of its Subsidiaries to merge, amend
or terminate any Company Plan.
(k)
No payment or benefit (or portion thereof) that is required to be made by the Company or any of its Subsidiaries under any Company Plan
or this Agreement with respect to any “disqualified individual” (as defined within Treas. Reg. 1.280G-1, Q&A 15), individually
or in the aggregate, could be an “excess parachute payment” within the meaning of Section 280G(b) of the Code.
Section
4.11 Employment and Labor Matters.
(a)
The Company has provided Parent a true, correct and complete list of each employee of the Company or any of its Subsidiaries (the “Business
Employees”) that specifies for each such Business Employee, to the extent applicable, his or her: (i) name, (ii) job title,
(iii) employing entity, (iv) hire date and service date (if different than hire date), (v) status as exempt or non-exempt under the Fair
Labor Standards Act, (vi) current annualized salary or hourly rate of pay, as applicable, (vii) eligibility to receive other compensation
(including bonus, commissions, profit-sharing, pension benefits and any other non-wage compensation), (viii) leave status (including
type of leave, start date of leave, and expected return date), (ix) whether the Business Employee is on a visa or work permit, the sponsoring
entity, and date of expiration, as applicable, and (x) primary location of employment. The Company has also provided Parent a true, correct
and complete list of each individual who provides material services to the Company or any of its Subsidiaries in the capacity of an independent
contractor, along with his or her: (i) name and, if applicable, the entity through which he or she provides services, (ii) nature of
the services performed, and (iii) compensation rate for such services. Collectively, the individuals listed within the two lists provided
by the Company to Parent and referenced in this Section 4.11(a) represent the individuals reasonably necessary to manage and operate
the businesses of the Company and its Subsidiaries as currently managed and operated.
(b)
The Company and each of its Subsidiaries are, and since January 1, 2022 have been, in compliance in all material respects with all applicable
Laws respecting labor and employment, including all such Laws respecting wages, hours, overtime pay, non-discrimination, non-retaliation,
non-harassment, civil rights, fair employment practices, equal opportunity, recordkeeping, meal and rest breaks, employee training, immigration
and employment eligibility verification, payroll withholdings and deductions, employee privacy, classification and payment of employees,
independent contractors and consultants, pay and employment equity, collective bargaining, employee leave, plant closings and mass layoffs,
workers’ compensation, occupational health and safety, immigration, and the terms and conditions of employment.
(c)
There are not, and since January 1, 2022 have not been, any Proceedings pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries in connection with the employment or engagement of, on behalf of, or otherwise relating to, any
current or former employee or independent contractor of the Company or any of its Subsidiaries, including any of the Business Employees.
(d)
Neither the Company nor any Subsidiary of the Company is or has ever been a party to, or bound by, any collective bargaining agreement,
memorandum of understanding, or other contract with a labor union, works council, labor organization, or similar representative of employees.
Neither the Company nor any Subsidiary of the Company is or has ever been subject to any strikes, work stoppages, picketing, walkouts,
slowdowns, or lockouts. There are not, and since January 1, 2022 have not been, any Proceedings pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries relating to unfair labor practice charges or other material labor disputes.
There is no organizing activity, or demands for recognition or certification, with respect to the formation of a collective bargaining
unit or election or recognition of a collective bargaining representative presently being made or, to the knowledge of the Company, threatened
involving any Business Employee.
Section
4.12 Taxes.
(a)
The Company and each of its Subsidiaries have (i) duly and timely filed (or there have been filed on their behalf) with the appropriate
Taxing Authority all U.S. Federal income and all other material Tax Returns required to be filed by them, taking into account any extensions
of time within which to file such Tax Returns, and all such Tax Returns were and are correct and complete in all material respects, and
(ii) duly and timely paid in full (or there has been duly and timely paid in full on their behalf) all material amounts of Taxes required
to be paid by them, other than Taxes that are not yet due and payable or that are being contested in good faith by appropriate Proceedings
and for which adequate reserves have been established in accordance with GAAP.
(b)
The unpaid Taxes of the Company and its Subsidiaries (i) did not as of the date of the most recent financial statement exceed the reserve
for Taxes set forth on the face of the most recent financial statement (rather than in any notes thereto) and (ii) will not exceed that
reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of the Company (and
its Subsidiaries) in filing the applicable Tax Returns. Since the date of the most recent financial statement, none of the Company nor
any of its Subsidiaries has incurred any liability for Taxes outside the ordinary course of business.
(c)
(i) There are no audits, investigations by any Governmental Entity or other proceedings pending or, to the knowledge of the Company,
threatened in writing with regard to any Taxes or Tax Returns of the Company or any of its Subsidiaries; (ii) no deficiency for Taxes
of the Company or any of its Subsidiaries has been claimed, proposed or assessed in writing or, to the knowledge of the Company, threatened
in writing, by any Governmental Entity, which deficiency has not yet been settled ; (iii) neither the Company nor any of its Subsidiaries
has waived any statute of limitations with respect to the assessment of Taxes or agreed to any extension of time with respect to any
Tax assessment or deficiency for any open tax year (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary
course); (iv) neither the Company nor any of its Subsidiaries is currently the beneficiary of any extension of time within which to file
any Tax Return that remains unfiled; and (v) neither the Company nor any of its Subsidiaries has entered into any “closing agreement”
as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax Law).
(d) None of the Company nor any of its Subsidiaries will be required to include any item of income
in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as
a result of any: (i) change in or improper use of method of accounting (other than by virtue of one or more of the transactions contemplated
by this Agreement) for a taxable period ending on or prior to the Closing Date under Code Section 481(c) (or any corresponding or similar
provision of state, local or foreign income Tax Law) or other provisions of applicable Law; (ii) “closing agreement” as described
in Code Section 7121 (or any corresponding or similar provision of state, local or foreign income Tax Law) executed on or prior to the
Closing Date; (iii) installment sale or open transaction made on or prior to the Closing Date, (iv) prepaid amount or deferred revenue
received on or prior to the Closing Date other than in the ordinary course of business, (v) intercompany transaction or excess loss account
described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local, or non-U.S.
Tax law); or (vi) an election under Section 965(h) of the Code (or any corresponding or similar provision of state, local or non-U.S.
law).
(e)
The Company and its Subsidiaries have complied, in all material respects, with all applicable Laws relating to the payment and withholding
of Taxes (including withholding of Taxes pursuant to Sections 1441, 1442, 1445, 1446, 1471, 3102 and 3402 of the Code or similar provisions
under any state and foreign Laws) and have duly and timely withheld and, in each case, have paid over to the appropriate Taxing Authority
all amounts required to be so withheld and paid over on or prior to the due date thereof under all applicable Laws.
(f)
There are no Tax Liens upon any property or assets of the Company or any of its Subsidiaries except for Liens for Taxes not yet due and
payable or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in
accordance with GAAP.
(g)
Neither the Company nor any of its Subsidiaries has requested, has received or is subject to any written ruling of a Taxing Authority.
(h)
There are no Tax allocation or sharing agreements or similar arrangements with respect to or involving the Company or any of its Subsidiaries,
and after the Closing Date neither the Company nor any of its Subsidiaries shall be bound by any such Tax allocation agreements or similar
arrangements or have any liability thereunder for amounts due in respect of periods prior to the Closing Date, in each case, other than
customary provisions of commercial or credit agreements.
(i)
Neither the Company nor any of its Subsidiaries (i) has been a member of an affiliated group filing a consolidated U.S. federal income
Tax Return or (ii) has any liability for the Taxes of any Person (other than any Subsidiary of the Company) under Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local or foreign Tax Law), as a transferee or successor, or otherwise by Law.
(j)
Neither the Company nor any of its Subsidiaries has participated in any “reportable transaction” within the meaning of Treasury
Regulation Section 1.6011-4(b).
(k)
Neither the Company nor any of its Subsidiaries has constituted either a “distributing corporation” or a “controlled
corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-free treatment
under Section 355 of the Code in the two years prior to the date of this Agreement.
(l)
No written power of attorney that has been granted by the Company or any of its Subsidiaries (other than to the Company or any of its
Subsidiaries) is currently in force with respect to any matter relating to Taxes.
(m)
Neither the Company nor any of its Subsidiaries (i) has elected to defer the payment of any Taxes pursuant to Section 2302 of the CARES
Act or any other COVID-19 Measures or (ii) has claimed any “employee retention credit” pursuant to Section 2301 of the CARES
Act.
Section
4.13 Litigation. Except for such matters as would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect, there is no, and since January 1, 2022 has been no, (a) Proceeding pending or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries or any of their respective properties, rights or assets or (b) judgment,
decree or injunction, ruling or order, in each case, of any Governmental Entity or arbitrator outstanding against the Company or any
of its Subsidiaries.
Section
4.14 Intellectual Property.
(a)
Section 4.14(a) of the Company Disclosure Letter identifies each item of Company Intellectual Property that is the subject of
a registration or application in any jurisdiction (“Company Registered Intellectual Property”), including, with respect to
each patent and patent application: (i) the name of the applicant/registrant, (ii) the jurisdiction of application/registration, (iii)
the application or registration number and (iv) any other co-applicants/co-owners. To the Company’s knowledge, each of the patents
and patent applications included in Section 4.14(a) of the Company Disclosure Letter properly identifies by name each and every
inventor of the inventions claimed therein as determined in accordance with applicable Laws of the United States. To the Company’s
knowledge, as of the date of this Agreement, no litigation, cancellation, interference, derivation proceeding, opposition, inter partes
review, post grant review, reexamination or other proceeding of any nature (other than office actions or similar communications issued
by any Governmental Entity in the ordinary course of prosecution of any pending applications for registration) is pending or threatened
in writing, in which the scope, validity, enforceability or ownership of any Company Intellectual Property is being or has been contested
or challenged.
(b)
To the Company’s knowledge, the Company and its Subsidiaries exclusively own, are the sole assignees of, or have exclusively licensed
all Company Intellectual Property (other than as disclosed on Section 4.14(b) of the Company Disclosure Letter), free and clear
of all Liens other than Permitted Liens. All Company Intellectual Property that is licensed to the Company or any of its Subsidiaries
is licensed pursuant to a written agreement. To the Company’s knowledge each Company Associate involved in the creation or development
of any Company Intellectual Property, pursuant to such Company Associate’s activities on behalf of the Company or any of its Subsidiaries,
has signed a written agreement containing an assignment of such Company Associate’s rights in such Company Intellectual Property
to the Company or such Subsidiary. To the Company’s knowledge each Company Associate who has or has had access to trade secrets
or confidential information of the Company or any of its Subsidiaries has signed a valid and enforceable written agreement containing
confidentiality provisions protecting the Company Intellectual Property, trade secrets and confidential information. To the Company’s
knowledge the Company and its Subsidiaries have taken commercially reasonable steps to protect and preserve the confidentiality of their
trade secrets and confidential information.
(c)
To the Company’s knowledge no funding, facilities or personnel of any Governmental Entity or any university, college, research
institute or other educational institution has been used to create Company Intellectual Property that is solely created by the Company.
(d)
Section 4.14(d) of the Company Disclosure Letter sets forth each license agreement pursuant to which the Company or any of its
Subsidiaries (i) is granted a license under any Intellectual Property owned by any third party that is used by the Company or a Subsidiary
of the Company in its business as currently conducted (each a “Company In-bound License”) or (ii) grants to any third party
a license under any Company Intellectual Property (each a “Company Out-bound License”) (provided, that, Company In-bound
Licenses shall not include, when entered into in the ordinary course of business, material transfer agreements, services agreements,
clinical trial agreements, agreements with Company Associates, commercially available Software-as-a-Service offerings or off-the-shelf
software licenses; and Company Out-bound Licenses shall not include, when entered into in the ordinary course of business, material transfer
agreements, clinical trial agreements, services agreements, or non-exclusive outbound licenses). To the Company’s knowledge, all
Company In-bound Licenses and Company Out-bound Licenses are in full force and effect and are binding obligations of each party to such
Company In-bound Licenses or Company Out-bound Licenses. No party to such Company In-bound Licenses or Company Out-bound Licenses are
in breach under to such Company In-bound Licenses or Company Out-bound Licenses.
(e)
(i) To the Company’s knowledge the operation of the businesses of the Company and its Subsidiaries as currently conducted does
not infringe, misappropriate or otherwise violate any Intellectual Property of any other Person and (ii) no other Person is infringing,
misappropriating or otherwise violating any Company Intellectual Property. To the Company’s knowledge no legal proceeding is pending
(or, to the Knowledge of the Company and its Subsidiaries, is threatened in writing) (A) against the Company or any of its Subsidiaries
alleging that the operation of the business of the Company or such Subsidiary infringes or constitutes the misappropriation or other
violation of any Intellectual Property of another Person or (B) by the Company or any of its Subsidiaries alleging that another Person
has infringed, misappropriated or otherwise violated any of the Company Intellectual Property. Since January 1, 2022, the Company and
its Subsidiaries have not received any written notice or other written communication alleging that the operation of the business of the
Company or any of its Subsidiaries infringes or constitutes the misappropriation or other violation of any Intellectual Property of another
Person.
(f)
To the Company’s knowledge none of the Company Intellectual Property is subject to any pending or outstanding injunction, directive,
order, judgment or other disposition of dispute that adversely and restricts the use, transfer, registration or licensing by the Company
or any of its Subsidiaries of any such Company Intellectual Property.
(g)
The Company has taken commercially reasonable steps and implemented commercially reasonable disaster recovery and security plans and
procedures to protect the information technology systems used in, material to or necessary for operation of the business of the Company
as currently conducted from unauthorized use, acquisition or access. To the knowledge of the Company, there have been no material malfunctions
or unauthorized intrusions, or breaches of the information technology systems used in, material to or necessary for the operation of
the business of the Company as currently conducted.
Section
4.15 Real Property. Neither the Company nor any Subsidiary of the Company owns any real property, other than as and to the
extent disclosed in Section 4.15 of the Company Disclosure Letter or the Company SEC Documents filed or furnished with the SEC
prior to the date hereof. Neither the Company nor any Subsidiary of the Company has leased or subleased any real property and does not
have any obligation to pay any rent or other fees for any real property other than as and to the extent disclosed in the Company SEC
Documents filed or furnished with the SEC prior to the date hereof.
Section
4.16 Material Contracts.
(a)
Section 4.16(a) of the Company Disclosure Letter sets forth a true and complete list, as of the date of this Agreement, of:
(i)
Each merger, business combination, acquisition, purchase, sale or divestiture contract that contains representations, covenants, indemnities
or other obligations (including “earnout” or other contingent payment obligations) that would reasonably be expected to result
in the receipt of or making of future payments in excess of $100,000;
(ii)
each contract that grants any right of first refusal or right of first offer or that limits the ability of the Company, any Subsidiary
of the Company or any of their respective Affiliates to own, operate, sell, transfer, pledge or otherwise dispose of any businesses,
securities or assets (other than provisions requiring notice of or consent to assignment by any counterparty thereto);
(iii)
each contract relating to outstanding Indebtedness (or commitments or guarantees in respect thereof) of the Company or any of its Subsidiaries
(whether incurred, assumed, guaranteed or secured by any asset) in excess of $50,000;
(iv)
each employment contract to which the Company or a Subsidiary of the Company is a party other than employment contracts that can be terminated
at any time with less than two days’ notice and without financial liability to the Company or any of its Subsidiaries;
(v)
each contract containing any non-compete, non-solicit, exclusivity or similar type of provision that materially restricts the ability
of the Company or any of its Subsidiaries (including Parent upon consummation of the Transactions) to compete or otherwise engage in
any line of business or with any Person or geographic area;
(vi)
each contract pursuant to which the Company or any Subsidiary of the Company
may be obligated to issue or repurchase any Company Capital Stock or any capital stock or other equity interests in any Subsidiary of
the Company (including the Company Warrants and the Company Convertible Notes);
(vii)
each partnership, joint venture, limited liability company, grantor trust, strategic alliance agreement or other similar agreement to
which the Company or a Subsidiary of the Company is a party (other than any such agreement solely between or among the Company and its
wholly-owned Subsidiaries);
(viii)
each contract between or among the Company or any Subsidiary of the Company, on the one hand, and any officer, director or Affiliate
(other than a wholly-owned Subsidiary of the Company) of the Company or any of its Subsidiaries or any of their respective “associates”
or “immediate family” members (as such terms are defined in Rule 12b-2 and Rule 16a-1 of the Exchange Act), on the other
hand;
(ix)
each contract that obligates the Company or any of its Subsidiaries to indemnify any past or present directors, officers, or employees
of the Company or any of its Subsidiaries;
(x)
each material vendor, supplier or third party consulting or similar contract not otherwise described in this Section 4.16(a) that
(A) cannot be voluntarily terminated pursuant to its terms within 60 days after the Effective Time and (B) under which it is reasonably
expected the Company or any of its Subsidiaries will be required to pay fees, expenses or other costs in excess of $50,000 following
the Effective Time; and
(xi)
each “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K under the Exchange Act) not otherwise
described in this Section 4.16(a) with respect to the Company or any Subsidiary of the Company.
(b)
Collectively, the contracts set forth in Section 4.16(a) are herein referred to as the “Company Contracts.”
Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect and assuming
each Company Contract has been duly authorized and is enforceable on each party thereto (excluding the Company and each of its Subsidiaries),
each Company Contract is legal, valid, binding and enforceable in accordance with its terms on the Company and each of its Subsidiaries
that is a party thereto and is in full force and effect, subject, as to enforceability, to Creditors’ Rights. Except as would not
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, neither the Company nor any of its
Subsidiaries is in breach or default under any Company Contract nor, to the knowledge of the Company, is any other party to any such
Company Contract in breach or default thereunder. Complete and accurate copies of each Company Contract in effect as of the date hereof
(including all amendments and modifications) have been furnished to or otherwise made available to Parent. Neither the Company nor any
of its Subsidiaries has received written notice of any material violation of or material default under any Company Contract.
Section
4.17 Insurance. To the knowledge of the Company, (a) all current, material insurance policies of the Company and its Subsidiaries
(collectively, the “Material Company Insurance Policies”) are in full force and effect and (b) all premiums payable
under the Material Company Insurance Policies prior to the date of this Agreement have been duly paid. As of the date of this Agreement,
no written notice of cancellation or termination has been received with respect to any Material Company Insurance Policy.
Section
4.18 Environmental Matters.
(a)
The Company and its Subsidiaries are, and for the past three (3) years have been, in compliance with all Environmental Laws and have
not (i) received from any Person any (A) written notice or (B) request for information pursuant to Environmental Law or (ii) been subject
to any environmental claim, which, in each case, either remains pending, threatened, or unresolved, except as would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b)
No Company Owned Real Property or Company Leased Real Property is currently listed on, or has been proposed for listing on, the National
Priorities List (or CERCLIS) under CERCLA, or any similar Law.
(c)
There are no Hazardous Materials present at any Company Owned Real Property or Company Leased Real Property in quantities or concentrations
requiring remedial or corrective action under any Environmental Law except as would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
(d)
The Company has previously made available to Parent true and complete copies of any and all material environmental reports, studies,
audits, records, sampling data, site assessments and other similar documents with respect to the business or assets of the Company or
any currently operated or leased real property which are in the reasonable possession, custody, or control of the Company.
Section
4.19 Brokers. No broker, investment banker or other Person is entitled to any broker’s, finder’s or other similar
fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Company or any of its Subsidiaries.
Section
4.20 State Takeover Statute. The Company Board has taken all action necessary to render inapplicable to the Merger and the
other Transactions to the extent applicable to the Company, any Takeover Law.
Section
4.21 Investment Company Act. Neither the Company nor any of its Subsidiaries is, or as of immediately prior to the Effective
Time will be, required to be registered as an investment company under the Investment Company Act.
Section
4.22 Related Party Transactions. Except as set forth in Section 4.22 of the Company Disclosure Letter and as set forth
in the Company SEC Documents filed through and including the date of this Agreement or as permitted by this Agreement, from January 1,
2021 through the date of this Agreement there have been no transactions, agreements, arrangements or understandings between the Company
or any of its Subsidiaries, on the one hand, and any Affiliates (other than Subsidiaries of the Company) of the Company, on the other
hand, that would be required to be disclosed under Item 404 of Regulation S-K promulgated by the SEC. Section 4.22 of the Company
Disclosure Letter sets forth each agreement between the Company or any of its Subsidiaries, on the one hand, and any Affiliates (other
than Subsidiaries of the Company) of Company, on the other hand.
Section
4.23 FDA Regulatory.
(a)
To the Knowledge of the Company, the Company is, and has been, in compliance in all materials respects with all applicable Laws in the
jurisdictions in which the Company conducts business including but not limited to, as applicable (i) preclinical and clinical testing,
(ii) application for marketing approval of, manufacture, distribution, promotion and sale of the Products, (iii) the requirement for
and the terms of all necessary permits, (iv) establishment registration, (v) payment of all establishment fees, (vi) Good Clinical Practices,
(vii) Good Manufacturing Practices, and (viii) recordkeeping and reporting requirements. The Company is not in default with respect to
any order, writ, judgment, award, injunction or decree of any Governmental Entity or arbitrator applicable to it, or any of its assets.
The Company has not received, at any time during the prior five (5) years from the actual date of this Agreement, any written notice
from any Governmental Entity regarding any actual, alleged, or potential violation of, or failure to comply with, any Law applicable
to the Company in any material respect.
(b)
To the Knowledge of the Company, the Company and any suppliers, manufacturers, or other companies with which the Company contracts for
services related to the Products, holds all certificates, authorizations, registrations, reports, documents, permits or notices required
to be filed, maintained or furnished under FDA Law and all other applicable local, state, and federal laws and regulations of the relevant
Governmental Entity engaged in the regulation of pharmaceuticals or biohazardous materials in the jurisdictions in which the Company
performs clinical trials and/or markets its Products (“FDA Permits”). All FDA Permits are in full force and effect
in all material respects and no suspension, revocation, cancellation, or withdrawal of such FDA Permits is threatened and there is no
reasonable basis for believing that such FDA Permits will not be renewable upon expiration or will be suspended, revoked, cancelled,
or withdrawn.
(c)
The Company has not received any written notices or statements from the FDA, the EMEA or any other Governmental Entity, and otherwise
has no knowledge or reason to believe, that (i) any drug, including the Products or other product candidate of the Company (each a “Potential
Product”) may or will be rejected or determined to be non-approvable; (ii) a delay in time for review and/or approval of a
marketing authorization application or marketing approval application in any jurisdiction for any Potential Product is or may be required,
requested or being implemented; (iii) one or more clinical studies for any Potential Product shall or may be requested or required in
addition to the clinical studies submitted to the FDA prior to the date hereof as a precondition to or condition of issuance or maintenance
of a marketing approval for any Potential Product; (iv) any license, approval, permit or authorization to conduct any clinical trial
of or market any product or Potential Product of the Company has been, will be or may be suspended, revoked, modified or limited. The
Company has not marketed Potential Products in a manner in any way suggesting that a Potential Product has been approved for an indication
that exceeds the scope of the approved product label. The Company is not aware of the results of any studies, tests or trials the which
reasonably call into question the results of the tests and trials conducted by or on behalf of the Company with respect to Potential
Products.
(d)
The Company has not received any written notice or communication from any Governmental Entity of any actual or threatened investigation,
inquiry, or administrative, judicial, or regulatory action, hearing, or enforcement proceeding against the Company regarding any violation
of applicable FDA Law or other applicable local, state, and federal laws and regulations of the relevant Governmental Entity engaged
in the regulation of pharmaceuticals or biohazardous materials, including but not limited to a notice of adverse finding, warning letter,
clinical hold notice, recall, field correction, market withdrawal or replacement, safety alert, “dear doctor” letter, investigator
notice, or other notice or action relating to an alleged or potential lack of safety or efficacy of any Products of the Company, any
alleged product defect of any Products of the Company, or any violation of any material applicable law, rule, regulation or any clinical
trial or marketing license, approval, permit or authorization for any Products of the Company, and the Company is not aware of any facts
or information that would cause it to initiate any such notice or action and has no knowledge or reason to believe that the FDA, the
EMEA or any other Governmental Entity or authority or any institutional or ethical review board or other non-governmental authority intends
to impose, require, request or suggest any material obligation arising under an investigation, inquiry, or administrative, judicial,
or regulatory action, hearing, or enforcement proceeding.
(e)
In the last five (5) years, the Company has not been party to any corporate integrity agreement, monitoring agreement, consent decree,
settlement order, or other similar written agreement, in each case, entered into with or imposed by the FDA. Neither the Company no,
to the Knowledge of the Company, any of its officers, employees, or agents, or any manufacturers, distributor, or other entity in the
Company’s supply chain, has been or is currently disqualified or debarred, suspended, proposed for debarment or suspensions, deemed
non-responsible, or otherwise excluded from the award of contracts or from participating in any Federal healthcare program by any Federal
agency or other Governmental Entity. Neither the Company nor, to the Knowledge of the Company, any of its officers, employees, or agents
has made an untrue statement of a material fact or a fraudulent statement to the FDA or failed to disclose a material fact required to
be disclosed to the FDA, in each of the foregoing cases on behalf of the Company.
(f)
No officer, employee, or agent of the Company is or has been, or has been threatened to be: (a) debarred under FDA proceedings pursuant
to 21 U.S.C. § 335a; (b) disqualified under FDA investigator qualification proceedings; (c) subject to the FDA’s Application
Integrity Policy; or (d) subject to any enforcement proceeding arising from material false statements to the FDA pursuant to 18 U.S.C.
§ 1001.
(g)
Neither the Company nor any of its managers, directors, officers, agents, or employees have (i) used any corporate funds of the Company
for unlawful contributions, gifts, entertainment or other unlawful expenses related to political activity, (ii) made any unlawful payments
to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds
or violated any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or any other U.S. or foreign Laws concerning
corrupt payments applicable to its business or (iii) made or received any other payment, contribution, gift, bribe, rebate, payoff or
kick-back prohibited under any applicable Law. Neither the Company nor any of its managers, directors, officers, stockholders, agents,
or employees is or has been the subject of any investigation, inquiry or enforcement Proceeding by any Governmental Entity regarding
any offense or alleged offense under anti-bribery, anti-corruption, or anti-fraud Law in any jurisdiction and, no such investigation,
inquiry or Proceedings have been threatened.
Section
4.24 No Additional Representations.
(a)
Except for the representations and warranties made in this Article IV, neither the Company nor any other Person makes any express
or implied representation or warranty with respect to the Company or its Subsidiaries or their respective businesses, operations, assets,
liabilities or conditions (financial or otherwise) in connection with this Agreement or the Transactions, and the Company hereby disclaims
any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither the Company nor any other
Person makes or has made any representation or warranty to Parent, Merger Sub, or any of their respective Affiliates or Representatives
with respect to (i) any financial projection, forecast, estimate, budget or prospect information relating to the Company or any of its
Subsidiaries or their respective properties, assets or businesses or (ii) except for the representations and warranties made by the Company
in this Article IV, any oral or written information presented to Parent or Merger Sub or any of their respective Affiliates or
Representatives in the course of their due diligence investigation of the Company, the negotiation of this Agreement or in the course
of the Transactions.
(b)
Notwithstanding anything contained in this Agreement to the contrary, the Company acknowledges and agrees that none of Parent, Merger
Sub or any other Person has made or is making, and the Company expressly disclaims reliance upon, any representations, warranties or
statements relating to Parent or its Subsidiaries (including Merger Sub) whatsoever, express or implied, beyond those expressly given
by Parent and Merger Sub in Article V, the Parent Disclosure Letter or in any other document or certificate delivered by Parent
or Merger Sub or their respective Affiliates or Representatives in connection herewith, including any implied representation or warranty
as to the accuracy or completeness of any information regarding Parent furnished or made available to the Company or any of its Affiliates
or Representatives. Without limiting the generality of the foregoing, the Company acknowledges that no representations or warranties
are made with respect to any projections, forecasts, estimates, budgets or prospect information that may have been made available to
the Company or any of its Affiliates or Representatives (including in certain “data rooms,” “virtual data rooms,”
management presentations or in any other form in expectation of, or in connection with, the Merger or the other Transactions).
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
Except
as set forth in the disclosure letter delivered by Parent and Merger Sub to the Company on or prior to the date of this Agreement (the
“Parent Disclosure Letter”) and except as disclosed in the Parent SEC Documents filed or furnished with the SEC and
publicly available on EDGAR at least two (2) Business Days prior to the date of this Agreement (including all exhibits and schedules
thereto and documents incorporated by reference therein, but excluding any forward-looking disclosures set forth in any “risk factors”
section, any disclosures in any “forward looking statements” section and any other disclosures included therein to the extent
they are predictive or forward looking in nature), Parent and Merger Sub jointly and severally represent and warrant to the Company as
follows:
Section
5.1 Organization, Standing and Power.
(a)
Each of Parent and its Subsidiaries (including Merger Sub) is, as applicable, a corporation, partnership or limited liability company
duly organized, validly existing and, where relevant, in good standing under the Laws of its jurisdiction of incorporation or organization,
with all requisite entity power and authority to own, lease and, to the extent applicable, operate its properties and to carry on its
business as now being conducted, other than where the failure to be so organized, validly existing, in good standing or to have such
power or authority would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Parent (a
“Parent Material Adverse Effect”). Each of Parent and its Subsidiaries (including Merger Sub) is duly qualified or
licensed to do business and, where relevant, is in good standing in each jurisdiction in which the business it is conducting, or the
operation, ownership or leasing of its properties, makes such qualification, licensing or good standing necessary, other than where the
failure to so qualify, be licensed or in good standing would not reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect. Parent and Merger Sub each has heretofore made available to the Company complete and correct copies of
its Organizational Documents.
(b)
Section 5.1(b) of the Parent Disclosure Letter sets forth an accurate and complete list of each Significant Subsidiary of Parent,
together with (i) the jurisdiction of incorporation or organization, as the case may be, of such Significant Subsidiary, (ii) the type
and percentage of interest held, directly or indirectly, by Parent in such Significant Subsidiary, (iii) the amount of such Significant
Subsidiary’s authorized capital stock or other equity interests and (iv) the amount of such Significant Subsidiary’s outstanding
capital stock or other equity interests.
Section
5.2 Capital Structure.
(a)
As of the date of this Agreement, the authorized capital stock of Parent consists of (i) 100,000,000 shares of Parent Common Stock and
(ii) 3,000,000 shares of Parent Preferred Stock. At the close of business on December 7, 2023: (A) 1,248,969 shares of Parent Common
Stock were issued and 1,248,918 shares of Parent Common Stock were outstanding; (B) 0 shares of Parent Preferred Stock were issued and
0 shares of Parent Preferred Stock were outstanding; (C) ) 1,114 shares of Company Common Stock were reserved and available for issuance
pursuant to the Company 2017 Equity Incentive Plan; (D) 44,459 shares of Company Common Stock were reserved and available for issuance
pursuant to the Company’s 2021 Omnibus Equity Incentive Plan; (E) 173,557 shares of Company Common Stock were reserved for issuance
in connection with the July 2023 secured promissory note; and (F) 1,261,882 shares of Company Common Stock were reserved for issuance
in connection with the exercise of the Company Warrants. Except as set forth in this Section 5.2, at the close of business on
December 7, 2023, there are no other shares of outstanding Parent Capital Stock issued, reserved for issuance or outstanding.
(b)
All outstanding shares of Parent Capital Stock have been, and all shares of Parent Common Stock to be issued in connection with the Merger,
when so issued in accordance with the terms of this Agreement, are or will be, as applicable, (i) duly authorized, validly issued, fully
paid and nonassessable and are not subject to preemptive rights and (ii) issued and granted in compliance in all material respects with
applicable state and federal securities Laws and other applicable Law, the Delaware General Corporation Law and the Organizational Documents
of Parent. The Parent Common Stock to be issued pursuant to this Agreement, when issued, will be (A) validly issued, fully paid and nonassessable
and not subject to preemptive rights, (B) free and clear of any Liens and (C) issued in compliance in all material respects with (i)
applicable securities Laws and other applicable Law and (ii) all requirements set forth in any applicable contracts of Parent or its
Subsidiaries. Parent owns, of record and beneficially, directly or indirectly, all of the issued and outstanding shares of capital stock,
membership interests, partnership interests or other equity interests, as applicable, of the Subsidiaries of Parent, including Merger
Sub, free and clear of all Liens, other than Permitted Liens. As of the close of business on September 30, 2023, except as set forth
in this Section 5.2, there is or are no outstanding: (i) shares of Parent Capital Stock; (ii) Voting Debt; (iii) securities of
Parent or any Subsidiary of Parent convertible into or exchangeable or exercisable for shares of Parent Capital Stock or Voting Debt;
(iv) contractual obligations of Parent or any Subsidiary of Parent to repurchase, redeem or otherwise acquire any shares of Parent Capital
Stock or capital stock, membership interests, partnership interests, joint venture interests or other equity interests of any Subsidiary
of Parent, except as set forth in Section 5.2(b) of the Parent Disclosure Letter; or (v) subscriptions, options, warrants, calls,
puts, rights of first refusal or other rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary
of Parent is a party or by which it is bound, in any case, obligating Parent or any Subsidiary of Parent to (1) issue, deliver, transfer,
sell, purchase, redeem or acquire, or cause to be issued, delivered, transferred, sold, purchased, redeemed or acquired, additional shares
of Parent Capital Stock, any Voting Debt or other voting securities of Parent or (2) grant, extend or enter into any such subscription,
option, warrant, call, put, right of first refusal or other similar right, commitment or agreement. There are no shareholder agreements,
voting trusts or other agreements to which Parent is a party or by which it is bound relating to the voting of any shares of Parent Capital
Stock.
(c)
As of the date of this Agreement, all of the outstanding capital stock of Merger Sub are validly issued and fully paid and are wholly-owned
by Parent.
(d)
All dividends or other distributions on the shares of Parent Capital Stock and any material dividends or other distributions on any securities
of any Subsidiary of Parent which have been authorized or declared prior to the date hereof have been paid in full (except to the extent
such dividends or distributions have been declared and are not yet due and payable). As of the date of this Agreement, except as disclosed
in the Parent SEC Documents, there are no declared and unpaid dividends or other distributions with respect to any shares of Parent Capital
Stock or declared and unpaid material dividends with respect to any securities of any Subsidiary of Parent.
Section
5.3 Authority; No Violations; Approvals.
(a)
Each of Parent and Merger Sub has all requisite corporate power to execute and deliver this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this Agreement by Parent and Merger Sub and the consummation by Parent and Merger
Sub of the Transactions, including the consummation of the Merger, have been duly and validly authorized by all necessary corporate action
on the part of each of Parent (subject to obtaining Parent Shareholder Approval) and Merger Sub, subject to, with respect to consummation
of the Merger, the filing of the Certificate of Merger with, and acceptance for record by, the Delaware Department. This Agreement has
been duly executed and delivered by each of Parent and Merger Sub and, assuming the due and valid execution of this Agreement by the
Company, constitutes a valid and legally binding obligation of each of Parent and Merger Sub enforceable against Parent and Merger Sub
in accordance with its terms, subject, as to enforceability, to Creditors’ Rights. The Parent Board, at a meeting duly called and
held unanimously, (i) determined that this Agreement and the Transactions, including the Parent Stock Issuance, are in the best interests
of Parent and its shareholders, (ii) adopted and approved this Agreement and the Transactions, including the Parent Stock Issuance, (iii)
directed that the Parent Stock Issuance be submitted to the holders of Parent Common Stock for its approval at the Parent Shareholders
Meeting and (iv) recommended that the holders of Parent Common Stock approve the Parent Stock Issuance. The Merger Sub Sole Stockholder
has (A)(1) determined that this Agreement and the Transactions, including the Merger, are in the best interests of Merger Sub and (2)
adopted and approved this Agreement and declared that the Transactions, including the Merger, are advisable, and (B) executed a written
consent pursuant to which it has authorized, adopted and approved this Agreement and the Transactions, including the Merger. As of the
date hereof, none of the foregoing actions by the Parent Board or the Merger Sub Sole Member have been rescinded, withdrawn or modified
in any way. The Parent Shareholder Approval is the only vote of the holders of any class or series of Parent Capital Stock necessary
to approve Transactions, including the Merger and the Parent Stock Issuance.
