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
Aditxt,
Inc.
(Exact name of registrant as specified in its charter)
Delaware |
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001-39336 |
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82-3204328 |
(State or other jurisdiction |
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(Commission File Number) |
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(I.R.S. Employer |
of incorporation) |
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Identification No.) |
737 N. Fifth Street, Suite 200 Richmond, VA 23219 |
(Address of principal executive offices, including zip code) |
Registrant’s telephone number, including
area code: (650) 870-1200
Not Applicable
(Former name or former address, if changed since
last report)
Check the appropriate box
below if the Form 8-K 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) |
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ |
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 |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock, par value $0.001 |
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ADTX |
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The Nasdaq Stock Market LLC |
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 |
Merger Agreement
On December 11, 2023 (the
“Execution Date”), Aditxt, Inc., a Delaware corporation (the “Company”) entered into an Agreement
and Plan of Merger (the “Merger Agreement”) with Adicure, Inc., a Delaware corporation and wholly owned subsidiary
of the Company (“Merger Sub”) and Evofem Biosciences, Inc., a Delaware corporation (“Evofem”), pursuant
to which, Merger Sub will be merged into and with Evofem (the “Merger”), with Evofem surviving the Merger as a wholly
owned subsidiary of the Company.
Effect on Capital Stock
Subject to the terms and conditions
set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), (i) all issued and outstanding
shares of common stock, par value $0.0001 per share of Evofem (“Evofem Common Stock”), other than any shares of Evofem
Common Stock held by the Company or Merger Sub immediately prior to the Effective Time, will be converted into the right to receive an
aggregate of 610,000 shares of the Company’s common stock, par value $0.001 per share (“Company Common Stock”);
and (ii) all issued and outstanding shares of Series E-1 Preferred Stock, par value $0.0001 of Evofem (the “Evofem Unconverted
Preferred Stock”), other than any shares of Evofem Unconverted Preferred Stock held by the Company or Merger Sub immediately
prior to the Effective Time, will be converted into the right to receive an aggregate of 2,327 shares of Series A-1 Preferred Stock, par
value $0.001 of the Company (the “Company Preferred Stock”), having such rights, powers, and preferences set forth
in the form of Certificate of Designation of Series A-1 Preferred Stock, the form of which is attached as Exhibit C to the Merger Agreement.
Treatment of Evofem Options and Employee Stock
Purchase Plan
At
the Effective Time, each outstanding option outstanding under the Evofem 2014 Equity Incentive Plan, the Evofem 2018 Inducement Equity
Incentive Plan and the Evofem 2019 Employee Stock Purchase Plan (collectively, the “Evofem Option Plans”), whether
or not vested, will be canceled without the right to receive any consideration, and the board of directors of Evofem shall take such action
such that the Evofem Option Plans are cancelled as of the Effective Time.
As
soon as practicable following the Execution Date, Evofem will take all action that may be reasonably necessary to provide that: (i) no
new offering period will commence under the Evofem 2019 Employee Stock Purchase Plan (the “Evofem ESPP”); (ii) participants
in the Evofem ESPP as of the Execution Date shall not be permitted to increase their payroll deductions or make separate non-payroll contributions
to the Evofem ESPP; and (iii) no new participants may commence participation in the Evofem ESPP following the Execution Date. Prior to
the Effective Time, Evofem will take all action that may be reasonably necessary to: (A) cause any offering period or purchase period
that otherwise be in progress at the Effective Time to be the final offering period under the Evofem 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; (C) cause each participant’s then-outstanding
share purchase right under the Evofem ESPP to be exercised as of the Final Exercise Date; and (D) terminate the Evofem ESPP, as of and
contingent upon, the Effective Time.
Representations and Warranties
The parties to the Merger
Agreement have agreed to customary representations and warranties for transactions of this type.
Covenants
The
Merger Agreement contains various customary covenants, including but not limited to, covenants with respect to the conduct of Evofem’s
business prior to the Effective Time.
Evofem
has also agreed not to (a) solicit proposals relating to alternative transactions or (b) enter into discussions or negotiations
or provide non-public information in connection with any proposal for an alternative transaction from a third party, subject to certain
exceptions to permit the Evofem board of directors to comply with its fiduciary obligations. Evofem has also agreed to cease and cause
to be terminated any existing discussions or negotiations, if any, with regard to alternative transactions. However, subject to satisfaction
of certain conditions and under the circumstances specified in the Merger Agreement prior to the adoption of the Merger Agreement by Evofem’s
stockholders, the Evofem board of directors may change its recommendation and may terminate the Merger Agreement in response to a bona
fide alternative acquisition proposal that the Evofem board of directors determines in good faith constitutes a Company Superior Proposal
(as defined in the Merger Agreement), subject to customary match rights. The Evofem board of directors may also change its recommendation
in response to an Intervening Event (as defined in the Merger Agreement).
Closing Conditions
Mutual
The respective obligations
of each of the Company, Merger Sub and Evofem to consummate the closing of the Merger (the “Closing”) are subject to
the satisfaction or waiver, at or prior to the closing of certain conditions, including but not limited to, the following:
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(i) |
approval by the Company’s shareholders and Evofem shareholders; |
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(ii) |
the registration statement on Form S-4 pursuant to which the shares of the Company Common Stock issuable in the Merger being declared effective by the U.S. Securities and Exchange Commission; |
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(iii) |
the entry into a voting agreement by the Company and certain members of Evofem management; |
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(iv) |
all preferred stock of Evofem other than
the Evofem Unconverted Preferred Stock shall have been converted to Evofem Common Stock; |
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(v) |
Evofem shall have received agreements (the “Evofem Warrant Holder Agreements”) from all holders of Evofem warrants which provide: (a) waivers with respect to any fundamental transaction, change in control or other similar rights that such warrant holder may have under any such Evofem warrants, and (b) an agreement to such Evofem warrants to exchange such warrants for not more than an aggregate (for all holders of Evofem warrants) of 551 shares of Company Preferred Stock; |
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(vi) |
Evofem shall have cashed out any other holder of Evofem warrants who has not provided an Evofem Warrant Holder Agreement; and |
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(vii) |
Evofem shall have obtained waivers from the holders of the convertible notes of Evofem (the “Evofem Convertible Notes”) with respect to any fundamental transaction rights that such holder may have under the Evofem Convertible Notes, including any right to vote, consent, or otherwise approve or veto any of the transactions contemplated under the Merger Agreement. |
The Company and Merger
Sub
The obligations of the Company
and Merger Sub to consummate the Closing are subject to the satisfaction or waiver, at or prior to the Closing of certain conditions,
including but not limited to, the following:
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(i) |
the Company shall have obtained agreements from the holders of Evofem Convertible Notes and purchase rights they hold to exchange such Convertible Notes and purchase rights for not more than an aggregate (for all holders of Evofem Convertible Notes) of 86,153 shares of Company Preferred Stock; |
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(ii) |
the Company shall have received waivers form the holders of certain of the Company’s securities which contain prohibitions on variable rate transactions; and |
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(iii) |
the Company, Merger Sub and Evofem shall work together between the Execution Date and the Effective Time to determine the tax treatment of the Merger and the other transactions contemplated by the Merger Agreement. |
The Company
The obligations of the Company
to consummate the Closing are subject to the satisfaction or waiver, at or prior to the Closing of certain conditions, including but not
limited to, the following:
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(i) |
The Company shall have regained compliance with the stockholders’ equity requirement in Nasdaq Listing Rule 5550(b)(1) and shall meet all other applicable criteria for continued listing, subject to any panel monitor imposed by Nasdaq; |
Termination
The Merger Agreement may be
terminated at any time prior to the consummation of the Closing by mutual written consent of the Company and Evofem. Either the Company
or Evofem may also terminate the Merger Agreement if (i) the Merger shall not have been consummated on or before 5:00 p.m. Eastern Time
on May 8, 2024; (ii) if any judgment, law or order prohibiting the Merger or the Transactions has become final and non-appealable;
(iii) the required vote of Evofem stockholders was not obtained; or (iv) in the event of any Terminable Breach (as defined in the Merger
Agreement). The Company may terminate the Merger Agreement if (i) prior to approval by the required vote of Evofem’s shareholders
if the Evofem board of directors shall have effected a change in recommendation with respect to the Merger; or (ii) in the event that
the Company determines, in its reasonable discretion, that the acquisition of Evofem could result in a material adverse amount of cancellation
of indebtedness income to the Company. Evofem may terminate the Merger Agreement if (i) prior to approval by the required vote of Evofem’s
shareholders if the Evofem board of directors determines to terminate the Merger Agreement in connection with a superior proposal in order
to enter into a definitive agreement for such superior proposal provided that Evofem has paid the termination fee of $4 million; (ii)
the Company Common Stock is no longer listed for trading on Nasdaq; or (iii) the Company has not made a loan to Evofem of no less than
$3 million prior to January 31, 2024.
Effect of Termination
If the Merger Agreement is
terminated, the Merger Agreement will become void, and there will be no liability under the Merger Agreement on the part of any party
thereto.
A copy of the Merger Agreement
is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference. The foregoing description
of the Merger Agreement and the transactions contemplated thereby is incomplete and is subject to, and qualified in its entirety by, reference
to the actual agreement. The Merger Agreement and other agreements described below have been included as exhibits to this Current Report
on Form 8-K to provide security holders with information regarding their terms. They are not intended to provide any other factual information
about the Company, Merger Sub or Evofem. In particular, the assertions embodied in representations and warranties by the Company, Merger
Sub and Evofem contained in the Merger Agreement were made as of a specified date, are subject to important qualifications and limitations
agreed to by the parties in connection with negotiating such agreement, including being qualified by confidential information in the disclosure
letters provided by the parties in connection with the execution of the Merger Agreement, and are subject to standards of materiality
applicable to the contractive parties that may differ from those applicable to security holders. The confidential disclosures contain
information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Merger Agreement. Moreover,
certain representations and warranties in the Merger Agreement were used for the purpose of allocating risk between the parties, rather
than establishing matters as facts. Accordingly, security holders should not rely on the representations and warranties in the Merger
Agreement as characterizations of the actual state of facts about the Company, Merger Sub or Evofem. Moreover, information concerning
the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information
may or may not be fully reflected in the Company’s public disclosures.
Assignment Agreement
In connection with the Merger
Agreement, the Company, Evofem and the holders (the “Holders”) of certain senior indebtedness (the “Notes”)
entered into an Assignment Agreement dated December 11, 2023 (the “Assignment Agreement”), pursuant to which the Holders
assigned the Notes to the Company in consideration for the issuance by the Company of (i) an aggregate principal amount of $5 million
in secured notes of the Company due on January 2, 2024 (the “January 2024 Secured Notes”), (ii) an aggregate principal
amount of $8 million in secured notes of the Company due on September 30, 2024 (the “September 2024 Secured Notes”),
(iii) an aggregate principal amount of $5 million in ten-year unsecured notes (the “Unsecured Notes”), and (iv) payment
of $154,480 in respect of net sales of Phexxi in respect of the calendar quarter ended September 30, 2023, which amount is due and payable
on December 14, 2023. The January 2024 Secured Notes are secured by certain intellectual property assets of the Company and its subsidiaries
pursuant to an Intellectual Property Security Agreement (the “IP Security Agreement”) entered into in connection with
the Assignment Agreement. The September 2024 Secured Notes are secured by the Notes and certain associated security documents pursuant
to a Security Agreement (the “Security Agreement”) entered into in connection with the Assignment Agreement.
The foregoing description
of the Assignment Agreement, January 2024 Secured Notes, September 2024 Secured Notes, the Unsecured Notes, the IP Security Agreement
and the Security Agreement are not complete and are qualified in their entirety by reference to the full text of the Assignment Agreement,
January 2024 Secured Notes, September 2024 Notes, the Unsecured Notes, the IP Security Agreement and the Security Agreement, copies of
which are filed as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5 and 10.6 to this Current Report on Form 8-K and are incorporated by reference
herein.
Item 2.03. |
Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant |
Reference
is made to the disclosure under Item 1.01 above with respect to the December 2023 Secured Notes, September 2024 Secured Notes and
the Royalty Note, which is hereby incorporated in this Item 2.03 by reference.
Item 7.01. |
Regulation FD Disclosure. |
On December 12, 2023, the
Company issued a press release announcing the execution of the Merger Agreement. A copy of the press release is furnished hereto as Exhibit
99.1 and incorporated in this Item 7.01 by reference.
The
information in this Item 7.01 and Exhibit 99.1 will not be deemed to be filed for purposes of Section 18 of the Exchange Act or
otherwise be subject to the liabilities of that section, nor will it be deemed to be incorporated by reference in any filing under the
Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing. The
submission of the information set forth in this Item 7.01 shall not be deemed an admission as to the materiality of any information in
this Item 7.01, including the information presented in Exhibit 99.1, that is provided solely in connection with Regulation FD.
Important Information for Stockholders
This
Current Report on Form 8-K and the exhibits hereto is not a proxy statement or solicitation of a proxy, consent or authorization with
respect to any securities or in respect of the potential transactions and shall not constitute an offer to sell or a solicitation of any
vote or approval, or of an offer to buy the securities of the Company or Evofem, 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 the Securities Act.
In connection with the proposed
transactions, the Company intends to file the Proxy Statement / Registration Statement with the SEC, which will include a proxy statement/prospectus
of the Company. the Company also plans to file other documents with the SEC regarding the proposed transactions. After the Proxy Statement
/ Registration Statement has been cleared by the SEC, a definitive proxy statement/prospectus will be mailed to the stockholders of the
Company. STOCKHOLDERS OF THE COMPANY AND EVOFEM ARE URGED TO CAREFULLY READ THE PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND
SUPPLEMENTS THERETO) AND OTHER DOCUMENTS RELATING TO THE PROPOSED TRANSACTIONS THAT WILL BE FILED WITH THE SEC IN THEIR ENTIRETY WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. Stockholders will be able to obtain
free copies of the proxy statement/prospectus and other documents containing important information about the Company and Evofem once such
documents are filed with the SEC, through the website maintained by the SEC at http://www.sec.gov.
Participants in the Solicitation
The
Company and its executive officers, directors, other members of management, employees and Evofem may be deemed, under SEC rules, to be
participants in the solicitation of proxies from the Company’s shareholders with respect to the proposed transaction. Information
regarding the executive officers and directors of the Company is set forth in its definitive proxy statement for its 2022 annual meeting
filed with the SEC on July 20, 2023, as amended. More detailed information regarding the identity of potential participants, and
their direct or indirect interests, by securities holdings or otherwise, will be set forth in the Proxy Statement / Registration Statement
on Form S-4 and other materials to be filed with the SEC in connection with the Merger Agreement.
Cautionary Note on Forward-Looking Statements
This
Current Report on Form 8-K contains certain forward-looking statements within the meaning of the “safe harbor “provisions
under the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained
in this Current Report on Form 8-K, including statements regarding the Company’s or
Evofem’s future results of operations and financial position are forward-looking statements. These forward-looking statements generally
are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,”
“target,” “intend,” “strategy,” “future,” “opportunity,” “plan,”
“may,” “should,” “will,” “would,” “will be,” “will continue,”
“will likely result,” and similar expressions. These statements are based on various assumptions, whether or not identified
in this Current Report on Form 8-K, and on the current expectations of the respective management teams of the Company and Evofem and are
not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended
to serve as, and must not be relied on by an investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or
probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events
and circumstances are beyond the control of the Company and Evofem.