(b)
Except as set forth in Section 5.3(b) of the Parent Disclosure Letter, the execution and delivery of this Agreement does not,
and the consummation of the Transactions will not (with or without notice or lapse of time, or both) (i) assuming that the Parent Shareholder
Approval is obtained, contravene, conflict with or result in a violation of any provision of the Organizational Documents of Parent or
Merger Sub, (ii) result in a violation of, or default under, or acceleration of any material obligation or the loss of a material benefit
under, or result in the creation of any Liens upon any of the properties or assets of Parent or any of its Subsidiaries under, any provision
of any Parent Contract to which Parent or any of its Subsidiaries is a party or by which Parent, Merger Sub, any of their respective
Subsidiaries or their respective properties or assets are bound, or (iii) assuming the Consents referred to in Section 5.4 are
duly and timely obtained or made and the Parent Shareholder Approval has been obtained, contravene, conflict with or result in a violation
of any Law applicable to Parent, any of its Subsidiaries or any of their respective properties or assets, other than, in the case of
clauses (ii) and (iii), any such contraventions, conflicts, violations, defaults, acceleration, losses, or Liens that would
not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
Section
5.4 Consents. Except as set forth in Section 5.4 of the Parent Disclosure Letter, no Consent from any Governmental
Entity, is required to be obtained or made by Parent or any of its Subsidiaries in connection with the execution and delivery of this
Agreement by Parent or Merger Sub or the consummation by Parent or Merger Sub of the Transactions, except for: (a) the filing with the
SEC of (i) the Joint Proxy Statement and the Registration Statement and (ii) such reports under the Exchange Act and the Securities Act,
and such other compliance with the Exchange Act and the Securities Act and the rules and regulations thereunder, as may be required in
connection with this Agreement and the Transactions; (b) the filing of the Certificate of Merger and any other required filings with,
and the acceptance for record by, the Delaware Department pursuant to the DGCL; (c) such filings as may be required under the rules and
regulations of the NASDAQ; (d) such filings and approvals as may be required by any applicable state securities or “blue sky”
Laws or Takeover Laws; and (e) any such Consent that the failure to obtain or make would not reasonably be expected to have, individually
or in the aggregate, a Parent Material Adverse Effect.
Section
5.5 SEC Documents; Financial Statements; Internal Controls and Procedures.
(a)
Since December 31, 2021, Parent has filed or furnished with the SEC all forms, reports, schedules and statements required to be filed
or furnished under the Securities Act or the Exchange Act, respectively (such forms, reports, schedules and statements, as amended, collectively,
the “Parent SEC Documents”). As of their respective filing dates, or, if amended prior to the date hereof, as of the
date of (and giving effect to) the last such amendment made prior to the date hereof, each of the Parent SEC Documents, complied as to
form in all material respects with the applicable requirements of the Securities Act or the Exchange Act, as the case may be, and the
rules and regulations of the SEC thereunder applicable to such Parent SEC Documents, and none of the Parent SEC Documents contained,
when filed or, if amended prior to the date of this Agreement, as of the date of such amendment with respect to those disclosures that
are amended, any untrue statement of a material fact or omitted 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.
(b)
The consolidated audited and unaudited interim financial statements of Parent included or incorporated by reference in the Parent SEC
Documents, including all notes and schedules thereto, complied in all material respects, when filed or if amended prior to the date of
this Agreement, as of the date of such amendment, with the rules and regulations of the SEC with respect thereto, were prepared in accordance
with GAAP, applied on a consistent basis during the periods indicated (except as may be indicated in the notes thereto or, in the case
of the unaudited statements, as permitted by Rule 10-01 of Regulation S-X of the SEC) and fairly present in all material respects in
accordance with applicable requirements of GAAP (subject, in the case of the unaudited interim financial statements, to normal year-end
audit adjustments) the consolidated financial position, results of operations, shareholders’ equity and cash flows of Parent and
its Subsidiaries, as of the respective dates thereof and for the respective periods indicated therein (subject, in the case of unaudited
interim financial statements, to absence of notes and normal year-end adjustments). To the knowledge of Parent, as of the date hereof,
none of the Parent SEC Documents is the subject of ongoing SEC review and Parent does not have outstanding and unresolved comments from
the SEC with respect to any of the Parent SEC Documents. As of the date hereof, none of the Parent SEC Documents is the subject of any
confidential treatment request by Parent.
(c)
Other than any off-balance sheet arrangements disclosed in the Parent SEC Documents filed or furnished prior to the date hereof, neither
Parent nor any Subsidiary of Parent is a party to, or has any contract to become a party to, any joint venture, off-balance sheet partnership
or any similar contractual arrangement, including any off-balance sheet arrangements (as described in Instruction 8 to Item 303(b) of
Regulation S-K of the SEC) where the purpose of such contract is to avoid disclosure of any material transaction involving, or material
liabilities of, Parent in Parent’s published financial statements or any Parent SEC Documents.
(d)
Parent has established and maintains disclosure controls and procedures and a system of internal controls over financial reporting (as
such terms are defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act) as required by the Exchange Act. From January 1, 2022,
to the date of this Agreement, Parent’s auditors and the Parent Board have not been advised of (i) any significant deficiencies
or material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely
affect in any material respect Parent’s ability to record, process, summarize and report financial information or (ii) any fraud,
whether or not material, that involves management or other employees who have a significant role in Parent’s internal controls
over financial reporting, and, in each case, neither Parent nor any of its Affiliates or Representatives has failed to disclose such
information to Parent’s auditors or the Parent Board.
Section
5.6 Absence of Certain Changes or Events.
(a)
From January 1, 2023, through the date of this Agreement, there has not been any event, change, effect or development that, individually
or in the aggregate, has had or would reasonably be expected to have a Parent Material Adverse Effect.
(b)
From January 1, 2023, through the date of this Agreement, except for events giving rise to, and the discussion and negotiation of and
other actions taken in connection with, this Agreement, Parent and each of its Subsidiaries have conducted their business in the ordinary
course of business in all material respects.
Section
5.7 No Undisclosed Material Liabilities. There are no liabilities of Parent or any of its Subsidiaries of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or otherwise, other than: (a) liabilities reflected or reserved against
on the consolidated balance sheet of Parent dated as of December 31, 2022 (including the notes thereto), contained in the Parent SEC
Documents filed or furnished prior to the date hereof; (b) liabilities incurred in the ordinary course of business subsequent to December
31, 2022; (c) liabilities incurred in connection with the preparation, negotiation and consummation of the Transactions; and (d) liabilities
that would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
Section
5.8 Information Supplied. None of the information supplied or to be supplied by or on behalf of Parent or Merger Sub for inclusion
or incorporation by reference in (a) the Registration Statement shall, at the time the Registration Statement becomes effective under
the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading or (b)
the Joint Proxy Statement shall, at the date it is first mailed to the Company Shareholders and to the Parent Shareholders and at the
time of the Company Shareholders Meeting and the Parent Shareholders Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The Joint Proxy Statement and the Registration Statement will comply as to form in all material
respects with the provisions of the Exchange Act and the Securities Act and the rules and regulations thereunder; provided, however,
that no representation is made by Parent with respect to statements made therein based on information (i) supplied by the Company specifically
for inclusion or incorporation by reference therein or (ii) not supplied by or on behalf of Parent and not obtained from or incorporated
by reference to Parent’s filings with the SEC.
Section
5.9 Parent Permits; Compliance with Applicable Law. Parent and its Subsidiaries hold all permits, licenses, franchises, variances,
exemptions, orders and approvals of all Governmental Entities necessary for the lawful conduct of their respective businesses (the “Parent
Permits”), except where the failure to so hold would not reasonably be expected to have, individually or in the aggregate,
a Parent Material Adverse Effect. Parent and its Subsidiaries are in compliance with the terms of the Parent Permits, except where the
failure to so comply would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. Neither
Parent nor any Subsidiary of Parent is in violation or breach of, or default under, any Parent Permit, nor has Parent or any Subsidiary
of Parent received any claim or notice indicating that Parent or any Subsidiary of Parent is currently not in compliance with the terms
of any Parent Permits, except where the failure to be in compliance with the terms of any Parent Permits would not reasonably be expected
to have, individually or in the aggregate, a Parent Material Adverse Effect. The businesses of Parent and its Subsidiaries are not currently
being conducted, and at no time since January 1, 2022, have been conducted, in violation of any applicable Law, except for violations
that would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. As of the date of
this Agreement, no investigation or review by any Governmental Entity with respect to Parent or any of its Subsidiaries is pending or,
to the knowledge of Parent, threatened, other than those the outcome of which would not reasonably be expected to have, individually
or in the aggregate, a Parent Material Adverse Effect. Notwithstanding anything to the contrary in this Section 5.9, the provisions
of this Section 5.9 shall not apply to matters addressed in Section 5.10, Section 5.11 or Section 5.12.
Section
5.10 Compensation; Benefits.
(a)
Set forth in Section 5.10(a) of the Parent Disclosure Letter is a list, as of the date hereof, of all of the material Employee
Benefit Plans sponsored, maintained, contributed to, or required to be contributed to by Parent or any of its Subsidiaries or with respect
to which Parent or any of its Subsidiaries has, or could reasonably be expected to have, any material liability (such Employee Benefit
Plans, whether or not material, the “Parent Plans”). True, correct and complete copies of each of the Parent Plans
(or, in the case of any unwritten Parent Plan, a written description thereof) and any amendments thereto and, as applicable, the most
current versions of any related trust agreements, insurance contracts or other funding arrangements, favorable determination or opinion
letters, and the most recent report on Form 5500 and summary plan description with respect to each such Parent Plan, in each case, have
been furnished or made available to the Company or its Representatives.
(b)
Each Parent Plan has been administered, funded (if applicable) and maintained in compliance with its terms and all applicable Laws.
(c)
Each Parent Plan that is intended to be a “qualified plan” within the meaning of Section 401(a) of the Code has received
a favorable determination letter, or may rely on a favorable opinion letter, issued by the IRS, and to the knowledge of Parent, no events
have occurred that would reasonably be expected to result in any such letter being revoked or in the loss of the qualified status of
any such Parent Plan.
(d)
As of the date of this Agreement, there are no actions, suits or claims pending (other than routine claims for benefits) or, to the knowledge
of Parent, threatened against, or with respect to, any of the Parent Plans, except for such pending actions, suits or claims that would
not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(e)
All material contributions required to be made to the Parent Plans pursuant to their terms have been timely made.
(f)
There are no material unfunded benefit obligations with respect to any Parent Plan that have not been properly accrued for in Parent’s
financial statements or disclosed in the notes thereto in accordance with GAAP.
(g)
Neither Parent nor any of its Subsidiaries or any of their ERISA Affiliates contributes to, has an obligation to contribute to or otherwise
has any liability (actual or contingent) with respect to, and no Parent Plan is, a plan subject to Title IV of ERISA (including a multiemployer
plan within the meaning of Section 3(37) of ERISA), Section 302 of ERISA, or Section 412 of the Code.
(h)
The execution and delivery of this Agreement and the consummation of the Transactions will not (either alone or in combination with another
event), (i) result in any payment or benefit from Parent or any of its Subsidiaries becoming due, or increase in the amount of any compensation
due, to any of their current or former respective officers, employees or consultants, (ii) materially increase any benefits otherwise
payable under any Parent Plan, (iii) to the knowledge of Parent, result in the acceleration of the time of payment (including the funding
of a trust or transfer of any assets to fund any benefits under any Parent Plan) or vesting of or otherwise trigger any compensation
or benefits payable to or in respect of any current or former employee, director or consultant of Parent or its Subsidiaries or (iv)
limit or restrict the right of Parent or any of its Subsidiaries to merge, amend or terminate any Parent Plan.
Section
5.11 Labor Matters.
(a)
As of the date of this Agreement, (i) neither Parent nor any of its Subsidiaries is a party to any collective bargaining agreement or
other agreement with any labor union, (ii) there is no pending union representation petition involving employees of Parent or any of
its Subsidiaries, and (iii) Parent does not have knowledge of any activity or proceeding of any labor organization (or representative
thereof) or employee group (or representative thereof) to organize any such employees.
(b)
As of the date of this Agreement, there is no unfair labor practice, charge or grievance arising out of a collective bargaining agreement,
other agreement with any labor union, or other labor-related grievance proceeding against Parent or any of its Subsidiaries pending,
or, to the knowledge of Parent, threatened.
(c)
As of the date of this Agreement, there is no strike, dispute, slowdown, work stoppage or lockout pending, or, to the knowledge of Parent,
threatened, against or involving Parent or any of its Subsidiaries.
(d)
Parent and each of its Subsidiaries are, and since January 1, 2022, have been, in compliance in all material respects with all applicable
Laws respecting employment and employment practices, terms and conditions of employment, wages and bonus, equal employment opportunity,
hours, overtime pay, non-discrimination, non-retaliation, non-harassment, civil rights, labor relations, occupational health and safety,
employee privacy, worker classification and payroll taxes, and there are no Proceedings pending or, to the knowledge of Parent, threatened
against Parent or any of its Subsidiaries, by or on behalf of any applicant for employment, any current or former employee, independent
contractor or any class of the foregoing, relating to any of the foregoing applicable Laws, or alleging breach of any express or implied
contract of employment, wrongful termination of employment, or alleging any other discriminatory, wrongful or tortious conduct in connection
with the employment or independent contractor relationship. Since January 1, 2023, neither Parent nor any of its Subsidiaries has received
any written notice of the intent of the Equal Employment Opportunity Commission, the National Labor Relations Board, the Department of
Labor or any other Governmental Entity responsible for the enforcement of labor or employment Laws to conduct an investigation with respect
to Parent or any of its Subsidiaries.
Section
5.12 Taxes.
(a)
Parent and each of its Subsidiaries have (i) duly and timely filed (or there have been filed on their behalf) with the appropriate Taxing
Authority all U.S. Federal income and all other material Tax Returns required to be filed by them, taking into account any extensions
of time within which to file such Tax Returns, and all such Tax Returns were and are correct and complete in all material respects, and
(ii) duly and timely paid in full (or there has been duly and timely paid in full on their behalf) all material amounts of Taxes required
to be paid by them other than Taxes that are not yet due and payable or that are being contested in good faith by appropriate Proceedings
and for which adequate reserves have been established in accordance with GAAP.
(b)
The unpaid Taxes of Parent and its Subsidiaries (i) did not as of the date of the most recent financial statement exceed the reserve
for Taxes set forth on the face of the most recent financial statement (rather than in any notes thereto) and (ii) will not exceed that
reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of Parent (and its
Subsidiaries) in filing the applicable Tax Returns. Since the date of the most recent financial statement, none of Parent nor any Company
Subsidiary has incurred any liability for Taxes outside the ordinary course of business.
(c)
(i) There are no audits, investigations by any Governmental Entity or other proceedings pending or, to the knowledge of Parent, threatened
in writing with regard to any Taxes or Tax Returns of Parent or any of its Subsidiaries; (ii) no deficiency for Taxes of Parent or any
of its Subsidiaries has been claimed, proposed or assessed in writing or, to the knowledge of Parent, threatened in writing, by any Governmental
Entity, which deficiency has not yet been settled ; (iii) neither Parent nor any of its Subsidiaries has waived any statute of limitations
with respect to the assessment of Taxes or agreed to any extension of time with respect to any Tax assessment or deficiency for any open
tax year (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course); (iv) neither Parent nor any
of its Subsidiaries is currently the beneficiary of any extension of time within which to file any Tax Return that remains unfiled; and
(v) neither Parent nor any of its Subsidiaries has entered into any “closing agreement” as described in Section 7121 of the
Code (or any corresponding or similar provision of state, local or foreign income Tax Law).
(d)
None of Parent nor any Company Subsidiary will be required to include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) change in or improper use of
method of accounting (other than by virtue of one or more of the transactions contemplated by this Agreement) for a taxable period ending
on or prior to the Closing Date under Code Section 481(c) (or any corresponding or similar provision of state, local or foreign income
Tax Law) or other provisions of applicable Law; (ii) “closing agreement” as described in Code Section 7121 (or any corresponding
or similar provision of state, local or foreign income Tax Law) executed on or prior to the Closing Date; (iii) installment sale or open
transaction made on or prior to the Closing Date, (iv) prepaid amount or deferred revenue received on or prior to the Closing Date other
than in the ordinary course of business, (v) intercompany transaction or excess loss account described in Treasury Regulations under
Section 1502 of the Code (or any corresponding or similar provision of state, local, or non-U.S. Tax law); or (vi) an election under
Section 965(h) of the Code (or any corresponding or similar provision of state, local or non-U.S. law).
(e)
Parent and its Subsidiaries have complied, in all material respects, with all applicable Laws relating to the payment and withholding
of Taxes (including withholding of Taxes pursuant to Sections 1441, 1442, 1445, 1446, 1471, 3102 and 3402 of the Code or similar provisions
under any state and foreign Laws) and have duly and timely withheld and, in each case, have paid over to the appropriate Taxing Authority
all amounts required to be so withheld and paid over on or prior to the due date thereof under all applicable Laws.
(f)
There are no Tax Liens upon any property or assets of Parent or any of its Subsidiaries except for Liens for Taxes not yet due and payable
or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance
with GAAP.
(g)
Neither Parent nor any of its Subsidiaries has requested, has received or is subject to any written ruling of a Taxing Authority.
(h)
There are no Tax allocation or sharing agreements or similar arrangements with respect to or involving Parent or any of its Subsidiaries,
and after the Closing Date neither Parent nor any of its Subsidiaries shall be bound by any such Tax allocation agreements or similar
arrangements or have any liability thereunder for amounts due in respect of periods prior to the Closing Date, in each case, other than
customary provisions of commercial or credit agreements.
(i)
Neither Parent nor any of its Subsidiaries (i) has been a member of an affiliated group filing a consolidated U.S. federal income Tax
Return or (ii) has any liability for the Taxes of any Person (other than any Subsidiary of Parent) under Treasury Regulation Section
1.1502-6 (or any similar provision of state, local or foreign Tax Law), as a transferee or successor, or otherwise by Law.
(j)
Neither Parent nor any of its Subsidiaries has participated in any “reportable transaction” within the meaning of Treasury
Regulation Section 1.6011-4(b).
(k)
Neither Parent nor any of its Subsidiaries has constituted either a “distributing corporation” or a “controlled corporation”
(within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-free treatment under Section 355
of the Code in the two years prior to the date of this Agreement.
(l)
No written power of attorney that has been granted by Parent or any of its Subsidiaries (other than to Parent or any of its Subsidiaries)
is currently in force with respect to any matter relating to Taxes.
(m)
Neither Parent nor any of its Subsidiaries (i) has elected to defer the payment of any Taxes pursuant to Section 2302 of the CARES Act
or any other COVID-19 Measures or (ii) has claimed any “employee retention credit” pursuant to Section 2301 of the CARES
Act.
Section
5.13 Litigation. Except for such matters as would not reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect, there is no (a) Proceeding pending or, to the knowledge of Parent, threatened against Parent or any of
its Subsidiaries or any of their respective properties, rights or assets or (b) judgment, decree, or injunction, ruling or order, in
each case, of any Governmental Entity or arbitrator outstanding against Parent or any of its Subsidiaries.
Section
5.14 Intellectual Property.
(a)
Section 5.14(a) of the Parent Disclosure Letter identifies each item of material Parent Intellectual Property that is the subject
of a registration or application in any jurisdiction (“Parent Registered Intellectual Property”), including, with respect
to each patent and patent application: (i) the name of the applicant/registrant, (ii) the jurisdiction of application/registration, (iii)
the application or registration number and (iv) any other co-applicants/co-owners. To the knowledge of Parent, each of the patents and
patent applications included in Section 5.14(a) of the Parent Disclosure Letter properly identifies by name each and every inventor
of the inventions claimed therein as determined in accordance with applicable Laws of the United States. To the knowledge of Parent,
as of the date of this Agreement, no litigation, cancellation, interference, derivation proceeding, opposition, inter partes review,
post grant review, reexamination or other proceeding of any nature (other than office actions or similar communications issued by any
Governmental Entity in the ordinary course of prosecution of any pending applications for registration) is pending or threatened in writing,
in which the scope, validity, enforceability or ownership of any Parent Intellectual Property is being or has been contested or challenged.
Except as set forth in Section 5.14(a) of the Parent Disclosure Letter, there are no actions that must be taken within ninety
(90) days of the Closing, the failure of which will result in the abandonment, lapse or cancellation of any Parent Registered Intellectual
Property.
(b)
Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect,
Parent and its Subsidiaries exclusively own, are the sole assignees of, or have exclusively licensed all material Parent Intellectual
Property (other than as disclosed on Section 5.14(b) of the Parent Disclosure Letter), free and clear of all Liens other than
Permitted Liens. All material Parent Intellectual Property that is licensed to Parent or any of its Subsidiaries is licensed pursuant
to a written agreement. To the knowledge of Parent, each Parent Associate involved in the creation or development of any material Parent
Intellectual Property, pursuant to such Parent Associate’s activities on behalf of Parent or any of its Subsidiaries, has signed
a valid and enforceable written agreement containing an assignment of such Parent Associate’s rights in such Parent Intellectual
Property to Parent or such Subsidiary. Each Parent Associate who has or has had access to trade secrets or confidential information of
Parent or any of its Subsidiaries has signed a valid and enforceable written agreement containing confidentiality provisions protecting
the Parent Intellectual Property, trade secrets and confidential information. To the knowledge of Parent, Parent and its Subsidiaries
have taken commercially reasonable steps to protect and preserve the confidentiality of their trade secrets and confidential information.
(c)
To the knowledge of Parent, no funding, facilities or personnel of any Governmental Entity or any university, college, research institute
or other educational institution has been used to create Parent Intellectual Property, except for any such funding or use of facilities
or personnel that does not result in such Governmental Entity or institution obtaining ownership rights or a license to such Parent Intellectual
property or the right to receive royalties for the practice of such Parent Intellectual Property.
(d)
Section 5.14(d) of the Parent Disclosure Letter sets forth each license agreement pursuant to which Parent or any of its Subsidiaries
(i) is granted a license under any material Intellectual Property owned by any third party that is used by Parent or a Subsidiary of
Parent in its business as currently conducted (each a “Parent In-bound License”) or (ii) grants to any third party a license
under any material Parent Intellectual Property (each a “Parent Out-bound License”) (provided, that, Parent In-bound Licenses
shall not include, when entered into in the ordinary course of business, material transfer agreements, services agreements, clinical
trial agreements, agreements with Parent Associates, commercially available Software-as-a-Service offerings or off-the-shelf software
licenses; and Parent Out-bound Licenses shall not include, when entered into in the ordinary course of business, material transfer agreements,
clinical trial agreements, services agreements, or non-exclusive outbound licenses). To the knowledge of Parent, all Parent In-bound
Licenses and Parent Out-bound Licenses are in full force and effect and are binding obligations of Parent or a Subsidiary of Parent and,
to the knowledge of Parent, each other party to such Parent In-bound Licenses or Parent Out-bound Licenses. Neither Parent or a Subsidiary
of Parent who is a party to such Parent In-bound Licenses or Parent Out-bound Licenses, nor to the knowledge of Parent, any other party
to such Parent In-bound Licenses or Parent Out-bound Licenses, is in material breach under such Parent In-bound Licenses or Parent Out-bound
Licenses.
(e)
To the knowledge of Parent, (i) the operation of the businesses of Parent and its Subsidiaries as currently conducted does not infringe,
misappropriate or otherwise violate any Intellectual Property of any other Person and (ii) no other Person is infringing, misappropriating
or otherwise violating any Parent Intellectual Property. To the knowledge of Parent, no legal proceeding is pending (or, to the knowledge
of Parent and its Subsidiaries, is threatened in writing) (A) against Parent or any of its Subsidiaries alleging that the operation of
the business of Parent or such Subsidiary infringes or constitutes the misappropriation or other violation of any Intellectual Property
of another Person or (B) by Parent or any of its Subsidiaries alleging that another Person has infringed, misappropriated or otherwise
violated any of the Parent Intellectual Property. Since January 1, 2022, Parent and its Subsidiaries have not received any written notice
or other written communication alleging that the operation of the business of Parent or any of its Subsidiaries infringes or constitutes
the misappropriation or other violation of any Intellectual Property of another Person.
(f)
To the knowledge of Parent, none of the Parent Intellectual Property is subject to any pending or outstanding injunction, directive,
order, judgment or other disposition of dispute that adversely and materially restricts the use, transfer, registration or licensing
by Parent or any of its Subsidiaries of any such Parent Intellectual Property.
(g)
Parent has taken commercially reasonable steps and implemented commercially reasonable disaster recovery and security plans and procedures
to protect the information technology systems used in, material to or necessary for operation of the business of Parent as currently
conducted from unauthorized use, acquisition or access. To the knowledge of Parent, there have been no material malfunctions or unauthorized
intrusions, or breaches of the information technology systems used in, material to or necessary for the operation of the business of
Parent as currently conducted.
Section
5.15 Real Property. Neither Parent nor any Subsidiary of Parent owns any real property, other than as and to the extent disclosed
in Section 5.15 of the Parent Disclosure Letter or the Parent SEC Documents filed or furnished with the SEC prior to the date
hereof. Neither Parent nor any Subsidiary of Parent has leased or subleased any real property and does not have any obligation to pay
any rent or other fees for any real property other than as and to the extent disclosed in the Parent SEC Documents filed or furnished
with the SEC prior to the date hereof.
Section
5.16 Material Contracts.
(a)
Section 5.16(a) of the Parent Disclosure Letter sets forth a true and complete list, as of the date of this Agreement, of:
(i)
each contract that grants any right of first refusal or right of first offer or that materially limits the ability of Parent, any Subsidiary
of Parent or any of their respective Affiliates to own, operate, sell, transfer, pledge or otherwise dispose of any businesses, securities
or assets (other than provisions requiring notice of or consent to assignment by any counterparty thereto);
(ii)
each contract relating to outstanding Indebtedness (or commitments or guarantees in respect thereof) of Parent or any of its Subsidiaries
(whether incurred, assumed, guaranteed or secured by any asset) in excess of $50,000;
(iii)
each employment contract to which Parent or a Subsidiary of Parent is a party other than employment contracts that can be terminated
at any time with less than two days’ notice and without financial liability to Parent or any of its Subsidiaries;
(iv)
each contract that involves or constitutes a material interest rate cap, interest rate collar, interest rate swap or other contract or
agreement relating to a forward, swap or other hedging transaction of any type, unless entered into for bona fide hedging purposes;
(v)
each contract containing any non-compete, non-solicit, exclusivity or similar type of provision that materially restricts the ability
of Parent or any of its Subsidiaries to compete or otherwise engage in any line of business or with any Person or geographic area;
(vi)
each contract pursuant to which Parent or any Subsidiary of Parent may be obligated to issue or repurchase any Parent Capital Stock or
any capital stock or other equity interests in any Subsidiary of Parent;
(vii)
each partnership, joint venture, limited liability company, strategic alliance agreement or other similar agreement to which Parent or
a Subsidiary of Parent is a party (other than any such agreement solely between or among Parent and its wholly-owned Subsidiaries);
(viii)
each contract, other than any Parent Plan, between or among Parent or any Subsidiary of Parent, on the one hand, and any officer, director
or affiliate (other than a wholly owned Subsidiary of Parent) of Parent or any of its Subsidiaries or any of their respective “associates”
or “immediate family” members (as such terms are defined in Rule 12b-2 and Rule 16a-1 of the Exchange Act), on the other
hand;
(ix)
each contract that obligates Parent or any of its Subsidiaries to indemnify any past or present directors, officers, or employees of
Parent or any of its Subsidiaries; and
(x)
each “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K under the Exchange Act) not otherwise
described in this Section 4.16(a) with respect to Parent or any Subsidiary of Parent.
(b)
Collectively, the contracts set forth in Section 5.16(a) are herein referred to as the “Parent Contracts.”
Except as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, each Parent Contract
is legal, valid, binding and enforceable in accordance with its terms on Parent and each of its Subsidiaries that is a party thereto
and, to the knowledge of Parent, each other party thereto, and is in full force and effect, subject, as to enforceability, to Creditors’
Rights. Except as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, neither
Parent nor any of its Subsidiaries is in breach or default under any Parent Contract nor, to the knowledge of Parent, is any other party
to any such Parent Contract in breach or default thereunder. Complete and accurate copies of each Parent Contract in effect as of the
date hereof (including all amendments and modifications) have been furnished to or otherwise made available to the Company. Neither Parent
nor any of its Subsidiaries has received written notice of any material violation of or material default under any Parent Contract.
Section
5.17 Insurance. To the knowledge of Parent, (a) all current, material insurance policies of Parent and each of its Subsidiaries
(collectively, the “Material Parent Insurance Policies”) are in full force and effect and (b) all premiums payable
under the Material Parent Insurance Policies prior to the date of this Agreement have been duly paid to date. As of the date of this
Agreement, no written notice of cancellation or termination has been received with respect to any Material Parent Insurance Policy.
Section
5.18 Brokers. No broker, investment banker or other Person is entitled to any broker’s, finder’s or other similar
fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Parent or any of its Subsidiaries.
Section
5.19 State Takeover Statute. The Parent Board has taken all action necessary to render exempt or inapplicable to the Merger
and the other Transactions (a) the provisions of the DGCL and (b) to the extent applicable to Parent, any other Takeover Law. Except
as set forth in Section 5.19, no other Takeover Laws are applicable to this Agreement, the Merger or the other Transactions.
Section
5.20 Investment Company Act. Neither Parent nor any of its Subsidiaries is, or as of immediately prior to the Effective Time
will be, required to be registered as an investment company under the Investment Company Act.
Section
5.21 Ownership of Company Capital Stock. Neither Parent nor any Subsidiary of Parent nor any of their respective affiliates
or associates (as defined in Rule 12b-2 of the Exchange Act) beneficially owns or in the past three years has owned, directly or indirectly,
or has the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or the right
to vote pursuant to any agreement, arrangement or understanding, any shares of Company Common Stock, Company Preferred Stock or other
securities convertible into, exchangeable for or exercisable for shares of Company Common Stock, Company Preferred Stock or any securities
of any Subsidiary of the Company and neither Parent nor any of its Subsidiaries has any rights to acquire any shares of Company Common
Stock or Company Preferred Stock except pursuant to this Agreement. Neither Parent nor any its Subsidiaries is an affiliate or associate
(as defined in Rule 12b-2 of the Exchange Act) of the Company. Neither Parent nor any of the Subsidiaries of Parent has at any time been
an assignee or has otherwise succeeded to the beneficial ownership of any shares of Company Common Stock or Company Preferred Stock during
the last two years.
Section
5.22 Business Conduct. Merger Sub was formed on October 16, 2023. Since its inception, Merger Sub has not engaged in any activity,
other than such actions in connection with (a) its organization and (b) the preparation, negotiation and execution of this Agreement
and the Transactions. Merger Sub has no operations, has not generated any revenues and has no liabilities other than those incurred in
connection with the foregoing and in association with the Merger as provided in this Agreement.
Section
5.23 Related Party Transactions. Except as set forth in Section 5.23 of the Parent Disclosure Letter and as set forth
in the Parent SEC Documents filed through and including the date of this Agreement or as permitted by this Agreement, from January 1,
2021 through the date of this Agreement there have been no transactions, agreements, arrangements or understandings between the Parent
or any of its Subsidiaries, on the one hand, and any Affiliates (other than Subsidiaries of the Parent) of the Parent, on the other hand,
that would be required to be disclosed under Item 404 of Regulation S-K promulgated by the SEC. Section 5.23 of the Parent Disclosure
Letter sets forth each agreement between the Parent or any of its Subsidiaries, on the one hand, and any Affiliates (other than Subsidiaries
of the Parent) of Parent, on the other hand.
Section
5.24 FDA Regulatory.
(a)
To the Knowledge of Parent, Parent is, and has been, in compliance in all materials respects with all applicable Laws in the jurisdictions
in which Parent conducts business including but not limited to, as applicable (i) preclinical and clinical testing, (ii) application
for marketing approval of, manufacture, distribution, promotion and sale of Parent’s Products, (iii) the requirement for and the
terms of all necessary permits, (iv) establishment registration, (v) payment of all establishment fees, (vi) Good Clinical Practices,
(vii) Good Manufacturing Practices, and (viii) recordkeeping and reporting requirements. Parent is not in default with respect to any
order, writ, judgment, award, injunction or decree of any Governmental Entity or arbitrator applicable to it, or any of its assets. Parent
has not received, at any time during the prior five (5) years from the actual date of this Agreement, any written notice from any Governmental
Entity regarding any actual, alleged, or potential violation of, or failure to comply with, any Law applicable to Parent in any material
respect.
(b)
To the Knowledge of Parent, Parent and any suppliers, manufacturers, or other companies with which Parent contracts for services related
to Parent’s Products, holds FDA Permits and all other applicable local, state, and federal laws and regulations of the relevant
Governmental Entity engaged in the regulation of pharmaceuticals or biohazardous materials in the jurisdictions in which Parent performs
clinical trials and/or markets its products. All FDA Permits are in full force and effect in all material respects and no suspension,
revocation, cancellation, or withdrawal of such FDA Permits is threatened and there is no reasonable basis for believing that such FDA
Permits will not be renewable upon expiration or will be suspended, revoked, cancelled, or withdrawn.
(c)
Parent has not received any written notices or statements from the FDA, the EMEA or any other Governmental Entity, and otherwise has
no knowledge or reason to believe, that (i) any drug, including the Parent’s Products or other Potential Product of Parent may
or will be rejected or determined to be non-approvable; (ii) a delay in time for review and/or approval of a marketing authorization
application or marketing approval application in any jurisdiction for any Potential Product is or may be required, requested or being
implemented; (iii) one or more clinical studies for any Potential Product shall or may be requested or required in addition to the clinical
studies submitted to the FDA prior to the date hereof as a precondition to or condition of issuance or maintenance of a marketing approval
for any Potential Product; (iv) any license, approval, permit or authorization to conduct any clinical trial of or market any product
or Potential Product of Parent has been, will be or may be suspended, revoked, modified or limited. Parent has not marketed Potential
Products in a manner in any way suggesting that a Potential Product has been approved for an indication that exceeds the scope of the
approved product label. Parent is not aware of the results of any studies, tests or trials the which reasonably call into question the
results of the tests and trials conducted by or on behalf of Parent with respect to Potential Products.
(d)
Parent has not received any written notice or communication from any Governmental Entity of any actual or threatened investigation, inquiry,
or administrative, judicial, or regulatory action, hearing, or enforcement proceeding against Parent regarding any violation of applicable
FDA Law or other applicable local, state, and federal laws and regulations of the relevant Governmental Entity engaged in the regulation
of pharmaceuticals or biohazardous materials, including but not limited to a notice of adverse finding, warning letter, clinical hold
notice, recall, field correction, market withdrawal or replacement, safety alert, “dear doctor” letter, investigator notice,
or other notice or action relating to an alleged or potential lack of safety or efficacy of any product of Parent, any alleged product
defect of any product of Parent, or any violation of any material applicable law, rule, regulation or any clinical trial or marketing
license, approval, permit or authorization for any product of Parent, and Parent is not aware of any facts or information that would
cause it to initiate any such notice or action and has no knowledge or reason to believe that the FDA, the EMEA or any other Governmental
Entity or authority or any institutional or ethical review board or other non-governmental authority intends to impose, require, request
or suggest any material obligation arising under an investigation, inquiry, or administrative, judicial, or regulatory action, hearing,
or enforcement proceeding.
(e)
In the last five (5) years, Parent has not been party to any corporate integrity agreement, monitoring agreement, consent decree, settlement
order, or other similar written agreement, in each case, entered into with or imposed by the FDA. Neither Parent no, to the Knowledge
of Parent, any of its officers, employees, or agents, or any manufacturers, distributor, or other entity in Parent’s supply chain,
has been or is currently disqualified or debarred, suspended, proposed for debarment or suspensions, deemed non-responsible, or otherwise
excluded from the award of contracts or from participating in any Federal healthcare program by any Federal agency or other Governmental
Entity. Neither Parent nor, to the Knowledge of Parent, any of its officers, employees, or agents has made an untrue statement of a material
fact or a fraudulent statement to the FDA or failed to disclose a material fact required to be disclosed to the FDA, in each of the foregoing
cases on behalf of Parent.
(f)
No officer, employee, or agent of Parent is or has been, or has been threatened to be: (a) debarred under FDA proceedings pursuant to
21 U.S.C. § 335a; (b) disqualified under FDA investigator qualification proceedings; (c) subject to the FDA’s Application
Integrity Policy; or (d) subject to any enforcement proceeding arising from material false statements to the FDA pursuant to 18 U.S.C.
§ 1001.
(g)
Neither Parent nor any of its managers, directors, officers, agents, or employees have (i) used any corporate funds of Parent for unlawful
contributions, gifts, entertainment or other unlawful expenses related to political activity, (ii) made any unlawful payments to foreign
or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds or violated
any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or any other U.S. or foreign Laws concerning corrupt payments
applicable to its business or (iii) made or received any other payment, contribution, gift, bribe, rebate, payoff or kick-back prohibited
under any applicable Law. Neither Parent nor any of its managers, directors, officers, stockholders, agents, or employees is or has been
the subject of any investigation, inquiry or enforcement Proceeding by any Governmental Entity regarding any offense or alleged offense
under anti-bribery, anti-corruption, or anti-fraud Law in any jurisdiction and, no such investigation, inquiry or Proceedings have been
threatened.
Section
5.25 No Additional Representations.
(a)
Except for the representations and warranties made in this Article V, neither Parent, Merger Sub nor any other Person makes any
express or implied representation or warranty with respect to Parent or its Subsidiaries (including Merger Sub) or their respective businesses,
operations, assets, liabilities or conditions (financial or otherwise) in connection with this Agreement or the Transactions, and Parent
hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither Parent
nor any other Person makes or has made any representation or warranty to the Company or any of its Affiliates or Representatives with
respect to (i) any financial projection, forecast, estimate, budget or prospect information relating to Parent or any of its Subsidiaries
or their respective properties, assets or businesses or (ii) except for the representations and warranties made by Parent in this Article
V, any oral or written information presented to the Company or any of its Affiliates or Representatives in the course of their due
diligence investigation of Parent, the negotiation of this Agreement or in the course of the Transactions.
(b)
Notwithstanding anything contained in this Agreement to the contrary, each of Parent and Merger Sub acknowledges and agrees that none
of the Company or any other Person has made or is making, and each of Parent and Merger Sub expressly disclaims reliance upon, any representations,
warranties or statements relating to the Company or its Subsidiaries whatsoever, express or implied, beyond those expressly given by
the Company in Article IV, the Company Disclosure Letter or in any other document or certificate delivered by the Company or its
Affiliates or Representatives in connection herewith, including any implied representation or warranty as to the accuracy or completeness
of any information regarding the Company or its Subsidiaries furnished or made available to Parent or any of its Affiliates or Representatives.
Without limiting the generality of the foregoing, each of Parent and Merger Sub acknowledges that no representations or warranties are
made with respect to any projections, forecasts, estimates, budgets or prospect information that may have been made available to Parent
or any of its Affiliates or Representatives (including in certain “data rooms,” “virtual data rooms,” management
presentations or in any other form in expectation of, or in connection with, the Merger or the other Transactions).
ARTICLE
VI
COVENANTS
AND AGREEMENTS
Section
6.1 Conduct of Company Business Pending the Merger.
(a)
The Company agrees that, except (i) as set forth in Section 6.1(a) of the Company Disclosure Letter, (ii) for any transaction,
contract or other business arrangement entered into or agreed by any Person set forth on Section 4.1(c) of the Company Disclosure
Letter, including but not limited to any issuance of securities by such Person or any sale or acquisition of any assets by such Person,
(iii) as permitted or required by this Agreement, (iii) as may be required by applicable Law or (iv) as otherwise consented to by Parent
in writing (which consent shall not be unreasonably withheld, delayed or conditioned), until the earlier of the Effective Time and the
termination of this Agreement pursuant to Article VIII, the Company shall, and shall cause each of its Subsidiaries to, use commercially
reasonable efforts to (1) conduct its businesses (I) in the ordinary course of business in all material respects and (II) in compliance
in all material respects with applicable Laws and (2) preserve substantially intact its present business organization and preserve its
existing relationships with its key business relationships, vendors, counterparties and employees; provided, however, that
no action by the Company or its Subsidiaries with respect to the matters specifically addressed by any provision of Section 6.1(b)
shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision of Section 6.1(b).
(b)
Except (v) as set forth in Section 6.1(b) of the Company Disclosure Letter, (w) as permitted or required by this Agreement, (x)
for any transaction, contract or other business arrangement entered into or agreed by any Person set forth on Section 4.1(c) of
the Company Disclosure Letter, including but not limited to any issuance of securities by such Person or any sale or acquisition of any
assets by such Person, (y) as may be required by applicable Law or (z) as otherwise consented to by Parent in writing (which consent
shall not be unreasonably withheld, delayed or conditioned), until the earlier of the Effective Time and the termination of this Agreement
pursuant to Article VIII, the Company shall not, and shall not permit any of its Subsidiaries to:
(i)
(A) authorize, declare, set aside or pay any dividends on, or make any other distribution (whether in cash, stock, property or otherwise)
in respect of any outstanding capital stock of, or other equity interests in, the Company or any of its Subsidiaries; (B) split, combine
or reclassify any capital stock of, or other equity interests in, the Company or any of its Subsidiaries (other than for transactions
by a wholly-owned Subsidiary of the Company); or (C) purchase, redeem or otherwise acquire, or offer to purchase, redeem or otherwise
acquire, any capital stock of, or other equity interests in, the Company, except as required by the Organizational Documents of the Company
or any Subsidiary of the Company, any Company Plan or any Company Warrant, in each case, existing as of the date hereof (or granted following
the date of this Agreement in accordance with the terms of this Agreement);
(ii)
offer, issue, deliver, grant or sell, or authorize or propose to offer, issue, deliver, grant or sell, any capital stock of, or other
equity interests in, the Company or any of its Subsidiaries or any securities convertible into or exchangeable for, or any rights, warrants
or options to acquire, any such capital stock or equity interests (including the grant of new equity-based awards under the Company Plans),
other than the issuance of Company Capital Stock upon exercise or exchange of any Company Warrants or Company Convertible Notes outstanding
on the date hereof;
(iii)
(A) amend or propose to amend the Company’s Organizational Documents or (B) amend or propose to amend the Organizational Documents
of any of the Company’s Subsidiaries;
(iv)
(A) merge, consolidate, combine or amalgamate with any Person other than another entity in which the Company or its Subsidiaries own
an interest, whether direct or indirect, or (B) acquire or agree to acquire (including by merging or consolidating with, purchasing any
equity interest in or a substantial portion of the assets of, licensing, or by any other manner) any assets or any business or any corporation,
partnership, association or other business organization or division thereof, in each case other than transactions between the Company
and a Subsidiary of the Company or between or among Subsidiaries of the Company;
(v)
sell, lease or otherwise dispose of, or agree to sell, lease or otherwise dispose of, any material portion of its assets;
(vi)
adopt a plan of complete or partial liquidation or dissolution of the Company or any of its Subsidiaries;
(vii)
change in any material respect its accounting principles, practices or methods in a manner that would materially affect the consolidated
assets, liabilities or results of operations of the Company or any of its Subsidiaries, except as required by GAAP or applicable Law;
(viii)
make or change any Tax election, adopt or change any Tax accounting period or material method of Tax accounting, file any amended Tax
Return, settle or compromise any liability for Taxes or any Tax audit or other proceeding relating to Taxes, enter into any closing or
similar agreement with any Taxing Authority, surrender any right to claim a material refund of Taxes or agree to any extension or waiver
of the statute of limitations;
(ix)
grant any increases in the compensation payable or to become payable to any of its directors, officers or any other employees (including
Business Employees) other than in the ordinary course of business; (B) establish, grant or provide any new cash bonuses or any new cash
bonus plan, program, arrangement, agreement or practice for any directors, officers, employees (including Business Employees), consultants
or other service providers; (C) establish any Employee Benefit Plan which was not in existence prior to the date of this Agreement, or
amend any Company Plan in existence on the date of this Agreement if such amendment would have the effect of enhancing or materially
increasing any benefits thereunder; (D) accelerate the vesting, payment or settlement of any compensation or benefit; or (E) hire any
new employees other than to fill existing vacancies or as necessary to maintain the ordinary course of business, or transfer or terminate
the service of any employee other than any such termination for cause;
(x)
establish or become obligated under any collective bargaining agreement, memorandum of understanding, or other contract with a labor
union, labor organization, works council or similar representative of employees;
(xi)
make any loans, advances or capital contributions to any other Person in excess of $50,000 in the aggregate, except for (A) funding of
commitments in the ordinary course of business and in accordance with the terms of any agreements in effect as of the date hereof, (B)
loans among the Company and its Subsidiaries or among the Company’s Subsidiaries consistent with past practice, (C) advances for
reimbursable employee expenses in the ordinary course of business, (D) advancement of reasonable legal expenses or (E) any indemnification
agreement in effect on the date hereof;
(xii)
(A) enter into any contract that would be a Company Contract or (B) modify, amend, terminate or assign, or waive or assign any material
rights under, any Company Contract (or any contract that, if existing as of the date hereof, would be a Company Contract), except in
the ordinary course of business, and, for the avoidance of doubt, with respect to clauses (A) and (B), except for: (1)
any termination, renewal or extension in accordance with the terms of any existing Company Contract that occurs automatically without
any action (other than notice of renewal or extension) by Company or any Subsidiary of the Company; or (2) any trade agreements entered
into, modified, amended, terminated or assigned in the ordinary course of business provided that, in each case, no such action will result
in a Company Material Adverse Effect or otherwise impede the Transactions;
(xiii)
other than the settlement of any Proceeding (A) reflected or reserved against on the balance sheet of the Company (or in the notes thereto),
(B) that would not reasonably be expected to restrict the operations of the Company and its Subsidiaries after the Effective Time or
(C) in connection with any shareholder litigation against the Company and/or its employees, officers or directors relating to this Agreement,
the Merger and/or the other Transactions in accordance with Section 6.11, settle, or offer or propose to settle, any Proceeding
against the Company or any of its Subsidiaries (excluding any audit, claim or other proceeding in respect of Taxes) involving a payment
or other transfer of value by the Company or any of its Subsidiaries exceeding $50,000 individually, or $100,000 in the aggregate;
(xiv)
make or agree to make any new capital expenditure or expenditures that, individually, is in excess of $50,000 or, in the aggregate, are
in excess of $100,000;
(xv)
other than the Loan or the issuance of Company Capital Stock upon exercise or exchange of any Company Warrants or Company Convertible
Notes outstanding on the date hereof, incur, create, assume, refinance, replace or prepay in any material respects the terms of any Indebtedness
or any derivative financial instruments or arrangements, or issue or sell any debt securities or calls, options, warrants or other rights
to acquire any debt securities (directly, contingently or otherwise); provided, however, that the foregoing shall not restrict
the incurrence of any Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(xvi)
enter into any new line of business;
(xvii)
take any action, or fail to take any action, which action or failure would reasonably be expected to cause the Company or any of its
Subsidiaries to be required to be registered as an investment company under the Investment Company Act;
(xviii)
enter into any transactions or contracts with any Affiliates (other than directors or officers in their capacities as such) of the Company;
or
(xix)
authorize, agree or enter into any arrangement or understanding to take any action that is prohibited by this Section 6.1(b).
Notwithstanding
anything to the contrary set forth in this Agreement, nothing in this Agreement shall prohibit the Company or any of its Subsidiaries
from taking any action, at any time or from time to time, that in the reasonable judgment of the Company, upon advice of counsel, is
reasonably necessary for the Company to avoid being required to register as an investment company under the Investment Company Act; provided
that prior to taking any action under this paragraph, the Company shall provide Parent with reasonable advance notice of any proposed
action and shall in good faith discuss such proposed action with Parent.
Section
6.2 [Intentionally Omitted]
Section
6.3 No Solicitation by the Company.
(a)
From and after the date of this Agreement until the Effective Time or if earlier, the termination of this Agreement in accordance with
Article VIII, the Company will, and will cause its Subsidiaries and instruct its Representatives to, immediately cease, and cause
to be terminated, any discussion, correspondence or negotiations with any Person conducted heretofore by the Company or any of its Subsidiaries
or Representatives with respect to a Company Competing Proposal or potential Company Competing Proposal, and shall immediately terminate
all physical and electronic data room access previously granted to any such Person and request any such Person to return or destroy all
information concerning the Company and its Subsidiaries to the extent permitted pursuant to any confidentiality agreement with such Person.
(b)
Except as otherwise permitted by this Section 6.3, from and after the date of this Agreement until the Effective Time or if earlier,
the termination of this Agreement in accordance with Article VIII, and except as otherwise provided in this Section 6.3,
the Company will not, and will cause its Subsidiaries and will instruct its and their respective Affiliates and Representatives not to,
directly or indirectly, (i) initiate, solicit or knowingly encourage or facilitate any inquiries, proposals or offers for the making
of, or that could reasonably be expected to lead to the making of, any Company Competing Proposal, (ii) enter into or engage in, continue
or otherwise participate in any discussions or negotiations with any Person regarding or otherwise in furtherance of, or that could reasonably
be expected to lead to, a Company Competing Proposal (other than to state that the terms of this Agreement prohibit such negotiations),
(iii) furnish any non-public information regarding the Company or its Subsidiaries, or access to the properties, assets or employees
of the Company or its Subsidiaries, to any Person in connection with or in response to a Company Competing Proposal, (iv) release any
Person from or fail to enforce any standstill provision or similar obligation set forth in any agreement; provided, that the Company
shall be permitted to grant waivers of, and not enforce, any such standstill provision or similar obligation in effect on the date hereof
solely to the extent necessary to permit the counterparty thereto to make a Company Competing Proposal, (v) enter into any binding or
nonbinding letter of intent or agreement in principle, or other agreement providing for a Company Competing Proposal (other than an Acceptable
Non-Disclosure Agreement as provided in Section 6.3(d)(ii)) or (vi) withhold, withdraw, modify or qualify, or propose publicly
to withhold, withdraw, modify or qualify, in a manner adverse to Parent, the Company Board Recommendation or publicly recommend the approval
or adoption of, or publicly approve or adopt, any Company Competing Proposal (the taking of any action described in clause (vi)
of this Section 6.3(b) being referred to as a “Company Change of Recommendation”).
(c)
From and after the date of this Agreement, the Company shall advise Parent of the receipt by the Company of any Company Competing Proposal
made on or after the date of this Agreement or any request for non-public information or data relating to the Company or any of its Subsidiaries
made by any Person that informs the Company or any of its Subsidiaries or Representatives that it is considering making, or has made,
a Company Competing Proposal or any inquiry or request from any Person for discussions or negotiations with the Company, a Subsidiary
of the Company or any of their or their Affiliates’ respective Representatives relating to a possible Company Competing Proposal
(in each case within twenty-four (24) hours thereof), and the Company shall provide to Parent (within such twenty-four (24) hour time
frame) (i) the identity of the person making the Company Competing Proposal, inquiry or request and (ii) either (A) a copy of any such
Company Competing Proposal made in writing provided to the Company or any of its Subsidiaries or (B) a written summary of the material
terms of such Company Competing Proposal, if not made in writing. The Company shall keep Parent reasonably informed on a current basis
with respect to the status and material terms of any such Company Competing Proposal and any material changes to the status of any such
discussions or negotiations.
(d)
Notwithstanding anything in this Agreement to the contrary, the Company, directly or indirectly through one or more of its Representatives,
may:
(i)
make such disclosures as the Company Board or any committee thereof determines in good faith are necessary to comply with Rule 14e-2(a),
Item 1012(a) of Regulation M-A and Rule 14d-9 promulgated under the Exchange Act or other applicable Laws; provided, however,
that none of the Company, the Company Board or any committee thereof shall, except as expressly permitted by Section 6.3(d)(iii)
or Section 6.3(e), effect a Company Change of Recommendation in any disclosure document or communication filed or publicly issued
or made in conjunction with the compliance with such requirements;
(ii)
prior to the receipt of the Company Shareholder Approval, engage in the activities prohibited by Section 6.3(b)(ii)-(iii) with
any Person who has made a written, bona fide Company Competing Proposal that did not arise from a breach of the obligations set
forth in this Section 6.3; provided, however, that (A) no non-public information that is prohibited from being furnished
pursuant to Section 6.3(b)(iii) may be furnished until the Company receives an executed Acceptable Non-Disclosure Agreement from
such Person, and (B) prior to taking any such actions, the Company Board or any committee thereof determines in good faith, after consultation
with its financial advisors and outside legal counsel, that such Company Competing Proposal is, or could reasonably be expected to lead
to, a Company Superior Proposal;
(iii)
prior to the receipt of the Company Shareholder Approval, in response to a bona fide written Company Competing Proposal from any
Person that did not arise from a breach of the obligations set forth in this Section 6.3, if the Company Board (or any committee
thereof) so chooses, cause the Company to effect a Company Change of Recommendation and/or terminate this Agreement pursuant to Section
8.1(d), if prior to taking any such action (A) the Company Board (or any committee thereof) determines in good faith, after consultation
with its financial advisors and outside legal counsel, that (x) such Company Competing Proposal is a Company Superior Proposal and (y)
the failure to terminate this Agreement to enter into a definitive agreement with respect to such Company Superior Proposal or make a
Company Change of Recommendation would be inconsistent with its legal duties as directors under applicable Law, and (B) the Company shall
have given notice to Parent that the Company has received such proposal, specifying the material terms and conditions of such proposal,
and stating that the Company intends to take such action (provided that the giving of such notice shall not, in and of itself,
constitute a Company Change of Recommendation), and either (1) Parent shall not have proposed revisions to the terms and conditions of
this Agreement prior to the earlier to occur of the scheduled time for the Company Shareholders Meeting and the third Business Day after
the date on which such notice is given to Parent, or (2) if Parent within the period described in the foregoing clause (1) shall
have proposed revisions to the terms and conditions of this Agreement in a manner that would form a binding contract if accepted by the
Company, the Company Board (or any committee thereof), after consultation with its financial advisors and outside legal counsel, shall
have determined in good faith that the Company Competing Proposal remains a Company Superior Proposal with respect to Parent’s
revised proposal; provided, however, that each time material modifications to the financial terms of a Company Competing
Proposal determined to be a Company Superior Proposal are made, the time period set forth in this clause (B) prior to which the
Company may effect a Company Change of Recommendation and/or terminate this Agreement pursuant to Section 8.1(d) shall be extended
for two Business Days after notification of such change to Parent; and
(iv)
prior to the receipt of the Company Shareholder Approval, seek clarification from (but not engage in negotiations with or provide non-public
information to) any Person that has made a bona fide written Company Competing Proposal (provided that the Company Competing Proposal
by such Person did not result from a breach or violation of this Section 6.3) solely to clarify and understand the terms and conditions
of such proposal to provide adequate information for the Company Board or any committee thereof to make an informed determination under
Section 6.3(d)(ii).
(e)
Notwithstanding anything in this Agreement to the contrary, the Company Board (or a committee thereof) shall be permitted, at any time
prior to the receipt of the Company Shareholder Approval, other than in response to a Company Competing Proposal (which is addressed
in Section 6.3(d)(iii)), to make a Company Change of Recommendation if (i) an Intervening Event has occurred, (ii) prior to taking
such action, the Company Board (or a committee thereof) determines in good faith, after consultation with outside legal counsel, that
the failure to take such action would be inconsistent with its legal duties as directors under applicable Law and (iii) the Company shall
have given notice to Parent that the Company intends to effect a Company Change of Recommendation (which notice will reasonably describe
the reasons for such Company Change of Recommendation, including a description of the Intervening Event in reasonable detail; provided
that the giving of such notice shall not, in and of itself, constitute a Company Change of Recommendation), and either (A) Parent shall
not have proposed revisions to the terms and conditions of this Agreement prior to the earlier to occur of the scheduled time for the
Company Shareholders Meeting and the third Business Day after the date on which such notice is given to Parent, or (B) if Parent within
the period described in the foregoing clause (A) shall have proposed revisions to the terms and conditions of this Agreement in
a manner that would form a binding contract if accepted by the Company, the Company Board (or a committee thereof), after consultation
with its outside legal counsel, shall have determined in good faith that notwithstanding such proposed changes the failure to make a
Company Change of Recommendation would be inconsistent with its legal duties as directors under applicable Law; provided, however, that
in the event the Company Board (or a committee thereof) does not make a Company Change of Recommendation in accordance with the foregoing
procedures, but thereafter determines to make a Company Change of Recommendation pursuant to this Section 6.3(e) in circumstances
involving or relating to another Intervening Event, the foregoing procedures referred to in this Section 6.3(e) shall apply anew.
Section
6.4 Indemnification; Directors’ and Officers’ Insurance.
(a)
Parent agrees that all rights existing as of the date of this Agreement to indemnification, advancement of expenses and exculpation from
Indemnified Liabilities in favor of current and/or former directors, officers or employees of the Company or any of its Subsidiaries
as provided in the Organizational Documents of the Company or any such Subsidiary, any employment agreement or indemnification agreement
in effect on the date hereof or otherwise (which shall be assumed by Parent and the Surviving Company) will continue in full force and
effect in accordance with their terms, and Parent will cause the Surviving Company to perform its respective obligations thereunder.
Without limiting the foregoing, from and after the Effective Time, Parent and the Surviving Company shall, jointly and severally, indemnify,
defend and hold harmless each Person who is now, or has been at any time prior to the date of this Agreement or who becomes prior to
the Effective Time, a director or officer of the Company or any of its Subsidiaries or is or was serving at the request of the Company
or any of its Subsidiaries as a director or officer of another corporation, partnership, limited liability company, joint venture, Employee
Benefit Plan, trust or other enterprise (the “Indemnified Persons”) against and from all losses, claims, damages,
costs, fines, penalties, expenses (including attorneys’ and other professionals’ fees and expenses), liabilities, judgments
and amounts that are paid in settlement of, or incurred in connection with any threatened or actual Proceeding to which such Indemnified
Person is, was or becomes a party or is otherwise involved (including as a witness) based, in whole or in part, on or arising, in whole
or in part, out of the fact that such Person is or was a director, officer, employee or agent of the Company or any of its Subsidiaries
or is or was serving at the request of the Company or any of its Subsidiaries as a director or officer of another corporation, partnership,
limited liability company, joint venture, Employee Benefit Plan, trust or other enterprise or by reason of anything done or not done
by such Person in any such capacity, whether pertaining to any act or omission occurring or existing prior to, at or after the Effective
Time and whether asserted or claimed prior to, at or after the Effective Time (“Indemnified Liabilities”), including
all Indemnified Liabilities based in whole or in part on, or arising in whole or in part out of, or pertaining to, this Agreement or
the Transactions, in each case, to the fullest extent permitted under applicable Law (and Parent and the Surviving Company shall, jointly
and severally, pay expenses incurred in connection therewith in advance of the final disposition of any such Proceeding to each Indemnified
Person to the fullest extent permitted under applicable Law). Without limiting the foregoing, in the event any such Proceeding is brought
or threatened to be brought against any Indemnified Persons (whether arising before or after the Effective Time), (i) the Indemnified
Persons may retain the Company’s regularly engaged legal counsel or other counsel satisfactory to such Indemnified Person, and
Parent and the Surviving Company shall pay all reasonable fees and expenses of such counsel for the Indemnified Persons as promptly as
statements therefor are received, and (ii) the Surviving Company shall use its reasonable best efforts to assist in the defense of any
such matter. With respect to any determination of whether any Indemnified Person is entitled to indemnification by Parent or Surviving
Company under this Section 6.4, such Indemnified Person shall have the right to require that such determination be made by special, independent
legal counsel selected by the Indemnified Person and approved by Parent or Surviving Company, as applicable (which approval shall not
be unreasonably withheld or delayed), and who has not otherwise performed material services for Parent, Surviving Company, the Company
or the Indemnified Person within the last three years. Notwithstanding anything to the contrary contained in this Agreement, Parent shall
not (and Parent shall cause the Surviving Company not to) settle or compromise or consent to the entry of any judgment or otherwise seek
termination with respect to any Proceeding for which indemnification may be sought by an Indemnified Person pursuant to this Agreement,
unless such settlement, compromise, consent or termination includes an unconditional release of all Indemnified Persons from all liability
arising out of such Proceeding and does not include the imposition of equitable relief on, or the admission of fault or wrongdoing by,
any Indemnified Person.
(b)
For a period of six (6) years following the Effective Time, Parent and the Surviving Company shall not amend, repeal or otherwise modify
any provision in the Organizational Documents of the Surviving Company or its Subsidiaries in any manner that would affect adversely
the rights thereunder or under the Organizational Documents of the Surviving Company or any of its Subsidiaries of any Person to indemnification,
exculpation and expense advancement except to the extent required by applicable Law. Parent shall, and shall cause the Surviving Company
and its Subsidiaries to, fulfill and honor any indemnification, expense advancement or exculpation agreements between the Company or
any of its Subsidiaries and any of its directors, officers or employees existing immediately prior the Effective Time.
(c)
To the extent permitted by applicable Law, Parent and the Surviving Company shall indemnify any Indemnified Person against all reasonable
costs and expenses (including reasonable attorneys’ fees and expenses), such amounts to be payable in advance upon request as provided
in Section 6.4(a), relating to the enforcement of such Indemnified Person’s rights under this Section 6.4 or under
any Organizational Documents of the Company or any of its Subsidiaries, any employment agreement or indemnification agreement in effect
on the date hereof or otherwise, regardless of whether such Indemnified Person is ultimately determined to be entitled to indemnification
hereunder or thereunder.
(d)
Parent and the Surviving Company shall put in place, and Parent shall fully prepay immediately prior to the Effective Time, “tail”
insurance policies (collectively, the “D&O Insurance”) with a claims period of at least six years from the Effective
Time from an insurance carrier with the same or better credit rating as the Company’s current insurance carrier with respect to
directors’ and officers’ liability insurance, fiduciary liability insurance and employment practices liability insurance
in an amount and scope at least as favorable as the Company’s existing policies with respect to matters, acts or omissions existing
or occurring at or prior to the Effective Time; provided, however, that Parent shall not be required to pay an annual premium
for the D&O Insurance in excess of (for any one year) 150% of the annual premium paid by the Company for such insurance as of the
date of this Agreement; and provided, further, that if the annual premiums of such insurance coverage exceed such amount,
Parent shall be obligated to obtain a policy with the greatest coverage available, with respect to facts, acts, events or omissions occurring
prior to the Effective Time, for a cost not exceeding such amount.
(e)
In the event that Parent, the Surviving Company or any Subsidiary of the Surviving Company, or any of their respective successors or
assigns, (i) consolidates with or merges into any other Person and shall not be the continuing or surviving company or entity of such
consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then, in each such case,
proper provisions shall be made so that the successors and assigns of Parent, the Surviving Company or such Subsidiary of the Surviving
Company, as the case may be, shall assume the obligations set forth in this Section 6.4. The provisions of this Section 6.4
are intended to be for the benefit of, and shall be enforceable by, the parties and each Person entitled to indemnification, exculpation,
insurance coverage or expense advancement or any other right pursuant to this Section 6.4, and his, her or its heirs and representatives.
The rights of the Indemnified Persons under this Section 6.4 are in addition to any rights such Indemnified Persons may have under the
Organizational Documents of the Company or any of its Subsidiaries, or under any applicable contracts or Law. Parent and the Surviving
Company shall pay all expenses, including attorneys’ fees, that may be incurred by any Indemnified Person in enforcing the indemnity
and other obligations provided in this Section 6.4.
Section
6.5 Preparation of Joint Proxy Statement and Registration Statement.
(a)
Parent will promptly furnish to the Company such data and information relating to it, its Subsidiaries (including Merger Sub) and the
holders of Parent Capital Stock, as the Company may reasonably request for the purpose of including such data and information in the
Joint Proxy Statement and any amendments or supplements thereto used by the Company to obtain the Company Shareholder Approval. The Company
will promptly furnish to Parent such data and information relating to it, its Subsidiaries and the holders of Company Capital Stock,
as Parent may reasonably request for the purpose of including such data and information in the Registration Statement (including the
Joint Proxy Statement) and any amendments or supplements thereto.
(b)
The Company and Parent shall cooperate in preparing and shall cause to be filed with the SEC, within 30 calendar days following the date
hereof, a mutually acceptable Joint Proxy Statement relating to the matters to be submitted to the holders of Company Common Stock at
the Company Shareholders Meeting and the holders of Parent Common Stock at the Parent Shareholders Meeting, which will set forth the
Merger Consideration and Exchange Ratio as finally determined pursuant to Section 3.1, and Parent shall prepare and file with the SEC
the Registration Statement (of which the Joint Proxy Statement will be a part). The Company and Parent shall each use commercially reasonable
efforts to cause the Registration Statement and the Joint Proxy Statement to comply with the rules and regulations promulgated by the
SEC and to respond promptly to any comments of the SEC or its staff. Parent and the Company shall each use its commercially reasonable
efforts to cause the Registration Statement to become effective under the Securities Act as soon after such filing as practicable but
in no event to exceed 90 calendar days following the initial filing of the Registration Statement and Parent and the Company shall use
commercially reasonable efforts to keep the Registration Statement effective as long as is necessary to consummate the Merger. Each of
the Company and Parent will advise the other promptly after it receives any request by the SEC for amendment of the Joint Proxy Statement
or the Registration Statement or comments thereon and responses thereto or any request by the SEC for additional information. Each of
the Company and Parent shall use commercially reasonable efforts to cause all documents that it is responsible for filing with the SEC
in connection with the Transactions to comply as to form and substance in all material respects with the applicable requirements of the
Securities Act and the Exchange Act. Notwithstanding the foregoing, prior to filing the Registration Statement (or any amendment or supplement
thereto) or mailing the Joint Proxy Statement (or any amendment or supplement thereto) or responding to any comments of the SEC with
respect thereto, each of the Company and Parent will (i) provide the other with an opportunity to review and comment on such document
or response (including the proposed final version of such document or response), (ii) include in such document or response all comments
reasonably proposed by the other and (iii) not file or mail such document or respond to the SEC prior to receiving the approval of the
other, which approval shall not be unreasonably withheld, conditioned or delayed; provided, however, that with respect
to documents filed by a party that are incorporated by reference in the Joint Proxy Statement or Registration Statement, this right of
approval shall apply only with respect to information relating to the other party, its Subsidiaries and its Affiliates, their business,
financial condition or results of operations or the Transactions; and provided, further that the Company, in connection
with any Company Change of Recommendation, may amend or supplement the Joint Proxy Statement (including by incorporation by reference)
and make other filings with the SEC, to effect such Company Change of Recommendation.
(c)
Parent and the Company each shall make all necessary filings with respect to the Merger and the Transactions under the Securities Act
and the Exchange Act and applicable blue-sky laws and the rules and regulations thereunder. Each party will advise the other, promptly
after it receives notice thereof, of the time when the Registration Statement has become effective or any supplement or amendment has
been filed, the issuance of any stop order, the suspension of the qualification of the Parent Common Stock issuable in connection with
the Merger for offer or sale in any jurisdiction. Each of the Company and Parent will use commercially reasonable efforts to have any
such stop order or suspension lifted, reversed or otherwise terminated.
(d)
If at any time prior to the Effective Time, any information relating to Parent or the Company, or any of their respective Affiliates,
officers or directors, should be discovered by Parent or the Company that should be set forth in an amendment or supplement to the Registration
Statement or the Joint Proxy Statement, so that such documents would not include any misstatement of a material fact or omit to state
any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading,
the party that discovers such information shall promptly notify the other party and an appropriate amendment or supplement describing
such information shall be promptly filed with the SEC and, to the extent required by applicable Law, disseminated to the Company Shareholders
and the Parent Shareholders.
Section
6.6 Shareholders Meetings.
(a)
The Company shall take all action necessary in accordance with applicable Laws and the Organizational Documents of the Company to duly
give notice of, convene and hold a meeting of its shareholders for the purpose of obtaining the Company Shareholder Approval, to be held
as promptly as reasonably practicable following the clearance of the Joint Proxy Statement by the SEC. Except as permitted by Section
6.3, the Company shall, through the Company Board, include in the Joint Proxy Statement the Company Board Recommendation for the
approval of the Merger and the other Transactions at the Company Shareholders Meeting and the Company shall solicit from the Company
Shareholders proxies in favor of the approval of the Merger and the other Transactions. Notwithstanding anything to the contrary contained
in this Agreement, the Company (i) shall be required to adjourn the Company Shareholders Meeting to the extent necessary to ensure that
any required supplement or amendment to the Joint Proxy Statement is provided to the Company Shareholders and (ii) may adjourn the Company
Shareholders Meeting if, as of the time for which the Company Shareholders Meeting is scheduled, there are insufficient shares of Company
Common Stock represented (either in person or by proxy) to constitute a quorum or to obtain the Company Shareholder Approval; provided,
however, that unless otherwise agreed to by the parties, the Company Shareholders Meeting shall not be adjourned to a date that
is more than 30 days after the date for which the meeting was previously scheduled; and provided, further, that the Company
Shareholders Meeting shall not be adjourned to a date on or after two Business Days prior to the End Date. Notwithstanding the foregoing,
the Company may adjourn the Company Shareholders Meeting to a date no later than the second Business Day after the expiration of any
of the periods contemplated by Section 6.3(d)(iii)(B). Unless this Agreement has been terminated in accordance with Article
VIII, the Company’s obligations to call, give notice of, convene and hold the Company Shareholders Meeting in accordance with
this Section 6.6(a) shall not be limited or otherwise affected by the making, commencement, disclosure, announcement or submission
of any Company Superior Proposal or Company Competing Proposal, or by any Company Change of Recommendation.
(b)
Parent shall take all action necessary in accordance with applicable Laws and the Organizational Documents of Parent to duly give notice
of, convene and hold a meeting of its shareholders for the purpose of obtaining the Parent Shareholder Approval, to be held as promptly
as reasonably practicable following the clearance of the Joint Proxy Statement by the SEC but in no event to exceed 45 calendar days
following such clearance. The Parent shall, through the Parent Board, include in the Joint Proxy Statement the Parent Board Recommendation
for the approval of the Merger and the other Transactions at the Parent Shareholders Meeting and the Parent shall solicit from the Parent
Shareholders proxies in favor of the approval of the Merger and the other Transactions. Notwithstanding anything to the contrary contained
in this Agreement, Parent (i) shall be required to adjourn the Parent Shareholders Meeting to the extent necessary to ensure that any
required supplement or amendment to the Joint Proxy Statement is provided to the Parent Shareholders and (ii) may adjourn the Parent
Shareholders Meeting if, as of the time for which the Parent Shareholders Meeting is scheduled, there are insufficient shares of Parent
Common Stock represented (either in person or by proxy) to constitute a quorum or to obtain the Parent Shareholder Approval; provided,
however, that unless otherwise agreed to by the parties, the Parent Shareholders Meeting shall not be adjourned to a date that
is more than 30 days after the date for which the meeting was previously scheduled; and provided, further, that the Parent
Shareholders Meeting shall not be adjourned to a date on or after two Business Days prior to the End Date.
(c)
The parties shall use their commercially reasonable efforts to hold the Company Shareholders Meeting and the Parent Shareholders Meeting
on the same day.
Section
6.7 Access to Information.
(a)
Each party shall, and shall cause each of its Subsidiaries to, afford to the other party and its Representatives, during the period from
the date of this Agreement to the earlier of the Effective Time and the termination of this Agreement pursuant to the terms of Section
8.1, reasonable access, during normal business hours and upon reasonable prior notice, to the officers, employees and offices of
such party and its Subsidiaries and to their books, records, contracts and documents and shall, and shall cause each of its Subsidiaries
to, furnish reasonably promptly to the other party and its Representatives such information concerning its and its Subsidiaries’
business, properties, contracts, records and personnel, in each case as such other party may reasonably request in connection with consummating
the Transactions. Each of the Company and Parent will use its commercially reasonable efforts to minimize any disruption to the businesses
of the other party that may result from the requests for access, data and information hereunder. Notwithstanding the foregoing provisions
of this Section 6.7(a), each party shall not be required to, or to cause any of its Subsidiaries to, grant access or furnish information
to the other party or any of its Representatives to the extent that (i) such information is subject to an attorney/client privilege,
the attorney work product doctrine or other legal privilege or (ii) such access or the furnishing of such information is prohibited by
applicable Law or an existing contract or agreement or a contract or agreement entered into after the date of this Agreement in the ordinary
course of business. Each party agrees that it will not, and will cause its Representatives not to, use any information obtained pursuant
to this Section 6.7(a) for any purpose unrelated to the consummation of the Transactions.
(b)
The Mutual Confidentiality and Non-Disclosure Agreement, dated as of October 23, 2023, between the Company and Parent (the “Non-Disclosure
Agreement”), shall survive the execution and delivery of this Agreement and shall apply to all information furnished thereunder
or hereunder. All information provided to any party or its Representatives pursuant to or in connection with this Agreement is deemed
to be “Confidential Information” as defined under the Non-Disclosure Agreement.
Section
6.8 Reasonable Best Efforts.
(a)
Subject to the terms and conditions of this Agreement, each party will use its reasonable best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws or pursuant to any contract
or agreement to consummate the Merger and the other Transactions as soon as practicable after the date hereof, including (i) preparing
and filing or otherwise providing, in consultation with the other party and as promptly as practicable and advisable after the date hereof,
all documentation to effect all necessary applications, notices, petitions, filings and other documents and to obtain as promptly as
practicable all waiting period expirations or terminations, consents, clearances, waivers, licenses, orders, registrations, approvals,
permits and authorizations necessary or advisable to be obtained from any third party and/or any Governmental Entity in order to consummate
the Merger or any of the other Transactions, (ii) taking all steps as may be necessary, subject to the limitations in this Section
6.8, to obtain all such waiting period expirations or terminations, consents, clearances, waivers, licenses, registrations, permits,
authorizations, orders and approvals and (iii) executing and delivering any additional instruments reasonably necessary or advisable
to consummate the Merger and the Transactions contemplated by this Agreement and to fully carry out the purposes of this Agreement.
(b)
In connection with and without limiting the foregoing, each of the parties shall give any required notices to third parties, and each
of the parties shall use, and cause each of their respective Subsidiaries and Affiliates to use, its reasonable best efforts to obtain
any third party consents that are necessary, proper or advisable to consummate the Merger and the other Transactions. Each of the parties
will furnish to the other such necessary information and reasonable assistance as the other may request in connection with the preparation
of any required filings or submissions with any Governmental Entity and will cooperate in responding to any inquiry from a Governmental
Entity, including promptly informing the other parties of such inquiry, consulting in advance before making any presentations or submissions
to a Governmental Entity and supplying each other with copies of all material correspondence, filings or communications between either
party and any Governmental Entity with respect to this Agreement. To the extent reasonably practicable, the parties and their Representatives
shall have the right to review in advance and each of the parties will consult the others on, all the information relating to the other
and each of their Affiliates that appears in any filing made with, or written materials submitted to, any Governmental Entity in connection
with the Merger and the other Transactions, except that confidential competitively sensitive business information may be redacted from
such exchanges. To the extent reasonably practicable, none of the parties shall, nor shall they permit their respective Representatives
to, participate independently in any meeting or engage in any substantive conversation with any Governmental Entity in respect of any
filing, investigation or other inquiry without giving the other party prior notice of such meeting or conversation and, to the extent
permitted by applicable Law, without giving the other parties the opportunity to attend or participate (whether by telephone or in person)
in any such meeting with such Governmental Entity.