These
forward-looking statements are subject to a number of risks including, but not limited to, the following risks relating to the proposed
transactions: (1) the risk that the proposed transactions may not be completed in a timely manner or at all, which may adversely affect
the price of the Company’s securities; (2) the failure to satisfy the conditions to the Initial Closing or Secondary Closing, including
the approval by the stockholders of the Company; (3) the ability to realize the anticipated benefits of the proposed transactions;
and (4) other risks and uncertainties indicated from time to time in the Company’s public filings with the SEC. If any of these
risks materialize or the Company’s and Evofem’s assumptions prove incorrect, actual results could differ materially from the
results implied by these forward-looking statements. You should carefully consider the risks and uncertainties described in the “Risk
Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and other documents we filed, or
will file, including the proxy statement/prospectus, with the SEC. There may be additional risks that neither the Company nor Evofem presently
know, or that the Company or Evofem currently believe are immaterial, that could also cause actual results to differ from those contained
in the forward-looking statements. In addition, forward-looking statements reflect the Company’s and Evofem’s expectations,
plans or forecasts of future events and views as of the date of this Current Report on Form 8-K. The Company and Evofem anticipate that
subsequent events and developments will cause the Company’s and Evofem’s assessments to change. However, while the Company
and Evofem may elect to update these forward-looking statements at some point in the future, the Company and Evofem specifically disclaim
any obligation to do so, except as otherwise required by law. These forward-looking statements should not be relied upon as representing
the Company’s and Evofem’s assessments of any date subsequent to the date of this Current Report on Form 8-K. Accordingly,
undue reliance should not be placed upon the forward-looking statements.
No Offer or Solicitation
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 proposed transaction 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 such state or jurisdiction. No offer of securities shall be made except
by means of a prospectus meeting the requirements of the Securities Act.
Item 9.01. |
Financial Statements and Exhibits. |
| (a) | Financial statements of a business acquired. |
The financial
statements required by this Item 9.01(a) are not included in this Current Report on Form 8-K. The Company intends to file such
financial statements by amendment to this Current Report on Form 8-K not later than 71 calendar days after the date this Current
Report on Form 8-K is required to be filed.
| (b) | Pro forma financial statements. |
The pro
forma financial information required by this Item 9.01(b) is not included in this Current Report on Form 8-K. The Company intends
to file such pro forma financial information by amendment to this Current Report on Form 8-K not later than 71 calendar days
after the date this Current Report on Form 8-K is required to be filed.
(d) Exhibits.
Exhibit No. |
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Exhibit |
2.1 † |
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Agreement and Plan of Merger among Aditxt, Inc., Adicure, Inc. and Evofem Biosciences, Inc. dated as of December 11, 2023 |
10.1 |
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Assignment Agreement dated as of December 11, 2023 |
10.2 |
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Form of December 2023 Secured Note |
10.3 |
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Form of September 2024 Secured Note |
10.4 |
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Form of Royalty Note |
10.5† |
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IP Security Agreement dated December 11, 2023 |
10.6 |
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Security Agreement dated December 11, 2023 |
99.1 |
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Press Release, dated December 12, 2023 |
104 |
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Cover Page Interactive Data File (embedded within the XBRL document) |
† | Certain of the schedules (and/or exhibits) have been omitted
pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule (and/or exhibit) will be furnished to the SEC upon request |
SIGNATURE
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.
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Aditxt, Inc. |
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Date: December 12, 2023 |
By: |
/s/ Amro Albanna |
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Name: |
Amro Albanna |
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Title: |
Chief Executive Officer |
-7-
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
among
ADITXT, INC.,
ADICURE, INC.
and
EVOFEM BIOSCIENCES, INC.
Dated as of December 11, 2023
TABLE OF CONTENTS
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ARTICLE I CERTAIN DEFINITIONS |
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Section 1.1 |
Certain Definitions |
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Section 1.2 |
Terms Defined Elsewhere |
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ARTICLE II THE MERGER |
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Section 2.1 |
The Merger |
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Section 2.2 |
Closing |
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Section 2.3 |
Effect of the Merger |
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Section 2.4 |
Organizational Documents |
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Section 2.5 |
Directors and Officers of the Surviving Company |
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ARTICLE III EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE COMPANY AND MERGER SUB; EXCHANGE |
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Section 3.1 |
Effect of the Merger on Capital Stock |
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Section 3.2 |
Payment for Securities; Exchange |
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
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Section 4.1 |
Organization, Standing and Power |
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Section 4.2 |
Capital Structure |
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Section 4.3 |
Authority; No Violations; Approvals |
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Section 4.4 |
Consents |
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Section 4.5 |
SEC Documents; Financial Statements; Internal Controls and Procedures |
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Section 4.6 |
Absence of Certain Changes or Events |
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Section 4.7 |
No Undisclosed Material Liabilities |
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Section 4.8 |
Information Supplied |
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Section 4.9 |
Company Permits; Compliance with Applicable Law |
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Section 4.10 |
Compensation; Benefits |
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Section 4.11 |
Employment and Labor Matters |
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Section 4.12 |
Taxes |
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Section 4.13 |
Litigation |
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Section 4.14 |
Intellectual Property |
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Section 4.15 |
Real Property |
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Section 4.16 |
Material Contracts |
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Section 4.17 |
Insurance |
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Section 4.18 |
Environmental Matters |
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Section 4.19 |
Brokers |
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Section 4.20 |
State Takeover Statute |
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Section 4.21 |
Investment Company Act |
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Section 4.22 |
Related Party Transactions |
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Section 4.23 |
FDA Regulatory. |
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Section 4.24 |
No Additional Representations |
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB |
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Section 5.1 |
Organization, Standing and Power |
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Section 5.2 |
Capital Structure |
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Section 5.3 |
Authority; No Violations; Approvals |
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Section 5.4 |
Consents |
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Section 5.5 |
SEC Documents; Financial Statements; Internal Controls and Procedures |
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Section 5.6 |
Absence of Certain Changes or Events |
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Section 5.7 |
No Undisclosed Material Liabilities |
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Section 5.8 |
Information Supplied |
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Section 5.9 |
Parent Permits; Compliance with Applicable Law |
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Section 5.10 |
Compensation; Benefits. |
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Section 5.11 |
Labor Matters. |
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Section 5.12 |
Taxes |
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Section 5.13 |
Litigation |
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Section 5.14 |
Intellectual Property |
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Section 5.15 |
Real Property |
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Section 5.16 |
Material Contracts |
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Section 5.17 |
Insurance |
45 |
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Section 5.18 |
Brokers |
45 |
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Section 5.19 |
State Takeover Statute |
45 |
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Section 5.20 |
Investment Company Act |
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Section 5.21 |
Ownership of Company Capital Stock |
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Section 5.22 |
Business Conduct |
45 |
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Section 5.23 |
Related Party Transactions |
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Section 5.25 |
No Additional Representations |
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ARTICLE VI COVENANTS AND AGREEMENTS |
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Section 6.1 |
Conduct of Company Business Pending the Merger |
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Section 6.2 |
[Intentionally Omitted] |
52 |
|
Section 6.3 |
No Solicitation by the Company |
52 |
|
Section 6.4 |
Indemnification; Directors’ and Officers’ Insurance |
55 |
|
Section 6.5 |
Preparation of Joint Proxy Statement and Registration Statement |
57 |
|
Section 6.6 |
Shareholders Meetings. |
59 |
|
Section 6.7 |
Access to Information |
60 |
|
Section 6.8 |
Reasonable Best Efforts |
60 |
|
Section 6.9 |
Employee Matters. |
62 |
|
Section 6.10 |
Parent Loan. Prior to January 31, 2024, |
62 |
|
Section 6.11 |
Shareholder Litigation |
62 |
|
Section 6.12 |
Public Announcements |
62 |
|
Section 6.13 |
Control of Business |
62 |
|
Section 6.14 |
Transfer Taxes |
63 |
|
Section 6.15 |
Notification |
63 |
|
Section 6.16 |
Use of Company’s Cash Receipts |
63 |
|
Section 6.17 |
Takeover Laws |
63 |
|
Section 6.18 |
Listing |
64 |
|
Section 6.19 |
Delisting |
64 |
|
Section 6.20 |
Obligations of Merger Sub and the Surviving Company |
64 |
|
|
|
|
ARTICLE VII CONDITIONS PRECEDENT |
65 |
|
|
|
|
|
Section 7.1 |
Conditions to Each Party’s Obligation to Consummate the Merger |
65 |
|
Section 7.2 |
Additional Conditions to Obligations of Parent and Merger Sub |
66 |
|
Section 7.3 |
Additional Conditions to Obligations of the Company |
67 |
|
Section 7.4 |
Frustration of Closing Conditions |
68 |
|
|
|
|
ARTICLE VIII TERMINATION |
68 |
|
|
|
|
|
Section 8.1 |
Termination |
68 |
|
Section 8.2 |
Notice of Termination; Effect of Termination |
69 |
|
Section 8.3 |
Expenses and Other Payments |
70 |
|
|
|
|
ARTICLE IX GENERAL PROVISIONS |
71 |
|
|
|
|
|
Section 9.1 |
Disclosure Letter Definitions |
71 |
|
Section 9.2 |
Survival |
71 |
|
Section 9.3 |
Notices |
71 |
|
Section 9.4 |
Rules of Construction |
72 |
|
Section 9.5 |
Counterparts |
74 |
|
Section 9.6 |
Entire Agreement; Third Party Beneficiaries |
74 |
|
Section 9.7 |
Governing Law; Venue; Waiver of Jury Trial |
75 |
|
Section 9.8 |
Severability |
75 |
|
Section 9.9 |
Assignment |
76 |
|
Section 9.10 |
Affiliate Liability |
76 |
|
Section 9.11 |
Remedies; Specific Performance |
76 |
|
Section 9.12 |
Amendment |
77 |
|
Section 9.13 |
Extension; Waiver |
77 |
|
|
|
|
Annex A |
Certain Definitions |
|
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 the date of this Agreement, 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 10,
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 4.21
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 10, 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 10, 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: Sandra 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. |
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By: |
/s/ Amro Albanna |
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Name: |
Amro Albanna |
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Title: |
Chief Executive Officer |
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ADICURE, INC. |
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By: |
/s/ Amro Albanna |
|
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Name: |
Amro Albanna |
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Title: |
Chief Executive Officer |
Signature Page to Agreement and Plan of Merger
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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: |
President and Chief Executive Officer |
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 C
FORM OF CERTIFICATE OF DESIGNATION OF SERIES
A-1 PREFERRED STOCK
CERTIFICATE OF DESIGNATIONS
OF RIGHTS AND PREFERENCES OF
SERIES A-1 CONVERTIBLE PREFERRED STOCK
OF
ADITXT, INC.
I, [_____________], hereby
certify that I am the [_____________] and [_____________] of Adixt, Inc. (the “Company”), a corporation organized
and existing under the Chapter 78 of 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 _____,
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 [ ] ([ ]) shares of preferred stock
designated as “Series A-1 Convertible Preferred Stock”, none of which shares have been issued, to be issued pursuant
to the Exchange Agreements (as defined in below), in accordance with the terms of the Exchange Agreements:
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 $0.001 per share, of the Company be and hereby is created pursuant to this certificate of designations (this “Certificate
of Designations”), and that the designation and number of shares established pursuant hereto 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 A-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
A-1 Convertible Preferred Stock” (the “Series A-1 Convertible Preferred Stock”). The authorized number of shares
of Series A-1 Convertible Preferred Stock (the “Preferred Shares”) shall be [ ]
([ ]) shares. Each Preferred Share shall have a par value of $0.001 per share. Capitalized terms
not defined herein shall have the meaning as set forth in Section 31 below.
2. Ranking.
Except to the extent that the Required Holders (as defined in the Exchange Agreements) 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
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 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 Preferred Shares in respect of the preferences as to dividends, distributions and payments upon the liquidation,
dissolution and winding up of the Company (which for the avoidance of doubt, shall include the Series A-2 Convertible Preferred Stock,
$0.001 par value 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 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.
3. Dividends.
In addition to Section 7, Section 8 and/or Section 14 below, as applicable, from and after the first date of issuance of any Preferred
Shares (the “Initial Issuance Date”), each holder of a Preferred Share (each, a “Holder” and collectively,
the “Holders”) shall be entitled to receive dividends (“Dividends”) when and as declared by the
Board, from time to time, in its sole discretion, which Dividends shall be paid by the Company out of funds legally available therefor,
payable, subject to the conditions and other terms hereof, in cash, in securities of the Company or any other entity, or using assets
as determined by the Board on the Stated Value of such Preferred Share.
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) (the “Conversion Shares”), 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 Conversion Shares 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 Company’s
transfer agent (the “Transfer Agent”)) 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 Conversion Shares 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
plus (3) any other amounts owed to such Holder pursuant to this Certificate of Designations or any Transaction Document.
(ii) “Conversion
Price” means, with respect to each Preferred Share, as of any Conversion Date or other date of determination, $[
], 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 Conversion Shares 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 Preferred Shares (the “Preferred Share
Certificates”) so converted as aforesaid (or an indemnification undertaking with respect to the 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 first (1st) 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 Conversion Shares 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 Conversion Shares 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 Conversion Shares 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 mail to such Holder (or its designee)
by overnight courier service a new Preferred Share Certificate or a new Book-Entry (in either case, in accordance with Section 17(d))
representing the number of Preferred Shares not converted. The Person or Persons entitled to receive the Conversion Shares issuable upon
a conversion of Preferred Shares shall be treated for all purposes as the record holder or holders of such Conversion Shares on the Conversion
Date. Notwithstanding the foregoing, if a Holder delivers a Conversion Notice to the Company prior to the date of issuance of Preferred
Shares to such Holder, whereby such Holder elects to convert such Preferred Shares pursuant to such Conversion Notice, the Share Delivery
Deadline with respect to any such Conversion Notice shall be the later of (x) the date of issuance of such Preferred Shares and (y) the
first (1st) Trading Day after the date of such Conversion Notice. 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 Conversion Shares to which such Holder is entitled and register such Conversion Shares 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 Conversion Shares 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 Conversion Shares 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 Conversion Shares is not timely effected an amount equal to 2%
of the product of (A) the sum of the number of Conversion Shares 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 a 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 Conversion Shares on the Company’s share register or, if the Transfer Agent is
participating in the 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 Conversion Shares 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 Conversion Shares 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 Conversion
Shares) or credit to the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Conversion
Shares to which such Holder is entitled upon such Holder’s conversion hereunder (as the case may be) (and to issue such Conversion
Shares) shall terminate, or (II) promptly honor its obligation to so issue and deliver to such Holder a certificate or certificates representing
such Conversion Shares or credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the
number of Conversion Shares 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 Conversion Shares (or to electronically deliver such Conversion Shares) upon the
conversion of the 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, as applicable, 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 Conversion Failure Notice Failure and/or Conversion
Failure, as applicable, pursuant to the analogous sections of any other agreement with such Holder.