(c)
Notwithstanding anything to the contrary in this Agreement, in connection with obtaining any approval or consent from any Person with
respect to the Merger and the other Transactions, neither the Company nor any Subsidiary of the Company shall pay or commit to pay to
any Person whose approval or consent is being solicited any cash or other consideration, make any accommodation or commitment or incur
any liability or other obligation to such Person without the prior written consent of Parent. The parties shall cooperate to obtain such
consents.
(d)
Except as described in this Agreement or in Section 6.8 of the Parent Disclosure Letter, in connection with obtaining any approval
or consent from any Person with respect to the Merger and the other Transactions, neither the Parent nor any Subsidiary of Parent shall
pay or commit to pay to any Person whose approval or consent is being solicited any cash or other consideration, make any accommodation
or commitment or incur any liability or other obligation to such Person without the prior written consent of the Company.
Section
6.9 Employee Matters. Parent may extend offers of employment to those Business Employee or, employees of any Subsidiary of
Parent’s choosing (including, for the avoidance of doubt, to any, some, none or all Business Employees) prior to the Closing Date
for employment immediately following the Effective Time. Such employment or consulting agreements shall be privately negotiated between
Parent and each such employee.
Section
6.10 Parent Loan. Prior to January 31, 2024, Parent shall make a loan to the Company of no less than $3 million (the “Loan”),
which Loan shall be made in accordance with the terms of the Original Loan Documents.
Section
6.11 Shareholder Litigation. In the event any Transaction Litigation is commenced, the parties agree to cooperate and use
their reasonable best efforts to defend against and respond thereto. Each party shall give the other party a reasonable opportunity to
participate in the defense or settlement of any Transaction Litigation and shall consider in good faith the other party’s advice
with respect to such Transaction Litigation; provided, that neither the Company nor Parent shall agree to settle any Transaction Litigation
without the prior written consent of the other (which consent shall not be unreasonably withheld, delayed or conditioned).
Section
6.12 Public Announcements. The initial press release with respect to the execution of this Agreement shall be a joint press
release to be reasonably agreed upon by the parties. From and after the date hereof, so long as this Agreement is in effect, neither
the Company nor Parent, nor any of their respective controlled Affiliates or Subsidiaries shall issue or cause the publication of any
press release or other announcement with respect to the Merger or this Agreement without the prior consent of the other party (which
consent shall not be unreasonably withheld, conditioned or delayed), unless (a) such party determines, after consultation with outside
counsel, that it is required by applicable Law or the rules of any stock exchange upon which such party’s capital stock is traded
to issue or cause the publication of any press release or other announcement with respect to the Transactions, including the Merger or
this Agreement, in which event such party shall endeavor, on a basis reasonable under the circumstances, to provide a meaningful opportunity
to the other party to review and comment upon such press release or other announcement and shall give due consideration to all reasonable
additions, deletions or changes suggested thereto or (b) in the case of the Company or Parent, it deems it necessary or appropriate to
issue or cause the publication of any press release or other announcement with respect to the Merger, this Agreement or the other Transactions
in connection with or following a Company Change of Recommendation or a Parent Change of Recommendation, respectively; provided,
however, each party and their respective controlled Affiliates may make statements that are not inconsistent with previous
press releases, public disclosures or public statements made by Parent and the Company in compliance with this Section 6.12.
Section
6.13 Control of Business. Without limiting in any way any party’s rights or obligations under this Agreement,
nothing contained in this Agreement shall give any party, directly or indirectly, the right to control or direct the other party and
their respective Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, each of the parties shall exercise,
consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective
operations.
Section
6.14 Transfer Taxes. All Transfer Taxes incurred in connection with the Transactions, if any, shall be paid by Parent
or the Surviving Company when due, whether levied on Parent or any other Person, and Parent or the Surviving Company shall file all necessary
Tax Returns and other documentation with respect to any such Transfer Taxes. Prior to the Closing, the parties will cooperate, in good
faith, in the filing of any Tax Returns with respect to Transfer Taxes and the minimization, to the extent reasonably permissible under
applicable Law, of the amount of any Transfer Taxes.
Section
6.15 Notification. The Company shall give prompt notice to Parent, and Parent shall give prompt notice to the Company, (a)
of any notice or other communication received by such party from any Governmental Entity in connection with this Agreement, the Merger
or the other Transactions, and each party shall keep the other party reasonably informed on a current basis regarding any such matters,
(b) of any notice or other communication received by such party from any Person (other than a Governmental Entity) alleging that the
consent of such Person is or may be required in connection with the Merger or the other Transactions, if the subject matter of such communication
or the failure of such party to obtain such consent could be material to the Company, the Surviving Company or Parent, and each party
shall keep the other party reasonably informed on a current basis regarding any such matters, (c) of any Proceeding commenced or, to
any party’s knowledge, threatened against, such party or any of its Affiliates or otherwise relating to, involving or affecting
such party or any of its Affiliates, in each case, in connection with, arising from or otherwise relating to the Merger or any other
Transaction (“Transaction Litigation”), and (d) upon becoming aware of the occurrence or impending occurrence of any
event or circumstance relating to it or any of the Subsidiaries of the Company or any of the Subsidiaries of Parent, respectively, which
would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or a Parent Material Adverse
Effect, as the case may be, or which would reasonably be expected to prevent or materially delay or impede the consummation of the Transactions;
provided, however, that, in each case, the delivery of any notice pursuant to this Section 6.15 shall not cure any
breach of any representation or warranty requiring disclosure of such matter prior to the date of this Agreement or otherwise limit or
affect the remedies available hereunder to any party. The failure to deliver any such notice shall not affect any of the conditions set
forth in Article VII or give rise to any right to terminate under Article VIII.
Section
6.16 Use of Company’s Cash Receipts. Parent shall not utilize any of the Company’s cash receipts to make
payments on Parent’s indebtedness; provided, however that notwithstanding the foregoing, Parent may use the Company’s cash
receipts from Net Sales of Phexxi (as defined by the Baker Royalty Note) solely to make payments on the Baker Royalty Note.
Section
6.17 Takeover Laws. The parties shall use their respective reasonable best efforts (a) to take all action necessary so that
no Takeover Law is or becomes applicable to the Merger or any of the other Transactions and (b) if any such Takeover Law is or becomes
applicable to any of the foregoing, to take all action necessary so that the Merger and the other Transactions may be consummated as
promptly as practicable on the terms contemplated by this Agreement and otherwise to eliminate or minimize the effect of such Takeover
Law on the Merger and the other Transactions.
Section
6.18 Listing. Parent shall take all actions necessary to cause the Parent Common Stock be approved for listing on NASDAQ prior
to the Effective Time, subject to official notice of issuance.
Section
6.19 Delisting. Each of the parties agrees to cooperate with the other parties in taking, or causing to be taken, all actions
necessary to delist the Company Common Stock and terminate its registration under the Exchange Act; provided that such delisting
and termination shall not be effective until after the Effective Time.
Section
6.20 Obligations of Merger Sub and the Surviving Company. Parent shall take all action necessary to cause Merger Sub and the
Surviving Company to perform their respective obligations under this Agreement and to consummate the Merger and the other Transactions
upon the terms and subject to the conditions set forth in this Agreement.
Section
6.21 Surviving Company Option Plan. Immediately subsequent to the Closing, the Surviving Company shall establish an option
plan on the terms and conditions with the grants set forth in Section 6.21 of the Parent Disclosure Letter and shall grant an
aggregate of at least 10% of the equity of the Company on a fully-diluted, post-Closing basis to the management group of the Company
on a mutually agreed basis.
Section
6.22 Benefits. Each Business Employee who becomes employed by Parent (or a Subsidiary of Parent) in connection with the transactions
contemplated by this Agreement shall be given eligibility to receive, as of the Closing Date, the benefits maintained for employees of
Parent’s Subsidiaries’ on substantially similar terms and conditions in the aggregate as are provided to such similarly situated
employees. Each Business Employee who becomes employed by Parent or a Parent Subsidiary (including the Company) in connection with the
transaction shall be given credit for his or her period of service with Company prior to the Closing Date for the purpose of eligibility
under the benefit plans maintained by Parent or such Parent Subsidiary and made available for such employee after the Closing Date, provided
that nothing herein will require the crediting of service that would operate to duplicate any benefits or to require funding of any such
benefits.
Section
6.23 Exchange Agreements. Prior to Closing, the Company shall assist the Parent in obtaining the agreement (the “Exchange
Agreements”) of the Company Convertible Noteholders to exchange such Company Convertible Notes and purchase rights they hold
for an aggregate (for all Company Convertible Note Holders) of not more than 86,153 shares of Parent Preferred Stock on terms acceptable
to Parent in its reasonable discretion.
ARTICLE
VII
CONDITIONS
PRECEDENT
Section
7.1 Conditions to Each Party’s Obligation to Consummate the Merger. The respective obligation of each party to consummate
the Merger is subject to the satisfaction at or prior to the Effective Time of each of the following conditions, any or all of which
may be waived jointly by the parties, in whole or in part, to the extent permitted by applicable Law:
(a)
Shareholder Approvals. The Company Shareholder Approval and the Parent Shareholder Approval shall have been obtained in accordance
with applicable Law, and the Organizational Documents of the Company and Parent, as applicable.
(b)
No Injunctions or Restraints. No Governmental Entity having jurisdiction over any party shall have issued any order, decree, ruling,
injunction or other action that is in effect (whether temporary, preliminary or permanent) restraining, enjoining or otherwise prohibiting
the consummation of the Merger and no Law shall have been adopted that makes consummation of the Merger illegal or otherwise prohibited.
(c)
Registration Statement. The Registration Statement shall have been declared effective by the SEC under the Securities Act and
no stop order suspending the effectiveness of the Registration Statement shall have been issued by the SEC and remain in effect and no
Proceeding to that effect shall have been commenced.
(d)
Voting Agreement. The Voting Agreement shall have been executed and delivered by the parties thereto.
(e)
Company Preferred Stock. All Company Preferred Stock shall have been converted to Company Common Stock except for the Unconverted
Company Preferred Stock.
(f)
Company Warrant Holder Agreements. The Company shall have received agreements from all of the holders of the Company’s warrants
(other than the Company Warrants set forth in Section 7.1(f) of the Company Disclosure Letter (the “Other Company Warrants”))
(all holders of Company Warrants, collectively, the “Warrant Holders”) duly executed agreements (“Warrant
Holder Agreements”) containing (i) waivers with respect to any fundamental transaction, change in control or other similar
rights that such Warrant Holders may have under any such Company Warrants, including, but not limited to, any right to vote, consent,
demand cash payment for their warrants, or otherwise approve or veto any of the transactions contemplated by this Agreement, including
the Merger, Parent Stock Issuance and any amendments to the Parent Charter, or any option to cause the Company or the Parent to purchase
any such Company Warrants from any Warrant Holders (or pay any other cash consideration to any Warrant Holders) and (ii) to exchange
such Company Warrants as they hold for an aggregate (for all Warrant Holders) of not more than 551 shares of Parent Preferred Stock on
terms acceptable to Parent in its reasonable discretion.
(g)
Other Company Warrants. The Company shall have cashed out any Other Warrant Holder who has not provided a Warrant Holder Agreement;
provided, however, that the aggregate amount of such cash out for any and all Other Warrant Holders who have not provided a Warrant Holder
Agreement shall not exceed $150,000.
(h)
Company Convertible Note Holders; Waivers. The Company shall have obtained waivers from holders of Company Convertible Notes (such
holders, collectively, the “Company Convertible Debt Holders” and such waivers, the “Company Convertible
Note Holder Waivers”) of the original principal amount thereof with respect to any fundamental transaction rights such Company
Convertible Note Holders may have under any such Company Convertible Notes, including any right to vote, consent, or otherwise approve
or veto any of the transactions contemplated by this Agreement, including the Merger, Parent Stock Issuance and any amendments to the
Parent Charter, or any option to cause Company or the Parent to redeem any such Company Convertible Notes from any Company Convertible
Note Holders (or pay any other cash consideration to any Company Convertible Note Holders).
Section
7.2 Additional Conditions to Obligations of Parent and Merger Sub. The obligations of Parent and Merger Sub to consummate
the Merger are subject to the satisfaction at or prior to the Effective Time of each of the following conditions, any or all of which
may be waived exclusively by Parent or Merger Sub, as applicable, in whole or in part, to the extent permitted by applicable Law:
(a)
Representations and Warranties of the Company. (i) The representations and warranties of the Company set forth in Section 4.3(a)
(Authority), Section 4.6(a) (Company Material Adverse Effect) and Section 4.19 (Brokers) shall be true and correct
in all respects as of the Closing Date, as though made on and as of the Closing Date (except that representations and warranties that
speak as of a specified date shall have been true and correct in all material respects only as of such date), (ii) the representations
and warranties of the Company set forth in Section 4.2(a) (Capital Structure) shall be true and correct in all but de minimis
respects as of the specified dates set forth therein, and (iii) all other representations and warranties of the Company set forth
in Article IV shall be true and correct as of the Closing Date, as though made on and as of the Closing Date (except that representations
and warranties that speak as of a specified date shall have been true and correct only as of such date), except where the failure of
such representations and warranties to be so true and correct (without regard to qualification or exceptions contained therein as to
“materiality” or “Company Material Adverse Effect”) would not reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect.
(b)
Performance of Obligations of the Company. The Company shall have performed, or complied with, in all material respects all agreements
and covenants required to be performed or complied with by it under this Agreement on or prior to the Effective Time.
(c)
Compliance Certificate. Parent shall have received a certificate of the Company signed by an executive officer of the Company,
dated the Closing Date, confirming that the conditions in Section 7.2(a) and Section 7.2(b) have been satisfied.
(d)
Exchange Agreements. The Company Convertible Note Holders shall have executed and delivered to Parent the Exchange Agreements.
(e)
Absence of Company Material Adverse Effect. Since the date of this Agreement, there shall not have been any event, change, effect
or development that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect.
(f)
VAR Waiver. Parent shall have received waivers from the parties to the agreements listed in Section 7.2(f) to the Parent
Disclosure Letter of the issuance of securities in a “Variable Rate Transaction” (as such term in defined in such agreements).
(g)
FIRPTA Statement. The Company shall have delivered to Parent a certificate, dated as of the Closing Date, certifying to the effect
that no interest in the Company is a U.S. real property interest (such certificate in the form required by Treasury Regulation Section
1.897-2(h) and 1.1445-3(c)).
(h)
Tax Analysis. The parties shall work together between the execution of this Agreement and the Effective Time to determine the
Tax treatment of the Merger and the other Transactions contemplated by this Agreement. Parties shall report consistently with the agreed
Tax treatment and shall not take any contrary position in any Tax return, examination, audit or any other proceeding.
Section
7.3 Additional Conditions to Obligations of the Company. The obligation of the Company to consummate the Merger is subject
to the satisfaction at or prior to the Effective Time of each of the following conditions, any or all of which may be waived exclusively
by the Company, in whole or in part, to the extent permitted by applicable Law:
(a)
Representations and Warranties of Parent and Merger Sub. (i) The representations and warranties of Parent and Merger Sub set forth
in Section 5.3(a) (Authority), Section 5.6(a) (Parent Material Adverse Effect) and Section 5.18 (Brokers) shall
be true and correct in all material respects as of the Closing Date, as though made on and as of the Closing Date (except that representations
and warranties that speak as of a specified date shall have been true and correct in all material respects only as of such date), (ii)
the representations and warranties of Parent and Merger Sub set forth in Section 5.2(a) (Capital Structure) shall be true and
correct in all but de minimis respects as of the specified dates set forth therein, and (iii) all other representations and warranties
of Parent and Merger Sub set forth in Article V shall be true and correct as of the Closing Date, as though made on and as of
the Closing Date (except that representations and warranties that speak as of specified date shall have been true and correct only as
of such date), except where the failure of such representations and warranties to be so true and correct (without regard to qualification
or exceptions contained therein as to “materiality” or “Parent Material Adverse Effect”) would not reasonably
be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(b)
Performance of Obligations of Parent and Merger Sub. Parent and Merger Sub each shall have performed, or complied with, in all
material respects all agreements and covenants required to be performed or complied with by them under this Agreement at or prior to
the Effective Time.
(c)
Compliance Certificate. The Company shall have received a certificate of Parent signed by an executive officer of Parent, dated
the Closing Date, confirming that the conditions in Section 7.3(a), Section 7.3(b), Section 7.3(d), Section 7.3(e)
and Section 7.3(f) have been satisfied.
(d)
Listing; Classification. The Parent Common Stock, including the Parent Common Stock to be issued in the Merger shall have been
approved for listing on the NASDAQ as of, subject to official notice of issuance or prior to, immediately following the Effective Time.
(e)
Absence of Parent Material Adverse Effect. Since the date of this Agreement, there shall not have been any event, change, effect
or development that, individually or in the aggregate, has had or would reasonably be expected to have a Parent Material Adverse Effect.
(f)
Nasdaq. The Parent shall have regained compliance with the stockholders’ equity requirement in Nasdaq Listing Rule 5550(b)(1)
and meets all other applicable criteria for continued listing, subject to any panel monitor imposed by Nasdaq.
Section
7.4 Frustration of Closing Conditions. None of the parties may rely, either as a basis for not consummating the Merger
or for terminating this Agreement, on the failure of any condition set forth in Section 7.1, Section 7.2 or Section
7.3, as the case may be, to be satisfied if such party’s breach of any provision of this Agreement contributed materially to
such failure.
ARTICLE
VIII
TERMINATION
Section
8.1 Termination. This Agreement may be terminated, and the Merger and the other Transactions contemplated hereby may be abandoned,
at any time prior to the Effective Time, whether (except as expressly set forth below) before or after the Company Shareholder Approval
or the Parent Shareholder Approval has been obtained:
(a)
by mutual written consent of the Company and Parent;
(b)
by either the Company or Parent:
(i)
if any Governmental Entity of competent jurisdiction shall have issued a final and nonappealable order, decree, ruling or injunction
or taken any other action permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger, or if there shall
have been adopted prior to the Effective Time any Law that permanently makes the consummation of the Merger illegal or otherwise permanently
prohibited;
(ii)
if the Merger shall not have been consummated on or before 5:00 p.m. Eastern Time, on May 8, 2024 (such date being the “End
Date”); provided, that the right to terminate this Agreement under this Section 8.1(b)(ii) shall not be available
to any party whose breach of any representation, warranty, covenant or agreement contained in this Agreement has been the primary cause
of or resulted in the failure of the Merger to occur on or before such date;
(iii)
in the event of a breach by the other party (treating Parent and Merger Sub as one party) of any covenant or other agreement contained
in this Agreement or if any representation and warranty of the other party contained in this Agreement fails to be true and correct which
(x) would give rise to the failure of a condition set forth in Section 7.2(a) or (b) or Section 7.3(a) or (b),
as applicable, if it were continuing as of the Closing Date and (y) cannot be or has not been cured (or is incapable of becoming true
or does not become true) by the earlier of (1) the End Date and (2) the date that is 30 days after the giving of written notice to the
breaching party of such breach or failure to be true and correct and the basis for such notice (a “Terminable Breach”);
provided, however, that the terminating party is not then in Terminable Breach of any representation, warranty, covenant
or other agreement contained in this Agreement; or
(iv)
if the Company Shareholder Approval shall not have been obtained at a duly held Company Shareholders Meeting (including any adjournment
or postponement thereof) at which a vote on the approval of this Agreement and the Transactions, including the Merger, was taken; or
(c)
by Parent prior to the time the Company Shareholder Approval is obtained, if the Company Board shall have effected a Company Change of
Recommendation, whether or not pursuant to and in accordance with Section 6.3(d)(iii) or Section 6.3(e);
(d)
by the Company prior to the time the Company Shareholder Approval is obtained, if the Company Board (or a committee thereof) determines
to terminate this Agreement in accordance with Section 6.3(d)(iii) in connection with a Company Superior Proposal in order to
enter a definitive agreement providing for the implementation of such Company Superior Proposal; provided, however, that,
except as otherwise provided in Section 8.3(b)(ii), such termination shall not be effective unless the Company concurrently therewith
pays or causes to be paid the Company Termination Fee;
(e)
by the Company if the Parent Common Stock is no longer listed for trading on NASDAQ;
(f)
by the Company if the Loan has not been made to the Company by January 31, 2024; and
(g)
by the Parent in the event that the Parent determines, in its reasonable discretion, that the acquisition of the Company pursuant to
this Agreement could result in a materially adverse amount of cancellation of indebtedness income to Parent for federal income-tax purposes
recognized and attributable to any modification, restructuring, or purchase of the indebtedness of the Company or the purchase of the
Company. Determining whether any income is “materially adverse” shall take into account both (i) whether such income is offset
by any available current operating losses and net operating loss and other tax attributes carryforwards, and (ii) the materiality of
the amount of tax attributable to such income, net of all offsets, deductions, credits and other reductions in the amount of tax actually
payable as a result thereof.
Section
8.2 Notice of Termination; Effect of Termination.
(a)
A terminating party shall provide written notice of termination to the other party specifying with particularity the reason for such
termination, and, except as otherwise provided in Section 8.1(d), any termination shall be effective immediately upon delivery
of such written notice to the other party.
(b)
In the event of termination of this Agreement by any party as provided in Section 8.1, this Agreement shall forthwith become void
and there shall be no liability or obligation on the part of any party except with respect to this Section 8.2, Section 6.7(b),
Section 8.3 and Articles I and IX, which Sections and Articles shall not terminate; provided, however,
that notwithstanding anything to the contrary herein, no such termination shall relieve any party from liability for any damages arising
from or arising out of an intentional and material breach of any covenant, agreement or obligation hereunder or intentional fraud, or
as provided in the Non-Disclosure Agreement, in which case the aggrieved party shall be entitled to all rights and remedies available
at law or in equity.
Section
8.3 Expenses and Other Payments.
(a)
Except as otherwise provided in this Section 8.3 or separately between the parties, each party shall pay its own expenses incident
to preparing for, entering into and carrying out this Agreement and the consummation of the Transactions, whether or not the Merger shall
be consummated.
(b)
If (i) Parent terminates this Agreement pursuant to Section 8.1(c) (Company Change of Recommendation), then the Company
shall pay Parent the Company Termination Fee in cash by wire transfer of immediately available funds (to an account designated by Parent)
no later than three Business Days after notice of termination of this Agreement or (ii) the Company terminates this Agreement pursuant
to Section 8.1(d) (Company Superior Proposal), then the Company shall pay Parent the Company Termination Fee in cash by
wire transfer of immediately available funds (to an account designated by Parent) concurrently with notice of termination of this Agreement,
unless Parent shall not have designated such account to the Company at least twenty-four (24) hours before the Company delivers notice
of termination pursuant to Section 8.1(d) (in which case, the Company’s termination pursuant to Section 8.1(d) shall
be effective immediately upon delivery of such notice to Parent and the Company shall pay the Company Termination Fee to Parent no later
than one Business Day after the date Parent designates an account to the Company).
(c)
[Intentionally Omitted]
(d)
If (i) (A) Parent or the Company terminates this Agreement pursuant to Section 8.1(b)(ii) (End Date) (and the Company Shareholder
Approval has not been obtained) or (B) Parent terminates this Agreement pursuant to Section 8.1(b)(iii) (Company Terminable
Breach), (ii) on or before the date of any such termination a Company Competing Proposal shall have been publicly announced or publicly
disclosed or otherwise publicly communicated to the Company Board and not withdrawn prior to such date and (iii) within nine months after
the date of such termination, the Company or any Subsidiary of the Company enters into a definitive agreement to effect any Company Competing
Proposal or consummates any Company Competing Proposal, then the Company shall pay Parent the Company Termination Fee in cash by wire
transfer of immediately available funds (to an account designated by Parent) no later than three Business Days after the occurrence of
an event described in the foregoing clause (iii). For purposes of this Section 8.3(d), any reference in the definition
of Company Competing Proposal to “25%” or “75%” shall be deemed to be a reference to “50%.”
(e)
If (i) Parent or the Company terminates this Agreement pursuant to Section 8.1(b)(iv) (Failure to Obtain Company Shareholder
Approval), (ii) on or before the date of the Company Shareholders Meeting a Company Competing Proposal shall have been publicly announced
or publicly disclosed and not withdrawn prior to such date and (iii) within nine months after the date of such termination, the Company
or any Subsidiary of the Company enters into a definitive agreement to effect any Company Competing Proposal or consummates any Company
Competing Proposal, then the Company shall pay Parent the Company Termination Fee in cash by wire transfer of immediately available funds
(to an account designated by Parent) no later than three Business Days after the occurrence of an event described in the foregoing clause
(iii). For purposes of this Section 8.3(e), any reference in the definition of Company Competing Proposal to “25%”
or “75%” shall be deemed to be a reference to “50%.”
(f)
[Intentionally Omitted]
(g)
In no event shall Parent be entitled to receive more than one payment of the Company Termination Fee. The parties agree that the agreements
contained in this Section 8.3 are an integral part of the Transactions, and that, without these agreements, the parties would
not enter into this Agreement. If the Company fails to promptly pay the amount due by it pursuant to this Section 8.3, interest
shall accrue on such amount from the date such payment was required to be paid pursuant to the terms of this Agreement until the date
of payment at the rate of 5% per annum. If, in order to obtain such payment, Parent commences a Proceeding that results in judgment for
such party for such amount, the Company shall pay the other party its out-of-pocket costs and expenses (including reasonable attorneys’
fees and expenses) incurred in connection with such Proceeding.
ARTICLE
IX
GENERAL
PROVISIONS
Section
9.1 Disclosure Letter Definitions. All capitalized terms in the Company Disclosure Letter and the Parent Disclosure Letter
shall have the meanings ascribed to them herein (including in Annex A) except as otherwise defined therein.
Section
9.2 Survival. Except as otherwise provided in this Agreement, none of the representations, warranties, agreements and
covenants in this Agreement or in any instrument delivered pursuant to this Agreement, including any rights arising out of any breach
of such representations, warranties, agreements and covenants, shall survive the Effective Time, except for those covenants and agreements
contained herein and therein that by their terms apply or are to be performed in whole or in part after the Effective Time. The Non-Disclosure
Agreement shall (a) survive termination of this Agreement in accordance with its terms and (b) terminate as of the Effective Time.
Section
9.3 Notices. All notices, requests and other communications to any party under, or otherwise in connection with, this Agreement
shall be in writing and shall be deemed to have been duly given upon the earlier of actual receipt or: (a) when delivered by hand providing
proof of delivery; (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); or (c)
on the date sent by email if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business
hours of the recipient. Such communications must be sent to the respective parties at the following addresses (or to such other Persons
or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.3):
(i)
if to Parent or Merger Sub, to:
Aditxt,
Inc.
737
Fifth Street, Suite 200
Richmond,
VA 23219
Attention:
Amro Albanna, CEO
E-mail:
aalbanna@aditxt.com
with
a required copy to (which copy shall not constitute notice):
Sheppard,
Mullin, Richter & Hampton LLP
30
Rockefeller Plaza
New
York, NY 10112
Attn:
Richard Friedman, Esq.
Email:
rafriedman@sheppardmullin.com
(ii)
if to the Company, to:
Evofem
Biosciences, Inc.
7770
Regents Road, Suite 113-618
San
Diego, CA 92122
Attn:
Saundra Pelletier, CEO
E-Mail:
spelletier@evofem.com
with
a required copy to (which copy shall not constitute notice):
Procopio,
Cory, Hargreaves & Savitch LLP
12544
High Bluff Drive, Suite 400
San
Diego, CA 92130
Attn:
Jennifer Trowbridge and Dennis Doucette
E-Mail:
jennifer.trowbridge@procopio.com; dennis.doucette@procopio.com
Section
9.4 Rules of Construction.
(a)
Each of the parties acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded
the execution of this Agreement and that it has executed the same with the advice of independent counsel. Each party and its counsel
cooperated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto
exchanged between the parties shall be deemed the work product of the parties and may not be construed against any party by reason of
its preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement
against any party that drafted it is of no application and is hereby expressly waived.
(b)
The inclusion of any information in the Company Disclosure Letter or Parent Disclosure Letter shall not be deemed an admission or acknowledgment,
in and of itself and solely by virtue of the inclusion of such information in the Company Disclosure Letter or Parent Disclosure Letter,
as applicable, that such information is required to be listed in the Company Disclosure Letter or Parent Disclosure Letter, as applicable,
that such items are material to the Company and its Subsidiaries, taken as a whole, or Parent and its Subsidiaries, taken as a whole,
as the case may be, or that such items have resulted in a Company Material Adverse Effect or a Parent Material Adverse Effect. The headings,
if any, of the individual sections of each of the Parent Disclosure Letter and Company Disclosure Letter are inserted for convenience
only and shall not be deemed to constitute a part thereof or a part of this Agreement. The Company Disclosure Letter and Parent Disclosure
Letter are arranged in sections corresponding to the Sections of this Agreement merely for convenience, and the disclosure of an item
in one section of the Company Disclosure Letter or Parent Disclosure Letter, as applicable, as an exception to a particular representation
or warranty shall be deemed adequately disclosed as an exception with respect to all other representations or warranties to the extent
that the relevance of such item to such representations or warranties is reasonably apparent from such item, notwithstanding the presence
or absence of an appropriate Section of the Company Disclosure Letter or Parent Disclosure Letter with respect to such other representations
or warranties or an appropriate cross reference thereto.
(c)
The specification of any dollar amount in the representations and warranties or otherwise in this Agreement or in the Company Disclosure
Letter or Parent Disclosure Letter is not intended and shall not be deemed to be an admission or acknowledgment of the materiality of
such amounts or items, nor shall the same be used in any dispute or controversy between the parties to determine whether any obligation,
item or matter (whether or not described herein or included in any schedule) is or is not material for purposes of this Agreement.
(d)
All references in this Agreement to Annexes, Exhibits, Schedules, Articles, Sections, subsections and other subdivisions refer to the
corresponding Annexes, Exhibits, Schedules, Articles, Sections, subsections and other subdivisions of this Agreement unless expressly
provided otherwise. Titles appearing at the beginning of any Articles, Sections, subsections or other subdivisions of this Agreement
are for convenience only, do not constitute any part of such Articles, Sections, subsections or other subdivisions, and shall be disregarded
in construing the language contained therein. The words “this Agreement,” “herein,” “hereby,” “hereunder”
and “hereof” and words of similar import, refer to this Agreement as a whole and not to any particular subdivision unless
expressly so limited. The words “this Section,” “this subsection” and words of similar import, refer only to
the Sections or subsections hereof in which such words occur. The word “including” (in its various forms) means “including,
without limitation.” Pronouns in masculine, feminine or neuter genders shall be construed to state and include any other gender
and words, terms and titles (including terms defined herein) in the singular form shall be construed to include the plural and vice versa,
unless the context otherwise expressly requires. Unless the context otherwise requires, all defined terms contained herein shall include
the singular and plural and the conjunctive and disjunctive forms of such defined terms. Unless the context otherwise requires, all references
to a specific time shall refer to New York, New York time.
(e)
In this Agreement, except as the context may otherwise require, references to: (i) any agreement (including this Agreement), contract,
statute or regulation are to the agreement, contract, statute or regulation as amended, modified, supplemented, restated or replaced
from time to time (in the case of an agreement or contract, to the extent permitted by the terms thereof and, if applicable, by the terms
of this Agreement); (ii) any Governmental Entity include any successor to that Governmental Entity; (iii) any applicable Law refers to
such applicable Law as amended, modified, supplemented or replaced from time to time (and, in the case of statutes, include any rules
and regulations promulgated under such statute) and references to any section of any applicable Law or other law include any successor
to such section; and (iv) “days” mean calendar days. If any period expires on a day which is not a Business Day or any event
or condition is required by the terms of this Agreement to occur or be fulfilled on a day which is not a Business Day, such period shall
expire or such event or condition shall occur or be fulfilled, as the case may be, on the next succeeding Business Day.
Section
9.5 Counterparts. This Agreement may be executed in two or more counterparts, including via facsimile or email in “portable
document format” (“pdf”) form transmission, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart. The exchange of a fully executed Agreement (in counterparts or otherwise)
by electronic transmission in pdf format or by facsimile shall be sufficient to bind the parties to the terms and conditions of this
Agreement.
Section
9.6 Entire Agreement; Third Party Beneficiaries.
(a)
This Agreement (together with the Non-Disclosure Agreement, the other Transaction Agreements and any other documents and instruments
executed pursuant hereto) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.
(b)
Except for the provisions of Article III (which, from and after the Effective Time, shall be for the benefit of the former holders
of Company Common Stock and Unconverted Company Preferred Stock to receive the Merger Consideration and with respect to which, prior
to the Effective Time, the Company shall have the right, on behalf of such holders, to pursue damages against Parent and Merger Sub for
the loss of the Merger Consideration in the event of any intentional and material breach of any covenant, agreement or obligation hereunder
or intentional fraud by Parent or Merger Sub) and Section 6.4 and Section 6.21 (which from and after the Effective Time
are intended for the benefit of, and shall be enforceable by, the Persons referred to therein and by their respective heirs and representatives),
nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
Section
9.7 Governing Law; Venue; Waiver of Jury Trial.
(a)
THIS AGREEMENT, AND ALL CLAIMS OR CAUSES OF ACTION (WHETHER IN CONTRACT OR TORT) THAT MAY BE BASED UPON, ARISE OUT OF OR RELATE TO THIS
AGREEMENT, OR THE NEGOTIATION, EXECUTION OR PERFORMANCE OF THIS AGREEMENT, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
(b)
Each of the parties hereto hereby irrevocably submits to the exclusive jurisdiction of the courts of the State of Delaware and to the
jurisdiction of the United States District Court for the District of Delaware, for the purpose of any action, proceeding or counterclaim
(whether based on contract, tort or otherwise) directly or indirectly arising out of or relating to this Agreement or the actions of
the parties hereto in the negotiation, administration, performance and enforcement thereof, and each of the parties hereto hereby irrevocably
agrees that all claims in respect to such action or proceeding may be heard and determined exclusively in any state or federal court
located in the State of Delaware. Each of the parties hereto further consents to the assignment to the Business and Technology Case Management
Program with regard to any proceeding in the courts of the State of Delaware.
(c)
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS. EACH PARTY CERTIFIES
AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED
THE IMPLICATIONS OF THE FOREGOING WAIVER; (III) SUCH PARTY MAKES THE FOREGOING WAIVER VOLUNTARILY; AND (IV) SUCH PARTY HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS Section
9.7.
Section
9.8 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by rule
of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the Merger is not affected in any manner adverse to any party. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the Merger
is fulfilled to the extent possible.
Section
9.9 Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any
of the parties (whether by operation of law or otherwise) without the prior written consent of the other party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors
and permitted assigns. Any purported assignment in violation of this Section 9.9 shall be void.
Section
9.10 Affiliate Liability.
(a)
Each of the following is herein referred to as a “Company Affiliate”: (i) any direct or indirect holder of equity
interests or securities in the Company (whether limited or general partners, members, shareholders or otherwise); and (ii) any director,
officer, employee or other Representative of (A) the Company or (B) any Person who controls the Company. To the fullest extent permitted
by applicable Law, no Company Affiliate shall have any liability or obligation to Parent or Merger Sub of any nature whatsoever in connection
with or under this Agreement or the Transactions, and Parent and Merger Sub hereby waive and release all claims of any such liability
and obligation.
(b)
Each of the following is herein referred to as a “Parent Affiliate”: (i) any direct or indirect holder of equity interests
or securities in Parent or Merger Sub (whether limited or general partners, members, shareholders or otherwise) and (ii) any director,
officer, employee or other Representative of (A) Parent or Merger Sub or (B) any Person who controls Parent or Merger Sub. To the fullest
extent permitted by applicable Law, no Parent Affiliate shall have any liability or obligation to the Company of any nature whatsoever
in connection with or under this Agreement or the Transactions, and the Company hereby waives and releases all claims of any such liability
and obligation.
Section
9.11 Remedies; Specific Performance.
(a)
Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and
not exclusive of any other remedy conferred hereby, or by Law or equity upon such party and the exercise by a party of any one remedy
will not preclude the exercise of any other remedy.
(b)
The parties agree that irreparable damage, for which monetary damages would not be an adequate remedy, would occur in the event that
any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached by the
parties. The parties acknowledge and agree that the parties shall be entitled to an injunction or injunctions, or any other appropriate
form of specific performance or equitable relief, to prevent breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of competent jurisdiction, in each case in accordance with this Section 9.11, this being in addition to any
other remedy to which they are entitled under the terms of this Agreement at law or in equity.
(c)
The parties’ rights in this Section 9.11 are an integral part of the Transactions and each party accordingly agrees not
to raise any objections to the availability of the equitable remedy of specific performance to prevent or restrain breaches or threatened
breaches of, or to enforce compliance with, the covenants and obligations of such party under this Agreement all in accordance with the
terms of this Section 9.11. Each party further agrees that no other party or any other Person shall be required to obtain, furnish
or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 9.11,
and each party irrevocably waives (i) any defense in an action for specific performance that a remedy at law would be adequate to prevent
or restrain breaches or threatened breaches and (ii) any right it may have to require the obtaining, furnishing or posting of any such
bond or similar instrument. If prior to the End Date, any party hereto brings an action to enforce specifically the performance of the
terms and provisions hereof by any other party, the End Date shall automatically be extended by such other time period established by
the court presiding over such action.
Section
9.12 Amendment. Prior to the Effective Time, this Agreement may be amended by the mutual agreement of the parties,
by action taken or authorized by their respective Boards of Directors at any time, whether before or after the Company Shareholder Approval
or the Parent Shareholder Approval has been obtained; provided, however, that after the Company Shareholder Approval or
the Parent Shareholder Approval has been obtained, no amendment shall be made that pursuant to applicable Law would require the further
approval or adoption by the shareholders of the Company or Parent, as applicable, without first obtaining such further approval or adoption.
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties.
Section
9.13 Extension; Waiver. At any time prior to the Effective Time, either the Company, on the one hand, or Parent and Merger
Sub, on the other hand, may, to the extent legally allowed and except as otherwise set forth herein: (a) extend the time for the performance
of any of the obligations or acts of the other party hereunder; (b) waive any inaccuracies in the representations and warranties of the
other party contained herein or in any document delivered pursuant hereto; and (c) waive compliance with any of the agreements or conditions
of the other party contained herein. Notwithstanding the foregoing, no failure or delay by the Company, on the one hand, or Parent and
Merger Sub, on the other hand, in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise of any other right hereunder. No agreement on the part of a party to any such extension
or waiver shall be valid unless set forth in an instrument in writing signed on behalf of such party.
[Signature
Pages Follow]
IN
WITNESS WHEREOF, each party hereto has caused this Agreement to be signed by its respective officer thereunto duly authorized, all
as of the date first written above.
| |
ADITXT,
INC. |
| |
|
|
| |
By: |
/s/
Amro Albanna |
| |
Name:
|
Amro
Albanna |
| |
Title: |
|
| |
|
|
| |
ADICURE,
INC. |
| |
|
|
| |
By: |
/s/
Amro Albanna |
| |
Name: |
Amro
Albanna |
| |
Title: |
|
| |
|
|
| |
EVOFEM
BIOSCIENCES, INC. |
| |
|
|
| |
By: |
/s/
Saundra Pelletier |
| |
Name:
|
Saundra
Pelletier |
| |
Title: |
|
Signature
Page to Agreement and Plan of Merger
ANNEX
A
Certain
Definitions
“Acceptable
Non-Disclosure Agreement” means a non-disclosure agreement that is not less favorable in the aggregate to the Company as the
Non-Disclosure Agreement, as determined by the Company Board (or any committee thereof) in good faith, after consultation with its outside
legal counsel; provided, further, that such non-disclosure agreement shall not be required to contain standstill provisions
and shall not in any way restrict the Company from complying with the provisions of Section 6.3.
“Affiliate”
means, with respect to any Person, any other Person directly or indirectly, controlling, controlled by, or under common control with,
such Person, through one or more intermediaries or otherwise.
“Business
Day” means a day that is not a Saturday or Sunday or other day on which banks in the State of New York or the State of Delaware
are authorized or obligated to be closed.
“CARES
Act” means the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. 116–136) and any administrative or other guidance
published with respect thereto by any Governmental Authority (including IRS Notices 2020-22 and 2020-65).
“Company
Associate” means any current or former employee, independent contractor, officer or director of the Company or any of its Subsidiaries.
“Company
Capital Stock” means the Company Common Stock and the Company Preferred Stock.
“Company
Competing Proposal” means any proposal, inquiry, offer or indication of interest relating to any transaction or series of related
transactions (other than transactions with Parent or any of its Subsidiaries) involving: (a) any acquisition or purchase by any Person
or group, directly or indirectly, of more than 25% of any class of outstanding voting or equity securities of the Company, or any tender
offer or exchange offer that, if consummated, would result in any Person or group beneficially owning more than 25% of any class of outstanding
voting or equity securities of the Company; (b) any merger, consolidation, share exchange, business combination, joint venture, recapitalization,
reorganization or other similar transaction involving the Company and a Person or group pursuant to which the Company Shareholders immediately
preceding such transaction hold less than 75% of the equity interests in the surviving or resulting entity of such transaction; or (c)
any sale, lease (other than in the ordinary course of business), exchange, transfer or other disposition to a Person or group of more
than 25% of the consolidated assets of the Company and its Subsidiaries (measured by the fair market value thereof).
“Company
Convertible Notes” means those items set forth in Section 10.1 of the Company Disclosure Letter.
“Company
Intellectual Property” means the Intellectual Property used in the operation of the business of each of the Company and its
Subsidiaries as presently conducted.
“Company
Notes” means, collectively, (a) the Company Convertible Notes and (b) the Company Unsecured Notes.
“Company
Optionholder” means a holder of Company Options.
“Company
Options” means any option or other award granted under the Company Option Plans.
“Company
Option Plans” means the Company’s Amended and Restated 2012 Equity Incentive Plan, 2014 Equity Incentive Plan and 2018
Inducement Equity Incentive Plan.
“Company
Preferred Stock” means those items set forth in Section 10.2 of the Company Disclosure Letter.
“Company
Shareholder Approval” means the approval of the Agreement and the Transactions, including the Merger, by the affirmative vote
of at least a majority of the outstanding shares of Company Common Stock (including all Company Preferred Stock on the basis and to the
extent it is permitted to so vote) entitled to vote thereon at the Company Shareholders Meeting in accordance with the DGCL and the Organizational
Documents of the Company.
“Company
Shareholders” means the holders of Company Common Stock and the Company Preferred Stock.
“Company
Superior Proposal” means a bona fide Company Competing Proposal (with references to “25%” being deemed replaced
with references to “50%” and references to “75%” being deemed to be replaced with references to “50%”)
by a third party, which the Company Board or any committee thereof determines in good faith, after consultation with the Company’s
outside legal and financial advisors and after taking into account relevant legal, financial, regulatory, estimated timing of consummation
and other aspects of such proposal that the Company Board considers in good faith and the Person or group making such proposal, would,
if consummated in accordance with its terms, result in a transaction more favorable to the Company Shareholders than the Transactions.
“Company
Termination Fee” means a cash amount equal to $4,000,000.
“Company
Warrants” means all warrants representing the right to purchase shares of Company Common Stock.
“Consent”
means any approval, consent, ratification, clearance, permission, waiver, or authorization.
“control”
and its correlative terms, means the possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“COVID-19”
means SARS-CoV-2 or COVID-19 (and all related strains and sequences), including any intensification, resurgence or any evolutions or
mutations thereof, and/or related or associated epidemics, pandemics, disease outbreaks or public health emergencies.
“COVID-19
Measures” means (i) a Person’s and its Subsidiaries’ compliance with any quarantine, “shelter in place,”
“stay at home,” social distancing, shut down, closure, sequester, safety or similar Law, guidelines or recommendations promulgated
by any Governmental Entity, including the Centers for Disease Control and Prevention or the World Health Organization, in each case,
in connection with, related to, or in response to COVID-19, including the Coronavirus Aid, Relief, and Economic Security Act (Public
Law 116-136), signed into law on March 27, 2020, and Families First Coronavirus Response Act, or any other response to COVID-19 (including
any such response undertaken by any similarly situated industry participants), and (ii) the reversal or discontinuation of any of the
foregoing.
“EDGAR”
means the Electronic Data Gathering, Analysis and Retrieval System administered by the SEC.
“EMEA”
means the European Medicines Agency.
“Employee
Benefit Plan” of any Person means any “employee benefit plan” (within the meaning of Section 3(3) of ERISA, regardless
of whether such plan is subject to ERISA), and any equity option, restricted equity, equity purchase plan, equity or equity-based compensation
plan, phantom equity or appreciation rights plan, collective bargaining agreement, bonus plan or arrangement, incentive award plan or
arrangement, vacation or holiday pay policy, retention or severance pay plan, policy or agreement, deferred compensation agreement or
arrangement, change in control, hospitalization or other medical, dental, vision, accident, disability, life or other insurance, executive
compensation or supplemental income arrangement, consulting agreement, employment agreement and any other material employee benefit plan,
agreement, arrangement, program, practice or understanding, in each case, whether written or unwritten, that is sponsored, maintained,
administered, contributed to or entered into by such Person for the current or future benefit of any present or former director, employee
or contractor of the Person or with respect to which such Person has any direct or indirect liability, whether current or contingent.
“Environmental
Law” means any applicable Law in effect as of the date of this Agreement, and any governmental order or binding agreement with
any Governmental Entity in effect as of the date of this Agreement: (a) relating to pollution (or the cleanup thereof) or the protection
of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient or indoor air,
soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture,
use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal,
or remediation of any Hazardous Materials.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA
Affiliate” means, with respect to any entity, trade or business, any other entity, trade or business that at any relevant time
would be a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(l) of ERISA that includes the
first entity, trade or business, or that is a member of the same “controlled group” as the first entity, trade or business
pursuant to Section 4001(a)(14) of ERISA.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder.
“FDA”
means the U.S. Food and Drug Administration.
“FDA
Law” means the Federal Food, Drug, and Cosmetic Act, as amended (21 U.S.C. § 301 et seq.), the Public Health Service Act
(42 U.S.C. § 201 et seq.), as amended, and the regulations promulgated thereunder.
“Governmental
Entity” means any federal, foreign, state, county, municipal, provincial, or local governmental authority, court, judicial
body, arbitration tribunal, government or self-regulatory organization, commission, tribunal or organization, or any regulatory, administrative,
or other agency, or any political or other subdivision, department, commission, board, bureau, branch, division, ministry, or instrumentality
of any of the foregoing
“group”
has the meaning ascribed to such term in Section 13(d) of the Exchange Act.
“Hazardous
Materials” means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, pollutant, contaminant,
solid, liquid, mineral or gas, in each case, whether naturally occurring or man-made, for which liability may be imposed under Environmental
Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing
materials, urea formaldehyde foam insulation and polychlorinated biphenyls and per- and poly-fluoroalkyl substances (PFAS) and other
emerging contaminants.
“Indebtedness”
of any Person means, without duplication: (a) indebtedness of such Person for borrowed money; (b) obligations of such Person evidenced
by bonds, debentures, notes or similar instruments; (c) obligations of such Person to pay the deferred purchase or acquisition price
for any property or services of such Person or as the deferred purchase price of a business or assets; (d) reimbursement obligations
of such Person in respect of drawn letters of credit or similar instruments issued or accepted by banks and other financial institutions
for the account of such Person; (e) obligations of such Person under a lease to the extent such obligations are required to be classified
and accounted for as a capital lease on a balance sheet of such Person under GAAP; and (f) indebtedness of others as described in clauses
(a) through (e) above guaranteed by such Person; but Indebtedness does not include obligations in respect of repurchase agreements,
securitizations, re-securitizations and similar financing arrangements, accounts payable to trade creditors, or accrued expenses arising
in the ordinary course of business, in each case, that are not yet due and payable, or are being disputed in good faith, and the endorsement
of negotiable instruments for collection in the ordinary course of business.
“Intellectual
Property” means any and all proprietary and intellectual property rights, under the applicable Law of any jurisdiction or rights
under international treaties, both statutory and common law rights, including: (a) patents and industrial property rights; (b) trademarks,
service marks, trade names, slogans, domain names, logos, trade dress and other identifiers of source, and registrations and applications
for registrations thereof (including all goodwill associated with the foregoing); (c) rights associated with works of authorship, including
exclusive exploitation rights, copyrightable works, copyrights, moral rights, computer programs, software, databases, and mask works;
(d) trade secrets, know-how, and rights in confidential information, including designs, formulations, concepts, compilations of information,
methods, techniques, procedures, and processes, whether or not patentable; (e) other similar proprietary rights in intellectual property
of every kind and nature; (f) rights of privacy and publicity; and (g) all registrations, renewals, extensions, statutory invention registrations,
continuations, continuations-in-part, provisionals, divisionals, or reissues of, and applications for, any of the rights referred to
in clauses (a) through (f) above (whether or not in tangible form and including all tangible embodiments of any of the foregoing, such
as samples, studies and summaries), along with all rights to prosecute and perfect the same through administrative prosecution, registration,
recordation or other administrative proceeding, and all causes of action and rights to sue or seek other remedies arising from or relating
to the foregoing, including for past, present or future infringement of any of the foregoing.
“Intervening
Event” means a material fact, event, circumstance, development or change that occurs, arises or comes to the attention of the
Company Board after the date of this Agreement that (a) materially affects the business, assets or operations of the Company or its Subsidiaries
(other than any event, occurrence, fact or change resulting from a breach of this Agreement by the Company or its Representatives), (b)
was not known to, or reasonably foreseeable by, the Company Board as of the date of this Agreement, and (c) becomes known to the Company
Board prior to receipt of the Company Shareholder Approval; provided, however, that in no event shall any of the following constitute
or be taken into account in determining whether an “Intervening Event” has occurred: (x) the receipt, existence of or terms
of a Company Competing Proposal; (y) a change in the market price or trading volume of the equity or debt securities of the Company Parent,
as applicable; and (z) the fact that, in and of itself, the Company exceeds any internal or published projections, estimates or expectations
of the Company’s or Parent’s, as applicable, revenue, earnings or other financial performance or results of operation for
any period (it being understood that the facts or circumstances giving rise to or contributing to any such change or fact described in
clause (y) or clause (z) may constitute or may be taken into account in determining whether there has been, an Intervening Event if not
otherwise excluded by this definition).
“Investment
Company Act” means the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.
“IRS”
means the U.S. Internal Revenue Service.
“knowledge”
means the actual knowledge, after reasonable inquiry, of (a) in the case of the Company, the individuals listed in Section 1.1
of the Company Disclosure Letter and (b) in the case of Parent, the individuals listed in Section 1.1 of the Parent Disclosure
Letter.
“Law”
means any law, rule, regulation, ordinance, code, judgment, order, treaty, convention, governmental directive or other legally enforceable
requirement, U.S. or non-U.S., of any Governmental Entity, including common law.
“Lien”
means any lien, pledge, hypothecation, mortgage, deed of trust, security interest, conditional or installment sale agreement, encumbrance,
option, right of first refusal, easement, right of way, encroachment, preemptive right, community property interest or restriction of
any nature (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset,
or any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset), whether voluntarily incurred,
consensual, non-consensual or arising by operation of Law.
“made
available” means, with respect to any statement in this Agreement, the Company Disclosure Letter or the Parent Disclosure Letter
to the effect that any information, document or other material has been “made available,” that such information, document
or material was: (a) uploaded for review by Parent and its Representatives or the Company and its Representatives, as applicable, in
the virtual data room established in connection with the Transactions prior to the execution of this Agreement; or (b) contained in a
true and complete unredacted form in the Company SEC Documents or the Parent SEC Documents, as applicable, filed at least two (2) Business
Days prior to the date hereof.
“Material
Adverse Effect” means, when used with respect to any Person, any fact, circumstance, occurrence, state of fact, effect, change,
event or development that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect
on (a) the financial condition, business, assets, properties or results of operations of such Person and its Subsidiaries, taken as a
whole, or (b) the ability of such Person and its Subsidiaries to consummate the Transactions before the End Date; provided, however,
that no fact, circumstance, occurrence, state of fact, effect, change, event or development (by itself or when aggregated or taken together
with any and all other effects) resulting from, arising out of, attributable to, or related to any of the following shall be deemed to
be or constitute a “Material Adverse Effect,” and no effect (by itself or when aggregated or taken together with any and
all other such effects) directly or indirectly resulting from, arising out of, attributable to, or related to any of the following shall
be taken into account when determining whether a “Material Adverse Effect” under the foregoing clause (a) exists or has occurred
or is reasonably expected to occur: (i) general economic conditions (or changes in such conditions) or conditions in the global economy
generally; (ii) conditions (or changes in such conditions) in any industry or industries in which the Person operates; (iii) political
conditions (or changes in such conditions) or acts of war, sabotage, terrorism, acts of God, epidemics, pandemics or disease outbreaks
(including COVID-19 and any actions or events resulting therefrom) (including any escalation or general worsening of any such acts of
war, sabotage, terrorism, acts of God, epidemics, pandemics or disease outbreaks (including COVID-19 and any COVID-19 Measures or other
actions or events resulting therefrom)); (iv) earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires, other natural
disasters or other weather conditions; (v) changes in Law or other legal or regulatory conditions, or the interpretation thereof, or
changes in GAAP or other accounting standards (or the interpretation thereof); (vi) the announcement of this Agreement or the pendency
or consummation of the Transactions; (vii) any actions taken or failure to take action, in each case, at the request of another party
to this Agreement (treating Parent and Merger Sub as one party); (viii) compliance with the terms of, or the taking of any action expressly
permitted or required by, this Agreement; (ix) any changes in such Person’s stock price, dividends or the trading volume of such
Person’s stock, or any failure by such Person to meet any analysts’ estimates or expectations of such Person’s revenue,
earnings or other financial performance or results of operations for any period, or any failure by such Person or any of its Subsidiaries
to meet any internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations (it
being understood that the facts or occurrences giving rise to or contributing to such changes or failures may constitute, or be taken
into account in determining whether there has been or will be, a Material Adverse Effect); (x) any Proceedings made or brought by any
of the current or former shareholders of such Person (on their own behalf or on behalf of such Person) against the Company, Parent, Merger
Sub or any of their directors or officers, arising out of the Merger or in connection with any other Transactions; or (xii) with respect
to a Parent Material Adverse Effect, anything set forth in the Parent Disclosure Letter, and with respect to a Company Material Adverse
Effect, anything set forth in the Company Disclosure Letter; except to the extent such effects resulting from, arising out of, attributable
to or related to the matters described in the foregoing clauses (i) through (v) disproportionately adversely affect such Person and its
Subsidiaries, taken as a whole, as compared to other Persons that conduct business in the regions in the world and in the industries
in which such Person and its Subsidiaries conduct business (in which case, the incremental adverse effects (if any) shall be taken into
account when determining whether a “Material Adverse Effect” exists, has occurred or is reasonably expected to occur).
“NASDAQ”
means the NASDAQ Capital Market and any successor stock exchange or quotation system operated by the New York Stock Exchange or any successor
thereto.
“Ordinary
course of business” means the ordinary course of business consistent with past custom and practice (including with respect
to quantity and frequency).
“Organizational
Documents” means (a) with respect to a corporation, the charter, articles, articles supplementary or certificate of incorporation,
as applicable, and bylaws thereof, (b) with respect to a limited liability company, the certificate or articles of formation or organization,
as applicable, and the operating or limited liability company agreement thereof, (c) with respect to a partnership, the certificate of
formation and the partnership agreement thereof, and (d) with respect to any other Person the organizational, constituent and/or governing
documents and/or instruments of such Person.
“Other
party” means (a) when used with respect to the Company, Parent and Merger Sub and (b) when used with respect to Parent or Merger
Sub, the Company.
“Parent
Associate” means any current or former employee, independent contractor, officer or director of the Parent or any of its Subsidiaries.
“Parent
Capital Stock” means Parent Common Stock and Parent Preferred Stock.
“Parent
Common Stock” means the common stock of Parent, par value $0.001 per share.
“Parent
Equity Plans” means the Parent’s 2017 Equity Incentive Plan and the Parent’s 2021 Omnibus Equity Incentive Plan.
“Parent
Intellectual Property” means the Intellectual Property used in the operation of the business of each of Parent and its Subsidiaries
as presently conducted.
Parent
Preferred Stock” means the Preferred Stock of the Parent, par value $0.001 per share, including any series thereof which is
created.
“Parent
Shareholder Approval” means the approval of (i) the Merger Agreement and the Transaction Documents, (ii) the Parent Stock Issuance,
(iii) adoption of a new Parent stock plan to be described in the Joint Proxy Statement, and (iv) the issuance of Company Common Stock
upon the conversion of the Company Preferred Stock, in each case, by the affirmative vote of a majority of the votes cast at the Parent
Shareholders Meeting in accordance with the rules and regulations of NASDAQ and the Organizational Documents of Parent; and (v) an amendment
to the Parent’s Certificate of Incorporation to increase its authorized capital stock, in an amount to be determined by the time
of the filing of the Joint Proxy Statement, by the affirmative vote of a majority of the outstanding stock entitled to vote thereon and
in accordance with the Organizational Documents of the Parent.
“Parent
Shareholders” means the holders of Parent Common Stock and the holders of Parent Preferred Stock.
“Parent
Shareholders Meeting” means a meeting of Parent Shareholders where the Parent Shareholder Approval is sought, including any
postponement, adjournment or recess thereof.
“Parent’s
Products” means AditxtScore™, Adimune™, and/or Adivir™.
“party”
or “parties” means a party or the parties to this Agreement, except as the context may otherwise require.
“Permitted
Lien” means any Lien (a) for Taxes or governmental assessments, charges or claims of payment not yet delinquent or that are
being contested in good faith by appropriate Proceedings, (b) relating to any Indebtedness disclosed in the Company Disclosure Letter,
(c) which is a carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar Liens
arising by operation of Law in the ordinary course of business for amounts not yet delinquent or is being contested in good faith by
appropriate Proceedings, (d) which is not material in amount and would not reasonably be expected to materially interfere with the ordinary
conduct of the business of the Company and its Subsidiaries as currently conducted, (e) which is a statutory or common law lien or encumbrance
to secure landlords, lessors or renters under leases or rental agreements, (f) which is imposed on the underlying fee interest in real
property subject to a company lease or over which the Company has easement rights, and subordination or similar agreements relating thereto,
(g) which is a zoning, building, planning, land use or other similar restriction, (h) which is a publicly recorded easement, covenant,
right-of-way, quasi-easement, license, restriction, utility agreement or defect, imperfection or irregularity of title or (i) which is
identified in the Company Disclosure Letter.
“Person”
means any individual, corporation, partnership, limited partnership, limited liability company, group (including a “person”
as defined in Section 13(d)(3) of the Exchange Act), trust, association or other entity or organization (including any Governmental Entity
or a political subdivision, agency or instrumentality of a Governmental Entity).
“Proceeding”
means any actual or threatened claim (including a claim of a violation of applicable Law), action, audit, demand, suit, proceeding, investigation
or other proceeding at law or in equity or order or ruling, in each case whether civil, criminal, administrative, investigative or otherwise
and whether or not such claim, action, audit, demand, suit, proceeding, investigation or other proceeding or order or ruling results
in a formal civil or criminal litigation or regulatory action.
“Product”
means EVO100 or EVO200, as the context requires.
“Representatives”
means, with respect to any Person, the officers, directors, employees, accountants, consultants, agents, legal counsel, financial advisors
and other representatives of such Person.
“SEC”
means the United States Securities and Exchange Commission.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Significant
Subsidiary” means, with respect to a Person, a Subsidiary of such Person that qualifies as a “Significant Subsidiary”
under Item 1.02(w) of Regulation S-X of the SEC.
“Subsidiary”
means, with respect to a Person, any Person, whether incorporated or unincorporated, of which (a) at least 50% of the securities or ownership
interests having by their terms ordinary voting power to elect a majority of the board of directors or other Persons performing similar
functions, (b) a general partner interest or (c) a managing member interest, is directly or indirectly owned or controlled by the subject
Person or by one or more of its respective Subsidiaries.
“Takeover
Law” means any “fair price,” “moratorium,” “control share acquisition,” “business
combination” or any other takeover or anti-takeover statute or similar statute enacted under applicable Law.
“Tax”
or “Taxes” means any and all U.S. federal, state, local and non-U.S. taxes, assessments, levies, duties, tariffs,
imposts and other similar charges and fees imposed by any Governmental Entity, including, income, franchise, windfall or other profits,
gross receipts, property, sales, use, net worth, capital stock, payroll, employment, social security, workers’ compensation, unemployment
compensation, excise, withholding, ad valorem, stamp, transfer, value-added, occupation, environmental, disability, real property, escheat,
personal property, registration, alternative or add-on minimum or estimated tax, including any interest, penalty, additions to tax or
additional amounts imposed with respect thereto, whether disputed or not and including any obligations to indemnify or otherwise assume
or succeed to the Tax liability of any other Person.
“Tax
Returns” means any return, report, certificate, claim for refund, election, estimated tax filing or declaration filed or required
to be filed with any Taxing Authority, including any schedule or attachment thereto, and including any amendments thereof.
“Taxing
Authority” means any Governmental Entity having jurisdiction in matters relating to Tax matters.
“Transaction
Agreements” means this Agreement and each other agreement to be executed and delivered in connection herewith and therewith.
“Transfer
Taxes” means any stock transfer, real estate transfer, documentary, stamp, recording and other similar Taxes (including interest,
penalties and additions to any such Taxes); provided, for the avoidance of doubt, which Transfer Taxes shall not include any income,
franchise or similar Taxes arising from the Transactions.
“Voting
Debt” of a Person means bonds, debentures, notes or other Indebtedness having the right to vote (or convertible into securities
having the right to vote) on any matters on which shareholders of such Person may vote.
Exhibit
3.1
EXECUTION
COPY
CERTIFICATE
OF DESIGNATIONS OF
SERIES F-1 CONVERTIBLE PREFERRED STOCK OF
EVOFEM BIOSCIENCES, INC.
I,
Saundra Pelletier, hereby certify that I am the Chief Executive Officer of Evofem Biosciences, Inc. (the “Company”),
a corporation organized and existing under the Delaware General Corporation Law (the “DGCL”), and further do hereby
certify:
That
pursuant to the authority expressly conferred upon the Board of Directors of the Company (the “Board”) by the Company’s
Certificate of Incorporation, as amended (the “Certificate of Incorporation”), and Section 151(g) of the DGCL, the
Board on December 11, 2023 adopted the following resolution determining it desirable and in the best interests of the Company and its
stockholders for the Company to create a series of ninety five thousand (95,000) shares of preferred stock designated as “Series
F-1 Convertible Preferred Stock”, none of which shares have been issued; be it
RESOLVED,
that pursuant to the authority vested in the Board this Company, in accordance with the provisions of the Certificate of Incorporation,
a series of preferred stock, par value $0.0001 per share, of the Company be and hereby is created, and that the designation and number
of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of
such series and the qualifications, limitations and restrictions thereof are as follows:
TERMS
OF SERIES F-1 CONVERTIBLE PREFERRED STOCK
1.
Designation and Number of Shares. There shall hereby be created and established a series of preferred stock of the Company designated
as “Series F-1 Convertible Preferred Stock” (the “F-1 Preferred Shares”). The authorized number of Preferred
Shares shall ninety five thousand (95,000) shares. Each Preferred Share shall have a par value of $0.0001. Capitalized terms not defined
herein shall have the meaning as set forth in Section 31 below.
2.
Ranking. Except to the extent that the holders of at least a majority of the outstanding Preferred Shares (the “Required
Holders”) expressly consent to the creation of Parity Stock (as defined below) or Senior Preferred Stock (as defined below)
in accordance with Section 15, all shares of capital stock of the Company shall be junior in rank to all Preferred Shares with respect
to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company (such
junior stock is referred to herein collectively as “Junior Stock”). The rights of all such shares of capital stock
of the Company shall be subject to the rights, powers, preferences and privileges of the F-1 Preferred Shares. Without limiting any other
provision of this Certificate of Designations, without the prior express consent of the Required Holders, voting separate as a single
class, the Company shall not hereafter authorize or issue any additional or other shares of capital stock that is (i) of senior rank
to the F-1 Preferred Shares in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution
and winding up of the Company (collectively, the “Senior Preferred Stock”), (ii) of pari passu rank to the F-1 Preferred
Shares in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of
the Company (collectively, the “Parity Stock”) or (iii) any Junior Stock having a maturity date or any other date
requiring redemption or repayment of such shares of Junior Stock that is prior to the first anniversary of the Initial Issuance Date.
In the event of the merger or consolidation of the Company with or into another corporation, the F-1 Preferred Shares shall maintain
their relative rights, powers, designations, privileges and preferences provided for herein and no such merger or consolidation shall
result inconsistent therewith.
4.
Conversion. At any time after the Initial Issuance Date, each Preferred Share shall be convertible into validly issued, fully
paid and non-assessable shares of Common Stock (as defined below), on the terms and conditions set forth in this Section 4.
(a)
Holder’s Conversion Right. Subject to the provisions of Section 4(d), at any time or times on or after the Initial Issuance
Date, each Holder shall be entitled to convert any portion of the outstanding Preferred Shares held by such Holder into validly issued,
fully paid and non-assessable shares of Common Stock in accordance with Section 4(c) at the Conversion Rate (as defined below). The Company
shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction
of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share. The Company
shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses
of the Transfer Agent (as defined below)) that may be payable with respect to the issuance and delivery of Common Stock upon conversion
of any Preferred Shares.
(b)
Conversion Rate. The number of shares of Common Stock issuable upon conversion of any Preferred Share pursuant to Section 4(a)
shall be determined by dividing (x) the Conversion Amount of such Preferred Share by (y) the Conversion Price (the “Conversion
Rate”):
(i)
“Conversion Amount” means, with respect to each Preferred Share, as of the applicable date of determination, the sum
of (1) the Stated Value thereof plus (2) the Additional Amount thereon with respect to such Stated Value and Additional Amount as of
such date of determination.
(ii)
“Conversion Price” means, with respect to each Preferred Share, as of any Conversion Date or other date of determination,
$0.0635, subject to adjustment as provided herein
(c)
Mechanics of Conversion. The conversion of each Preferred Share shall be conducted in the following manner:
(i)
Optional Conversion. To convert a Preferred Share into shares of Common Stock on any date (a “Conversion Date”),
a Holder shall deliver (whether via electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date,
a copy of an executed notice of conversion of the share(s) of Preferred Shares subject to such conversion in the form attached hereto
as Exhibit I (the “Conversion Notice”) to the Company. If required by Section 4(c)(iii), within two
(2) Trading Days following a conversion of any such Preferred Shares as aforesaid, such Holder shall surrender to a nationally recognized
overnight delivery service for delivery to the Company the original certificates, if any, representing the F-1 Preferred Shares (the
“Preferred Share Certificates”) so converted as aforesaid (or an indemnification undertaking with respect to the F-1
Preferred Shares in the case of its loss, theft or destruction as contemplated by Section 17(b)). On or before the first (1st)
Trading Day following the date of receipt of a Conversion Notice, the Company shall transmit by electronic mail an acknowledgment of
confirmation and representation as to whether such shares of Common Stock may then be resold pursuant to Rule 144 or an effective and
available registration statement, in the form attached hereto as Exhibit II, of receipt of such Conversion Notice to such
Holder and the Transfer Agent, which confirmation shall constitute an instruction to the Transfer Agent to process such Conversion Notice
in accordance with the terms herein. On or before the second (2nd) Trading Day following each date on which the Company has received
a Conversion Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement
of a trade initiated on the applicable Conversion Date of such shares of Common Stock issuable pursuant to such Conversion Notice) (the
“Share Delivery Deadline”), the Company shall (1) provided that the Transfer Agent is participating in FAST, credit
such aggregate number of shares of Common Stock to which such Holder shall be entitled pursuant to such conversion to such Holder’s
or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (2) if the Transfer Agent is
not participating in FAST, upon the request of such Holder, issue and deliver (via reputable overnight courier) to the address as specified
in such Conversion Notice, a certificate, registered in the name of such Holder or its designee, for the number of shares of Common Stock
to which such Holder shall be entitled. If the number of Preferred Shares represented by the Preferred Share Certificate(s) submitted
for conversion pursuant to Section 4(c)(iii) is greater than the number of Preferred Shares being converted, then the Company shall,
as soon as practicable and in no event later than two (2) Trading Days after receipt of the Preferred Share Certificate(s) and at its
own expense, issue and deliver to such Holder (or its designee) a new Preferred Share Certificate (in accordance with Section 17(d))
representing the number of Preferred Shares not converted. The Person or Persons entitled to receive the shares of Common Stock issuable
upon a conversion of Preferred Shares shall be treated for all purposes as the record holder or holders of such shares of Common Stock
on the Conversion Date. Notwithstanding anything to the contrary contained in this Certificate of Designations or the Registration Rights
Agreement, after the effective date of a Registration Statement (as defined in the Registration Rights Agreement) and prior to a Holder’s
receipt of the notice of a Grace Period (as defined in the Registration Rights Agreement), the Company shall cause the Transfer Agent
to deliver unlegended shares of Common Stock to such Holder (or its designee) in connection with any sale of Registrable Securities (as
defined in the Registration Rights Agreement) with respect to which such Holder has entered into a contract for sale, and delivered a
copy of the prospectus included as part of the particular Registration Statement to the extent applicable, and for which such Holder
has not yet settled.
(ii)
Company’s Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the applicable
Share Delivery Deadline, either (I) if the Transfer Agent is not participating in FAST, to issue and deliver to such Holder (or its designee)
a certificate for the number of shares of Common Stock to which such Holder is entitled and register such shares of Common Stock on the
Company’s share register or, if the Transfer Agent is participating in FAST, to credit such Holder’s or its designee’s
balance account with DTC for such number of shares of Common Stock to which such Holder is entitled upon such Holder’s conversion
of any Conversion Amount (as the case may be) or (II) if the Registration Statement covering the resale of the shares of Common Stock
that are the subject of the Conversion Notice (the “Unavailable Conversion Shares”) is not available for the resale
of such Unavailable Conversion Shares and the Company fails to promptly, but in no event later than as required pursuant to the Registration
Rights Agreement (x) notify such Holder and (y) deliver the shares of Common Stock electronically without any restrictive legend by crediting
such aggregate number of shares of Common Stock to which such Holder is entitled pursuant to such conversion to the Holder’s or
its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in the immediately
foregoing clause (II) is hereinafter referred as a “Notice Failure” and together with the event described in clause
(I) above, a “Conversion Failure”), then, in addition to all other remedies available to such Holder, (X) the Company
shall pay in cash to such Holder on each day after the Share Delivery Deadline that the issuance of such shares of Common Stock is not
timely effected an amount equal to 2% of the product of (A) the sum of the number of shares of Common Stock not issued to such Holder
on or prior to the Share Delivery Deadline and to which such Holder is entitled, multiplied by (B) any trading price of the Common Stock
selected by such Holder in writing as in effect at any time during the period beginning on the applicable Conversion Date and ending
on the applicable Share Delivery Deadline, and (Y) such Holder, upon written notice to the Company, may void its Conversion Notice with
respect to, and retain or have returned, as the case may be, all, or any portion, of such Preferred Shares that has not been converted
pursuant to such Conversion Notice; provided that the voiding of an Conversion Notice shall not affect the Company’s obligations
to make any payments which have accrued prior to the date of such notice pursuant to this Section 4(c)(ii) or otherwise. In addition
to the foregoing, if on or prior to the Share Delivery Deadline either (A) the Transfer Agent is not participating in FAST, the Company
shall fail to issue and deliver to such Holder (or its designee) a certificate and register such shares of Common Stock on the Company’s
share register or, if the Transfer Agent is participating in FAST, the Transfer Agent shall fail to credit the balance account of such
Holder or such Holder’s designee, as applicable, with DTC for the number of shares of Common Stock to which such Holder is entitled
upon such Holder’s conversion hereunder or pursuant to the Company’s obligation pursuant to clause (ii) below or (B) a Notice
Failure occurs, and if on or after such Share Delivery Deadline such Holder acquires (in an open market transaction, stock loan or otherwise)
shares of Common Stock corresponding to all or any portion of the number of shares of Common Stock issuable upon such conversion that
such Holder is entitled to receive from the Company and has not received from the Company in connection with such Conversion Failure
or Notice Failure, as applicable (a “Buy-In”), then, in addition to all other remedies available to such Holder, the
Company shall, within two (2) Business Days after receipt of such Holder’s request and in such Holder’s discretion, either:
(I) pay cash to such Holder in an amount equal to such Holder’s total purchase price (including brokerage commissions, stock loan
costs and other out-of-pocket expenses, if any) for the shares of Common Stock so acquired (including, without limitation, by any other
Person in respect, or on behalf, of such Holder) (the “Buy-In Price”), at which point the Company’s obligation
to so issue and deliver such certificate (and to issue such shares of Common Stock) or credit to the balance account of such Holder or
such Holder’s designee, as applicable, with DTC for the number of shares of Common Stock to which such Holder is entitled upon
such Holder’s conversion hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate, or (II) promptly
honor its obligation to so issue and deliver to such Holder a certificate or certificates representing such shares of Common Stock or
credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of shares of Common
Stock to which such Holder is entitled upon such Holder’s conversion hereunder (as the case may be) and pay cash to such Holder
in an amount equal to the excess (if any) of the Buy-In Price over the product of (x) such number of shares of Common Stock multiplied
by (y) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable
Conversion Notice and ending on the date of such issuance and payment under this clause (II) (each, a “Buy-In Payment Amount”).
Nothing herein shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the conversion of the
F-1 Preferred Shares as required pursuant to the terms hereof. Notwithstanding anything herein to the contrary, with respect to any given
Notice Failure and/or Conversion Failure, this Section 4(c)(ii) shall not apply to a Holder to the extent the Company has already paid
such amounts in full to such Holder with respect to such Notice Failure and/or Conversion Failure, as applicable, pursuant to the analogous
sections of the Securities Purchase Agreement.