(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 Preferred Shares and
whether the 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 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
A-1 PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE, INCLUDING SECTION 4(c)(iii) THEREOF. THE NUMBER OF SHARES OF SERIES A-1 PREFERRED
STOCK REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN THE NUMBER OF SHARES OF SERIES A-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 A-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 Conversion
Shares issuable to a Holder in connection with a conversion of Preferred Shares, the Company shall issue to such Holder the number of
Conversion Shares not in dispute and resolve such dispute in accordance with Section 22. If a Conversion Notice delivered to the Company
would result in a breach of Section 4(d) below, and the Holder does not elect in writing to withdraw, in whole, such Conversion Notice,
the Company shall hold such Conversion Notice in abeyance until such time as such Conversion Notice may be satisfied without violating
Section 4(d) below (with such calculations thereunder made as of the date such Conversion Notice was initially delivered to the Company).
(d) Limitation
on Beneficial Ownership.
(i) Beneficial
Ownership. The Company shall not effect the conversion of any of the Preferred Shares held by a Holder, and such Holder shall not
have the right to convert any of the 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 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 Preferred Shares) 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 the avoidance of doubt, the calculation of the Maximum Percentage
shall take into account the concurrent exercise and/or conversion, as applicable, of the unexercised or unconverted portion of any other
securities of the Company beneficially owned by the Holder and/or any other Attribution Party, as applicable. 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 not 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.
(ii) Principal
Market Regulation. The Company shall not issue any shares of Common Stock upon conversion of any Preferred Shares or otherwise pursuant
to the terms of this Certificate of Designations if the issuance of such shares of Common Stock would exceed the aggregate number of
shares of Common Stock which the Company may issue upon exercise or conversion (as the case may be) of the Preferred Shares without breaching
the Company’s obligations under the rules and regulations the listing rules of the Principal Market (the maximum number of shares
of Common Stock which may be issued without violating such rules and regulations, the “Exchange Cap”), except that
such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as required by the applicable
rules and regulations of the Principal Market for issuances of shares of Common Stock in excess of such amount (the “Stockholder
Approval Date”) or (B) obtains a written opinion from outside counsel to the Company that such approval is not required, which
opinion shall be reasonably satisfactory to the Required Holders. Until such approval or such written opinion is obtained, no Holder
shall be issued in the aggregate, upon conversion or exercise (as the case may be) of any Preferred Shares, shares of Common Stock in
an amount greater than the product of (i) the Exchange Cap as of the Initial Issuance Date multiplied by (ii) the quotient of (1) the
aggregate number of Preferred Shares issued to such Holder on the Initial Issuance Date divided by (2) the aggregate number of Preferred
Shares issued to the Holders on the Initial Issuance Date pursuant to the Exchange Agreements (with respect to each Holder, the “Exchange
Cap Allocation”). In the event that any Holder shall sell or otherwise transfer any of such Holder’s Preferred Shares,
the transferee shall be allocated a pro rata portion of such Holder’s Exchange Cap Allocation with respect to such portion of such
Preferred Shares so transferred, and the restrictions of the prior sentence shall apply to such transferee with respect to the portion
of the Exchange Cap Allocation so allocated to such transferee. Upon conversion in full of a holder’s Preferred Shares, the
difference (if any) between such holder’s Exchange Cap Allocation and the number of shares of Common Stock actually issued to such
holder upon such holder’s conversion in full of such Preferred Shares shall be allocated, to the respective Exchange Cap Allocations
of the remaining holders of Preferred Shares on a pro rata basis in proportion to the shares of Common Stock underlying the Preferred
Shares then held by each such holder of Preferred Shares.
(e) Right
of Alternate Conversion Upon a Triggering Event.
(i) General.
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 “Alternate Conversion Right Commencement Date”)
and ending (such ending date, the “Alternate Conversion Right Expiration Date”, and each such period, an “Alternate
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 reasonable 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 Alternate
Conversion 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 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; provided that in the event of the Conversion Floor Price Condition, on the applicable
Alternate Conversion Date the Stated Value of the remaining Preferred Shares of such Holder shall automatically increase, pro rata, by
the applicable Alternate Conversion Floor Amount or, at the Company’s option, the Company shall deliver the applicable Alternate
Conversion Floor Amount to the Holder on the applicable Alternate Conversion Date. 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)(ix), 5(a)(x),
and 5(a)(xi), 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
failure (A) to cure a Conversion Failure 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,
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 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 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 Preferred Shares then held by such Holder (at the Alternate Conversion
Price then in effect without regard to any limitations on conversion set forth in this Certificate of Designations);
(vi) 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 Exchange Agreements 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;
(vii) the Company
fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the applicable Holder upon conversion
of the Preferred Shares held by such Holder as and when required by this Certificate of Designations or the Side Letters, unless otherwise
then prohibited by applicable federal securities laws, and any such failure remains uncured for at least five(5) days;
(viii) the occurrence
of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $500,000 of indebtedness for borrowed
money of the Company or any of its Subsidiaries, excluding any indebtedness for borrowed money in which no cash payment is required at
such time pursuant to a forbearance agreement in full force and effect or any applicable grace period under the terms of such indebtedness
for borrowed money, except, in the case of a default or breach that is curable, only if such default or breach, as applicable, remains
uncured for a period of twenty (20 days;
(ix) 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;
(x) 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;
(xi) 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;
(xii) a final judgment
or judgments for the payment of money aggregating in excess of $500,000 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 $500,000 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;
(xiii) 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 $500,000 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 $500,000, 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;
(xiv) 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;
(xv) a false or inaccurate
certification (including a false or inaccurate deemed certification) by the Company as to whether any Triggering Event has occurred;
(xvi) any Preferred
Shares remain outstanding on or after [ ]1;
(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 Change
of Control occurs;
(xix) any Material
Adverse Effect (as defined in the Exchange Agreements) occurs; or
| 1 | Insert thirty-six (36) month anniversary of the Initial Issuance
Date |
(xx) 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) (a “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
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 (calculated using the lowest Alternate Conversion
Price during the period commencing on the 20th Trading Day immediately preceding such public announcement and ending on the date the
Company makes the entire redemption payment pursuant to this Section 5(c)) 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.
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 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 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 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 Preferred Shares held by each Holder been converted immediately prior to such Fundamental Transaction
(without regard to any limitations on the conversion of the 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 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 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. 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.
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 Preferred Shares (without taking
into account any limitations or restrictions on the convertibility of the Preferred Shares and assuming for such purpose that all the
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 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 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 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 of an Alternate
Conversion. 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 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 Exchange Agreements Effective 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 Exchange Agreements Effective 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 Holders, the “Primary
Security”, and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary Securities”
and together with the Primary Security, each a “Unit”), together comprising one integrated transaction, the aggregate
consideration per share of Common Stock with respect to such Primary Security shall be deemed to be the lower of (x) the purchase price
of such Unit, (y) if such Primary Security is an Option and/or Convertible Security, the lowest price per share for which one share of
Common Stock is at any time issuable upon the exercise or conversion of the Primary Security in accordance with Section 8(a)(i) or 8(a)(ii)
above and (z) the lowest VWAP of the shares of Common Stock on any Trading Day during the five (5) Trading Day period (the “Adjustment
Period”) immediately following the public announcement of such Dilutive Issuance (for the avoidance of doubt, if such public
announcement is released prior to the opening of the Principal Market on a Trading Day, such Trading Day shall be the first Trading Day
in such five Trading Day period and if any Preferred Shares are converted, on any given Conversion Date during any such Adjustment Period,
solely with respect to such Preferred Shares converted on such applicable Conversion Date, such applicable Adjustment Period shall be
deemed to have ended on, and included, the Trading Day immediately prior to such Conversion Date). 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 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 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 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 Exchange Agreements Effective 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 Exchange Agreements Effective 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 Exchange Agreements Effective 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 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 Exchange Agreements Effective 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 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, 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 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 ninetieth (90th) and one hundred and eightieth (180th), as applicable, calendar day after the
Applicable 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.
(i) Exchange
Right. Notwithstanding anything herein to the contrary, in connection with exercise of those certain participation rights granted
to certain Holders pursuant to Section [ ] of the Side Letters, if any such applicable Holder participates
in such applicable Subsequent Placement (as defined in the Side Letter) in accordance therewith, each such Holder may, at the option
of such Holder as elected in writing to the Company, satisfy the purchase price of the securities to be sold to such Holder in such Subsequent
Placement, in whole or in part, with Preferred Shares valued at 120% of the Conversion Amount of the Preferred Shares delivered by such
Holder as payment therefor.
9. Redemption at
the Company’s Election.
(a) Company
Optional Redemption. At any time, the Company shall have the right to redeem all, but not less than all, of the Preferred Shares
then outstanding (the “Company Optional Redemption Amount”) on the Company Optional Redemption Date (each as defined
below) (a “Company Optional Redemption”). The Preferred Shares subject to redemption pursuant to this Section 9(a)
shall be redeemed by the Company in cash at a price (the “Company Optional Redemption Price”) equal to 115% of the
greater of (i) the Conversion Amount being redeemed as of the Company Optional Redemption Date and (ii) 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 9(a). The Company may exercise its right to require redemption under this Section 9(a) by 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 twenty (20) Trading Days following the Company Optional Redemption Notice Date, (y) certify that there has been no Equity Conditions
Failure and (z) state the aggregate Conversion Amount of the Preferred Shares which is being redeemed in such Company Optional Redemption
from such Holder and all of the other Holders of the Preferred Shares pursuant to this Section 9(a) on the Company Optional Redemption
Date. The Company shall deliver the applicable Company Optional Redemption Price to each Holder in cash on the applicable 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 Preferred Shares of such Holder required to be redeemed on the Company Optional Redemption
Date. In the event of the Company’s redemption of any of the Preferred Shares under this Section 9, 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 9 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.
10. Noncircumvention.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, bylaws 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 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.
11. Authorized Shares.
(a) Reservation.
So long as any Preferred Shares remain outstanding, the Company shall at all times reserve at least 150% 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 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 Preferred 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 Preferred Shares then held by the Holders. Notwithstanding the foregoing, a Holder may allocate its
Authorized Share Allocation to any other of the securities of the Company held by such Holder (or any of its designees) by delivery of
a written notice to the Company.
(b) Insufficient
Authorized Shares. If, notwithstanding Section 10(a) and not in limitation thereof, at any time while any of the 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 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 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 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(b);
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.
12. Voting Rights.
The holders of the Preferred Shares shall have no voting power and no right to vote on any matter at any time, either as a separate series
or class or together with any other series or class of share of capital stock, and shall not be entitled to call a meeting of such holders
for any purpose nor shall they be entitled to participate in any meeting of the holders of Common Stock, except as provided in this Section
11 and Section 14 or as otherwise required by the DGCL. To the extent that under the DGCL the vote of the holders of the Preferred Shares,
voting separately as a class or series, as applicable, is required to authorize a given action of the Company, the affirmative vote or
consent of the Required Holder of the shares of the Preferred Shares, voting together in the aggregate and not in separate series unless
required under the DGCL, represented at a duly held meeting at which a quorum is presented or by written consent of the Required Holder
(except as otherwise may be required under the DGCL), voting together in the aggregate and not in separate series unless required under
the DGCL, shall constitute the approval of such action by both the class or the series, as applicable. Holders of the Preferred Shares
shall be entitled to written notice of all stockholder meetings or written consents (and copies of proxy materials and other information
sent to stockholders) with respect to which they would be entitled to vote, which notice would be provided pursuant to the Company’s
bylaws (the “Bylaws”) and the DGCL.
13. Covenants.
(a) 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).
(b) 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.
(c) 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 Exchange Agreement Effective 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.
(d) 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.
(e) 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.
(f) 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.
(g) 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.
(h) 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.
(i) 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 Exchange Agreements and this Certificate of Designations), or (ii) issue any other
securities that would cause a breach or default under this Certificate of Designations.
(j) 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.
(k) 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.
(l) 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.
(m) Independent
Investigation. At the request of any Holder either (x) at any time when a Triggering Event has occurred and is continuing, (y) upon
the occurrence of an event that with the passage of time or giving of notice would constitute a Triggering Event or (z) at any time such
Holder reasonably believes a Triggering Event may have occurred or be continuing, the Company shall hire an independent, reputable investment
bank selected by the Company and approved by such Holder to investigate as to whether any breach of the Certificate of Designations has
occurred (the “Independent Investigator”). If the Independent Investigator determines that such breach of the Certificate
of Designations has occurred, the Independent Investigator shall notify the Company of such breach and the Company shall deliver written
notice to each Holder of such breach. In connection with such investigation, the Independent Investigator may, during normal business
hours, inspect all contracts, books, records, personnel, offices and other facilities and properties of the Company and its Subsidiaries
and, to the extent available to the Company after the Company uses reasonable efforts to obtain them, the records of its legal advisors
and accountants (including the accountants’ work papers) and any books of account, records, reports and other papers not contractually
required of the Company to be confidential or secret, or subject to attorney-client or other evidentiary privilege, and the Independent
Investigator may make such copies and inspections thereof as the Independent Investigator may reasonably request. The Company shall furnish
the Independent Investigator with such financial and operating data and other information with respect to the business and properties
of the Company as the Independent Investigator may reasonably request. The Company shall permit the Independent Investigator to discuss
the affairs, finances and accounts of the Company with, and to make proposals and furnish advice with respect thereto to, the Company’s
officers, directors, key employees and independent public accountants or any of them (and by this provision the Company authorizes said
accountants to discuss with such Independent Investigator the finances and affairs of the Company and any Subsidiaries), all at such
reasonable times, upon reasonable notice, and as often as may be reasonably requested.
14. 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 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 (at the Alternate
Conversion Price then in effect) 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.
15. Distribution
of Assets. In addition to any adjustments pursuant to Section 7 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 Preferred Shares (without taking into account any limitations or restrictions
on the convertibility of the 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).
16. 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 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 Series A-1 Convertible Preferred Stock; (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 Exchange Agreements or the Merger Agreement; or (g) without limiting any provision of Section 9, whether or not prohibited by
the terms of the Preferred Shares, circumvent a right of the Preferred Shares hereunder.
17. 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 [ ] of the Exchange Agreements.
18. 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 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 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
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 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.
19. 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.
20. 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 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.
21. 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.
22. 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).
23. 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 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 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 rules then in effect under Delaware Rapid Arbitration Act, as amended,
(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).
24. Notices; Currency;
Payments.
(a) Any notices,
consents, waivers or other communications required or permitted to be given under the terms of this Certificate of Designations must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the sending
party does not receive an automatically generated message from the recipient’s email server that such e-mail could not be delivered
to such recipient); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in
each case, properly addressed to the party to receive the same. The mailing addresses and e-mail addresses for such communications shall
be as set forth in the Exchange Agreements or to such other mailing address and/or e-mail address and/or to the attention of such other
Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically
or electronically generated by the sender’s e-mail containing the time, date and recipient’s e-mail or (C) provided by an
overnight courier service shall be rebuttable evidence of personal service, receipt by e-mail or receipt from an overnight courier service
in accordance with clause (i), (ii) or (iii) above, respectively. 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.