(iii)
Registration; Book-Entry. At the time of issuance of any Preferred Shares hereunder, the applicable Holder may, by written request
(including by electronic-mail) to the Company, elect to receive such Preferred Shares in the form of one or more Preferred Share Certificates
or in Book-Entry form. The Company (or the Transfer Agent, as custodian for the Preferred Shares) shall maintain a register (the “Register”)
for the recordation of the names and addresses of the Holders of each Preferred Share and the Stated Value of the F-1 Preferred Shares
and whether the F-1 Preferred Shares are held by such Holder in Preferred Share Certificates or in Book-Entry form (the “Registered
Preferred Shares”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The
Company and each Holder of the F-1 Preferred Shares shall treat each Person whose name is recorded in the Register as the owner of a
Preferred Share for all purposes (including, without limitation, the right to receive payments and dividends hereunder) notwithstanding
notice to the contrary. A Registered Preferred Share may be assigned, transferred or sold only by registration of such assignment or
sale on the Register. Upon its receipt of a written request to assign, transfer or sell one or more Registered Preferred Shares by such
Holder thereof, the Company shall record the information contained therein in the Register and issue one or more new Registered Preferred
Shares in the same aggregate Stated Value as the Stated Value of the surrendered Registered Preferred Shares to the designated assignee
or transferee pursuant to Section 17, provided that if the Company does not so record an assignment, transfer or sale (as the case may
be) of such Registered Preferred Shares within two (2) Business Days of such a request, then the Register shall be automatically deemed
updated to reflect such assignment, transfer or sale (as the case may be). Notwithstanding anything to the contrary set forth in this
Section 4, following conversion of any Preferred Shares in accordance with the terms hereof, the applicable Holder shall not be required
to physically surrender such Preferred Shares held in the form of a Preferred Share Certificate to the Company unless (A) the full or
remaining number of Preferred Shares represented by the applicable Preferred Share Certificate are being converted (in which event such
certificate(s) shall be delivered to the Company as contemplated by this Section 4(c)(iii)) or (B) such Holder has provided the Company
with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of Preferred Shares upon physical
surrender of the applicable Preferred Share Certificate. Each Holder and the Company shall maintain records showing the Stated Value
and dividends converted and/or paid (as the case may be) and the dates of such conversions and/or payments (as the case may be) or shall
use such other method, reasonably satisfactory to such Holder and the Company, so as not to require physical surrender of a Preferred
Share Certificate upon conversion. If the Company does not update the Register to record such Stated Value, and dividends converted and/or
paid (as the case may be) and the dates of such conversions and/or payments (as the case may be) within two (2) Business Days of such
occurrence, then the Register shall be automatically deemed updated to reflect such occurrence. In the event of any dispute or discrepancy,
such records of such Holder establishing the number of Preferred Shares to which the record holder is entitled shall be controlling and
determinative in the absence of manifest error. A Holder and any transferee or assignee, by acceptance of a certificate, acknowledge
and agree that, by reason of the provisions of this paragraph, following conversion of any Preferred Shares, the number of Preferred
Shares represented by such certificate may be less than the number of Preferred Shares stated on the face thereof. Each Preferred Share
Certificate shall bear the following legend:
ANY
TRANSFEREE OR ASSIGNEE OF THIS CERTIFICATE SHOULD CAREFULLY REVIEW THE TERMS OF THE CORPORATION’S CERTIFICATE OF DESIGNATIONS RELATING
TO THE SHARES OF SERIES F-1 PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE, INCLUDING SECTION 4(c)(iii) THEREOF. THE NUMBER OF SHARES
OF SERIES D PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN THE NUMBER OF SHARES OF SERIES F-1 PREFERRED STOCK STATED
ON THE FACE HEREOF PURSUANT TO SECTION 4(c)(iii) OF THE CERTIFICATE OF DESIGNATIONS RELATING TO THE SHARES OF SERIES F-1 PREFERRED STOCK
REPRESENTED BY THIS CERTIFICATE.
(iv)
Pro Rata Conversion; Disputes. In the event that the Company receives a Conversion Notice from more than one Holder for the same
Conversion Date and the Company can convert some, but not all, of such Preferred Shares submitted for conversion, the Company shall convert
from each Holder electing to have Preferred Shares converted on such date a pro rata amount of such Holder’s Preferred Shares submitted
for conversion on such date based on the number of Preferred Shares submitted for conversion on such date by such Holder relative to
the aggregate number of Preferred Shares submitted for conversion on such date. In the event of a dispute as to the number of shares
of Common Stock issuable to a Holder in connection with a conversion of Preferred Shares, the Company shall issue to such Holder the
number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 22.
(d)
Limitation on Beneficial Ownership. The Company shall not effect the conversion of any of the F-1 Preferred Shares held by a Holder,
and such Holder shall not have the right to convert any of the F-1 Preferred Shares held by such Holder pursuant to the terms and conditions
of this Certificate of Designations and any such conversion shall be null and void and treated as if never made, to the extent that after
giving effect to such conversion, such Holder together with the other Attribution Parties collectively would beneficially own in excess
of 4.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such
conversion. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such Holder
and the other Attribution Parties shall include the number of shares of Common Stock held by such Holder and all other Attribution Parties
plus the number of shares of Common Stock issuable upon conversion of the F-1 Preferred Shares with respect to which the determination
of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (A) conversion of the remaining,
nonconverted Preferred Shares beneficially owned by such Holder or any of the other Attribution Parties and (B) exercise or conversion
of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any convertible notes,
convertible preferred stock or warrants, including the F-1 Preferred Shares and the Warrants) beneficially owned by such Holder or any
other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 4(d).
For purposes of this Section 4(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes
of determining the number of outstanding shares of Common Stock a Holder may acquire upon the conversion of such Preferred Shares without
exceeding the Maximum Percentage, such Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s
most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the SEC,
as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer
Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”).
If the Company receives a Conversion Notice from a Holder at a time when the actual number of outstanding shares of Common Stock is less
than the Reported Outstanding Share Number, the Company shall notify such Holder in writing of the number of shares of Common Stock then
outstanding and, to the extent that such Conversion Notice would otherwise cause such Holder’s beneficial ownership, as determined
pursuant to this Section 4(d), to exceed the Maximum Percentage, such Holder must notify the Company of a reduced number of shares of
Common Stock to be purchased pursuant to such Conversion Notice. For any reason at any time, upon the written or oral request of any
Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to such Holder the number of
shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including such Preferred Shares, by such Holder and any other Attribution
Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common
Stock to a Holder upon conversion of such Preferred Shares results in such Holder and the other Attribution Parties being deemed to beneficially
own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section
13(d) of the 1934 Act), the number of shares so issued by which such Holder’s and the other Attribution Parties’ aggregate
beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall
be cancelled ab initio, and such Holder shall not have the power to vote or to transfer the Excess Shares. Upon delivery of a written
notice to the Company, any Holder may from time to time increase (with such increase not effective until the sixty-first (61st)
day after delivery of such notice) or decrease the Maximum Percentage of such Holder to any other percentage not in excess of 9.99% as
specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st)
day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to such Holder and the other
Attribution Parties and not to any other Holder that is not an Attribution Party of such Holder. For purposes of clarity, the shares
of Common Stock issuable to a Holder pursuant to the terms of this Certificate of Designations in excess of the Maximum Percentage shall
not be deemed to be beneficially owned by such Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of
the 1934 Act. No prior inability to convert such Preferred Shares pursuant to this paragraph shall have any effect on the applicability
of the provisions of this paragraph with respect to any subsequent determination of convertibility. The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to the extent
necessary to correct this paragraph (or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial
ownership limitation contained in this Section 4(d) or to make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of such Preferred
Shares.
(e)
Right of Alternate Conversion Upon a Triggering Event.
(i)
Subject to Section 4(d), at any time after the earlier of a Holder’s receipt of a Triggering Event Notice (as defined below) and
such Holder becoming aware of a Triggering Event (such earlier date, the “Triggering Event Right Commencement Date”)
and ending (such ending date, the “Triggering Event Right Expiration Date”, and each such period, an “Triggering
Event Conversion Right Period”) on the twentieth (20th) Trading Day after the later of (x) the date such Triggering
Event is cured and (y) such Holder’s receipt of a Triggering Event Notice that includes (I) a reasonable description of the applicable
Triggering Event, (II) a certification as to whether, in the opinion of the Company, such Triggering Event is capable of being cured
and, if applicable, a reasonable description of any existing plans of the Company to cure such Triggering Event and (III) a certification
as to the date the Triggering Event occurred and, if cured on or prior to the date of such Triggering Event Notice, the applicable Triggering
Event Right Expiration Date, such Holder may, at such Holder’s option, by delivery of a Conversion Notice to the Company (the date
of any such Conversion Notice, each an “Alternate Conversion Date”), convert all, or any number of Preferred Shares
(such Conversion Amount of the F-1 Preferred Shares to be converted pursuant to this Section 4(e)(ii), each, an “Alternate Conversion
Amount”) into shares of Common Stock at the Alternate Conversion Price (each, an “Alternate Conversion”).
(ii)
Mechanics of Alternate Conversion. On any Alternate Conversion Date, a Holder may voluntarily convert any Alternate Conversion
Amount of Preferred Shares pursuant to Section 4(c) (with “Alternate Conversion Price” replacing “Conversion Price”
for all purposes hereunder with respect to such Alternate Conversion and with “Required Premium of the Conversion Amount”
replacing “Conversion Amount” in clause (x) of the definition of Conversion Rate above with respect to such Alternate Conversion)
by designating in the Conversion Notice delivered pursuant to this Section 4(e) of this Certificate of Designations that such Holder
is electing to use the Alternate Conversion Price for such conversion. Notwithstanding anything to the contrary in this Section 4(e),
but subject to Section 4(d), until the Company delivers shares of Common Stock representing the applicable Alternate Conversion Amount
of Preferred Shares to such Holder, such Preferred Shares may be converted by such Holder into shares of Common Stock pursuant to Section
4(c) without regard to this Section 4(e).
5.
Triggering Events.
(a)
General. Each of the following events shall constitute a “Triggering Event” and each of the events in clauses
5(a)(x), 5(a)(xi), and 5(a)(xii), shall constitute a “Bankruptcy Triggering Event”:
(i)
the failure of the applicable Registration Statement (as defined in the Registration Rights Agreement) to be filed with the SEC on or
prior to the date that is five (5) days after the applicable Filing Deadline (as defined in the Registration Rights Agreement) or the
failure of the applicable Registration Statement to be declared effective by the SEC on or prior to the date that is five (5) days after
the applicable Effectiveness Deadline (as defined in the Registration Rights Agreement);
(ii)
while the applicable Registration Statement is required to be maintained effective pursuant to the terms of the Registration Rights Agreement,
the effectiveness of the applicable Registration Statement lapses for any reason (including, without limitation, the issuance of a stop
order) or such Registration Statement (or the prospectus contained therein) is unavailable to any holder of Registrable Securities (as
defined in the Registration Rights Agreement) for sale of all of such holder’s Registrable Securities in accordance with the terms
of the Registration Rights Agreement, and such lapse or unavailability continues for a period of five (5) consecutive days or for more
than an aggregate of ten (10) days in any 365-day period (excluding days during an Allowable Grace Period (as defined in the Registration
Rights Agreement));
(iii)
the suspension from trading or the failure of the Common Stock to be trading or listed (as applicable) on an Eligible Market for a period
of five (5) consecutive Trading Days or the delisting, removal or withdrawal, as applicable, of registration of the Common Stock under
the 1934 Act with respect to a going-private transaction;
(iv)
the Company’s (A) failure to cure a Conversion Failure or a Delivery Failure (as defined in the Warrants) by delivery of the required
number of shares of Common Stock within five (5) Trading Days after the applicable Conversion Date or exercise date (as the case may
be) or (B) notice, written or oral, to any holder of Preferred Shares or Warrants, including, without limitation, by way of public announcement
or through any of its agents, at any time, of its intention not to comply, as required, with a request for exercise of any Warrants for
Warrant Shares in accordance with the provisions of the Warrants or a request for conversion of any Preferred Shares into shares of Common
Stock that is requested in accordance with the provisions of this Certificate of Designations, other than pursuant to Section 4(d) hereof;
(v)
except to the extent the Company is in compliance with Section 10(b) below, at any time following the tenth (10th) consecutive
day that a Holder’s Authorized Share Allocation (as defined in Section 10(a) below) is less than the sum of (A) 300% of the number
of shares of Common Stock that such Holder would be entitled to receive upon a conversion, in full, of all of the F-1 Preferred Shares
then held by such Holder (assuming conversions at the Alternate Conversion Price then in effect without regard to any limitations on
conversion set forth in this Certificate of Designations) and (B) the number of shares of Common Stock that such Holder would then be
entitled to receive upon exercise in full of such Holder’s Warrants (without regard to any limitations on exercise set forth in
the Warrants);
(vi)
subject to the provisions of Section 170 of the DGCL, the Board fails to declare any dividend to be capitalized or paid in accordance
with Section 3;
(vii)
the Company’s failure to pay to any Holder any dividend when required to be paid hereunder (whether or not declared by the Board)
or any other amount when and as due under this Certificate of Designations (including, without limitation, the Company’s failure
to pay any redemption payments or amounts hereunder), the Securities Purchase Agreement or any other Transaction Document or any other
agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby (in
each case, whether or not permitted pursuant to the DGCL), except, in the case of a failure to pay dividends when and as due, in each
such case only if such failure remains uncured for a period of at least two (2) Trading Days;
(viii)
the Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the applicable Holder upon
conversion or exercise (as the case may be) of any Securities (as defined in the Securities Purchase Agreement) acquired by such Holder
under the Transaction Documents as and when required by such Securities or the Securities Purchase Agreement, unless otherwise then prohibited
by applicable federal securities laws, and any such failure remains uncured for at least five (5) days;
(ix)
the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $100,000 of Indebtedness
(as defined in the Securities Purchase Agreement) of the Company or any of its Subsidiaries;
(x)
bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted
by or against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed
within thirty (30) days of their initiation;
(xi)
the commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy,
insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company or any Subsidiary in an involuntary
case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of
creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or
the admission by it in writing of its inability to pay its debts generally as they become due, the taking of corporate action by the
Company or any Subsidiary in furtherance of any such action or the taking of any action by any Person to commence a Uniform Commercial
Code foreclosure sale or any other similar action under federal, state or foreign law;
(xii)
the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of a voluntary
or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar
law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar
document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any
Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance
of any such decree, order, judgment or other similar document or any such other decree, order, judgment or other similar document unstayed
and in effect for a period of thirty (30) consecutive days;
(xiii)
a final judgment or judgments for the payment of money aggregating in excess of $100,000 are rendered against the Company and/or any
of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed
pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which
is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $100,000 amount set forth
above so long as the Company provides each Holder a written statement from such insurer or indemnity provider (which written statement
shall be reasonably satisfactory to each Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company
or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance
of such judgment;
(xiv)
the Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable grace
period, any payment with respect to any Indebtedness in excess of $100,000 due to any third party (other than, with respect to unsecured
Indebtedness only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper proceedings
and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP) or is otherwise in breach
or violation of any agreement for monies owed or owing in an amount in excess of $100,000, which breach or violation permits the other
party thereto to declare a default or otherwise accelerate amounts due thereunder, or (ii) suffer to exist any other circumstance or
event that would, with or without the passage of time or the giving of notice, result in a default or event of default under any agreement
binding the Company or any Subsidiary, which default or event of default would or is likely to have a material adverse effect on the
business, assets, operations (including results thereof), liabilities, properties, condition (including financial condition) or prospects
of the Company or any of its Subsidiaries, individually or in the aggregate;
(xv)
other than as specifically set forth in another clause of this Section 5(a), the Company or any Subsidiary breaches any representation
or warranty in any material respect (other than representations or warranties subject to material adverse effect or materiality, which
may not be breached in any respect) or any covenant or other term or condition of any Transaction Document, except, in the case of a
breach of a covenant or other term or condition that is curable, only if such breach remains uncured for a period of five (5) consecutive
Trading Days;
(xvi)
a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that either (A) the Equity
Conditions are satisfied, (B) there has been no Equity Conditions Failure, or (C) as to whether any Triggering Event has occurred
(xvii)
any breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 12 of this Certificate
of Designations;
(xviii)
any Material Adverse Effect (as defined in the Securities Purchase Agreement) occurs; or
(xix)
any provision of any Transaction Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to
be valid and binding on or enforceable against the parties thereto, or the validity or enforceability thereof shall be contested, directly
or indirectly, by the Company or any Subsidiary, or a proceeding shall be commenced by the Company or any Subsidiary or any governmental
authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof or the Company or any
of its Subsidiaries shall deny in writing that it has any liability or obligation purported to be created under one or more Transaction
Documents.
(b)
Notice of a Triggering Event. Upon the occurrence of a Triggering Event with respect to the Preferred Shares, the Company shall
within one (1) Business Day deliver written notice thereof via electronic mail and overnight courier (with next day delivery specified)
(an “Triggering Event Notice”) to each Holder.
(c)
Mandatory Redemption upon Bankruptcy Triggering Event. Notwithstanding anything to the contrary herein, and notwithstanding any
conversion that is then required or in process, upon any Bankruptcy Triggering Event, the Company shall immediately redeem, in cash,
each of the F-1 Preferred Shares then outstanding at a redemption price equal to the greater of (i) the product of (A) the Conversion
Amount to be redeemed multiplied by (B) the Required Premium and (ii) the product of (X) the Conversion Rate with respect to the Conversion
Amount in effect immediately following the date of initial public announcement (or public filing of bankruptcy documents, as applicable)
of such Bankruptcy Triggering Event multiplied by (Y) the product of (1) the Required Premium multiplied by (2) the greatest Closing
Sale Price of the Common Stock on any Trading Day during the period commencing on the date immediately preceding such Bankruptcy Triggering
Event and ending on the date the Company makes the entire payment required to be made under this Section 5(c), without the requirement
for any notice or demand or other action by any Holder or any other person or entity, provided that a Holder may, in its sole discretion,
waive such right to receive payment upon a Bankruptcy Triggering Event, in whole or in part, and any such waiver shall not affect any
other rights of such Holder or any other Holder hereunder, including any other rights in respect of such Bankruptcy Triggering Event
or any right to conversion (or Alternate Conversion), as applicable.
(d)
Company Elected Redemptions.
(i)
Company Optional Redemptions. At any time, the Company shall have the right to redeem all, or any portion, of the F-1 Preferred
Shares then outstanding (the “Company Optional Redemption Amount”) on the Company Optional Redemption Date (as defined
below) (a “Company Optional Redemption”). The Preferred Shares subject to redemption pursuant to this Section 5(d)
shall be redeemed by the Company in cash at a price (the “Company Optional Redemption Price”) equal to the greater
of (i) the Conversion Amount being redeemed as of the Company Optional Redemption Date and (ii) solely if an Equity Conditions Failure
then exists, the product of (1) the Conversion Rate with respect to the Conversion Amount being redeemed as of the Company Optional Redemption
Date multiplied by (2) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date
immediately preceding such Company Optional Redemption Notice Date and ending on the Trading Day immediately prior to the date the Company
makes the entire payment required to be made under this Section 5(d). The Company may exercise its right to require redemption under
this Section 5(d) delivering a written notice thereof by electronic mail and overnight courier to all, but not less than all, of the
Holders (the “Company Optional Redemption Notice” and the date all of the Holders received such notice is referred
to as the “Company Optional Redemption Notice Date”). The Company may deliver only one Company Optional Redemption
Notice hereunder and such Company Optional Redemption Notice shall be irrevocable. The Company Optional Redemption Notice shall (x) state
the date on which the Company Optional Redemption shall occur (the “Company Optional Redemption Date”) which date
shall not be less than ten (10) Trading Days nor more than sixty (60) Trading Days following the Company Optional Redemption Notice Date,
and (y) state the aggregate Conversion Amount of the F-1 Preferred Shares which is being redeemed in such Company Optional Redemption
from such Holder and all of the other Holders of the F-1 Preferred Shares pursuant to this Section 5(d) on the Company Optional Redemption
Date. Notwithstanding anything herein to the contrary, at any time prior to the date the Company Optional Redemption Price is paid, in
full, the Company Optional Redemption Amount may be converted, in whole or in part, by any Holder into shares of Common Stock pursuant
to Section 4. All Conversion Amounts converted by a Holder after the Company Optional Redemption Notice Date shall reduce the Company
Optional Redemption Amount of the F-1 Preferred Shares of such Holder required to be redeemed on the Company Optional Redemption Date.
Redemptions made pursuant to this Section 5(d) shall be made in accordance with Section 5(d)(ii). In the event of the Company’s
redemption of any of the F-1 Preferred Shares under this Section 5(d), a Holder’s damages would be uncertain and difficult to estimate
because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute
investment opportunity for such Holder. Accordingly, any redemption premium due under this Section 5(d) is intended by the parties to
be, and shall be deemed, a reasonable estimate of such Holder’s actual loss of its investment opportunity and not as a penalty.
For the avoidance of doubt, the Company shall have no right to effect a Company Optional Redemption if any Triggering Event has occurred
and continuing, but any Triggering Event shall have no effect upon any Holder’s right to convert Preferred Shares in its discretion.
(ii)
Mechanics of Company Elected Redemptions. The Company shall deliver the applicable Company Optional Redemption Price to each Holder
in cash on the applicable Company Optional Redemption Date. If the Company has elected to pay a Change of Control Election Price in cash
in accordance with Section 6(b), the Company shall deliver the applicable Change of Control Election Price (and together with any Company
Optional Redemption Price, each a “Redemption Price”) to such Holder in cash concurrently with the consummation of
such Change of Control. Notwithstanding anything herein to the contrary, in connection with any redemption hereunder at a time a Holder
is entitled to receive a cash payment under any of the other Transaction Documents, at the option of such Holder delivered in writing
to the Company, the applicable Redemption Price hereunder shall be increased by the amount of such cash payment owed to such Holder under
such other Transaction Document and, upon payment in full or conversion in accordance herewith, shall satisfy the Company’s payment
obligation under such other Transaction Document. In the event of a redemption of less than all of the Preferred Shares, the Company
shall promptly cause to be issued and delivered to such Holder a new Preferred Share Certificate (in accordance with Section 17) (or
evidence of the creation of a new Book-Entry) representing the number of Preferred Shares which have not been redeemed. In the event
that the Company does not pay the applicable Redemption Price to a Holder within the time period required for any reason (including,
without limitation, to the extent such payment is prohibited pursuant to the DGCL), at any time thereafter and until the Company pays
such unpaid Redemption Price in full, such Holder shall have the option, in lieu of redemption, to require the Company to promptly return
to such Holder all or any of the F-1 Preferred Shares that were submitted for redemption and for which the applicable Redemption Price
has not been paid. Upon the Company’s receipt of such notice, (x) the applicable redemption shall be null and void with respect
to such Preferred Shares, (y) the Company shall immediately return the applicable Preferred Share Certificate, or issue a new Preferred
Share Certificate (in accordance with Section 17(d)), to such Holder (unless the F-1 Preferred Shares are held in Book-Entry form, in
which case the Company shall deliver evidence to such Holder that a Book-Entry for such Preferred Shares then exists), and in each case
the Additional Amount of such Preferred Shares shall be increased by an amount equal to the difference between (1) the applicable Redemption
Price (as the case may be, and as adjusted pursuant to this Section 5(d)(ii), if applicable) minus (2) the Stated Value portion of the
Conversion Amount submitted for redemption.
6.
Rights Upon Fundamental Transactions.
(a)
Assumption. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing all of the obligations of the Company under this Certificate of Designations and the other Transaction Documents in accordance
with the provisions of this Section 6(a) pursuant to written agreements in form and substance satisfactory to the Required Holders and
approved by the Required Holders prior to such Fundamental Transaction, including agreements to deliver to each holder of Preferred Shares
in exchange for such Preferred Shares a security of the Successor Entity evidenced by a written instrument substantially similar in form
and substance to this Certificate of Designations, including, without limitation, having a stated value and dividend rate equal to the
stated value and dividend rate of the F-1 Preferred Shares held by the Holders and having similar ranking to the Preferred Shares, and
satisfactory to the Required Holders and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose
shares of common stock are quoted on or listed for trading on an Eligible Market. Upon the occurrence of any Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions
of this Certificate of Designations and the other Transaction Documents referring to the “Company” shall refer instead to
the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under
this Certificate of Designations and the other Transaction Documents with the same effect as if such Successor Entity had been named
as the Company herein and therein. In addition to the foregoing, upon consummation of a Fundamental Transaction, the Successor Entity
shall deliver to each Holder confirmation that there shall be issued upon conversion or redemption of the F-1 Preferred Shares at any
time after the consummation of such Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets
or other property (except such items still issuable under Sections 7 and 14, which shall continue to be receivable thereafter)) issuable
upon the conversion or redemption of the F-1 Preferred Shares prior to such Fundamental Transaction, such shares of the publicly traded
common stock (or their equivalent) of the Successor Entity (including its Parent Entity) which each Holder would have been entitled to
receive upon the happening of such Fundamental Transaction had all the F-1 Preferred Shares held by each Holder been converted immediately
prior to such Fundamental Transaction (without regard to any limitations on the conversion of the F-1 Preferred Shares contained in this
Certificate of Designations), as adjusted in accordance with the provisions of this Certificate of Designations. Notwithstanding the
foregoing, such Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 6(a) to permit
the Fundamental Transaction without the assumption of the Preferred Shares. The provisions of this Section 6 shall apply similarly and
equally to successive Fundamental Transactions and shall be applied without regard to any limitations on the conversion or redemption
of the Preferred Shares.
(b)
Notice of a Change of Control; Change of Control Election Notice. No sooner than twenty (20) Trading Days nor later than ten (10)
Trading Days prior to the consummation of a Change of Control (the “Change of Control Date”), but not prior to the
public announcement of such Change of Control, the Company shall deliver written notice thereof via electronic mail and overnight courier
to each Holder (a “Change of Control Notice”). At any time during the period beginning after a Holder’s receipt
of a Change of Control Notice or such Holder becoming aware of a Change of Control if a Change of Control Notice is not delivered to
such Holder in accordance with the immediately preceding sentence (as applicable) and ending on twenty (20) Trading Days after the later
of (A) the date of consummation of such Change of Control or (B) the date of receipt of such Change of Control Notice or (C) the date
of the announcement of such Change of Control, such Holder may require, by delivering written notice thereof (“Change of Control
Election Notice”) to the Company (which Change of Control Election Notice shall indicate the number of Preferred Shares subject
to such election), to have the Company exchange such Holder’s Preferred Shares designated in such Change of Control Election Notice
for consideration equal to the Change of Control Election Price (as defined below), to be satisfied at the Company’s election (such
election to pay in cash or by delivery of the Rights (as defined below), a “Consideration Election”), in either (I)
rights (with a beneficial ownership limitation in the form of Section 4(d) hereof, mutatis mutandis) (collectively, the “Rights”),
convertible in whole, or in part, at any time, without the requirement to pay any additional consideration, at the option of the Holder,
into such Corporate Event Consideration (as defined below) applicable to such Change of Control equal in value to the Change of Control
Election Price (as determined with the fair market value of the aggregate number of Successor Shares (as defined below) issuable upon
conversion of the Rights to be determined in increments of 10% (or such greater percentage as the applicable Holder may notify the Company
from time to time) of the portion of the Change of Control Election Price attributable to such Successor Shares (the “Successor
Share Value Increment”), with the aggregate number of Successor Shares issuable upon exercise of the Rights with respect to
the first Successor Share Value Increment determined based on 70% of the Closing Bid Price of the Successor Shares on the date the Rights
are issued and on each of the nine (9) subsequent Trading Days, in each case, the aggregate number of additional Successor Shares issuable
upon exercise of the Rights shall be determined based upon a Successor Share Value Increment at 70% of the Closing Bid Price of the Successor
Shares in effect for such corresponding Trading Day (such ten (10) Trading Day period commencing on, and including, the date the Rights
are issued, the “Rights Measuring Period”)), or (II) in cash; provided, that the Company shall not consummate a Change
of Control if the Corporate Event Consideration includes capital stock or other equity interest (the “Successor Shares”)
either in an entity that is not listed on an Eligible Market or an entity in which the daily share volume for the applicable Successor
Shares for each of the twenty (20) Trading Days prior to the date of consummation of such Change of Control is less than the aggregate
number of Successor Shares issuable to all Holders upon conversion in full of the applicable Rights (without regard to any limitations
on conversion therein, assuming the exercise in full of the Rights on the date of issuance of the Rights and assuming the Closing Bid
Price of the Successor Shares for each Trading Day in the Rights Measuring Period is the Closing Bid Price on the Trading Day ended immediately
prior to the time of consummation of the Change of Control). The Company shall give each Holder written notice of each Consideration
Election at least twenty (20) Trading Days prior to the time of consummation of such Change of Control. Payment of such amounts or delivery
of the Rights, as applicable, shall be made by the Company (or at the Company’s direction) to each Holder on the later of (x) the
second (2nd) Trading Day after the date of such request and (y) the date of consummation of such Change of Control (or, with respect
to any Right, if applicable, such later time that holders of shares of Common Stock are initially entitled to receive Corporate Event
Consideration with respect to the shares of Common Stock of such holder). Any Corporate Event Consideration included in the Rights, if
any, pursuant to this Section 6(b) is pari passu with the Corporate Event Consideration to be paid to holders of shares of Common
Stock and the Company shall not permit a payment of any Corporate Event Consideration to the holders of shares of Common Stock without
on or prior to such time delivering the Right to the Holders in accordance herewith. Cash payments, if any, required by this Section
6(b) shall have priority to payments to all other stockholders of the Company in connection with such Change of Control. Notwithstanding
anything to the contrary in this Section 6(b), but subject to Section 4(d), until the applicable Change of Control Election Price is
paid in full to the applicable Holder in cash or Corporate Event Consideration in accordance herewith, the F-1 Preferred Shares submitted
by such Holder for exchange or payment, as applicable, under this Section 6(b) may be converted, in whole or in part, by such Holder
into Common Stock pursuant to Section 4 or in the event the Conversion Date is after the consummation of such Change of Control, stock
or equity interests of the Successor Entity substantially equivalent to the Company’s shares of Common Stock pursuant to Section
6(a). In the event of the Company’s repayment or exchange, as applicable, of any of the F-1 Preferred Shares under this Section
6(b), such Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future
interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for a Holder. Accordingly, any
Required Premium due under this Section 6(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of such Holder’s
actual loss of its investment opportunity and not as a penalty. If the Company elects to pay the applicable Change of Control Election
Price in cash, such redemption of Preferred Shares pursuant to this Section 6(b) shall be made in accordance with Section 5(d)(ii) above.
7.
Rights Upon Issuance of Purchase Rights and Other Corporate Events.
(a)
Purchase Rights. In addition to any adjustments pursuant to Section 8 and Section 14 below, if at any time the Company grants,
issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all
or substantially all of the record holders of any class of Common Stock (the “Purchase Rights”), then each Holder
will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could
have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of all the F-1 Preferred
Shares (without taking into account any limitations or restrictions on the convertibility of the F-1 Preferred Shares and assuming for
such purpose that all the F-1 Preferred Shares were converted at the Alternate Conversion Price as of the applicable record date) held
by such Holder immediately prior to the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or,
if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue
or sale of such Purchase Rights; provided, however, to the extent that such Holder’s right to participate in any such Purchase
Right would result in such Holder and the other Attribution Parties exceeding the Maximum Percentage, then such Holder shall not be entitled
to participate in such Purchase Right to such extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of
such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent of any such excess) and such
Purchase Right to such extent shall be held in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar
provision, such term shall be extended by such number of days held in abeyance, if applicable) for the benefit of such Holder until such
time or times, if ever, as its right thereto would not result in such Holder and the other Attribution Parties exceeding the Maximum
Percentage, at which time or times such Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial
Purchase Right or on any subsequent Purchase Right held similarly in abeyance (and, if such Purchase Right has an expiration date, maturity
date or other similar provision, such term shall be extended by such number of days held in abeyance, if applicable)) to the same extent
as if there had been no such limitation.
(b)
Other Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any
Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to
ensure that each Holder will thereafter have the right, at such Holder’s option, to receive upon a conversion of all the F-1 Preferred
Shares held by such Holder (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets
(the “Corporate Event Consideration”) to which such Holder would have been entitled with respect to such shares of
Common Stock had such shares of Common Stock been held by such Holder upon the consummation of such Corporate Event (without taking into
account any limitations or restrictions on the convertibility of the F-1 Preferred Shares set forth in this Certificate of Designations)
or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by
the holders of shares of Common Stock in connection with the consummation of such Corporate Event in such amounts as such Holder would
have been entitled to receive had the F-1 Preferred Shares held by such Holder initially been issued with conversion rights for the form
of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion
Rate. Provision made pursuant the preceding sentence shall be in a form and substance satisfactory to the Required Holders. The provisions
of this Section 7 shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations
on the conversion or redemption of the F-1 Preferred Shares set forth in this Certificate of Designations.
8.
Rights Upon Issuance of Other Securities.
(a)
Adjustment of Conversion Price upon Issuance of Common Stock. If and whenever on or after the Subscription Date the Company grants,
issues or sells (or enters into any agreement to grant, issue or sell), or in accordance with this Section 8(a) is deemed to have granted,
issued or sold, any shares of Common Stock (including the granting, issuance or sale of shares of Common Stock owned or held by or for
the account of the Company, but excluding any Excluded Securities granted, issued or sold or deemed to have been granted, issued or sold)
for a consideration per share (the “New Issuance Price”) less than a price equal to the Conversion Price in effect
immediately prior to such granting, issuance or sale or deemed granting, issuance or sale (such Conversion Price then in effect is referred
to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then, immediately after
such Dilutive Issuance, the Conversion Price then in effect shall be reduced to an amount equal to the New Issuance Price. For all purposes
of the foregoing (including, without limitation, determining the adjusted Conversion Price and the New Issuance Price under this Section
8(a)), the following shall be applicable:
(i)
Issuance of Options. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue or sell)
any Options and the lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such
Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise
pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and
to have been issued and sold by the Company at the time of the granting, issuance or sale of such Option for such price per share. For
purposes of this Section 8(a)(i), the “lowest price per share for which one share of Common Stock is at any time issuable upon
the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any
such Option or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x) the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting, issuance
or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon
exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth in such Option for which
one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon the exercise of any such
Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise
pursuant to the terms thereof, minus (2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) with
respect to any one share of Common Stock upon the granting, issuance or sale of such Option, upon exercise of such Option and upon conversion,
exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof plus
the value of any other consideration (including, without limitation, consideration consisting of cash, debt forgiveness, assets or any
other property) received or receivable by, or benefit conferred on, the holder of such Option (or any other Person). Except as contemplated
below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such share of Common Stock or of such
Convertible Securities upon the exercise of such Options or otherwise pursuant to the terms thereof or upon the actual issuance of such
shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.
(ii)
Issuance of Convertible Securities. If the Company in any manner issues or sells (or enters into any agreement to issue or sell)
any Convertible Securities and the lowest price per share for which one share of Common Stock is at any time issuable upon the conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common
Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale (or the time
of execution of such agreement to issue or sell, as applicable) of such Convertible Securities for such price per share. For the purposes
of this Section 8(a)(ii), the “lowest price per share for which one share of Common Stock is at any time issuable upon the conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x) the sum of the
lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance
or sale (or pursuant to the agreement to issue or sell, as applicable) of the Convertible Security and upon conversion, exercise or exchange
of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth in such Convertible
Security for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder
of such Convertible Security (or any other Person) with respect to any one share of Common Stock upon the issuance or sale (or the agreement
to issue or sell, as applicable) of such Convertible Security plus the value of any other consideration received or receivable (including,
without limitation, any consideration consisting of cash, debt forgiveness, assets or other property) by, or benefit conferred on, the
holder of such Convertible Security (or any other Person). Except as contemplated below, no further adjustment of the Conversion Price
shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities
or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities is made upon exercise of
any Options for which adjustment of the Conversion Price has been or is to be made pursuant to other provisions of this Section 8(a),
except as contemplated below, no further adjustment of the Conversion Price shall be made by reason of such issuance or sale.
(iii)
Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than
proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 8(b) below),
the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion Price which would have been
in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate (as the case may be) at the time initially granted, issued or sold. For purposes
of this Section 8(a)(iii), if the terms of any Option or Convertible Security (including, without limitation, any Option or Convertible
Security that was outstanding as of the Subscription Date) are increased or decreased in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange
thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 8(a)
shall be made if such adjustment would result in an increase of the Conversion Price then in effect.
(iv)
Calculation of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection
with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Required Holder, the
“Primary Security”, and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary Securities”),
together comprising one integrated transaction (or one or more transactions if such issuances or sales or deemed issuances or sales of
securities of the Company either (A) have at least one investor or purchaser in common, (B) are consummated in reasonable proximity to
each other and/or (C) are consummated under the same plan of financing), the aggregate consideration per share of Common Stock with respect
to such Primary Security shall be deemed to be equal to the difference of (x) the lowest price per share for which one share of Common
Stock was issued (or was deemed to be issued pursuant to Section 8(a)(i) or 8(a)(ii) above, as applicable) in such integrated transaction
solely with respect to such Primary Security, minus (y) with respect to such Secondary Securities, the sum of (I) the Black Scholes Consideration
Value of each such Option, if any, (II) the fair market value (as determined by the Required Holder in good faith) or the Black Scholes
Consideration Value, as applicable, of such Adjustment Right, if any, and (III) the fair market value (as determined by the Required
Holder) of such Convertible Security, if any, in each case, as determined on a per share basis in accordance with this Section 8(a)(iv).