(b) 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.
(c) 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).
(d) 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.
25. 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
Exchange Agreements.
26. 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. Except as otherwise required by Section
22 above, the Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Wilmington,
Delaware, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue
of such suit, action or proceeding is improper. 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.
27. 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 proceeding in the courts of New York or in the courts of any other 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.
28. 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 Exchange Agreements) 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 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.
29. 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).
30. Maximum Payments.
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.
31. 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. Except (a) to the extent otherwise expressly provided in
the Certificate of Incorporation with respect to voting or approval rights of a particular class or series of capital stock or (b) to
the extent otherwise provided pursuant to the DGCL, the holders of each outstanding class or series of shares of this corporation shall
not be entitled to vote as a separate voting group on any amendment to the terms of this Certificate of Designations with respect to
which such class or series would otherwise be entitled under the DGCL to vote as a separate voting group.
32. 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 Floor Amount” means an amount equal to the product obtained by multiplying (A) the higher of (I) the highest price
that the Common Stock trades at on the Trading Day immediately preceding the relevant Alternate Conversion Date and (II) the applicable
Alternate Conversion Price and (B) the difference obtained by subtracting (I) the number of shares of Common Stock delivered (or to be
delivered) to such Holder on the applicable Share Delivery Deadline with respect to such Alternate Conversion from (II) the quotient
obtained by dividing (x) the applicable Conversion Amount that such Holder has elected to be the subject of the applicable Alternate
Conversion, by (y) the applicable Alternate Conversion Price without giving effect to clause (x) of such definition.
(g) “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) the greater of (x) the Floor
Price and (y) [80]% of the lowest VWAP of the Common Stock during the five (5) consecutive Trading Day period ending and including the
Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice (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.
(h) “Applicable
Date” means the later of (x) Stockholder Approval Date and (y) the earlier to occur of (A) the effective date of a registration
statement registering the resale by the Holders of all of the shares of Common Stock issuable upon conversion of the Preferred Shares
then outstanding and (B) the date the Preferred Shares are eligible to be resold by the Holders (assuming such Holders are not then affiliates
of the Company) without restriction under Rule 144 of the 1933 Act (in each case, without regard to any limitations on exercise herein).
(i) “Approved
Stock Plan” means any employee benefit plan or agreement which has been approved by the Board prior to or subsequent to the
Exchange Agreements Effective 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.
(j) “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.
(k) “Bloomberg”
means Bloomberg, L.P.
(l) “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.
(m) “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.
(n) “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 and (iv) any merger or acquisition of any business by the
Company, directly or indirectly, in which either (x) the holders of the Company’s voting power to elect the board of directors
of the Company immediately prior to such merger or acquisition continue after such merger or acquisition to have the voting power to
elect a majority of the board of directors of the Company or (y) the Company shall not, 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 10% of the aggregate ordinary voting
power represented by issued and outstanding Common Stock, (y) at least 10% 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 elect a majority of the directors of the Board of Directors of the Company (and, in either case, a majority
of the directors on the board of directors of the Company immediately prior to such merger or acquisition continue after such merger
or acquisition to be a majority of the directors on the board of directors of the Company).
(o) “Change
of Control Election Price” means, with respect to any given Change of Control, such price equal to the greatest of (i) the
product of (w) the Required Premium multiplied by (y) the Conversion Amount of the Preferred Shares subject to the applicable election,
as applicable, (ii), the product of (A) the Conversion Amount of the
Preferred Shares being redeemed or exchanged, as applicable, multiplied by (B) the quotient determined by dividing (I) the greatest Closing
Sale Price of the shares of Common Stock during the period beginning on the date immediately preceding the earlier to occur of (1) the
consummation of the applicable Change of Control and (2) the public announcement of such Change of Control and ending on the date such
Holder delivers the Change of Control Election Notice by (II) the Alternate Conversion Price then in effect and (iii) the product of
(A) the Conversion Amount of the Preferred Shares being redeemed multiplied by (B) the quotient of (I) the aggregate cash consideration
and the aggregate cash value of any non-cash consideration per share of Common Stock to be paid to such holders of the shares of Common
Stock upon consummation of such Change of Control (any such non-cash consideration constituting publicly-traded securities shall be valued
at the highest of the Closing Sale Price of such securities as of the Trading Day immediately prior to the consummation of such Change
of Control, the Closing Sale Price of such securities on the Trading Day immediately following the public announcement of such proposed
Change of Control and the Closing Sale Price of such securities on the Trading Day immediately prior to the public announcement of such
proposed Change of Control) divided by (II) the Conversion Price then in effect.
(p) “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.
(q) “Code”
means the Internal Revenue Code of 1986, as amended.
(r) “Common
Stock” means (i) the Company’s shares of common stock, $0.001 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) “Conversion
Floor Price Condition” means that the relevant Alternate Conversion Price is being determined based on clause (x) of such definitions.
(u) “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.
(v) “Eligible
Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, the
Nasdaq Capital Market.
(w) “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).
(x) “Exchange
Agreement” means those certain exchange agreements set forth on Schedule I attached hereto.
(y) “Exchange
Agreements Effective Date” means _____, 2023.
(z)
“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 Exchange Agreements Effective Date pursuant to this clause (i) do not either (x)
with respect to any issuances during the period commencing on the Initial Issuance Date through December 31, 2023 and/or (y) with
respect to any issuances in any given calendar year thereafter, as applicable, exceed 10% of the Common Stock issued and outstanding
as of the first calendar day in such period and/or calendar year, as applicable, 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 Exchange Agreements
Effective 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; and (iii)
the shares of Common Stock issuable upon conversion of the 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
Exchange Agreements Effective Date (other than antidilution adjustments pursuant to the terms thereof in effect as of the Exchange
Agreements Effective Date).
(aa) “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.
(bb) “Floor
Price” means $[ ]2
(as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events), or, subject to
the rules and regulations of the Principal Market, such lower price as the Company and the Required Holders may agree, from time to time.
(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.
| 2 | Insert 20% of Nasdaq Minimum Price as of the Initial Issuance
Date |
(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) “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.
(gg) “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.
(hh) “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.
(ii) “Market
Price” means [TBD]
(jj) “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.
(kk) “Merger
Agreement” means [ ]
(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) “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.
(oo) “Principal
Market” means, as of any time of determination, the principal trading market, if any, in which the shares of Common Stock then
trade.
(pp) “Registration
Rights Agreement” means that certain registration rights agreement, dated as of the Initial Issuance Date, by and among the
Company and the initial holders of the Preferred Shares relating to, among other things, the registration of the resale of the Common
Stock issuable upon conversion of the Preferred Shares or otherwise pursuant to the terms of this Certificate of Designations, as may
be amended from time to time.
(qq) “Required
Premium” means as applicable (i) [ ]% with respect to an Alternate Conversion pursuant to clause 5(a)(xiv)
above or (ii) otherwise, 125%.
(rr) “SEC”
means the United States Securities and Exchange Commission or the successor thereto.
(ss) “Securities”
means the Preferred Shares and the Conversion Shares.
(tt) “Side
Letters” means each of those certain side letters, each by and between the Company and an initial holder of Preferred Shares.
(uu) “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.
(vv) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(ww) “Subsidiary”
shall have the meaning set forth in the Exchange Agreements.
(xx) “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.
(yy) “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.
(zz) “Transaction
Documents” means the Exchange Agreements, this Certificate of Designations, the Registration Rights Agreement 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 Exchange Agreements, all as may be amended from time to time in accordance with the terms thereof.
(aaa) “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.
33. 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.
34. 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 the Certificate of Incorporation of Aditxt, Inc. to be signed by its ________________
on this ___ day of ____, 2023.
EXHIBIT I
ADITXT, INC.
CONVERSION NOTICE
Reference is made to the
Certificate of Designations of the Certificate of Incorporation of Aditxt, Inc., a Delaware corporation (the “Company”)
establishing the terms, preferences and rights of the Series A-1 Convertible Preferred Stock, $0.001 par value (the “Preferred
Shares”) of the Company (the “Certificate of Designations”). In accordance with and pursuant to the Certificate
of Designations, the undersigned hereby elects to convert the number of Preferred Shares indicated below into shares of common stock,
$0.001 value per share (the “Common Stock”), of the Company, as of the date specified below.
Aggregate number of Preferred Shares to be converted |
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Aggregate Stated Value of such Preferred Shares to be converted: |
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Aggregate accrued and unpaid Dividends with respect to such Preferred Shares
and such Aggregate Dividends to be converted: |
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AGGREGATE CONVERSION AMOUNT TO BE CONVERTED: |
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Please confirm the following information:
Number of shares of Common Stock to be issued: |
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☐ 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: |
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DTC Number: |
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Account Number: |
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Date: _____________ __, _____
_______________________
Name of Registered Holder
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Tax ID:_____________________ |
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E-mail Address: |
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EXHIBIT II
ACKNOWLEDGMENT
The Company hereby (a) acknowledges
this Conversion Notice, (b) certifies that the above indicated number of shares of Common Stock are eligible to be resold by the applicable
Holder without restriction and 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 ________________________.
A-64
Exhibit 10.1
ASSIGNMENT AGREEMENT
This Assignment Agreement
(the “Assignment Agreement”) is dated as of December 11, 2023 (the “Effective Date”) by and among
Aditxt, Inc. (“Assignee”), Baker Brothers Life Sciences, L.P. (“BBLS”), 667, L.P. (“667”
and collectively with BBLS, “Baker”) and Baker Bros. Advisors LP as their designated agent (the “Designated
Agent”), and consented to by Evofem Biosciences, Inc., a Delaware corporation (“Borrower”).
WHEREAS, Baker entered into
that certain Securities Purchase and Security Agreement by and among Borrower, Baker and Designated Agent, dated as of April 23, 2020,
as amended on November 20, 2021, March 21, 2022, September 15, 2022 and September 8, 2023 (the “Agreement”). All capitalized
terms used but not otherwise defined in this Assignment Agreement shall have the meaning provided in the Agreement;
WHEREAS, pursuant to the Agreement,
Baker loaned a principal amount of twenty-five million dollars ($25,000,000) to Borrower (the “Original Loan Amount”);
WHEREAS, the Original Loan
Amount is evidenced by those certain convertible promissory notes (the “Notes”) that were issued by Borrower to Baker;
WHEREAS, Baker desires to
sell and assign the Notes and all remaining amounts due under the Agreement and the Notes, for (i) an aggregate principal amount of Five
Million ($5,000,000) secured notes due on December 31, 2023, in the form annexed hereto as Exhibit A (the “$5,000,000
Secured Notes”), (ii) an aggregate principal amount of Eight Million ($8,000,000) secured notes due on September 30, 2024, in
the form annexed hereto as Exhibit B (the “$8,000,000 Secured Notes”; the obligations under the $5,000,000 Secured
Notes and the $8,000,000 Secured Notes, collectively, the “Secured Obligations”), (iii) an aggregate principal amount
of Five Million ($5,000,0000) ten-year unsecured coupon notes, in the form annexed hereto as Exhibit C (the “$5,000,000
Unsecured Coupon Note”) and (iv) payment of $154,480 in respect of net sales of Phexxi in respect of the calendar quarter ended
September 30, 2023, which amount shall be due and payable on December 14, 2023 (the “Phexxi Payment Amount”), to Assignee,
and Assignee desires to purchase and assume the Notes and such remaining amounts due under the Agreement and accept the assignment, all
in accordance with the terms of this Assignment Agreement;
WHEREAS, Borrower consents
to such purchase by and assignment to Assignee; and
NOW, THEREFORE, based on the
mutual promises provided herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
Assignee, Borrower and Baker agree as follows:
1. Assignment.
a.
Assignment. For consideration in the form of (i) issuance by Assignee to Baker of the $5,000,000 Secured Notes, (ii) the
$8,000,000 Secured Notes, (iii) the $5,000,000 Unsecured Coupon Notes to Baker and (iv) payment to Baker of the Phexxi Payment Amount,
Baker hereby assigns to Assignee, and Assignee hereby assumes, the Notes and all remaining amounts due under the Agreement and the Notes
(the “Outstanding Loan Amount”; the Outstanding Loan Amount and the Notes, collectively referred to herein as the “Assigned
Loan”). Subject to the provisions of section 3, Baker assigns, transfers and conveys to Assignee the Transaction Documents.
The Assigned Loan shall be secured by the Collateral to the same extent that the Collateral secures the Notes and the Original Loan Amount.
For the avoidance of doubt, this Assignment Agreement is not conditioned on, and the foregoing consideration shall be due and payable
to Baker regardless of whether Assignee or any affiliate of Assignee consummates, the acquisition of or any similar transaction with Borrower
(any such transaction, regardless of structure, a “Contemplated Transaction”).
b. The
assignment of the Assigned Loan is without recourse to Baker.
2. Representations
and Warranties.
a.
Assignee. The Assignee (i) represents and warrants that (A) it is legally authorized to enter into this Assignment Agreement;
(B) it has obtained all consents and approvals required to enter into this Assignment Agreement; (C) this Assignment Agreement is binding
legal obligation of Assignee, enforceable against it in accordance with this Assignment Agreement’s terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or
by equitable principles relating to enforceability; (D) from and after the Effective Date, it shall be bound by the provisions of the
Agreement as a Lender thereunder and, to the extent of the Assigned Loan, shall have the obligations of a Lender thereunder; (E) it is
sophisticated with respect to decisions to acquire assets of the type represented by such Assigned Loan and either it, or the Person exercising
discretion in making its decision to acquire such Assigned Loan, is experienced in acquiring assets of such type; (F) it has, independently
and without reliance upon Baker and based on such documents and information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Assignment Agreement to purchase such Assigned Loan; and (G) it is not prohibited from being a Lender;
(ii) confirms that, based on Borrower’s and Baker’s representation, it has received a copy of the Transaction Documents and
such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment
and Acceptance; (iii) will independently and without reliance upon Baker and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not taking action permitted to be taken under the Transaction
Documents; and (iv) agrees that it will perform in accordance with their terms all the obligations which by the terms of the Transaction
Documents (excluding the Warrants) are required to be performed by it as a Lender.
b. Baker.
Baker represents and warrants that (i) it is legally authorized to enter into this Assignment Agreement, (ii) it has obtained all
consents and approvals required to enter into this Assignment Agreement, (iii) this Assignment Agreement is binding legal obligation
of Baker, enforceable against it in accordance with this Assignment Agreement’s terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or by equitable
principles relating to enforceability, (iv) it is the legal and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, (v) to Baker’s knowledge, the Transaction Documents were duly authorized, executed, delivered and performed
pursuant to all requisite corporate action on behalf of Baker, and in accordance with all applicable law, including, without limitation,
federal, state and securities law, (vi) [reserved], (vii) they are sophisticated with respect to decisions to acquire assets of the type
represented by such Assigned Loan and either they, or the Person exercising discretion in making their decision to sell such Assigned
Loan, is experienced in disposing of assets of such type; (viii) they have, independently and without reliance upon Assignee and based
on such documents and information as they have deemed appropriate, made their own credit analysis and decision to enter into this Assignment
Agreement to sell such Assigned Loan, (ix) they will independently and without reliance upon Assignee and based on such documents and
information as they shall deem appropriate at the time, continue to make their own credit decisions in taking or not taking action permitted
to be taken under the Transaction Documents, and (x) the Assignee has received a complete, fully executed set of all the Transaction
Documents, as amended to date. Except as set forth in this Section (b)(i)-(x), Baker makes no representations or warranties and assume
no responsibility with respect to any statements, warranties or representations made in or in connection with the Transaction Documents,
or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Transaction Documents or any other instrument
or document furnished pursuant to the Transaction Documents, or the financial condition of, Borrower or any of its Subsidiaries or the
performance or observance by Borrower or any such Subsidiary of any of its obligations under the Transaction Documents or any other instrument
or document furnished pursuant thereto. Except for the representations and warranties provided in this Section 2(b)(i)-(vi), the Assigned
Loan is sold and assigned “as is” and “where is” without representations or warranties of any kind, including
without limitation, warranties of merchantability or fitness of purpose.
c.
Borrower. Borrower represents and warrants that (i) it is legally authorized to enter into this Assignment Agreement,
(ii) it has obtained all consents and approvals required to enter into this Assignment Agreement, (iii) this Assignment Agreement is binding
legal obligation of Borrower, enforceable against it in accordance with this Assignment Agreement’s terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or
by equitable principles relating to enforceability, (iv) the Transaction Documents were duly authorized, executed, delivered and performed
pursuant to all requisite corporate action on behalf of Borrower and in accordance with all applicable law, including, without limitation,
all federal and state securities law, (vi) Borrower has delivered to Assignee Borrower’s most recent financial statements delivered
pursuant to Section 8.1 of the Agreement.
3. Administration
of Assigned Loans Prior to Repayment of Secured Obligations.
a.
Until all Secured Obligations owed to Baker are repaid in full, any principal of the Assigned Loan or other amounts (other than
regularly scheduled interest) that would otherwise be required to be paid to Assignee under the Agreement shall simply be deferred. If
any interest or other amounts (other than principal) are not paid, such amounts shall instead be added to the principal balance of the
Assigned Loan, with interest to accrue on the principal balance at the interest rate applicable under the Agreement.
b. No
Contemplated Transaction shall be deemed to be a “Change of Control” under the Transaction Documents. Baker consents to the
Contemplated Transaction and to any amendments to Borrower’s organizational documents in connection with any Contemplated Transaction.
In no event will Assignee or any affiliate of Assignee (other than any wholly-owned subsidiary of Borrower) be deemed to be a guarantor
of the Assigned Loan or required to join as a guarantor under the terms of the Transaction Documents.
c.
Assignee shall have the right to make additional loans pursuant to the Agreement that are secured by the Collateral described in
the Transaction Documents and the Designated Agent shall use commercially reasonable efforts to facilitate any amendments that are reasonably
necessary to facilitate the making of such loans.
d. Prior
to repayment of the Secured Obligations, Baker’s consent shall be required for any waiver, amendment or other modification of the
Assigned Loan or the Transaction Documents; provided, that Baker’s consent to any waiver or modification in respect of a technical
and/or non-economic breach that does not, and cannot reasonably be expected to, meaningfully impair the value of the Assigned Loan shall
not be unreasonably withheld, conditioned, or delayed. The parties agree that Assignee shall have no obligation or duty to monitor Borrower’s
compliance under the Assigned Loan.
e.
Prior to the repayment of the Secured Obligations, Designated Agent shall continue to act as the Designated Agent under the Transaction
Documents. So long as no Event of Default has occurred under the $5,000,000 Secured Notes or the $8,000,000 Secured Notes, (i) Borrower
shall not be obligated to comply with the provisions of Section 8.1(n) of the Agreement, and (ii) the Designated Agent shall not exercise
any remedies in response to any Event of Default under the Transaction Documents without the prior written consent of Assignee, unless
such action is necessary to preserve or protect the Assigned Loan from meaningful impairment or loss.
f. Upon
payment in full of the Secured Obligations to Baker, (i) the Designated Agent shall be deemed to have resigned as agent under the Transaction
Documents and Assignee shall be deemed to have been appointed as Designated Agent, and (ii) Baker consents the filing of a UCC-3 Financing
Statement Amendment in the appropriate jurisdictions, and such other assignments as may be reasonably necessary to evidence and perfect
Assignee’s security interests in the Collateral, all such actions to be at the sole cost and expense of Assignee.
4. Consent
and Approval. Borrower hereby approves the foregoing Assignment Agreement, the modifications to the Agreement made herein, and the
sale and assignment of the Assigned Loan to Assignee.
5. General Provisions.
a.
Severability. Whenever possible, each provision of this Assignment Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Assignment Agreement shall be prohibited by or invalid under such
law, such provision shall be ineffective only to the extent and duration of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Assignment Agreement.
b. Notice.
Any notice or service of process or other communication shall be in writing, and shall be deemed to have been validly served, given,
delivered, and received upon the earlier of: (i) the day of transmission if sent by facsimile or email, (ii) the day of delivery
if hand delivered or delivered by an overnight express service or overnight mail delivery service, in each case addressed to the party
to be notified as follows:
(a)
If to Baker:
Baker Brothers Life Sciences, L.P.
Attention: Scott Lessing, President
860 Washington St., 10th Floor
New York, NY 10014
Facsimile:
Telephone:
Email:
(b)
If to Assignee:
Aditxt, Inc.
Attn: Amro Albanna, CEO
737 Fifth Street, Suite 200
Richmond, VA 23219
E-mail: aalbanna@aditxt.com
(c)
If to Borrower:
Evofem Biosciences, Inc.
7770 Regents Road, Suite 113-618
San Diego, CA 92122
Attn: Sandra Pelletier, CEO
E-Mail: spelletier@evofem.com
or to such other address as each party may designate
for itself by like notice.
c.
Entire Agreement; Amendments. This Assignment Agreement and the agreements referenced herein, constitute the entire agreement
and understanding of the parties hereto in respect of the subject matter hereof and thereof, and supersede and replace in their entirety
any prior proposals, term sheets, letters, negotiations or other documents or agreements, whether written or oral, with respect to the
subject matter hereof or thereof. None of the terms of this Assignment Agreement may be amended except by an instrument executed by each
of the parties hereto.
d. No
Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Assignment Agreement. In
the event an ambiguity or question of intent or interpretation arises, this Assignment Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Assignment Agreement.
e.
No Waiver. No omission or delay by Baker or Assignee at any time to enforce any right or remedy reserved to it, or to require
performance of any of the terms, covenants or provisions hereof by Assignee at any time designated, shall be a waiver of any such right
or remedy to which such party is entitled, nor shall it in any way affect such party’s right to enforce such provisions thereafter.
f. Survival.
All agreements, representations and warranties contained in this Assignment Agreement or in any document delivered pursuant hereto or
thereto shall survive the execution and delivery of this Assignment Agreement.
g. Governing
Law. THIS ASSIGNMENT AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO ITS CONFLICT OF LAWS PRINCIPLES.
h. Consent
to Jurisdiction and Venue. All judicial proceedings arising in or under or related to this Assignment Agreement shall be brought
in any state or federal court located in the State of New York. Each of the parties hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America
sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Assignment
Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the fullest
extent permitted by law, in such Federal court. Each party hereto irrevocably waives all right to trial by jury in any action, proceeding
or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Assignment Agreement.
i.
Counterparts. This Assignment Agreement and any amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts, and by different parties hereto in separate counterparts, each of which when so delivered shall be deemed an original,
but all of which counterparts shall constitute but one and the same instrument.
j.
No Third Party Beneficiaries. No provisions of this Assignment Agreement are intended, nor will be interpreted, to provide
or create any third-party beneficiary rights or any other rights of any kind in any Person other than Baker, Assignee and Borrower unless
specifically provided otherwise herein.
[Remainder of page intentionally left blank]
The terms set forth in this
Assignment Agreement are hereby agreed to as of the date first provided above.
BAKER BROTHERS LIFE SCIENCES, L.P.
By: BAKER BROS. ADVISORS LP, management company and investment
adviser to Baker Brothers Life Sciences, L.P., pursuant to authority granted to it by Baker Brothers Life Sciences Capital, L.P.,
general partner to Baker Brothers Life Sciences, L.P., and not as the general partner.
By: |
/s/ Scott Lessing |
|
Print Name: |
Scott Lessing |
|
Title: |
President |
|
667, L.P.,
By: Baker
Bros. Advisors LP, management company and investment adviser to 667, L.P., pursuant to authority granted to it by Baker
Biotech Capital, L.P., general partner to 667, L.P., and not as the general partner.
By: |
/s/ Scott Lessing |
|
Print Name: |
Scott Lessing |
|
Title: |
President |
|
Baker Bros. Advisors LP |
|
|
|
Signature: |
/s/ Scott Lessing |
|
Print Name: |
Scott Lessing |
|
Title: |
President |
|
[Assignment Agreement]
ADITXT, INC. |
|
|
|
Signature: |
/s/ Amro Albanna |
|
Print Name: |
Amro Albanna |
|
Title: |
Chief Executive Officer |
|
[Assignment Agreement]
Consented to by:
EVOFEM BIOSCIENCES, INC. |
|
|
|
Signature: |
/s/ Saundra Pelletier |
|
Print Name: |
Saundra Pelletier |
|
Title: |
Chief Executive Officer |
|
[Assignment Agreement]
Exhibit 10.2
SECURED PROMISSORY
NOTE
$____________ |
December 11, 2023 |
1. Principal.
For value received, ADITXT, INC., a Delaware corporation (“Borrower”), promises to pay ________
or its permitted assignees (“Lender”) at such place as the holder hereof may from time to time designate
in writing, the principal sum of _______________________________________________________ ($______). This Note is one of a series
of similar Notes (collectively, the “Notes”) issued pursuant to that certain Assignment Agreement dated as of
December 11, 2023 among Borrower, Lender, Baker Brothers Life Sciences, L.P. (“BBLS” and collectively with Lender,
the “Noteholders”) and Baker Bros. Advisors LP as their designated agent (the “Designated Agent”).
2. Maturity
Date. The unpaid principal balance hereof (the “Obligations”) is due and payable on the earlier to occur
of (a) January 2, 2024 (the “Maturity Date”), and (b) after the occurrence and during the continuance of an
Event of Default.
3. Interest.
These Notes shall not bear or accrue interest. The parties hereto intend that (i) any payments hereunder be treated as payments by
the Borrower to the Lender under an “installment sale” within the meaning of Section 453(b)(1) of the Internal Revenue Code
of 1986, as amended (the “Code”), and (ii) the receipt by the Lender of this Note not be treated as a “payment”
pursuant to Section 453(f) of the Code. The parties hereto further agree that a portion of the amounts payable under the Notes will be
treated as interest for U.S. federal income tax purposes, determined using the test rate set forth in Section 1.1274-4(a)(1)(ii) of the
U.S. Treasury Regulations promulgated under the Code (the “Regulations”), which the parties hereto agree is five and fifteen
hundredths percent (5.15%).
4. Secured
Note. The Obligations are secured by the collateral described in the Intellectual Property Security Agreement of even date herewith
by Borrower in favor of Designated Agent as agent for the Noteholders (the “Security Agreement” and together
with the Notes, collectively, the “Loan Documents”).
5. Representations
and Warranties. Borrower represents and warrants as follows:
(a) The
Borrower and each of its subsidiaries (i) is duly organized or formed, validly existing and, as applicable, in good standing under the
laws of the jurisdiction of its incorporation or organization, (ii) has all requisite power and authority and all requisite governmental
licenses, authorizations, consents and approvals to (x) own or lease its assets and carry on its business and (y) execute, deliver and
perform its obligations under the Loan Documents to which it is a party, and (iii) is duly qualified and is licensed and, as applicable,
in good standing under the laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business
requires such qualification or license.
(b) The
execution, delivery and performance by the Borrower of each Loan Document have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (i) contravene the terms of its certificate of incorporation or bylaws, (ii) conflict with
or result in any breach or contravention of, or the creation of any lien under, or require any payment to be made under (x) any material
contract to which the Borrower is a party or affecting the Borrower or the properties of the Borrower or any subsidiary or (y) any material
order, injunction, writ or decree of any governmental authority or any arbitral award to which the Borrower or any subsidiary or its property
is subject or (iii) violate any law in any material respect.
(c) No
approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any governmental authority or any other
person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Borrower or
its subsidiaries of this Note or any other Loan Document to which they are a party, except for such approvals, consents, exemptions, authorizations,
actions or notices that have been duly obtained, taken or made and in full force and effect.
(d) This
Note has been, and each other Loan Document has been, duly executed and delivered by the Borrower. This Note constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium
or other laws affecting creditors’ rights generally and by general principles of equity.
6. Event
of Default. The following conditions or events shall be a default under this Note (each an “Event of Default”):
(a) Borrower
shall fail to pay any principal when due;
(b) any
representation or warranty made by Borrower in this Note, any other Loan Document shall prove to have been incorrect in any material respect
when made;
(c) the
Borrower shall fail to observe or perform any covenant, condition or agreement contained in this Note or any other Loan Document, subject
to any applicable notice and cure provisions set forth therein; or
(d) The
commencement of any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debt, assignment for the benefit of creditor,
dissolution, insolvency, receivership or liquidation or similar proceeding of any jurisdiction relating to Borrower.
7. Remedies.
Upon the occurrence and during the continuance of an Event of Default, the entire principal balance of this Note shall, without demand
or notice, immediately become due and payable. Upon the occurrence and during the continuance of an Event of Default, Lender may exercise
any and all rights and remedies it may have under the Loan Documents and under applicable law. No delay or omission on the part of the
holder hereof in exercising any right under this Note or under any of the other Loan Documents will operate as a waiver of such right.
The failure of Lender to immediately exercise its option to accelerate this Note upon the occurrence of an Event of Default shall not
constitute a waiver of Lender’s right to exercise such option at that time or at any subsequent time with respect to such uncured
Event of Default or any other Event of Default. The acceptance by Lender of any payment hereunder which is less than payment in full of
all amounts then due and payable hereunder shall not constitute a waiver of or impair, reduce, release or extinguish Borrower’s
rights or remedies at that time or any subsequent time or nullify any prior exercise by Borrower of its rights.
8. Prepayment.
This Note may be prepaid in part or in whole at any time without any prepayment penalty or premium. Any such prepayment will be applied
to the outstanding principal balance of the Note in the inverse order of maturity.
9. Severability.
Every provision of this Note is intended to be severable. If any term or provision hereof is declared by a court of competent jurisdiction
to be illegal or invalid for any reason whatsoever, such illegality or invalidity will not affect the balance of the terms and provisions
hereof, which terms and provisions will remain binding and enforceable.
10. Modifications.
This Note cannot be modified orally. No modification of this Note shall be effective for any purpose unless it is in writing and executed
by an officer of Lender authorized to do so. All prior agreements, understandings, representations and negotiations; if any, are merged
into this Note.
11. Notices.
Any notice required by the provisions of this Note shall be given in writing and shall be deemed given (i) when delivered personally by
hand (with written confirmation of receipt), (ii) three (3) business days after the deposit thereof in the mail or (iii) one (1) business
day following the day sent by overnight courier (with written confirmation of receipt), in each case, at the address separately provided
to the recipient entitled thereto.