If any shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the
consideration received therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security,
but not for the purpose of the calculation of the Black Scholes Consideration Value) will be deemed to be the net amount of consideration
received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company (for the purpose of determining the consideration paid for
such Common Stock, Option or Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration Value)
will be the fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the
amount of consideration received by the Company for such securities will be the arithmetic average of the VWAPs of such security for
each of the five (5) Trading Days immediately preceding the date of receipt. If any shares of Common Stock, Options or Convertible Securities
are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the
amount of consideration therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible
Security, but not for the purpose of the calculation of the Black Scholes Consideration Value) will be deemed to be the fair value of
such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or
Convertible Securities (as the case may be). The fair value of any consideration other than cash or publicly traded securities will be
determined jointly by the Company and the Required Holder. If such parties are unable to reach agreement within ten (10) days after the
occurrence of an event requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined
within five (5) Trading Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser
jointly selected by the Company and the Required Holder. The determination of such appraiser shall be final and binding upon all parties
absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.
(v)
Record Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase
shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale
of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase (as the case may be).
(b)
Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section 7 or
Section 14, if the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend, stock combination,
recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a greater number of
shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision
of Section 7 or Section 14, if the Company at any time on or after the Subscription Date combines (by any stock split, stock dividend,
stock combination, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into
a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased. Any
adjustment pursuant to this Section 8(b) shall become effective immediately after the effective date of such subdivision or combination.
If any event requiring an adjustment under this Section 8(b) occurs during the period that a Conversion Price is calculated hereunder,
then the calculation of such Conversion Price shall be adjusted appropriately to reflect such event.
(c)
Holder’s Right of Adjusted Conversion Price. In addition to and not in limitation of the other provisions of this Section
8(c), if the Company in any manner issues or sells or enters into any agreement to issue or sell, any Common Stock, Options or Convertible
Securities (any such securities, “Variable Price Securities”) after the Subscription Date that are issuable pursuant
to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with
the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations
reflecting share splits, share combinations, and share dividends (each of the formulations for such variable price being herein referred
to as, the “Variable Price”), the Company shall provide written notice thereof via electronic mail and overnight courier
to each Holder on the date of such agreement and/or the issuance of such shares of Common Stock, Convertible Securities or Options, as
applicable. From and after the date the Company enters into such agreement or issues any such Variable Price Securities, each Holder
shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Conversion Price upon conversion
of the F-1 Preferred Shares by designating in the Conversion Notice delivered upon any conversion of Preferred Shares that solely for
purposes of such conversion such Holder is relying on the Variable Price rather than the Conversion Price then in effect. A Holder’s
election to rely on a Variable Price for a particular conversion of Preferred Shares shall not obligate such Holder to rely on a Variable
Price for any future conversions of Preferred Shares.
(d)
Stock Combination Event Adjustments. If at any time and from time to time on or after the Subscription Date there occurs any stock
split, stock dividend, stock combination recapitalization or other similar transaction involving the Common Stock (each, a “Stock
Combination Event”, and such date thereof, the “Stock Combination Event Date”) and the Event Market Price
is less than the Conversion Price then in effect (after giving effect to the adjustment in Section 8(b) above), then on the sixteenth
(16th) Trading Day immediately following such Stock Combination Event Date, the Conversion Price then in effect on such sixteenth (16th)
Trading Day (after giving effect to the adjustment in Section 8(b) above) shall be reduced (but in no event increased) to the Event Market
Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an increase in the
Conversion Price hereunder, no adjustment shall be made.
(e)
Other Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are not strictly
applicable, or, if applicable, would not operate to protect any Holder from dilution or if any event occurs of the type contemplated
by the provisions of this Section 8(e) but not expressly provided for by such provisions (including, without limitation, the granting
of stock appreciation rights, phantom stock rights or other rights with equity features), then the Board shall in good faith determine
and implement an appropriate adjustment in the Conversion Price so as to protect the rights of such Holder, provided that no such adjustment
pursuant to this Section 8(e) will increase the Conversion Price as otherwise determined pursuant to this Section 8(e), provided further
that if such Holder does not accept such adjustments as appropriately protecting its interests hereunder against such dilution, then
the Board and such Holder shall agree, in good faith, upon an independent investment bank of nationally recognized standing to make such
appropriate adjustments, whose determination shall be final and binding absent manifest error and whose fees and expenses shall be borne
by the Company.
(f)
Calculations. All calculations under this Section 8(f) shall be made by rounding to the nearest cent or the nearest 1/100th
of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.
(g)
Voluntary Adjustment by Company. Subject to the rules and regulations of the Principal Market, the Company may at any time any
Preferred Shares remain outstanding, with the prior written consent of the Required Holder, reduce the then current Conversion Price
to any amount and for any period of time deemed appropriate by the Board.
(h)
Adjustments. If on any of the thirtieth (30th), sixtieth (60th), ninetieth (90th),one hundred
and twentieth (120th), and one hundred and eightieth (180th), as applicable, calendar day after the Initial Issuance
Date (the “Adjustment Date”), the Conversion Price then in effect is greater than the Market Price then in effect
(the “Adjustment Price”), on the Adjustment Date the Conversion Price shall automatically lower to the Adjustment
Price.
9.
Noncircumvention. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation
(as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this Certificate of Designations, and will at all times in
good faith carry out all the provisions of this Certificate of Designations and take all action as may be required to protect the rights
of the Holders hereunder. Without limiting the generality of the foregoing or any other provision of this Certificate of Designations
or the other Transaction Documents, the Company (a) shall not increase the par value of any shares of Common Stock receivable upon the
conversion of any Preferred Shares above the Conversion Price then in effect, (b) shall take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the conversion
of Preferred Shares and (c) shall, so long as any Preferred Shares are outstanding, take all action necessary to reserve and keep available
out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the conversion of the Preferred Shares,
the maximum number of shares of Common Stock as shall from time to time be necessary to effect the conversion of the F-1 Preferred Shares
then outstanding (without regard to any limitations on conversion contained herein). Notwithstanding anything herein to the contrary,
if after the sixty (60) calendar day anniversary of the Initial Issuance Date, each Holder is not permitted to convert such Holder’s
Preferred Shares in full for any reason (other than pursuant to restrictions set forth in Section 4(d) hereof), the Company shall use
its best efforts to promptly remedy such failure, including, without limitation, obtaining such consents or approvals as necessary to
effect such conversion into shares of Common Stock.
10.
Authorized Shares.
(a)
Reservation. So long as any Preferred Shares remain outstanding, the Company shall at all times reserve at least 300% of the number
of shares of Common Stock as shall from time to time be necessary to effect the conversion, including without limitation, Alternate Conversions,
of all of the F-1 Preferred Shares then outstanding at the Alternate Conversion Price then in effect (without regard to any limitations
on conversions) (the “Required Reserve Amount”). The Required Reserve Amount (including, without limitation, each
increase in the number of shares so reserved) shall be allocated pro rata among the Holders based on the number of the F-1Preferred Shares
held by each Holder on the Initial Issuance Date or increase in the number of reserved shares, as the case may be (the “Authorized
Share Allocation”). In the event that a Holder shall sell or otherwise transfer any of such Holder’s Preferred Shares,
each transferee shall be allocated a pro rata portion of such Holder’s Authorized Share Allocation. Any shares of Common Stock
reserved and allocated to any Person which ceases to hold any Preferred Shares shall be allocated to the remaining Holders of Preferred
Shares, pro rata based on the number of the F-1Preferred Shares then held by the Holders.
(b)
Insufficient Authorized Shares. If, notwithstanding Section 10(a) and not in limitation thereof, at any time while any of the
F-1 Preferred Shares remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock
to satisfy its obligation to reserve for issuance upon conversion of the F-1 Preferred Shares at least a number of shares of Common Stock
equal to the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all
action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve
the Required Reserve Amount for the F-1 Preferred Shares then outstanding (or deemed outstanding pursuant to Section 10(a) above). Without
limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure,
but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of
its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting,
the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval
of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they
approve such proposal (or, if a majority of the voting power then in effect of the capital stock of the Company consents to such increase,
in lieu of such proxy statement, deliver to the stockholders of the Company an information statement that has been filed with (and either
approved by or not subject to comments from) the SEC with respect thereto). Notwithstanding the foregoing, if any such time of an Authorized
Share Failure, the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding shares of
Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining
such consent and submitting for filing with the SEC an Information Statement on Schedule 14C. In the event that the Company is prohibited
from issuing shares of Common Stock to a Holder upon any conversion due to the failure by the Company to have sufficient shares of Common
Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorized
Failure Shares”), in lieu of delivering such Authorized Failure Shares to such Holder, the Company shall pay cash in exchange
for the redemption of such portion of the Conversion Amount of the F-1 Preferred Shares convertible into such Authorized Failure Shares
at a price equal to the sum of (i) the product of (x) such number of Authorized Failure Shares and (y) the greatest Closing Sale Price
of the Common Stock on any Trading Day during the period commencing on the date such Holder delivers the applicable Conversion Notice
with respect to such Authorized Failure Shares to the Company and ending on the date of such issuance and payment under this Section
10(a); and (ii) to the extent such Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by such Holder of Authorized Failure Shares, any brokerage commissions and other out-of-pocket expenses, if any,
of such Holder incurred in connection therewith. Nothing contained in Section 10(a) or this Section 10(b) shall limit any obligations
of the Company under any provision of the Securities Purchase Agreement or Registration Rights Agreement.
11.
Voting Rights. Except as otherwise provided herein or as otherwise required by law, the Series F-1 Preferred Stock shall have
no voting rights. However, as long as any shares of Series F-1 Preferred Stock are outstanding, the Corporation shall not, without the
affirmative vote of the holders of at least a majority of the outstanding shares of Series F-1 Preferred Stock (the “Requisite
Holders”), (a) alter or change adversely the powers, preferences or rights given to the Series F-1 Preferred Stock or alter or
amend this Certificate of Designation, (b) amend its certificate of incorporation or other charter documents in any manner that adversely
affects any rights of the Holders, (c) increase the number of authorized shares of Series F-1 Preferred Stock, or (d) enter into any
agreement with respect to any of the foregoing.
12.
Covenants.
(a)
Incurrence of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
incur or guarantee, assume or suffer to exist any Indebtedness (other than Permitted Indebtedness).
(b)
Existence of Liens. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
allow or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by the Company or any of its Subsidiaries (collectively, “Liens”) other
than Permitted Liens.
(c)
Restricted Payments and Investments. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in
whole or in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any
Indebtedness whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness or make any
Investment, as applicable, if at the time such payment with respect to such Indebtedness and/or Investment, as applicable, is due or
is otherwise made or, after giving effect to such payment, (i) an event constituting a Triggering Event has occurred and is continuing
or (ii) an event that with the passage of time and without being cured would constitute a Triggering Event has occurred and is continuing.
(d)
Restriction on Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries to not,
directly or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock (other than
as required by the Certificate of Designations).
(e)
Restriction on Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, sell, lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any assets or rights
of the Company or any Subsidiary owned or hereafter acquired whether in a single transaction or a series of related transactions, other
than (i) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of such assets or rights by the Company
and its Subsidiaries in the ordinary course of business consistent with its past practice and (ii) sales of inventory and product in
the ordinary course of business.
(f)
Change in Nature of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or
indirectly, engage in any material line of business substantially different from those lines of business conducted by or publicly contemplated
to be conducted by the Company and each of its Subsidiaries on the Subscription Date or any business substantially related or incidental
thereto. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, modify its or their
corporate structure or purpose.
(g)
Preservation of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve,
its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and
in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its
business makes such qualification necessary.
(h)
Maintenance of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve,
all of its properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary
wear and tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which
it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.
(i) Maintenance of Intellectual Property. The Company will, and will cause each of its Subsidiaries to, take all action necessary or advisable to maintain all of the Intellectual Property Rights of the Company and/or any of its Subsidiaries that are necessary or material to the conduct of its business in full force and effect.
(j)
Maintenance of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible
and reputable insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business
interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such amounts
and covering such risks as is required by any governmental authority having jurisdiction with respect thereto or as is carried generally
in accordance with sound business practice by companies in similar businesses similarly situated.
(k)
Transactions with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend
or be a party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer
or exchange of property or assets of any kind or the rendering of services of any kind) with any affiliate, except transactions in the
ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable for the prudent operation
of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable
arm’s length transaction with a Person that is not an affiliate thereof.
(l)
Restricted Issuances. The Company shall not, directly or indirectly, without the prior written consent of the Required Holders,
(i) issue any Preferred Shares (other than as contemplated by the Securities Purchase Agreement and this Certificate of Designations),
or (ii) issue any other securities that would cause a breach or default under this Certificate of Designations or the Warrants.
(m)
Stay, Extension and Usury Laws. To the extent that it may lawfully do so, the Company (A) agrees that it will not at any time
insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law (wherever
or whenever enacted or in force) that may affect the covenants or the performance of this Certificate of Designations; and (B) expressly
waives all benefits or advantages of any such law and agrees that it will not, by resort to any such law, hinder, delay or impede the
execution of any power granted to the Holders by this Certificate of Designations, but will suffer and permit the execution of every
such power as though no such law has been enacted.
(n)
Taxes. The Company and its Subsidiaries shall pay when due all taxes, fees or other charges of any nature whatsoever (together
with any related interest or penalties) now or hereafter imposed or assessed against the Company and its Subsidiaries or their respective
assets or upon their ownership, possession, use, operation or disposition thereof or upon their rents, receipts or earnings arising therefrom
(except where the failure to pay would not, individually or in the aggregate, have a material effect on the Company or any of its Subsidiaries).
The Company and its Subsidiaries shall file on or before the due date therefor all personal property tax returns (except where the failure
to file would not, individually or in the aggregate, have a material effect on the Company or any of its Subsidiaries). Notwithstanding
the foregoing, the Company and its Subsidiaries may contest, in good faith and by appropriate proceedings, taxes for which they maintain
adequate reserves therefor in accordance with GAAP.
(o)
PCAOB Registered Auditor. At all times any Preferred Shares remain outstanding, the Company shall have engaged an independent
auditor to audit its financial statements that is registered with (and in compliance with the rules and regulations of) the Public Company
Accounting Oversight Board.
13.
Liquidation, Dissolution, Winding-Up. In the event of a Liquidation Event, the Holders shall be entitled to receive in cash out
of the assets of the Company, whether from capital or from earnings available for distribution to its stockholders (the “Liquidation
Funds”), before any amount shall be paid to the holders of any of shares of Junior Stock, but pari passu with any Parity Stock
then outstanding, an amount per Preferred Share equal to the sum of (i) the Black Scholes Value (as defined in the Warrants) with respect
to the outstanding portion of all Warrants held by such Holder (without regard to any limitations on the exercise thereof) as of the
date of such event and (ii) the greater of (A) 125% of the Conversion Amount of such Preferred Share on the date of such payment and
(B) the amount per share such Holder would receive if such Holder converted such Preferred Share into Common Stock immediately prior
to the date of such payment, provided that if the Liquidation Funds are insufficient to pay the full amount due to the Holders and holders
of shares of Parity Stock, then each Holder and each holder of Parity Stock shall receive a percentage of the Liquidation Funds equal
to the full amount of Liquidation Funds payable to such Holder and such holder of Parity Stock as a liquidation preference, in accordance
with their respective certificate of designations (or equivalent), as a percentage of the full amount of Liquidation Funds payable to
all holders of Preferred Shares and all holders of shares of Parity Stock. To the extent necessary, the Company shall cause such actions
to be taken by each of its Subsidiaries so as to enable, to the maximum extent permitted by law, the proceeds of a Liquidation Event
to be distributed to the Holders in accordance with this Section 13. All the preferential amounts to be paid to the Holders under this
Section 13 shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution
of any Liquidation Funds of the Company to the holders of shares of Junior Stock in connection with a Liquidation Event as to which this
Section 13 applies. Upon payment in full of the Black-Scholes Value (as defined in the Warrants) of such Warrants pursuant to this Section
13, such Warrants shall be deemed repurchased by the Company and no longer exercisable.
14.
Distribution of Assets. In addition to any adjustments pursuant to Section 7(a) and Section 8, if the Company shall declare or
make any dividend or other distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock,
by way of return of capital or otherwise (including without limitation, any distribution of cash, stock or other securities, property
or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(the “Distributions”), then each Holder, as holders of Preferred Shares, will be entitled to such Distributions as
if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of the F-1 Preferred Shares (without
taking into account any limitations or restrictions on the convertibility of the F-1 Preferred Shares and assuming for such purpose that
the Preferred Share was converted at the Alternate Conversion Price as of the applicable record date) immediately prior to the date on
which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders of Common Stock
are to be determined for such Distributions (provided, however, that to the extent that such Holder’s right to participate
in any such Distribution would result in such Holder and the other Attribution Parties exceeding the Maximum Percentage, then such Holder
shall not be entitled to participate in such Distribution to such extent of the Maximum Percentage (and shall not be entitled to beneficial
ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to such extent of any such excess)
and the portion of such Distribution shall be held in abeyance for the benefit of such Holder until such time or times as its right thereto
would not result in such Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times, if any, such
Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution
held similarly in abeyance) to the same extent as if there had been no such limitation).
15.
Vote to Change the Terms of or Issue Preferred Shares. In addition to any other rights provided by law, except where the vote
or written consent of the holders of a greater number of shares is required by law or by another provision of the Certificate of Incorporation,
without first obtaining the affirmative vote at a meeting duly called for such purpose or the written consent without a meeting of the
Required Holders, voting together as a single class, the Company shall not: (a) amend or repeal any provision of, or add any provision
to, its Certificate of Incorporation or bylaws, or file any certificate of designations or articles of amendment of any series of shares
of preferred stock, if such action would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions
provided for the benefit of the F-1 Preferred Shares hereunder, regardless of whether any such action shall be by means of amendment
to the Certificate of Incorporation or by merger, consolidation or otherwise; (b) increase or decrease (other than by conversion) the
authorized number of Preferred Shares; (c) without limiting any provision of Section 2, create or authorize (by reclassification or otherwise)
any new class or series of Senior Preferred Stock or Parity Stock; (d) purchase, repurchase or redeem any shares of Junior Stock (other
than pursuant to the terms of the Company’s equity incentive plans and options and other equity awards granted under such plans
(that have in good faith been approved by the Board)); (e) without limiting any provision of Section 2, pay dividends or make any other
distribution on any shares of any Junior Stock; (f) issue any Preferred Shares other than as contemplated hereby or pursuant to the Securities
Purchase Agreement; or (g) without limiting any provision of Section 8, whether or not prohibited by the terms of the Preferred Shares,
circumvent a right of the F-1 Preferred Shares hereunder.
16.
Transfer of Preferred Shares. A Holder may offer, sell or transfer some or all of its Preferred Shares without the consent of
the Company, subject only to the provisions of Section 2(g) of the Securities Purchase Agreement.
17.
Reissuance of Preferred Share Certificates and Book Entries.
(a)
Transfer. If any Preferred Shares are to be transferred, the applicable Holder shall surrender the applicable Preferred Share
Certificate to the Company (or, if the F-1 Preferred Shares are held in Book-Entry form, a written instruction letter to the Company),
whereupon the Company will forthwith issue and deliver upon the order of such Holder a new Preferred Share Certificate (in accordance
with Section 17(d)) (or evidence of the transfer of such Book-Entry), registered as such Holder may request, representing the outstanding
number of Preferred Shares being transferred by such Holder and, if less than the entire outstanding number of Preferred Shares is being
transferred, a new Preferred Share Certificate (in accordance with Section 17(d)) to such Holder representing the outstanding number
of Preferred Shares not being transferred (or evidence of such remaining Preferred Shares in a Book-Entry for such Holder). Such Holder
and any assignee, by acceptance of the Preferred Share Certificate or evidence of Book-Entry issuance, as applicable, acknowledge and
agree that, by reason of the provisions of Section 4(c)(i) following conversion or redemption of any of the Preferred Shares, the outstanding
number of Preferred Shares represented by the F-1 Preferred Shares may be less than the number of Preferred Shares stated on the face
of the Preferred Shares.
(b)
Lost, Stolen or Mutilated Preferred Share Certificate. Upon receipt by the Company of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of a Preferred Share Certificate (as to which a written certification and the indemnification
contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking
by the applicable Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation
of such Preferred Share Certificate, the Company shall execute and deliver to such Holder a new Preferred Share Certificate (in accordance
with Section 17(d)) representing the applicable outstanding number of Preferred Shares.
(c)
Preferred Share Certificate and Book-Entries Exchangeable for Different Denominations and Forms. Each Preferred Share Certificate
is exchangeable, upon the surrender hereof by the applicable Holder at the principal office of the Company, for a new Preferred Share
Certificate or Preferred Share Certificate(s) or new Book-Entry (in accordance with Section 17(d)) representing, in the aggregate, the
outstanding number of the F-1 Preferred Shares in the original Preferred Share Certificate, and each such new Preferred Share Certificate
and/or new Book-Entry, as applicable, will represent such portion of such outstanding number of Preferred Shares from the original Preferred
Share Certificate as is designated in writing by such Holder at the time of such surrender. Each Book-Entry may be exchanged into one
or more new Preferred Share Certificates or split by the applicable Holder by delivery of a written notice to the Company into two or
more new Book-Entries (in accordance with Section 17(d)) representing, in the aggregate, the outstanding number of the F-1 Preferred
Shares in the original Book-Entry, and each such new Book-Entry and/or new Preferred Share Certificate, as applicable, will represent
such portion of such outstanding number of Preferred Shares from the original Book-Entry as is designated in writing by such Holder at
the time of such surrender.
(d)
Issuance of New Preferred Share Certificate or Book-Entry. Whenever the Company is required to issue a new Preferred Share Certificate
or a new Book-Entry pursuant to the terms of this Certificate of Designations, such new Preferred Share Certificate or new Book-Entry
(i) shall represent, as indicated on the face of such Preferred Share Certificate or in such Book-Entry, as applicable, the number of
Preferred Shares remaining outstanding (or in the case of a new Preferred Share Certificate or new Book-Entry being issued pursuant to
Section 17(a) or Section 17(c), the number of Preferred Shares designated by such Holder) which, when added to the number of Preferred
Shares represented by the other new Preferred Share Certificates or other new Book-Entry, as applicable, issued in connection with such
issuance, does not exceed the number of Preferred Shares remaining outstanding under the original Preferred Share Certificate or original
Book-Entry, as applicable, immediately prior to such issuance of new Preferred Share Certificate or new Book-Entry, as applicable, and
(ii) shall have an issuance date, as indicated on the face of such new Preferred Share Certificate or in such new Book-Entry, as applicable,
which is the same as the issuance date of the original Preferred Share Certificate or in such original Book-Entry, as applicable.
18.
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Certificate of Designations
shall be cumulative and in addition to all other remedies available under this Certificate of Designations and any of the other Transaction
Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall
limit any Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of
this Certificate of Designations. No failure on the part of a Holder to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by such Holder of any right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right, power or remedy. In addition, the exercise of any right or
remedy of a Holder at law or equity or under this Certificate of Designations or any of the documents shall not be deemed to be an election
of such Holder’s rights or remedies under such documents or at law or equity. The Company covenants to each Holder that there shall
be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with
respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by a Holder and shall
not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). No failure
on the part of a Holder to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise by such Holder of any right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. In addition, the exercise of any right or remedy of any Holder at law or equity
or under Preferred Shares or any of the documents shall not be deemed to be an election of such Holder’s rights or remedies under
such documents or at law or equity. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holders and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event
of any such breach or threatened breach, each Holder shall be entitled, in addition to all other available remedies, to specific performance
and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such
case without the necessity of proving actual damages and without posting a bond or other security. The Company shall provide all information
and documentation to a Holder that is requested by such Holder to enable such Holder to confirm the Company’s compliance with the
terms and conditions of this Certificate of Designations.
19.
Payment of Collection, Enforcement and Other Costs. If (a) any Preferred Shares are placed in the hands of an attorney for collection
or enforcement or is collected or enforced through any legal proceeding or a Holder otherwise takes action to collect amounts due under
this Certificate of Designations with respect to the F-1 Preferred Shares or to enforce the provisions of this Certificate of Designations
or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditors’
rights and involving a claim under this Certificate of Designations, then the Company shall pay the costs incurred by such Holder for
such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including,
without limitation, attorneys’ fees and disbursements. The Company expressly acknowledges and agrees that no amounts due under
this Certificate of Designations with respect to any Preferred Shares shall be affected, or limited, by the fact that the purchase price
paid for each Preferred Share was less than the original Stated Value thereof.
20.
Construction; Headings. This Certificate of Designations shall be deemed to be jointly drafted by the Company and the Holders
and shall not be construed against any such Person as the drafter hereof. The headings of this Certificate of Designations are for convenience
of reference and shall not form part of, or affect the interpretation of, this Certificate of Designations. Unless the context clearly
indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof.
The terms “including,” “includes,” “include” and words of like import shall be construed broadly
as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof”
and words of like import refer to this entire Certificate of Designations instead of just the provision in which they are found. Unless
expressly indicated otherwise, all section references are to sections of this Certificate of Designations. Terms used in this Certificate
of Designations and not otherwise defined herein, but defined in the other Transaction Documents, shall have the meanings ascribed to
such terms on the Initial Issuance Date in such other Transaction Documents unless otherwise consented to in writing by the Required
Holders.
21.
Failure or Indulgence Not Waiver. No failure or delay on the part of a Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party. This Certificate of Designations shall be deemed to be jointly drafted by
the Company and all Holders and shall not be construed against any Person as the drafter hereof. Notwithstanding the foregoing, nothing
contained in this Section 21 shall permit any waiver of any provision of Section 4(d).
22.
Dispute Resolution.
(a)
Submission to Dispute Resolution.
(i)
In the case of a dispute relating to a Closing Bid Price, a Closing Sale Price, a Conversion Price, an Alternate Conversion Price, a
Black Scholes Consideration Value, a VWAP or a fair market value or the arithmetic calculation of a Conversion Rate, or the applicable
redemption price (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing),
the Company or the applicable Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the
Company, within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by such Holder
at any time after such Holder learned of the circumstances giving rise to such dispute. If such Holder and the Company are unable to
promptly resolve such dispute relating to such Closing Bid Price, such Closing Sale Price, such Conversion Price, such Alternate Conversion
Price, such Black Scholes Consideration Value, such VWAP or such fair market value, or the arithmetic calculation of such Conversion
Rate or such applicable redemption price (as the case may be), at any time after the second (2nd) Business Day following such
initial notice by the Company or such Holder (as the case may be) of such dispute to the Company or such Holder (as the case may be),
then such Holder may, at its sole option, select an independent, reputable investment bank to resolve such dispute.
(ii)
Such Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance
with the first sentence of this Section 22 and (B) written documentation supporting its position with respect to such dispute, in each
case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which such
Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately
preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being
understood and agreed that if either such Holder or the Company fails to so deliver all of the Required Dispute Documentation by the
Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled
to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect
to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered
to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and such
Holder or otherwise requested by such investment bank, neither the Company nor such Holder shall be entitled to deliver or submit any
written documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii)
The Company and such Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and such
Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses
of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall be final
and binding upon all parties absent manifest error.
(b)
Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 22 constitutes an agreement to arbitrate between
the Company and each Holder (and constitutes an arbitration agreement) under the Delaware Uniform Arbitration Act, (ii) the terms of
this Certificate of Designations and each other applicable Transaction Document shall serve as the basis for the selected investment
bank’s resolution of the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make
all findings, determinations and the like that such investment bank determines are required to be made by such investment bank in connection
with its resolution of such dispute and in resolving such dispute such investment bank shall apply such findings, determinations and
the like to the terms of this Certificate of Designations and any other applicable Transaction Documents, (iii) the applicable Holder
(and only such Holder with respect to disputes solely relating to such Holder), in its sole discretion, shall have the right to submit
any dispute described in this Section 22 to any state or federal court sitting in Wilmington, Delaware in lieu of utilizing the procedures
set forth in this Section 22 and (iv) nothing in this Section 22 shall limit such Holder from obtaining any injunctive relief or other
equitable remedies (including, without limitation, with respect to any matters described in this Section 22).
23.
Notices; Currency; Payments.
| (a) | Notices.
The Company shall provide each Holder of Preferred Shares with prompt written notice of all
actions taken pursuant to the terms of this Certificate of Designations, including in reasonable
detail a description of such action and the reason therefor. Whenever notice is required
to be given under this Certificate of Designations, unless otherwise provided herein, such
notice must be in writing and shall be given in accordance with Section 9(f) of the Securities
Purchase Agreement. The Company shall provide each Holder with prompt written notice of all
actions taken pursuant to this Certificate of Designations, including in reasonable detail
a description of such action and the reason therefore. Without limiting the generality of
the foregoing, the Company shall give written notice to each Holder (i) immediately upon
any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying,
the calculation of such adjustment and (ii) at least fifteen (15) days prior to the date
on which the Company closes its books or takes a record (A) with respect to any dividend
or distribution upon the Common Stock, or (B) for determining rights to vote with respect
to any Fundamental Transaction, dissolution or liquidation, provided in each case that such
information shall be made known to the public prior to or in conjunction with such notice
being provided to such Holder. |
(b)
Currency. All dollar amounts referred to in this Certificate of Designations are in United States Dollars (“U.S. Dollars”),
and all amounts owing under this Certificate of Designations shall be paid in U.S. Dollars. All amounts denominated in other currencies
(if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange
Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Certificate of Designations,
the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed
that where an amount is calculated with reference to, or over, a period of time, the date of calculation shall be the final date of such
period of time).
(c)
Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Certificate of Designations,
unless otherwise expressly set forth herein, such payment shall be made in lawful money of the United States of America by wire transfer
of immediately available funds pursuant to wire transfer instructions that Holder shall provide to the Company in writing from time to
time. Whenever any amount expressed to be due by the terms of this Certificate of Designations is due on any day which is not a Business
Day, the same shall instead be due on the next succeeding day which is a Business Day.
24.
Waiver of Notice. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and
all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Certificate of
Designations and the Securities Purchase Agreement.
25.
Governing Law. This Certificate of Designations shall be construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance of this Certificate of Designations shall be governed by, the internal laws
of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware
or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein (i) shall be
deemed or operate to preclude any Holder from bringing suit or taking other legal action against the Company in any other jurisdiction
to collect on the Company’s obligations to such Holder, to realize on any collateral or any other security for such obligations,
or to enforce a judgment or other court ruling in favor of such Holder or (ii) shall limit, or shall be deemed or construed to limit,
any provision of Section 22 above. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS CERTIFICATE OF DESIGNATIONS OR ANY TRANSACTION
CONTEMPLATED HEREBY.
26.
Judgment Currency.
(a)
If for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to convert
into any other currency (such other currency being hereinafter in this Section 26 referred to as the “Judgment Currency”)
an amount due in U.S. dollars under this Certificate of Designations, the conversion shall be made at the Exchange Rate prevailing on
the Trading Day immediately preceding:
(i)
the date actual payment of the amount due, in the case of any any jurisdiction that will give effect to such conversion being made on
such date: or
(ii)
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of
which such conversion is made pursuant to this Section 26(a)(ii) being hereinafter referred to as the “Judgment Conversion Date”).
(b)
If in the case of any proceeding in the court of any jurisdiction referred to in Section 26(a)(ii) above, there is a change in the Exchange
Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay
such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate
prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(c)
Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Certificate of Designations.
27.
TAXES.
(a)
All payments made by the Company hereunder or under any other Transaction Document shall be made in accordance with the terms of the
respective Transaction Document and shall be made without set-off, counterclaim, withholding, deduction or other defense. Without limiting
the foregoing, all such payments shall be made free and clear of and without deduction or withholding for any present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding (i) taxes imposed on the net
income of a Holder by the jurisdiction in which such Holder is organized or where it has its principal lending office, (ii) with respect
to any payments made by the Company hereunder, taxes (including, but not limited to, backup withholding) to the extent such taxes are
imposed due to the failure of the applicable recipient of such payment to provide the Company with whichever (if any) is applicable of
valid and properly completed and executed IRS Forms W-9, W-8BEN, W-8BEN-E, W-8ECI, and/or W-8IMY, when requested in writing by the Company,
and (iii) with respect to any payments made by the Company, taxes to the extent such taxes are imposed due to the failure of the applicable
recipient of such payment to comply with FATCA (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and liabilities,
collectively or individually, “Taxes”). If the Company shall be required to deduct or to withhold any Taxes from or
in respect of any amount payable hereunder or under any other Transaction Document:
(i)
the amount so payable shall be increased to the extent necessary so that after making all required deductions and withholdings (including
Taxes on amounts payable to a Holder pursuant to this sentence) such Holder receives an amount equal to the sum it would have received
had no such deduction or withholding been made,
(ii)
the Company shall make such deduction or withholding,
(iii)
the Company shall pay the full amount deducted or withheld to the relevant Governmental Authority (as defined in the Securities Purchase
Agreement) in accordance with applicable law, and
(iv)
as promptly as possible thereafter, the Company shall send such Holder an official receipt (or, if an official receipt is not available,
such other documentation as shall be satisfactory to such Holder, as the case may be) showing payment. In addition, the Company agrees
to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from
any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to, this Preferred
Shares or any other Transaction Document (collectively, “Other Taxes”).
(b)
The Company hereby indemnifies and agrees to hold each Holder and each of their affiliates and their respective officers, directors,
employees, agents and advisors (each, an “Indemnified Party”) each Indemnified Party harmless from and against Taxes
or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section
27) paid by any Indemnified Party as a result of any payment made hereunder or from the execution, delivery, registration or enforcement
of, or otherwise with respect to, this Preferred Shares or any other Transaction Document, and any liability (including penalties, interest
and expenses for nonpayment, late payment or otherwise) arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be paid within thirty (30) days from the date on which such Holder
makes written demand therefor, which demand shall identify the nature and amount of such Taxes or Other Taxes.
(c)
If the Company fails to perform any of its obligations under this Section 27, the Company shall indemnify such Holder for any taxes,
interest or penalties that may become payable as a result of any such failure. The obligations of the Company under this Section 27 shall
survive the repayment and/or conversion, as applicable, in full of the F-1 Preferred Shares and all other amounts payable with respect
thereto.
(d)
If any Indemnified Party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to
which it has been indemnified pursuant to this Section 27 (including by the payment of additional amounts pursuant to this Section 27),
it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section
27 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including taxes) of such Indemnified Party
and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such Indemnified Party, shall repay to such Indemnified Party the amount paid over pursuant to this paragraph
(d) (plus any penalties, interest, or other charges imposed by the relevant Governmental Authority) in the event that such Indemnified
Party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (d),
in no event will the Indemnified Party be required to pay any amount to an indemnifying party pursuant to this paragraph (d) the payment
of which would place the Indemnified Party in a less favorable net after-Tax position than the Indemnified Party would have been in if
the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification
payments or additional amounts with respect to such Tax had never been paid. This paragraph (d) shall not be construed to require any
Indemnified Party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.
28.
Severability. If any provision of this Certificate of Designations is prohibited by law or otherwise determined to be invalid
or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Certificate of Designations so long as this Certificate of
Designations as so modified continues to express, without material change, the original intentions of the parties as to the subject matter
hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred
upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
29.
Maximum Payments. Without limiting Section 9(d) of the Securities Purchase Agreement, nothing contained herein shall be deemed
to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the
event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments
in excess of such maximum shall be credited against amounts owed by the Company to the applicable Holder and thus refunded to the Company.
30.
Stockholder Matters; Amendment.
(a)
Stockholder Matters. Any stockholder action, approval or consent required, desired or otherwise sought by the Company pursuant
to the DGCL, the Certificate of Incorporation, this Certificate of Designations or otherwise with respect to the issuance of Preferred
Shares may be effected by written consent of the Company’s stockholders or at a duly called meeting of the Company’s stockholders,
all in accordance with the applicable rules and regulations of the DGCL. This provision is intended to comply with the applicable sections
of the DGCL permitting stockholder action, approval and consent affected by written consent in lieu of a meeting.
(b)
Amendment. Except for Section 4(d), which may not be amended or waived hereunder, this Certificate of Designations or any provision
hereof may be amended by obtaining the affirmative vote at a meeting duly called for such purpose, or written consent without a meeting
in accordance with the DGCL, of the Required Holders, voting separate as a single class, and with such other stockholder approval, if
any, as may then be required pursuant to the DGCL and the Certificate of Incorporation.
31.
Certain Defined Terms. For purposes of this Certificate of Designations, the following terms shall have the following meanings:
(a)
“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b)
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c)
“Additional Amount” means, as of the applicable date of determination, with respect to each Preferred Share, all declared
and unpaid dividends on such Preferred Share.