12. Successors
and Assigns. This Note shall be binding upon the successors and assigns of Borrower and inure to the benefit of Lender and its
successors, endorsers and assigns; provided, however, that (except as provided below) neither party may assign this Note without the prior
written consent of the other party and any assignment in violation hereof shall be void ab initio. The foregoing notwithstanding,
Lender may assign all or any part of its interests in this Note to any affiliate of Lender. Borrower shall keep at its principal office
a register in which Borrower shall provide for the registration of the Note and of transfers thereof Notes. Upon surrender for registration
of transfer of the Note at the principal office of Borrower, Borrower shall, at its expense, execute and deliver one or more new Notes
of like tenor and of a like aggregate principal amount, registered in the name of the applicable transferee or transferees. Whenever the
Note is surrendered for exchange, Borrower shall, at its expense, execute and deliver the Note(s) which the holder making the exchange
is entitled to receive. In the event the Note is surrendered for registration of transfer or exchange, the Note shall be duly endorsed,
or be accompanied by a written instrument of transfer duly executed, by Lender.
13. Headings.
Headings at the beginning of each numbered Paragraph of this Note are intended solely for convenience and are not to be deemed or construed
to be a part of this Note.
14. Governing
Law; Jurisdiction and Venue. This Note and the other Loan Documents and any claims, controversy, dispute or cause of action (whether
in contract or tort or otherwise) based upon, arising out of or relating to this Note or any other Loan Document (except, as to any other
Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed
in accordance with, the law of the State of New York, without regard to conflict of law principles. All judicial proceedings arising in
or under or related to this Note any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) shall
be brought in any state or federal court located in the State of New York. Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America
sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Note,
or for recognition or enforcement of any judgment, and hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State court or, to the fullest extent permitted by law, in
such Federal court.
15. WAIVER
OF JURY TRIAL. BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
16. Counterparts.
This Note may be signed in any number of counterparts, each of which shall be an original and all of which together shall have the same
effect as if the signatures thereto and hereto were upon the same instrument.
[Remainder
of page intentionally left blank]
IN WITNESS WHEREOF, Borrower has signed
this Note and delivered this Note to Lender as of the date first written above.
|
“BORROWER”: |
|
|
|
ADITXT, INC., a Delaware corporation |
|
|
|
By: |
|
|
|
Amro Albanna, Chief Executive Officer |
Secured Promissory Note due January, 2024
Exhibit 10.3
SECURED PROMISSORY
NOTE
$___________ |
December 11, 2023 |
1. Principal.
For value received, ADITXT, INC., a Delaware corporation (“Borrower”), promises to pay ________
or its permitted assignees (“Lender”) at such place as the holder hereof may from time to time designate
in writing, the principal sum of ________________________________________________ ($_______). This Note is one of a series of similar
Notes (collectively, the “Notes”) issued pursuant to that certain Assignment Agreement dated as of December
11, 2023 among Borrower, Lender, Baker Brothers Life Sciences, L.P. (“BBLS” and collectively with Lender, the
“Noteholders”) and Baker Bros. Advisors LP as their designated agent (the “Designated Agent”).
2. Maturity
Date. The unpaid principal balance hereof (the “Obligations”) is due and payable on the earlier to occur
of (a) September 30, 2024 (the “Maturity Date”), and (b) after the occurrence and during the continuance of
an Event of Default.
3. Interest.
These Notes shall not bear or accrue interest. The parties hereto intend that (i) any payments hereunder be treated as payments by
the Borrower to the Lender under an “installment sale” within the meaning of Section 453(b)(1) of the Internal Revenue Code
of 1986, as amended (the “Code”), and (ii) the receipt by the Lender of this Note not be treated as a “payment”
pursuant to Section 453(f) of the Code. The parties hereto further agree that a portion of the amounts payable under the Notes will be
treated as interest for U.S. federal income tax purposes, determined using the test rate set forth in Section 1.1274-4(a)(1)(ii) of the
U.S. Treasury Regulations promulgated under the Code (the “Regulations”), which the parties hereto agree is five and fifteen
hundredths percent (5.15%).
4. Secured
Note. The Obligations are secured by the collateral described in the Security Agreement of even date herewith by Borrower in favor
of Designated Agent as agent for the Noteholders (the “Security Agreement” and together with the Notes, collectively,
the “Loan Documents”).
5. Representations
and Warranties. Borrower represents and warrants as follows:
(a) The
Borrower and each of its subsidiaries (i) is duly organized or formed, validly existing and, as applicable, in good standing under the
laws of the jurisdiction of its incorporation or organization, (ii) has all requisite power and authority and all requisite governmental
licenses, authorizations, consents and approvals to (x) own or lease its assets and carry on its business and (y) execute, deliver and
perform its obligations under the Loan Documents to which it is a party, and (iii) is duly qualified and is licensed and, as applicable,
in good standing under the laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business
requires such qualification or license.
(b) The
execution, delivery and performance by the Borrower of each Loan Document have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (i) contravene the terms of its certificate of incorporation or bylaws, (ii) conflict with
or result in any breach or contravention of, or the creation of any lien under, or require any payment to be made under (x) any material
contract to which the Borrower is a party or affecting the Borrower or the properties of the Borrower or any subsidiary or (y) any material
order, injunction, writ or decree of any governmental authority or any arbitral award to which the Borrower or any subsidiary or its property
is subject or (iii) violate any law in any material respect.
| -1- | Secured Promissory Note due September 2024 |
(c) No
approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any governmental authority or any other
person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Borrower or
its subsidiaries of this Note or any other Loan Document to which they are a party, except for such approvals, consents, exemptions, authorizations,
actions or notices that have been duly obtained, taken or made and in full force and effect.
(d) This
Note has been, and each other Loan Document has been, duly executed and delivered by the Borrower. This Note constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium
or other laws affecting creditors’ rights generally and by general principles of equity.
6. Event
of Default. The following conditions or events shall be a default under this Note (each an “Event of Default”):
(a) Borrower
shall fail to pay any principal when due;
(b) any
representation or warranty made by Borrower in this Note, any other Loan Document shall prove to have been incorrect in any material respect
when made;
(c) the
Borrower shall fail to observe or perform any covenant, condition or agreement contained in this Note or any other Loan Document, subject
to any applicable notice and cure provisions set forth therein;
(d) the
occurrence of any “Event of Default” under and as defined in those certain Secured Promissory Notes in the aggregate original
principal amount of $5,000,000.00, dated of even date herewith (as may be amended, restated, supplemented or otherwise modified time to
time) delivered by Borrower to the Noteholders; or
(e) the
commencement of any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debt, assignment for the benefit of creditor,
dissolution, insolvency, receivership or liquidation or similar proceeding of any jurisdiction relating to Borrower.
7. Remedies.
Upon the occurrence and during the continuance of an Event of Default, the entire principal balance of this Note shall, without demand
or notice, immediately become due and payable. Upon the occurrence and during the continuance of an Event of Default, Lender may exercise
any and all rights and remedies it may have under the Loan Documents and under applicable law. No delay or omission on the part of the
holder hereof in exercising any right under this Note or under any of the other Loan Documents will operate as a waiver of such right.
The failure of Lender to immediately exercise its option to accelerate this Note upon the occurrence of an Event of Default shall not
constitute a waiver of Lender’s right to exercise such option at that time or at any subsequent time with respect to such uncured
Event of Default or any other Event of Default. The acceptance by Lender of any payment hereunder which is less than payment in full of
all amounts then due and payable hereunder shall not constitute a waiver of or impair, reduce, release or extinguish Borrower’s
rights or remedies at that time or any subsequent time or nullify any prior exercise by Borrower of its rights.
8. Prepayment.
This Note may be prepaid in part or in whole at any time without any prepayment penalty or premium. Any such prepayment will be applied
to the outstanding principal balance of the Note in the inverse order of maturity.
| -2- | Secured Promissory Note due September 2024 |
9. Severability.
Every provision of this Note is intended to be severable. If any term or provision hereof is declared by a court of competent jurisdiction
to be illegal or invalid for any reason whatsoever, such illegality or invalidity will not affect the balance of the terms and provisions
hereof, which terms and provisions will remain binding and enforceable.
10. Modifications.
This Note cannot be modified orally. No modification of this Note shall be effective for any purpose unless it is in writing and executed
by an officer of Lender authorized to do so. All prior agreements, understandings, representations and negotiations; if any, are merged
into this Note.
11. Notices.
Any notice required by the provisions of this Note shall be given in writing and shall be deemed given (i) when delivered personally by
hand (with written confirmation of receipt), (ii) three (3) business days after the deposit thereof in the mail or (iii) one (1) business
day following the day sent by overnight courier (with written confirmation of receipt), in each case, at the address separately provided
to the recipient entitled thereto.
12. Successors
and Assigns. This Note shall be binding upon the successors and assigns of Borrower and inure to the benefit of Lender and its
successors, endorsers and assigns; provided, however, that (except as provided below) neither party may assign this Note without the prior
written consent of the other party and any assignment in violation hereof shall be void ab initio. The foregoing notwithstanding, Lender
may assign all or any part of its interests in this Note to any affiliate of Lender. Borrower shall keep at its principal office a register
in which Borrower shall provide for the registration of the Note and of transfers thereof Notes. Upon surrender for registration of transfer
of the Note at the principal office of Borrower, Borrower shall, at its expense, execute and deliver one or more new Notes of like tenor
and of a like aggregate principal amount, registered in the name of the applicable transferee or transferees. Whenever the Note is surrendered
for exchange, Borrower shall, at its expense, execute and deliver the Note(s) which the holder making the exchange is entitled to receive.
In the event the Note is surrendered for registration of transfer or exchange, the Note shall be duly endorsed, or be accompanied by a
written instrument of transfer duly executed, by Lender.
13. Headings.
Headings at the beginning of each numbered Paragraph of this Note are intended solely for convenience and are not to be deemed or construed
to be a part of this Note.
14. Governing
Law; Jurisdiction and Venue. This Note and the other Loan Documents and any claims, controversy, dispute or cause of action (whether
in contract or tort or otherwise) based upon, arising out of or relating to this Note or any other Loan Document (except, as to any other
Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed
in accordance with, the law of the State of New York, without regard to conflict of law principles. All judicial proceedings arising in
or under or related to this Note any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) shall
be brought in any state or federal court located in the State of New York. Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America
sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Note,
or for recognition or enforcement of any judgment, and hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State court or, to the fullest extent permitted by law, in
such Federal court.
15. WAIVER
OF JURY TRIAL. BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
16. Counterparts.
This Note may be signed in any number of counterparts, each of which shall be an original and all of which together shall have the same
effect as if the signatures thereto and hereto were upon the same instrument.
[Remainder of page intentionally left
blank]
| -3- | Secured Promissory Note due September 2024 |
IN WITNESS WHEREOF, Borrower has signed
this Note and delivered this Note to Lender as of the date first written above.
|
“BORROWER”: |
|
|
|
ADITXT, INC., a Delaware corporation |
|
|
|
By: |
|
|
|
Amro Albanna, Chief Executive Officer |
Secured Promissory Note due September, 2024
Exhibit 10.4
UNSECURED PROMISSORY
NOTE
$___________ |
December 11, 2023 |
1. Principal.
For value received, ADITXT, INC., a Delaware corporation (“Borrower”), promises to pay ______
or its permitted assignees (“Lender”) at such place as the holder hereof may from time to time designate
in writing, the principal sum of __________________________________________________________ ($______), or such lesser amount as
is payable hereunder pursuant to Section 2 below. This Note is one of a series of similar Notes (collectively, the “Notes”)
issued pursuant to that certain Assignment Agreement dated as of December 11, 2023 among Borrower, Lender, Baker Brothers Life Sciences,
L.P. (“BBLS” and collectively with Lender, the “Noteholders”) and Baker Bros. Advisors
LP as their designated agent (the “Designated Agent”).
2. Repayment.
Commencing on the 30th day after the first Applicable Filing Date (as defined below) after December 31, 2023 and for each Applicable
Filing Date thereafter through and including the Applicable Filing Date following the calendar quarter ended September 30, 2033, the principal
balance of this Note will be payable in quarterly installments in amount equal to the sum of the product obtained by multiplying 0.25215%
of Net Sales of Phexxi during the most recently ended applicable calendar quarter; provided that the aggregate amount of all such payments
shall not exceed $420,250.00 in the aggregate. The final payment shall be due and payable on December 14, 2033 (the “Final
Installment”). Any unpaid balance remaining after payment of the Final Installment shall be forgiven in full. As used herein,
the term “Applicable Filing Date” shall mean, for each calendar quarter, the date of filing of the audited or
reviewed financial statements in the Form 10-Q and/or 10-K as applicable (if timely filed, and if not timely filed, 45 days after the
last day of each applicable quarter).
“Net Sales of Phexxi”
means the amount billed in arm’s-length transactions by Evofem Biosciences, Inc. or its affiliates, licensees, or any of their respective
successors or assigns (each of the foregoing persons and entities, for purposes of this definition, shall be considered a “Related
Party”), for sales of Phexxi to a third party, less the sum of the following (to the extent not reimbursed by any third
party):
(a) reasonable and customary rebates, chargebacks,
quantity, trade and similar discounts, credits and allowances and other price reductions reasonably granted, allowed, incurred or paid
in so far as they are applied to sales of Phexxi;
(b) discounts (including cash discounts and
quantity discounts), coupons, retroactive price reductions, charge back payments and rebates granted to managed care organizations or
to federal, state and local governments, or to their agencies, in each case, as applied to sales of Phexxi and actually given to customers;
(c) reasonable and customary credits and
allowances taken upon rejection, return or recall of Phexxi;
(d) reasonable and customary freight and
insurance costs incurred with respect to the shipment of Phexxi to customers, in each case if charged separately and invoiced to the customer;
(e) customs duties, surcharges and other
similar governmental charges incurred in connection with the exportation or importation of Phexxi to the extent included in the gross
amount invoiced;
(f) value added tax, and that portion of
annual fees due under Section 9008 of the United States Patient Protection and Affordable Care Act of 2010 (Pub. L. No. 111-48) and any
other fee imposed by any equivalent applicable law, in each of the foregoing cases, that is allocable to sales of Phexxi in accordance
with the Related Party’s standard policies and procedures consistently applied across its products, as adjusted for rebates and
refunds, imposed in connection with the sales of Phexxi to any third party, to the extent such taxes are not paid by such third party;
and
(g) actual uncollectible debt amounts with
respect to sales of Phexxi, provided that if the debt is thereafter paid, the corresponding amount shall be added to the Net Sales of
the period during which it is paid.
Such amounts shall be determined consistent
with a Related Party’s customary practices and in accordance with GAAP.
3. Interest.
These Notes shall not bear or accrue interest. The parties hereto intend that (i) any payments hereunder be treated as payments by
the Borrower to the Lender under an “installment sale” within the meaning of Section 453(b)(1) of the Internal Revenue Code
of 1986, as amended (the “Code”), and (ii) the receipt by the Lender of this Note not be treated as a “payment”
pursuant to Section 453(f) of the Code. The parties hereto further agree that a portion of the amounts payable under this Notes will be
treated as interest for U.S. federal income tax purposes, determined (i) using the test rate set forth in Section 1.1274-4(a)(1)(ii) of
the U.S. Treasury Regulations promulgated under the Code (the “Regulations”), which the parties hereto agree is five and fifteen
hundredths percent (5.15%) compounded semiannually for the short-term AFR, four and thirty-eight hundredths percent (4.38)% compounded
semiannually for the mid-term AFR and four and forty-one hundredths percent (4.41%) compounded semiannually for the long-term AFR and
(ii) in accordance with the principles of Regulations Section 1.1274-2 and 1.1275-4(c) and, for purposes of determining interest accruals
hereunder, treating all of the payments under this Note as contingent until paid for purposes of such sections. Each of the Borrower and
the Lender agree to report the tax treatment of any amounts payable under this Note consistently with this Section 3 and not to take any
position contrary hereto in any U.S. federal income tax return, tax audit or other tax proceeding, unless otherwise required as a result
of a “determination” under Section 1313(a) of the Code or otherwise in connection with a settlement with a taxing authority.
4. Unsecured
Note. All amounts payable under this Note shall be unsecured.
5. Representations
and Warranties. Borrower represents and warrants as follows:
(a) The
Borrower and each of its subsidiaries (i) is duly organized or formed, validly existing and, as applicable, in good standing under the
laws of the jurisdiction of its incorporation or organization, (ii) has all requisite power and authority and all requisite governmental
licenses, authorizations, consents and approvals to (x) own or lease its assets and carry on its business and (y) execute, deliver and
perform its obligations under this Note, and (iii) is duly qualified and is licensed and, as applicable, in good standing under the laws
of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification
or license.
(b) The
execution, delivery and performance by the Borrower of this Note have been duly authorized by all necessary corporate or other organizational
action, and do not and will not (i) contravene the terms of its certificate of incorporation or bylaws, (ii) conflict with or result in
any breach or contravention of, or the creation of any lien under, or require any payment to be made under (x) any material contract to
which the Borrower is a party or affecting the Borrower or the properties of the Borrower or any subsidiary or (y) any material order,
injunction, writ or decree of any governmental authority or any arbitral award to which the Borrower or any subsidiary or its property
is subject or (iii) violate any law in any material respect.
(c) No
approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any governmental authority or any other
person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Borrower or
its subsidiaries of this Note, except for such approvals, consents, exemptions, authorizations, actions or notices that have been duly
obtained, taken or made and in full force and effect.
(d) This
Note has been, duly executed and delivered by the Borrower. This Note constitutes a legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws affecting creditors’ rights generally and by general principles of equity.
6. Event
of Default. The following conditions or events shall be a default under this Note (each an “Event of Default”):
(a) Borrower
shall fail to pay any amounts payable under this Note when due;
(b) any
representation or warranty made by Borrower in this Note shall prove to have been incorrect in any material respect when made;
(c) the
Borrower shall fail to observe or perform any covenant, condition or agreement contained in this Note; or
(d) The
commencement of any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debt, assignment for the benefit of creditor,
dissolution, insolvency, receivership or liquidation or similar proceeding of any jurisdiction relating to Borrower.
7. Remedies.
Upon the occurrence and during the continuance of an Event of Default, the entire principal balance of this Note shall, without demand
or notice, immediately become due and payable. Upon the occurrence and during the continuance of an Event of Default, Lender may exercise
any and all rights and remedies it may have under this Note and under applicable law. No delay or omission on the part of the holder hereof
in exercising any right under this Note will operate as a waiver of such right. The failure of Lender to immediately exercise its option
to accelerate this Note upon the occurrence of an Event of Default shall not constitute a waiver of Lender’s right to exercise such
option at that time or at any subsequent time with respect to such uncured Event of Default or any other Event of Default. The acceptance
by Lender of any payment hereunder which is less than payment in full of all amounts then due and payable hereunder shall not constitute
a waiver of or impair, reduce, release or extinguish Borrower’s rights or remedies at that time or any subsequent time or nullify
any prior exercise by Borrower of its rights.
8. Prepayment.
This Note may be prepaid in part or in whole at any time without any prepayment penalty or premium. Any such prepayment will be applied
to the outstanding principal balance of the Note in the inverse order of maturity.
9. Severability.
Every provision of this Note is intended to be severable. If any term or provision hereof is declared by a court of competent jurisdiction
to be illegal or invalid for any reason whatsoever, such illegality or invalidity will not affect the balance of the terms and provisions
hereof, which terms and provisions will remain binding and enforceable.
10. Modifications.
This Note cannot be modified orally. No modification of this Note shall be effective for any purpose unless it is in writing and executed
by an officer of Lender authorized to do so. All prior agreements, understandings, representations and negotiations; if any, are merged
into this Note.
11. Notices.
Any notice required by the provisions of this Note shall be given in writing and shall be deemed given (i) when delivered personally by
hand (with written confirmation of receipt), (ii) three (3) business days after the deposit thereof in the mail or (iii) one (1) business
day following the day sent by overnight courier (with written confirmation of receipt), in each case, at the address separately provided
to the recipient entitled thereto.
12. Successors
and Assigns. This Note shall be binding upon the successors and assigns of Borrower and inure to the benefit of Lender and its
successors, endorsers and assigns; provided, however, that (except as provided below) neither party may assign this Note without the prior
written consent of the other party and any assignment in violation hereof shall be void ab initio. The foregoing notwithstanding,
Lender may assign all or any part of its interests in this Note to any affiliate of Lender. Borrower shall keep at its principal office
a register in which Borrower shall provide for the registration of the Note and of transfers thereof Notes. Upon surrender for registration
of transfer of the Note at the principal office of Borrower, Borrower shall, at its expense, execute and deliver one or more new Notes
of like tenor and of a like aggregate principal amount, registered in the name of the applicable transferee or transferees. Whenever the
Note is surrendered for exchange, Borrower shall, at its expense, execute and deliver the Note(s) which the holder making the exchange
is entitled to receive. In the event the Note is surrendered for registration of transfer or exchange, the Note shall be duly endorsed,
or be accompanied by a written instrument of transfer duly executed, by Lender.
13. Relationship
of the Parties. Notwithstanding any business or personal relationship that may exist or have existed between the Borrower and
the Lender, or any of their respective officers, directors or employees, the relationship between the Borrower and the Lender shall be
solely that of debtor and creditor. The Borrower and the Lender are not partners or joint venturers, and no term or condition of this
Note shall be construed so as to deem the relationship between the Borrower and the Lender to be other than that of debtor and creditor,
and each of Borrower and Lender agree not to take any position contrary thereto for any U.S. federal, state or local tax purposes unless
otherwise required as a result of a “determination” under Section 1313(a) of the Code or otherwise in connection with a settlement
with a taxing authority.
14. Headings.
Headings at the beginning of each numbered Paragraph of this Note are intended solely for convenience and are not to be deemed or construed
to be a part of this Note.
15. Governing
Law; Jurisdiction and Venue. This Note and any claims, controversy, dispute or cause of action (whether in contract or tort or
otherwise) based upon, arising out of or relating to this Agreement and the transactions contemplated hereby and thereby shall be governed
by, and construed in accordance with, the law of the State of New York, without regard to conflict of law principles. All judicial proceedings
arising in or under or related to this Note shall be brought in any state or federal court located in the State of New York. Borrower
hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court
or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Note, or for recognition or enforcement of any judgment, and hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to
the fullest extent permitted by law, in such Federal court.
16. WAIVER
OF JURY TRIAL. BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
17. Counterparts.
This Note may be signed in any number of counterparts, each of which shall be an original and all of which together shall have the same
effect as if the signatures thereto and hereto were upon the same instrument.
[Remainder of page intentionally left
blank]
IN WITNESS WHEREOF, Borrower has signed
this Note and delivered this Note to Lender as of the date first written above.
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“BORROWER”: |
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ADITXT, INC., a Delaware corporation |
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By: |
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Amro Albanna, Chief Executive Officer |
Unsecured Promissory Note
Exhibit 10.5
INTELLECTUAL PROPERTY SECURITY AGREEMENT
THIS INTELLECTUAL PROPERTY
SECURITY AGREEMENT (this “Agreement”), dated as of December 11, 2023, is made by ADITXT, INC., a Delaware
corporation f/k/a Aditx Therapeutics, Inc. and PEARSANTA, INC., a Delaware limited liability company (collectively, “Grantor”)
in favor of Baker Bros. ADVISORS LP as
agent for the Noteholders (as defined below) (in such capacity, “Secured Party”), with reference to the following facts:
RECITALS
A. Grantor
and Secured Party entered into a Assignment Agreement of even date herewith (as the same may be amended from time to time, the “Assignment
Agreement”), pursuant to which Grantor was assigned from Secured party the “Assigned Loans” (as defined therein)
(the “Assigned Assets”).
B. In
consideration for the purchase of the Assigned Assets, Aditxt, Inc. (in such capacity, “Borrower”) delivered to Baker
Brothers Life Sciences, L.P. and 667, L.P. (the “Noteholders”), among other things, Secured Promissory Notes, in the
aggregate original principal amount of $5,000,000.00, dated of even date herewith (as may be amended, restated, supplemented or otherwise
modified from time to time, the “Notes”).
C. In
further consideration for the purchase of the Assigned Assets, Grantor has agreed to grant to Secured Party, for the benefit of the Noteholders,
a continuing security interest in the Collateral (defined below) in order to secure the Obligations (defined below).
AGREEMENT
NOW, THEREFORE, for good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged, and incorporating the recitals set forth above, Grantor
hereby jointly and severally represents, warrants, covenants, agrees, assigns and grants as follows:
1. | Definitions. Capitalized terms defined in the Delaware Uniform Commercial Code (the “UCC”)
and not otherwise defined in this Agreement shall have the meanings defined for those terms in the UCC and if not defined in this Agreement
or in the UCC shall have the meanings defined for such terms in the Note. As used in this Agreement, the following terms shall have the
meanings respectively set forth after each: |
“Collateral”
means the trademarks and patents set forth on Exhibit A-1, all licensed patents that do not constitute Excluded Property (including,
but not limited to those licenses set forth on Exhibit A-2, as amended from time to time), all Proceeds of each of the foregoing
(such as, by way of example but not by way of limitation, income, license royalties, damages, proceeds of infringement suits and other
payments due and/or payable with respect thereto), the right to sue for past, present and future infringements and misappropriations,
all rights corresponding thereto throughout the world and all re-issues, divisions continuations, renewals, extensions and continuations-in-part
thereof, and all books and records relating to any of the foregoing, and any and all claims, rights and interests in any of the above
and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and
insurance proceeds of any or all of the foregoing; provided, however, Collateral shall not include any Excluded Property.
“Excluded
Property” means any lease, license or contract to which Grantor is a party, or any license, consent, permit, variance, certification,
authorization or approval of any governmental authority (or any person acting on behalf of a governmental authority) of which Grantor
is the owner or beneficiary, or any of its rights or interests thereunder, if and for so long as the grant of a security interest therein
shall constitute or result in (i) the abandonment, invalidation or unenforceability of the right, title or interest of Grantor therein
or (ii) a breach or termination pursuant to the terms of, or a default under, such lease, license or contract or such license, consent,
permit, variance, certification, authorization or approval (other than, in the case of clauses (i) and (ii), to the extent that any such
term would be rendered ineffective pursuant to Section 9.406, 9.407, 9.408 or 9.409 of the UCC or any other applicable law or principles
of equity).
“Lien”
means any mortgage, deed of trust, or pledge, security interest, hypothecation, assignment, assigned deposit, arrangement, encumbrance,
encroachment, lien (statutory or otherwise), claim, option, reservation or defect of any kind, or preference, or priority, or other security
agreement or preferential arrangement of any kind of or nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing statement under the UCC, or under the comparable law of any other jurisdiction).
“Obligations”
means any and all principal or other amounts owed by Grantor to the Noteholders from time to time under the Notes.