(d)
“Adjustment Right” means any right granted with respect to any securities issued in connection with, or with respect
to, any issuance or sale (or deemed issuance or sale in accordance with Section 8(a)) of shares of Common Stock (other than rights of
the type described in Section 7(a) hereof) that could result in a decrease in the net consideration received by the Company in connection
with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar
rights).
(e)
“Affiliate” or “Affiliated” means, with respect to any Person, any other Person that directly or
indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition
that “control” of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary
voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.
(f)
“Alternate Conversion Price” means, with respect to any Alternate Conversion that price which shall be the lowest
of (i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, (ii) 80%
of the VWAP of the Common Stock as of the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion
Notice, (iii) 80% of the VWAP of the Common Stock as of the Trading Day of the delivery or deemed delivery of the applicable Conversion
Notice and (iv) 80% of the price computed as the quotient of (I) the sum of the VWAP of the Common Stock for each of the three (3) Trading
Days with the lowest VWAP of the Common Stock during the fifteen (15) consecutive Trading Day period ending and including the Trading
Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice, divided by (II) three (3) (such period,
the “Alternate Conversion Measuring Period”). All such determinations to be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the Common Stock
during such Alternate Conversion Measuring Period.
(g)
“Approved Stock Plan” means any employee benefit plan or agreement which has been approved by the Board prior to or
subsequent to the Subscription Date pursuant to which shares of Common Stock and standard options to purchase Common Stock may be issued
to any employee, officer, consultant or director for services provided to the Company in their capacity as such.
(h)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including,
any funds, feeder funds or managed accounts, currently, or from time to time after the Initial Issuance Date, directly or indirectly
managed or advised by a Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates
of such Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with such Holder
or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated
with such Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of
the foregoing is to subject collectively such Holder and all other Attribution Parties to the Maximum Percentage.
(i)
“Black Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment Right
(as the case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Stock on the Trading
Day immediately preceding the public announcement of the execution of definitive documents with respect to the issuance of such Option,
Convertible Security or Adjustment Right (as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate
for a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as of the date
of issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv) an expected
volatility equal to the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization
factor) as of the Trading Day immediately following the date of issuance of such Option, Convertible Security or Adjustment Right (as
the case may be).
(j)
“Bloomberg” means Bloomberg, L.P.
(k)
“Book-Entry” means each entry on the Register evidencing one or more Preferred Shares held by a Holder in lieu of
a Preferred Share Certificate issuable hereunder.
(l)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New
York are authorized or required by law to remain closed; provided, however, for clarification,
commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
(m)
“Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct
or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification
of the shares of Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization
or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and,
directly or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities with the
authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity
or entities) after such reorganization, recapitalization or reclassification, or (iii) pursuant to a migratory merger effected solely
for the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries.
F-1F-1F-1
(o)
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing
bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the
Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price
(as the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time,
as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the
last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade
price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of
the bid prices, or the ask prices, respectively, of any market makers for such security as reported in The Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices). If the Closing Bid Price or the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the
case may be) of such security on such date shall be the fair market value as mutually determined by the Company and the Required Holder.
If the Company and the Required Holders are unable to agree upon the fair market value of such security, then such dispute shall be resolved
in accordance with the procedures in Section 22. All such determinations shall be appropriately adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions during such period.
(p)
“Closing Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is the date the Company
initially issued the F-1 Preferred Shares and the Warrants pursuant to the terms of the Securities Purchase Agreement.
(q)
“Code” means the Internal Revenue Code of 1986, as amended.
(r)
“Common Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii) any capital
stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(s)
“Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that
Person with respect to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the
Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability
will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will
be protected (in whole or in part) against loss with respect thereto.
(t)
“Convertible Securities” means any stock or other security (other than Options) that is at any time and under any
circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof
to acquire, any shares of Common Stock.
(w)
“Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq
Global Market, the Nasdaq Capital Market, the OTCQX and the OTCQB.
(x)
“Equity Conditions” means, with respect to an given date of determination: (i) on each day during the period beginning
twenty (20) Trading Days prior to such applicable date of determination and ending on and including such applicable date of determination
either (x) one or more Registration Statements filed pursuant to the Registration Rights Agreement shall be effective and the prospectus
contained therein shall be available on such applicable date of determination (with, for the avoidance of doubt, any shares of Common
Stock previously sold pursuant to such prospectus deemed unavailable) for the resale of all shares of Common Stock to be issued in connection
with the event requiring this determination (or issuable upon conversion of the Conversion Amount being redeemed, as applicable, in the
event requiring this determination at the Alternate Conversion Price then in effect (without regard to any limitations on conversion
set forth herein)) (each, a “Required Minimum Securities Amount”), in each case, in accordance with the terms of the
Registration Rights Agreement and there shall not have been during such period any Grace Periods (as defined in the Registration Rights
Agreement) or (y) all Registrable Securities shall be eligible for sale pursuant to Rule 144 (as defined in the Securities Purchase Agreement)
without the need for registration under any applicable federal or state securities laws (in each case, disregarding any limitation on
conversion of the Preferred Shares, other issuance of securities with respect to the F-1 Preferred Shares and exercise of the Warrants)
and no Current Public Information Failure (as defined in the Registration Rights Agreement) exists or is continuing; (ii) on each day
during the period beginning twenty (20) Trading Days prior to the applicable date of determination and ending on and including the applicable
date of determination (the “Equity Conditions Measuring Period”), the Common Stock (including all Registrable Securities)
is listed or designated for quotation (as applicable) on an Eligible Market and shall not have been suspended from trading on an Eligible
Market (other than suspensions of not more than two (2) days and occurring prior to the applicable date of determination due to business
announcements by the Company) nor shall delisting or suspension by an Eligible Market have been threatened or likely to occur or pending
as evidenced by (A) a writing by such Eligible Market or (B) the Company falling below the minimum listing maintenance requirements of
the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable); (iii) during the Equity Conditions
Measuring Period, the Company shall have delivered all shares of Common Stock issuable upon conversion of the F-1 Preferred Shares on
a timely basis as set forth in Section 4 hereof and all other shares of capital stock required to be delivered by the Company on a timely
basis as set forth in the other Transaction Documents; (iv) any shares of Common Stock to be issued in connection with the event requiring
determination (or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination) may be
issued in full without violating Section 4(d) hereof; (v) any shares of Common Stock to be issued in connection with the event requiring
determination (or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination (without
regards to any limitations on conversion set forth herein)) may be issued in full without violating the rules or regulations of the Eligible
Market on which the Common Stock is then listed or designated for quotation (as applicable); (vi) on each day during the Equity Conditions
Measuring Period, no public announcement of a pending, proposed or intended Fundamental Transaction shall have occurred which has not
been abandoned, terminated or consummated; (vii) the Company shall have no knowledge of any fact that would reasonably be expected to
cause (1) any Registration Statement required to be filed pursuant to the Registration Rights Agreement to not be effective or the prospectus
contained therein to not be available for the resale of the applicable Required Minimum Securities Amount of Registrable Securities in
accordance with the terms of the Registration Rights Agreement or (2) any Registrable Securities to not be eligible for sale pursuant
to Rule 144 without the need for registration under any applicable federal or state securities laws (in each case, disregarding any limitation
on conversion of the Preferred Shares, other issuance of securities with respect to the F-1 Preferred Shares and exercise of the Warrants)
and no Current Public Information Failure exists or is continuing; (viii) the applicable Holder shall not be in (and no other Holder
shall be in) possession of any material, non-public information provided to any of them by the Company, any of its Subsidiaries or any
of their respective affiliates, employees, officers, representatives, agents or the like; (ix) on each day during the Equity Conditions
Measuring Period, the Company otherwise shall have been in compliance with each, and shall not have breached any representation or warranty
in any material respect (other than representations or warranties subject to material adverse effect or materiality, which may not be
breached in any respect) or any covenant or other term or condition of any Transaction Document, including, without limitation, the Company
shall not have failed to timely make any payment pursuant to any Transaction Document; (x) there shall not have occurred any Volume Failure
or Price Failure as of such applicable date of determination; (xi) on the applicable date of determination (A) no Authorized Share Failure
shall exist or be continuing and the applicable Required Minimum Securities Amount of shares of Common Stock are available under the
certificate of incorporation of the Company and reserved by the Company to be issued pursuant to this Certificate of Designations and
(B) all shares of Common Stock to be issued in connection with the event requiring this determination (or issuable upon conversion of
the Conversion Amount being redeemed in the event requiring this determination (without regards to any limitations on conversion set
forth herein)) may be issued in full without resulting in an Authorized Share Failure; (xii) on each day during the Equity Conditions
Measuring Period, there shall not have occurred and there shall not exist an Triggering Event or an event that with the passage of time
or giving of notice would constitute an Triggering Event; (xiii) no bone fide dispute shall exist, by and between any of Holder or Warrants,
the Company, the Principal Market (or such applicable Eligible Market in which the Common Stock of the Company is then principally trading)
and/or FINRA with respect to any term or provision of any Preferred Shares or any other Transaction Document and (xiv) the shares of
Common Stock issuable pursuant the event requiring the satisfaction of the Equity Conditions are duly authorized and listed and eligible
for trading without restriction on an Eligible Market.
(y)
“Equity Conditions Failure” means that on any day during the period commencing twenty (20) Trading Days prior to the
applicable date of determination, and including such applicable date of determination, the Equity Conditions have not been satisfied
(or waived in writing by the Holder).
(z)
“Event Market Price” means, with respect to any Stock Combination Event Date, 80% of the quotient determined by dividing
(x) the sum of the VWAP of the Common Stock for each of the three (3) lowest Trading Days during the twenty (20) consecutive Trading
Day period ending and including the Trading Day immediately preceding the sixteenth (16th) Trading Day after such Stock Combination Event
Date, divided by (y) three (3).
(aa)
“Excluded Securities” means (i) shares of Common Stock or standard options to purchase Common Stock issued to directors,
officers or employees of the Company for services rendered to the Company in their capacity as such pursuant to an Approved Stock Plan
(as defined above), provided that (A) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such
options) after the Subscription Date pursuant to this clause (i) do not, in the aggregate, exceed more than 5% of the Common Stock issued
and outstanding immediately prior to the Subscription Date and (B) the exercise price of any such options is not lowered, none of such
options are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such options are
otherwise materially changed in any manner that adversely affects any of the Holders; (ii) shares of Common Stock issued upon the conversion
or exercise of Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan
that are covered by clause (i) above) issued prior to the Subscription Date, provided that the conversion price of any such Convertible
Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause
(i) above) is not lowered, none of such Convertible Securities (other than standard options to purchase Common Stock issued pursuant
to an Approved Stock Plan that are covered by clause (i) above) are amended to increase the number of shares issuable thereunder and
none of the terms or conditions of any such Convertible Securities (other than standard options to purchase Common Stock issued pursuant
to an Approved Stock Plan that are covered by clause (i) above) are otherwise materially changed in any manner that adversely affects
any of the Holders; (iii) the shares of Common Stock issuable upon conversion of the F-1 Preferred Shares or otherwise pursuant to the
terms of this Certificate of Designations; provided, that the terms of this Certificate of Designations are not amended, modified or
changed on or after the Subscription Date (other than antidilution adjustments pursuant to the terms thereof in effect as of the Subscription
Date) and (iv) the shares of Common Stock issuable upon exercise of the Warrants; provided, that the terms of the Warrants are not amended,
modified or changed on or after the Subscription Date (other than antidilution adjustments pursuant to the terms thereof in effect as
of the Subscription Date) and (v) any shares of Common Stock issued or issuable in connection with any bona fide strategic or commercial
alliances, acquisitions, mergers, licensing arrangements, and strategic partnerships, provided, that (x) the primary purpose of such
issuance is not to raise capital as reasonably determined, and (y) the purchaser or acquirer or recipient of the securities in such issuance
solely consists of either (I) the actual participants in such strategic or commercial alliance, strategic or commercial licensing arrangement
or strategic or commercial partnership, (II) the actual owners of such assets or securities acquired in such acquisition or merger or
(III) the stockholders, partners, employees, consultants, officers, directors or members of the foregoing Persons, in each case, which
is, itself or through its subsidiaries, an operating company or an owner of an asset, in a business synergistic with the business of
the Company and shall provide to the Company additional benefits in addition to the investment of funds, and (IV) the number or amount
of securities issued to such Persons by the Company shall not be disproportionate to each such Person’s actual participation in
(or fair market value of the contribution to) such strategic or commercial alliance or strategic or commercial partnership or ownership
of such assets or securities to be acquired by the Company, as applicable.
(bb)
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Preferred Shares (or any amended or successor
version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official
interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation,
rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing
such Sections of the Code.
(cc)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject
to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that
is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of
Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject
Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock
such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or
exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding
shares of Common Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities,
individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the
outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or
Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding;
or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in
Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify
its Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one
or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment,
conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination,
reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise
in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common
Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such
Subject Entities as of the date of this Certificate of Designations calculated as if any shares of Common Stock held by all such Subject
Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares
of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form
merger or other transaction requiring other stockholders of the Company to surrender their shares of Common Stock without approval of
the stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more
related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent,
or that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this
definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
(dd)
“GAAP” means United States generally accepted accounting principles, consistently applied.
(ee)
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5
thereunder.
(ff)
“Holder Pro Rata Amount” means, with respect to any Holder, a fraction (i) the numerator of which is the number of
Preferred Shares issued to such Holder pursuant to the Securities Purchase Agreement on the Initial Issuance Date and (ii) the denominator
of which is the number of Preferred Shares issued to all Holders pursuant to the Securities Purchase Agreement on the Initial Issuance
Date.
(gg)
“Indebtedness” means of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations
issued, undertaken or assumed as the deferred purchase price of property or services, including, without limitation, “capital leases”
in accordance with United States generally accepted accounting principles consistently applied for the periods covered thereby (other
than trade payables entered into in the ordinary course of business consistent with past practice), (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets
or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights
and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property),
(F) all monetary obligations under any leasing or similar arrangement which, in connection with United States generally accepted accounting
principles, consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to
in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any mortgage, deed of trust, lien, pledge, charge, security interest or other encumbrance of any nature whatsoever
in or upon any property or assets (including accounts and contract rights) with respect to any asset or property owned by any Person,
even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and
(H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G)
above.
(hh)
“Intellectual Property Rights” means, with respect to the Company and its Subsidiaries, all of their rights or licenses
to use all trademarks, trade names, service marks, service mark registrations, service names, original works of authorship, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property
rights and all applications and registrations therefor.
(ii)
“Investment” means any beneficial ownership (including stock, partnership or limited liability company interests)
of or in any Person, or any loan, advance or capital contribution to any Person or the acquisition of all, or substantially all, of the
assets of another Person or the purchase of any assets of another Person for greater than the fair market value of such assets.
(jj)
“Liquidation Event” means, whether in a single transaction or series of transactions, the voluntary or involuntary
liquidation, dissolution or winding up of the Company or such Subsidiaries the assets of which constitute all or substantially all of
the assets of the business of the Company and its Subsidiaries, taken as a whole.
(kk)
“Material Adverse Effect” means any material adverse effect on the business, properties, assets, liabilities, operations,
results of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, if any, individually or taken
as a whole, or on the transactions contemplated hereby or on the other Transaction Documents (as defined below), or by the agreements
and instruments to be entered into in connection therewith or on the authority or ability of the Company to perform its obligations under
the Transaction Documents.
(ll)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities.
(mm)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose
common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(nn)
“Permitted Indebtedness” means (i) Indebtedness set forth on Schedule 3(s) to the Securities Purchase Agreement, as
in effect as of the Subscription Date (ii) Indebtedness secured by Permitted Liens or unsecured but as described in clauses (iii) and
(v) of the definition of Permitted Liens, and (iv) Permitted Senior Indebtedness.
(oo)
“Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary
course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business
with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings, (iv)
Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment
or Indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing on such equipment
at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the
proceeds of such equipment, in either case, with respect to Indebtedness in an aggregate amount not to exceed $100,000, (v) Liens incurred
in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in clause (iv) above,
provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal
amount of the Indebtedness being extended, renewed or refinanced does not increase, (vi) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payments of custom duties in connection with the importation of goods, (vii) Liens arising from
judgments, decrees or attachments in circumstances not constituting a Triggering Event under Section 5(a)(xiii); Liens with respect to
Permitted Senior Indebtedness.
(pp)
“Permitted Senior Indebtedness” means Indebtedness issued pursuant to that certain Securities Purchase and Security
Agreement, dated April 23, 2020, by and between the Company and the persons set forth therein and Indebtedness issued pursuant to that
certain Securities Purchase Agreement, dated October 14, 2020, by and between the Company and the persons set forth therein.
(qq)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity or a government or any department or agency thereof.
(rr)
“Price Failure” means, with respect to a particular date of determination, the VWAP of the Common Stock on any Trading
Day during the twenty (20) Trading Day period ending on the Trading Day immediately preceding such date of determination fails to exceed
$0.05 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring after
the Subscription Date). All such determinations to be appropriately adjusted for any stock splits, stock dividends, stock combinations,
recapitalizations or other similar transactions during any such measuring period.
(ss)
“Principal Market” means, as of any time of determination, the principal trading market, if any, in which the shares
of Common Stock then trade.
(tt)
“Registration Rights Agreement” means that certain registration rights agreement, dated as of the Closing Date, by
and among the Company and the initial holders of the F-1 Preferred Shares relating to, among other things, the registration of the resale
of the Common Stock issuable upon conversion of the F-1 Preferred Shares or otherwise pursuant to the terms of this Certificate of Designations
and exercise of the Warrants, as may be amended from time to time.
(uu)
“Required Premium” means 125%.
(vv)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.
(ww)
“Securities Purchase Agreement” means that certain securities purchase agreement by and among the Company and the
initial holders of Preferred Shares, dated as of the Subscription Date, as may be amended from time in accordance with the terms thereof.
(xx)
“Stated Value” shall mean $1,000 per share, subject to adjustment for stock splits, stock dividends, recapitalizations,
reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the Initial Issuance Date with
respect to the Preferred Shares.
(yy)
“Subscription Date” means August __, 2023.
(zz)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(aaa)
“Subsidiaries” shall have the meaning as set forth in the Securities Purchase Agreement
(bbb)
“Successor Entity” means the Person (or, if so elected by the Required Holders, the Parent Entity) formed by, resulting
from or surviving any Fundamental Transaction or the Person (or, if so elected by the Required Holders, the Parent Entity) with which
such Fundamental Transaction shall have been entered into.
(ccc)
“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the
Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded,
provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or
market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange
or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during
the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the applicable
Holder or (y) with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New
York Stock Exchange (or any successor thereto) is open for trading of securities.
(ddd)
“Transaction Documents” means the Securities Purchase Agreement, the Registration Rights Agreement, this Certificate
of Designations, the Warrants and each of the other agreements and instruments entered into or delivered by the Company or any of the
Holders in connection with the transactions contemplated by the Securities Purchase Agreement, all as may be amended from time to time
in accordance with the terms thereof.
(eee)
“Volume Failure” means, with respect to a particular date of determination, the aggregate daily dollar trading volume
(as reported on Bloomberg) of the Common Stock on the Principal Market on any Trading Day during the twenty (20) Trading Day period ending
on the Trading Day immediately preceding such date of determination (such period, the “Volume Failure Measuring Period”),
is less than $50,000.
(fff)
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal
Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange
or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00
p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) or,
if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as
reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the
average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in
The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated
for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as
mutually determined by the Company and the Required Holders. If the Company and the Required Holders are unable to agree upon the fair
market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 22. All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction
during such period.
(ggg)
“Warrants” has the meaning ascribed to such term in the Securities Purchase Agreement, and shall include all warrants
issued in exchange therefor or replacement thereof.
(hhh)
“Warrant Shares” means, collectively, the shares of Common Stock issuable upon exercise of the Warrants.
32.
Disclosure. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Certificate of Designations,
unless the Company has in good faith determined that the matters relating to such notice do not constitute material, non-public information
relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York city time on the Business Day
immediately following such notice delivery date, publicly disclose such material, non-public information on a Current Report on Form
8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating to the Company
or any of its Subsidiaries, the Company so shall indicate to the applicable Holder explicitly in writing in such notice (or immediately
upon receipt of notice from such Holder, as applicable), and in the absence of any such written indication in such notice (or notification
from the Company immediately upon receipt of notice from such Holder), such Holder shall be entitled to presume that information contained
in the notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries. Nothing contained
in this Section 32 shall limit any obligations of the Company, or any rights of any Holder, under Section 4(i) of the Securities Purchase
Agreement.
33.
Absence of Trading and Disclosure Restrictions. The Company acknowledges and agrees that no Holder is a fiduciary or agent of
the Company and that each Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company
or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure agreement
signed by an officer of such Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such
an executed, written non-disclosure agreement, the Company acknowledges that each Holder may freely trade in any securities issued by
the Company, may possess and use any information provided by the Company in connection with such trading activity, and may disclose any
such information to any third party.
[The
remainder of the page is intentionally left blank]
IN
WITNESS WHEREOF, the Company has caused this Certificate of Designations of Series F-1 Convertible Preferred Stock of Evofem Biosciences,
Inc. to be signed by its Chief Executive Officer on this 11th day of December, 2023.
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EVOFEM BIOSCIENCES, INC. |
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By: |
/s/
Saundra Pelletier |
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Name: |
Saundra Pelletier |
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Title: |
Chief Executive Officer |
EXHIBIT
I
EVOFEM
BIOSCIENCES, INC.
CONVERSION
NOTICE
Reference
is made to the Certificate of Designations, Preferences and Rights of the Series F-1 Convertible Preferred Stock of Evofem Biosciences,
Inc. (the “Certificate of Designations”). In accordance with and pursuant to the Certificate of Designations, the undersigned hereby
elects to convert the number of shares of Series F-1 Convertible Preferred Stock, $0.0001 par
value per share (the “Preferred Shares”), of Evofem Biosciences, Inc., a Delaware corporation (the “Company”), indicated
below into shares of common stock, $0.0001 value per share (the “Common Stock”), of the Company, as of the date specified below.
| Date
of Conversion: |
|
|
| Aggregate
number of Preferred Shares to be converted |
|
|
| Aggregate
Stated Value of such Preferred Shares to be converted: |
|
|
AGGREGATE
CONVERSION AMOUNT
TO
BE CONVERTED: |
|
|
Please
confirm the following information:
| Conversion
Price: |
|
| Number
of shares of Common Stock to be issued: |
|
☐
If this Conversion Notice is being delivered with respect to an Alternate Conversion, check here if Holder is electing to use the following
Alternate Conversion Price:____________
Please
issue the Common Stock into which the applicable Preferred Shares are being converted to Holder, or for its benefit, as follows:
| ☐ |
Check here if requesting delivery as a certificate to
the following name and to the following address: |
| ☐ |
Check here if requesting delivery
by Deposit/Withdrawal at Custodian as follows: |
| DTC
Participant: |
|
| DTC
Number: |
|
| Account
Number: |
|
| Date:
|
_____________
____, __ |
|
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|
|
|
|
| Name
of Registered Holder |
|
| |
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| By: |
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| Name:
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| Title: |
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| Tax
ID: |
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| |
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| E-mail
Address: |
|
EXHIBIT
II
ACKNOWLEDGMENT
The
Company hereby (a) acknowledges this Conversion Notice, (b) certifies that the above indicated number of shares of Common Stock [are][are
not] eligible to be resold by the applicable Holder either (i) pursuant to Rule 144 (subject to such Holder’s execution and delivery
to the Company of a customary 144 representation letter) or (ii) an effective and available registration statement and (c) hereby directs
_________________ to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated
_____________, 20__ from the Company and acknowledged and agreed to by ________________________.
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EVOFEM BIOSCIENCES, INC. |
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By: |
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Name: |
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Title: |
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Exhibit
99.1
Aditxt,
Inc. Enters into Definitive Agreement to Acquire Evofem Biosciences, Inc., Creator of Phexxi®, the First and Only FDA-Approved
Hormone-Free Contraceptive Gel, to Address Diverse Reproductive Health Needs of Women Globally
Evofem
posted $13.4 million in net sales of Phexxi for the first nine months of 2023;
Aditxt
looks to accelerate Evofem into the global non-hormonal birth control market valued at $27.7 billion in 2022 and is projected to grow
to $52.2 billion by 2031
RICHMOND,
VA and SAN DIEGO, CA, December 12, 2023 – Aditxt, Inc. (“Aditxt” or the “Company”) (NASDAQ:
ADTX), a company dedicated to discovering, developing, and deploying promising health innovations, and Evofem Biosciences, Inc. (“Evofem”)
(OTCQB: EVFM), a pioneer in women’s health, today announced the signing of a definitive agreement (the “Agreement”)
under which Aditxt is to acquire Evofem in consideration of the issuance of a combination of common stock and preferred stock, and the
assumption of certain senior indebtedness, having an aggregate amount of approximately $100 million (the “Transaction”).
Pending a successful Transaction, it will also mark the establishment of a women’s health mission within Aditxt’s platform,
aligning with global healthcare needs.
Revolutionizing
Women’s Reproductive Health with Phexxi®
Evofem
is a commercial-stage women’s health company with a strong focus on innovation. Evofem is the creator of the first and only FDA-approved
hormone-free contraceptive gel, Phexxi® (lactic acid, citric acid, and potassium bitartrate). Phexxi® empowers
women with a convenient, discreet, and flexible contraception method, putting control in their hands. By allowing on-demand usage within
one hour before intercourse, Phexxi® addresses a critical need in the United States and global contraception market, offering
women greater autonomy over their reproductive health decisions.
Phexxi®
represents a groundbreaking shift in women’s healthcare, offering a non-daily, hormone-free contraceptive choice for the
23 million women who need alternatives to traditional methods in the United States alone. Like male contraception, female contraception
should be adaptable to personal needs – not a daily burden, irrespective of actual necessity. This innovation not only challenges
the decades-long norm of daily hormonal contraception but empowers women with more personalized healthcare choices. Phexxi®
is a testament to the urgent need for more focused innovation in women’s health, ensuring choices are made for their benefit,
not by chance or default.
Aditxt
Unlocking Evofem’s Global Potential for Non-Hormonal Contraception
The
global need for effective family planning is evident, with nearly 1.1 billion women worldwide desiring contraception, according
to the UN Department of Economic and Social Affairs. This demand is mirrored in the significant market growth projections for non-hormonal
birth control; Growth Plus Reports highlights an increase from $27.7 billion in 2022 to $52.2 billion by 2031. The success of
Phexxi® in the U.S., with an 82% approval rate for claims and escalating sales, reflects this rising demand. With Aditxt’s
acquisition of Evofem, there is an opportunity to leverage this momentum, access untapped markets, and potentially capture a significant
global market share. This move is poised to meet commercial objectives and address a crucial aspect of women’s healthcare. The
power to decide when to have a family should rest firmly in each woman’s hands, aligning with her life choices and aspirations
and thus playing a crucial role in shaping her economic and social future.
Furthermore,
Evofem’s consistent sales growth aligns with the rising demand for innovative contraceptive solutions. The post-acquisition integration
into the Aditxt platform will strengthen Evofem’s ability to enter global markets through organic expansion, product acquisitions,
and licensing agreements, positioning it to capture a substantial market share and address crucial women’s healthcare needs globally.
Aditxt
– A Platform for Accelerating Promising Innovations
As
a company focused on discovering, developing, and deploying promising health innovations, Aditxt offers a dynamic environment dedicated
to helping ground-breaking innovations thrive. As a public company with global stakeholders, Aditxt aims to engage society in supporting
innovations addressing autoimmunity, health by the numbers, life-extending transplant technologies, population health, and now, with
the proposed Evofem acquisition, women’s health, rendering its collaborative ecosystem a powerful tool for realizing the full potential
of each subsidiary.
Amro
Albanna, co-Founder, chairman, and CEO of Aditxt, shared his insights on this announcement: “At Aditxt, our mission is to make
promising innovations possible together. Evofem represents precisely the kind of groundbreaking innovation that aligns with our mission.
Aditxt will provide Evofem with a global platform to amplify their transformative innovation in women’s health. As we move forward,
we aim to empower our shareholders to participate in this journey through their votes. This approach ensures that our stakeholders are
integral in advancing these vital health innovations on the Aditxt platform, truly socializing how health innovations advance and impact
lives worldwide.”
“We
are excited about the opportunity to accelerate our growth trajectory, as a subsidiary of Aditxt, into a multi-product women’s
health franchise,” said Evofem’s CEO, Saundra Pelletier. “We believe this Transaction is in the best interests
of our shareholders and are confident that they and the women we serve will benefit from our expanded offering and stronger voice.”
Details
of the Proposed Transaction
The
Transaction is intended to create significant strategic advantages for both companies. Evofem’s growing revenue base may allow
Aditxt to catalyze future growth by leveraging synergies by and amongst Evofem, Aditxt, and Aditxt’s other subsidiaries. The boards
of directors of both companies have unanimously approved the Transaction.
Aditxt
has assumed Evofem’s senior secured debt that was issued to the investor under the Securities Purchase and Security Agreement
dated April 2020, as amended, and shall pay $5.0 million to Evofem’s senior secured debtholder by year-end 2023, $8.0
million by September 2024, and up to an additional $5 million thereafter.
Aditxt
has also agreed to provide a $3.0 million loan to Evofem between the date of signing of the Agreement and closing and to cover Evofem’s
legal costs related to the Transaction. At closing, the holders of Evofem’s common stock will exchange their shares for an aggregate
of 610,000 shares of Aditxt common stock. In addition, Aditxt has agreed to issue up to an aggregate of 89,126 shares of preferred stock
to the holders of Evofem’s currently outstanding unsecured notes, purchase rights, certain warrants, and preferred stock. Upon
closing of the Transaction, which is currently anticipated to occur in the first half of 2024, Evofem will be a wholly-owned
subsidiary of Aditxt, with the Evofem management team to receive equity grants in the subsidiary of up to ten percent on a fully
diluted basis after closing, and will continue to be led by Saundra Pelletier, Chief Executive Officer of Evofem, and the current
management team.
The
boards of directors of Aditxt and Evofem have unanimously approved the proposed transaction. The Transaction is subject to, among
other things, the approval of both Aditxt and Evofem stockholders and satisfaction or waiver of the conditions stated in the Agreement.
The
description of the business combination contained herein is only a high-level summary. Additional information about the proposed Transaction,
including a copy of the business combination agreement, will be provided in a Current Report on Form 8-K to be filed by Aditxt with
the Securities and Exchange Commission (“SEC”) and will be available at the SEC’s website at www.sec.gov. In
addition, Aditxt intends to file a registration statement on Form S-4 with the SEC, which will include a proxy statement/prospectus,
and will file other documents regarding the proposed Transaction with the SEC.
About
Aditxt, Inc.
Aditxt
is focused on discovering, developing, and deploying life-changing health innovations. Aditxt’s diverse portfolio includes Adimune™,
Inc., developing a new class of therapeutics designed to retrain the immune system to address organ rejection, autoimmunity, and allergies;
and Pearsanta™, Inc., offering timely, convenient, and high-quality personalized lab testing anytime and anywhere, backed by its
CLIA-certified and CAP-accredited monitoring center. For more information, visit Aditxt.com.
About
Evofem Biosciences, Inc.
Evofem
is focused on commercializing innovative products to address unmet needs in women’s sexual and reproductive health. The
Company’s first FDA-approved product, Phexxi® (lactic acid, citric acid and potassium bitartrate), is a
hormone-free, on-demand prescription contraceptive vaginal gel. It comes in a box of 12 pre-filled applicators and is applied 0-60
minutes before each act of sex. Learn more at phexxi.com and evofem.com.
Aditxt®
is a registered trademark and Adimune™, Adivir™, and Pearsanta™ are trademarks of Aditxt, Inc.
Phexxi®
is a registered trademark of Evofem Biosciences, Inc.
Sources
1.
United Nations Department of Economic and Social Affairs, Population Division (2022). World Family Planning 2022: Meeting the changing
needs for family planning: Contraceptive use by age and method. UN DESA/POP/2022/TR/NO. 4. Accessed 29 November 2023 via https://www.un.org/development/desa/pd/sites/www.un.org.development.desa.pd/files/files/documents/2023/Feb/undesa_pd_2022_world-family-planning.pdf
2.
Growth Plus Reports. Non-Hormonal Birth Control Market by Type (Contraceptive Devices, Sterilization), Gender (Male, Female) –
Global Outlook & Forecast 2023-2033. 05 May 2023. Accessed 28 November 2023 via https://www.growthplusreports.com/report/nonhormonal-birth-control-market/8914
Additional
Information and Where to Find It
In
connection with the Agreement and the proposed Transaction, Aditxt intends to file with the Securities and Exchange Commission (the “SEC”)
a registration statement on Form S-4 (the “Registration Statement”), which will include a joint preliminary proxy statement/prospectus
certain other related documents; this will be both the proxy statement to be distributed to the respective stockholders of Aditxt and
Evofem in connection with Aditxt’s and Evofem’s solicitation of proxies for the vote by their respective stockholders with
respect to the proposed Transaction and other matters as may be described in the definitive proxy statement. This press release does
not contain any information that should be considered by Aditxt’s or Evofem’s stockholders concerning the proposed Transaction
and is not intended to constitute the basis of any voting or investment decision in respect of the proposed Transaction. The respective
stockholders of Aditxt and Evofem and other interested persons are advised to read, when available, the joint preliminary proxy statement/prospectus
and the amendments thereto and the joint definitive proxy statement/prospectus and documents incorporated by reference therein filed
in connection with the proposed Transaction, as these materials will contain important information about Aditxt, Evofem, the merger agreement
and the proposed Transaction. When available, the joint definitive proxy statement/prospectus and other relevant materials regarding
the proposed Transaction will be mailed to stockholders of Aditxt and Evofem as of a record date to be established for voting on the
proposed Transaction. Stockholders of Aditxt and Evofem will also be able to obtain copies of the Registration Statement, the joint preliminary
proxy statement/prospectus, the joint definitive proxy statement/prospectus and other documents filed with the SEC that will be incorporated
by reference therein, without charge, once available, through the SEC’s website at https://www.sec.gov, through Aditxt’s
website at https://www.aditxt.com/investor-relations/sec-filings/, through Evofem’s website at https://evofem.investorroom.com/SEC-filings,
or by directing a request to ir@aditxt.com.
Participants
in the Solicitation
Aditxt,
Evofem and their respective directors, executive officers, other members of management and employees may be deemed participants in
the solicitation of proxies from Aditxt’s and Evofem’s stockholders with respect to the proposed Transaction. Investors
and security holders may obtain more detailed information regarding the names and interests in the proposed Transaction of the
directors and officers of each of Aditxt and Evofem with respect to the proposed Transaction in the proxy statement/prospectus for
the proposed Transaction when available and in the companies’ respective filings with the SEC.
Non-Solicitation
This
press release is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect
of the proposed business combination and shall not constitute an offer to sell or a solicitation of an offer to buy any securities nor
shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior
to registration or qualification under the securities laws of any such state or jurisdiction. No offer of securities shall be made except
by means of a prospectus meeting the requirements of the Securities Act.
Forward-Looking
Statements
This
press release includes “forward-looking statements” within the meaning of the safe harbor for forward-looking statements
provided by Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995
including, without limitation, statements related to the parties’ ability to close the proposed Transaction, including the ability
of both companies to secure all required regulatory, third-party and shareholder approvals for the proposed Transaction; availability
of cash to meet Aditxt’s obligation to pay noteholders under the Agreement and other near-and longer-term obligations under the
Agreement; Aditxt’s expectation that shares of its common stock will remain listed on the Nasdaq Stock Market; the anticipated
timing to close the Transaction; the anticipated financial performances of Aditxt and Evofem both before and after the proposed Transaction,
anticipated benefits of the proposed Transaction including synergies to Aditxt’s business following the proposed Transaction, the
degree of growth in the non-hormonal birth control market anticipated by third-party market researchers; Aditxt’s ability to leverage
Evofem for subsequent product acquisitions and license agreements subsequent to the Transaction; Evofem’s ability to maintain requisite
regulatory approvals; Evofem’s costs related to the Transaction; and changes to the potential market size and the size of
the patient populations utilizing Phexxi®. You are cautioned not to place undue reliance on these forward-looking statements,
which are current only as of the date of this press release. Each of these forward-looking statements involves risks and uncertainties.
Important factors that could cause actual results to differ materially from those discussed or implied in the forward-looking statements
are disclosed in the each company’s SEC filings, including Aditxt’s Annual Report on Form 10-K for the year ended December
31, 2022 filed with the SEC on April 17, 2023 as amended April 28, 2023 and July 12, 2023, Quarterly Report on Form 10-Q for the
quarter ended September 30, 2023 filed with the SEC on November 14, 2023, and any subsequent filings, and Evofem’s
Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on April 27, 2023, Quarterly Report on Form
10-Q for the quarter ended September 30, 2023 filed with the SEC on November 14, 2023, and any subsequent filings.
All forward-looking statements are expressly qualified in their entirety by such factors. The companies do not undertake any duty to
update any forward-looking statement except as required by law.
Contacts
| Evofem
Biosciences, Inc. |
Aditxt,
Inc. |
| Amy
Raskopf |
ir@aditxt.com |
| araskopf@evofem.com |
Mary
O’ Brien |
| (917)
673-5775 |
+971
585922120 |
v3.23.3
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