2. | Security Agreement. To secure the prompt payment and performance in full when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations, Grantor hereby assigns and pledges to Secured Party, and grants to Secured
Party a security interest in, all presently existing and hereafter acquired Collateral, as security for the timely payment and performance
of the Obligations. |
| 3.1 | The Grantor shall promptly from time to time give, execute, deliver, file, record, authorize or obtain all such financing statements,
continuation statements, notices, instruments, documents, agreements or consents or other papers as may be necessary or reasonably requested
by the Secured Party to create, preserve, perfect, maintain the perfection of or validate the security interest granted pursuant hereto,
or to enable the Secured Party to exercise and enforce its rights hereunder with respect to such security interest, and without limiting
the foregoing, shall (x) file with the Delaware Department of State a UCC-1 describing the Collateral, (y) upon the occurrence of an Event
of Default, file with the United States Patent and Trademark Office (or any successor office) this Agreement or any intellectual property
security agreements (or supplements thereto) or other documents that are necessary for the purpose of perfecting, continuing or enforcing
the pledge and security interest granted hereunder in the Collateral owned by Grantor, and (z) take such other action as necessary
or appropriate to duly record or otherwise perfect the security interest created hereunder in the Collateral. |
| 3.2 | The Grantor will not (a) create, incur, assume or suffer to exist any Lien upon any Collateral, except for non-exclusive licenses
granted by the Grantor in the ordinary course of business, or file or allow to be on file or authorize to be filed, in any jurisdiction,
any financing statement or like instrument with respect to all or any part of the Collateral in which the Secured Party is not named as
secured party for the benefit of the Noteholders or (b) sell, lease, license or otherwise transfer the Collateral, except for non-exclusive
licenses granted by the Grantor in the ordinary course of business. The Grantor will use its reasonable efforts to (unless in the judgment
of Grantor, it is no longer necessary for the business of the Grantor) (i) protect, defend and maintain the validity and enforceability
of the Collateral, (ii) detect infringements of the Collateral, and (iii) not allow any material Collateral to be abandoned, forfeited
or otherwise disposed without the written consent of Secured Party, which shall not be unreasonably withheld. |
| 3.3 | The Grantor will use commercially reasonable efforts to obtain the consent of Loma Linda University and Leland Stanford Junior University
(collectively, “Licensors”) to grant Secured Party a security interest in the license agreements entered into between
Licensors and the Grantor from time to time. After obtaining such consent, Exhibit A-2 to this Agreement will be amended and supplemented
to add such licenses and the Grantor shall promptly (but in any event within two Business Days) deliver notice thereof to Secured Party. |
4. | Rights Upon Event of Default. Upon the occurrence of an Event of Default, Secured Party may from time to time, exercise any
or all rights and remedies available under this Agreement and the other Loan Documents, at law and/or in equity including, without limitation,
the rights and remedies of a secured party under the UCC and such additional rights and remedies to which a secured party is entitled
under applicable law in any jurisdiction where any rights and remedies hereunder may be asserted, including the right, to the fullest
extent permitted by applicable, to exercise, without notice of any kind (except as required by applicable law), all voting, consensual
and other powers of ownership pertaining to the Collateral and to receive dividends, interest payments and distributions, as if the Secured
Party were the sole and absolute owner thereof (and the Grantor agrees to take all such action as may be appropriate to give effect to
such right). The rights and remedies of Secured Party under this Agreement and the other Loan Documents shall be cumulative. |
5. | Release of Collateral. The security interest granted herein shall terminate and be of no further force and effect upon the
repayment in full (other than contingent indemnification obligations that are not yet due and payable) of the Notes. Following such repayment,
the Secured Party will promptly will execute and deliver, (and file, if required) as soon as reasonably practical, such documentation
as may be reasonably necessary to evidence and effectuate the appropriate releases and terminations, including UCC financing statement
terminations and intellectual property security terminations, in each case at the sole cost of the Grantor. |
6. | Waivers. Except for termination or release of a Grantor’s obligations hereunder as expressly provided for in Section
5, the obligations of each Grantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or un-enforceability of the Obligations or otherwise (other
than defense of payment in full). Without limiting the generality of the foregoing, the obligations of each Grantor hereunder, to the
fullest extent permitted by applicable law, shall not be discharged or impaired or otherwise affected by: (i) the failure of the Secured
Party or any Noteholder to assert any claim or demand or to exercise or enforce any right or remedy under the provisions of any Loan Document
or otherwise; (ii) the failure of any other Grantor to sign or become party to this Guaranty or any rescission, waiver, amendment or modification
of, or any release from any of the terms or provisions of, any Loan Document or any other agreement, including with respect to any other
Grantor under this Agreement; (iii) the failure to perfect any security interest in, or the exchange, substitution, release or any impairment
of, any security held by the Secured Party or any Noteholder for the Obligations; (iv) any default, failure or delay, willful or otherwise,
in the performance of the Obligations; (v) any other act or omission that may or might in any manner or to any extent vary the risk of
any Grantor or otherwise operate as a discharge of any Grantor as a matter of law or equity; (vi) any illegality, irregularity, invalidity
or enforceability of any Obligation or any part thereof or the genuineness, enforceability or validity of any agreement relating thereto
or with respect to any collateral securing the Obligations or any part thereof, or any other invalidity or unenforceability relating to
or against Borrower of any of the Obligations, for any reason related to any Loan Document or any provision of applicable law, decree,
order or regulation of any jurisdiction purporting to prohibit the payment by Borrower or any Grantor of the Obligations or otherwise
affecting any term of any of the Obligations; (vii) any change in the corporate existence, structure or ownership of any Grantor of any
of the Obligations, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Grantor of the Obligations,
or any of their respective assets or any resulting release or discharge of any Obligation; (viii) the existence of any claim, set-off
or other rights that such Grantor may have at any time against any Grantor, the Secured Party, or any other corporation or person, whether
in connection herewith or any unrelated transactions; provided that nothing herein will prevent the assertion of any such claim by separate
suit or compulsory counterclaim; (ix) any extension, renewal, settlement, indulgence, compromise, waiver or release of or with respect
to the Obligations or any part thereof or any agreement relating thereto, or with respect to any obligation of any other guarantor of
any of the Obligations, whether (in any such case) by operation of law or otherwise, or any failure or omission to enforce any right,
power or remedy with respect to the Obligations or any part thereof or any agreement relating thereto, or with respect to any obligation
of any other guarantor of any of the Obligations; (x) any modification or amendment of or supplement to the Notes or any other Loan Document,
including, without limitation, any such amendment which may increase the amount of, or the interest rates applicable to, any of the Obligations;
(xi) any release, surrender, compromise, settlement, waiver, subordination or modification, with or without consideration, of any collateral
securing the Obligations or any part thereof, any other guaranties with respect to the Obligations or any part thereof, or any other obligation
of any person or entity with respect to the Obligations or any part thereof, or any nonperfection or invalidity of any direct or indirect
security for the Obligations; (xii) the election by, or on behalf of, any one or more of the Noteholders, in any proceeding instituted
under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code (or any equivalent or similar provisions under
any Debtor Relief Law); (xiii) any borrowing or grant of a security interest by the Borrower or any of its subsidiaries, as debtor-in-possession,
under Section 364 of the Bankruptcy Code (or any equivalent or similar provisions under any Debtor Relief Law) or in any other bankruptcy
or insolvency proceeding; and (xiv) any other circumstance (including, without limitation, any statute of limitations) or any existence
of or reliance on any representation by the Secured Party that might otherwise constitute a defense to, or a legal or equitable discharge
of, any Grantor or any other guarantor or surety (other than defense of payment or performance in full) to take and hold security in accordance
with the terms of the Loan Documents for the payment and performance of the Obligations, to exchange, waive or release any or all such
security (with or without consideration), to enforce or apply such security and direct the order and manner of any sale thereof in their
sole discretion or to release or substitute any one or more other guarantors or obligors upon or in respect of the Obligations, all without
affecting the obligations of any Grantor hereunder. To the fullest extent permitted by applicable law, each Grantor waives any defense
based on or arising out of any defense of any other Grantor or the unenforceability of the Obligations or any part thereof from any cause,
or the cessation from any cause of the liability of any other Grantor, other than the the release of such Grantor from this Agreement
pursuant to Section 5. The Secured Party and the other Noteholders may, at their election and in accordance with the terms of the Loan
Documents, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of
any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with any Grantor
or exercise any other right or remedy available to them against any Grantor, without affecting or impairing in any way the liability of
any Grantor hereunder. To the fullest extent permitted by applicable law, each Grantor waives any defense arising out of any such election
even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or
other right or remedy of such Grantor against any other Grantor, as the case may be, or any security. |
7. | Miscellaneous Provisions. Sections 8 through 15 of the Notes are hereby incorporated herein by this reference mutatis mutandis. |
IN WITNESS WHEREOF, Grantor has executed this Agreement
by its duly authorized officer as of the date first written above.
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“Grantor” |
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ADITXT, INC., a Delaware corporation |
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By: |
/s/ Amro Albanna |
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Amro Albanna, Chief Executive Officer |
[IP Security Agreement]
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PEARSANTA, INC., a Delaware corporation |
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By: |
/s/ Ernie Lee |
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Ernie Lee, Chief Executive Officer |
[IP Security Agreement]
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Acknowledged and accepted: |
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“Secured Party” |
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BAKER BROS. ADVISORS LP |
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By: |
/s/ Scott Lessing |
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Scott Lessing, President |
[IP Security Agreement]
EXHIBIT A-1
Trademarks
Patents
EXHIBIT A-2
Exhibit 10.6
SECURITY AGREEMENT
THIS SECURITY
AGREEMENT (this “Agreement”), dated as of December 11, 2023, is made by ADITXT, INC., a Delaware
corporation (“Grantor”) in favor of Baker
Bros. ADVISORS LP as agent for the Noteholders (as defined below) (in such capacity, “Secured Party”),
with reference to the following facts:
RECITALS
A. Grantor
and Secured Party entered into an Assignment Agreement of even date herewith (as the same may be amended from time to time, the “Assignment
Agreement”), pursuant to which Grantor was assigned from Secured party the “Assigned Loans” and the “Transaction
Documents” (each as defined therein) (collectively, the “Assigned Assets”).
B. In
consideration for the purchase of the Assigned Assets, Grantor delivered to Baker Brothers Life Sciences, L.P. and 667, L.P. (the “Noteholders”),
among other things, Secured Promissory Notes, in the aggregate original principal amount of $8,000,000.00, dated of even date herewith
(as may be amended, restated, supplemented or otherwise modified from time to time, the “Notes”).
C. In
further consideration for the purchase of the Assigned Assets, Grantor has agreed to grant to Secured Party, for the benefit of the Noteholders,
a continuing security interest in the Collateral (defined below) in order to secure the Obligations (defined below) and in connection
therewith is delivering allonges to the Notes (the “Allonges”) subject to Section 4 of this Agreement.
AGREEMENT
NOW, THEREFORE, for good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged, and incorporating the recitals set forth above, Grantor
hereby jointly and severally represents, warrants, covenants, agrees, assigns and grants as follows:
1. | Definitions. Capitalized terms defined in the Delaware Uniform Commercial Code (the “UCC”)
and not otherwise defined in this Agreement shall have the meanings defined for those terms in the UCC and if not defined in this Agreement
or in the UCC shall have the meanings defined for such terms in the Note. As used in this Agreement, the following terms shall have the
meanings respectively set forth after each: |
“Collateral”
means the Assigned Assets (including, without limitation, any additional loans or other obligations presently or hereafter existing pursuant
to or in connection with the Transaction Documents, and all instruments evidencing any such Assigned Assets or additional loans or obligations),
all Proceeds and products in whatever form of all or any part of any of the Assigned Assets, all accessions to and substitutions and replacements
for, any of the Assigned Assets, and all tolls, rents, profits, incomes, benefits, substitutions, renewals, replacements and products
of any of the Assigned Assets, and, to the extent related to any Assigned Assets, all books, correspondence, credit files, records, invoices
and other papers, and, to the extent not included in the foregoing, all certificates, instruments or other documents from time to time
evidencing any of the foregoing.
“Lien”
means any mortgage, deed of trust, or pledge, security interest, hypothecation, assignment, assigned deposit, arrangement, encumbrance,
encroachment, lien (statutory or otherwise), claim, option, reservation or defect of any kind, or preference, or priority, or other security
agreement or preferential arrangement of any kind of or nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing statement under the UCC, or under the comparable law of any other jurisdiction).
“Obligations”
means any and all principal or other amounts owed by Grantor to the Noteholders from time to time under the Notes.
2. | Security Agreement. To secure the prompt payment and performance in full when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations, Grantor hereby assigns and pledges to Secured Party, and grants to Secured
Party a security interest in, all presently existing and hereafter acquired Collateral, as security for the timely payment and performance
of the Obligations. |
| 3.1 | The Grantor shall promptly from time to time give, execute, deliver, file, record, authorize or obtain all such financing statements,
continuation statements, notices, instruments, documents, agreements or consents or other papers as may be necessary or reasonably requested
by the Secured Party to create, preserve, perfect, maintain the perfection of or validate the security interest granted pursuant hereto,
or to enable the Secured Party to exercise and enforce its rights hereunder with respect to such security interest, and without limiting
the foregoing, shall (x) deliver to the Secured Party any certificates or instruments representing or evidencing the same, duly endorsed
in blank or accompanied by such instruments of assignment and transfer in such form and substance as the Secured Party may reasonably
request, all of which thereafter shall be held by the Secured Party, pursuant to the terms of this Agreement, as part of the Collateral
and (y) take such other action as necessary or appropriate to duly record or otherwise perfect the security interest created hereunder
in the Collateral. |
| 3.2 | The Grantor will not (a) create, incur, assume or suffer to exist any Lien upon any Collateral or file or allow to be on file or authorize
to be filed, in any jurisdiction, any financing statement or like instrument with respect to all or any part of the Collateral in which
the Secured Party is not named as secured party for the benefit of the Noteholders; (b) cause or permit any Person other than the Secured
Party to have “control” (as defined in the UCC) of any part of the Collateral, (c) sell, lease, license, transfer or otherwise
dispose of any of the Assigned Assets or (d) except as expressly permitted by Section 5, amend, modify or waive any terms or provisions
of the Assigned Assets. |
| 3.3 | The Grantor shall, at its own expense, take any and all actions reasonably necessary to defend title to the Collateral against all
Persons and to defend the security interest of the Secured Party in the Collateral and the priority thereof against any Lien other than
Permitted Liens. |
| 3.4 | Anything herein to the contrary notwithstanding, (i) the Grantor shall remain liable under the contracts and agreements included
in the Grantor’s Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (ii) the exercise by Secured Party of any of the rights hereunder shall not release
the Grantor from the performance of its duties or obligations under the contracts and agreements included in the Collateral, and (iii) neither
the Secured Party or any Noteholder shall have any obligation or liability under the contracts and agreements included in the Collateral
by reason of this Agreement, nor shall the Secured Party or any Noteholder be obligated to perform any of the obligations or duties of
the Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder. |
4. | Rights Upon Event of Default. Upon the occurrence of an Event of Default, Secured Party may from time to time, exercise any
or all rights and remedies available under this Agreement and the other Loan Documents, at law and/or in equity including, without limitation,
the rights and remedies of a secured party under the UCC and such additional rights and remedies to which a secured party is entitled
under applicable law in any jurisdiction where any rights and remedies hereunder may be asserted, including the right, to the fullest
extent permitted by applicable, to exercise, without notice of any kind (except as required by applicable law), all voting, consensual
and other powers of ownership pertaining to the Collateral and to receive dividends, interest payments and distributions, as if the Secured
Party were the sole and absolute owner thereof (and the Grantor agrees to take all such action as may be appropriate to give effect to
such right). Upon the occurrence of an Event of Default, Secured Party may, in accordance with the UCC or other applicable law, date and
deliver Allonges to one or more purchasers in connection with any commercially reasonable disposition of Collateral. The rights and remedies
of Secured Party under this Agreement and the other Loan Documents shall be cumulative. |
5. | Amendment and Waiver. No amendment or waiver of any provision of the Assigned Assets, and no consent to any departure by borrower
or guarantor thereunder (each an “Obligor”), shall in any event be effective absent the written consent of the Secured
Party, and in addition, without the written consent of all of the Noteholders, no such amendment, waiver or consent shall: |
| 5.1 | reduce (including any waiver or forgiveness of) the principal of, or interest on, any outstanding indebtedness or any fees or other
amounts payable under any loan comprising a part of the Assigned Assets (each a “Assigned Loan”); |
| 5.2 | postpone any date fixed for any payment of principal of, or interest on, any outstanding indebtedness or any fees or other amounts
payable under any Assigned Loan; |
| 5.3 | release all or substantially all of the collateral security for any Assigned Loan (the “Assigned Security Interest”)
in any transaction or series of related transactions; or |
| 5.4 | contractually subordinate any Assigned Loan (including any guaranty thereof) or contractually subordinate any Assigned Security Interest
on all or substantially all of the collateral granted by the Obligors under the Assigned Assets. |
6. | Release of Collateral. The security interest granted herein shall terminate and be of no further force and effect upon the
repayment in full (other than contingent indemnification obligations that are not yet due and payable) of the Notes. Following such repayment,
the Secured Party will promptly will execute and deliver, (and file, if required) as soon as reasonably practical, such documentation
as may be reasonably necessary to evidence and effectuate the appropriate releases and terminations, including UCC financing statement
terminations, in each case at the sole cost of the Grantor and Secured Party will promptly return all Collateral in Secured Party’s
possession, including, without limitation, the Notes and Allonges. |
7. | Miscellaneous Provisions. Sections 8 through 15 of the Notes are hereby incorporated herein by this reference mutatis mutandis. |
IN WITNESS WHEREOF, Grantor has executed this Agreement
by its duly authorized officer as of the date first written above.
|
“Grantor” |
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ADITXT, INC., a Delaware corporation |
|
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|
By: |
|
|
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Amro Albanna, Chief Executive Officer |
[Security Agreement]
|
Acknowledged and accepted: |
|
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“Secured Party” |
|
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BAKER BROS. ADVISORS LP |
|
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|
|
By: |
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Scott Lessing, President |
[Security Agreement]
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 |
516-753-9933 |
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