UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities and Exchange Act of 1934

 

Date of Report (Date of earliest reported): May 11, 2016

 

AVANT DIAGNOSTICS, INC.

(Exact name of registrant as specified in charter)

 

Nevada

000-54004

98-0583166

(State or Other Jurisdiction of
Incorporation or Organization)

(Commission File
Number)

(IRS Employer
Identification No.)

 

8561 East Anderson Drive, Suite 104

Scottsdale, AZ 85225

(Address of principal executive offices)

 

Registrant's telephone number, including area code: (480) 478-6660

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 1.01 Entry into a Material Definitive Agreement

 

Item 2.01 Completion of Acquisition or Disposition of Assets

 

Amarantus Diagnostics Acquisition

 

On May 11, 2016 (the " Effective Date "), Avant Diagnostics, Inc. (the " Company ") entered into a Share Exchange Agreement (the " Exchange Agreement ") among the Company, Amarantus Diagnostics, Inc., a Delaware corporation (" AMDX ") and Amarantus Biosciences Holdings, Inc., a Delaware corporation (the " Shareholder "). Pursuant to the terms of the Exchange Agreement, the Company purchased 100% of the outstanding capital stock of AMDX from the Shareholder (the " AMDX Acquisition "). The AMDX Acquisition closed upon the execution of the Exchange Agreement. Gerald Commissiong, President and Chief Executive Officer of Shareholder, became a member of the Company's Board of Directors (the " Board ") upon closing of the AMDX Acquisition.

 

The Company paid aggregate consideration of 80,000,000 shares of its common stock for the AMDX Acquisition (the " AMDX Consideration "). During the thirty-six (36) months from the Effective Date (the " Measurement Period "), if AMDX generates sales of at least five million dollars ($5,000,000) with respect to MSPrecise Ò during any consecutive 12-month period or twelve million dollars ($12,000,000) million cumulatively during the Measurement Period, the Company shall issue the Shareholder an additional 10,000,000 shares of its common stock. .Each share of Company common stock received in connection with the AMDX Acquisition shall be subject to a lock-up beginning on the Effective Date and ending on the earlier of (i) eighteen (18) months after such date or (ii) a Change in Control (as defined in the Exchange Agreement) or (iii) written consent of the parties to that certain escrow agreement entered into between the Company, AMDX, the Shareholder and certain creditors of the Shareholder.

 

At the end of the Lock-Up Period, in the event that the AMDX Consideration has a value equal to or less than $3,000,000 in the aggregate on the date the Lock-Up Period expires (based on the average closing "print' prices at 4:00 p.m. of the Company's common stock on the last five days prior to the date the Lock-Up Period expires as listed or quoted on any national securities exchange or over-the-counter market (including any tier maintained by the OTC Markets, Inc.), as the case may be (the " Lock-Up Termination Date Closing Price ") multiplied by the AMDX Consideration) (the " Lock-Up Termination Date "), the Company shall issue Shareholder such number of additional shares of its common stock (the " Additional Common Stock ") equal to the lesser of (i) 9.99% of the outstanding shares of the Company's common stock as of the Lock-Up Termination Date or (ii) the difference between $3,000,000 and the value of the AMDX Consideration as of the Lock-Up Termination Date divided by the Lock-Up Termination Date Closing Price. Notwithstanding the foregoing, in lieu of issuance any Additional Common Stock, the Company may, in its sole discretion, pay to the Shareholder an amount in cash equal to the aggregate value of the Additional Common Stock to be issued. So long as the Shareholder hold any shares of Additional Common Stock, at any meeting of the stockholders of the Company or any written action by consent of stockholders of the Company called for any matter, unless otherwise directed in writing by the Company, Shareholder shall vote or shall cause to be voted any issued and outstanding shares of Additional Common Stock owned by Shareholder as of the record date with respect to such meeting or consent as requested by the Company's chief executive officer.

 

AMDX owns the rights to MSPrecise Ò , a proprietary next-generation DNA sequencing (NGS) assay for the identification of patients with relapsing-remitting multiple sclerosis (RRMS) at first clinical presentation, has an exclusive worldwide license to the Lymphocyte Proliferation test (LymPro Test Ò ) for Alzheimer's disease, which was developed by Prof. Thomas Arendt, Ph.D., from the University of Leipzig, and owns intellectual property for the diagnosis of Parkinson's disease (NuroPro). 

 

 
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The Exchange Agreement includes customary representations, warranties and covenants of the Company, AMDX and the Shareholder made solely for the benefit of the parties to the Exchange Agreement. The assertions embodied in those representations and warranties were made solely for purposes of the contract among the Company, AMDX and the Shareholder and may be subject to important qualifications and limitations agreed to by the Company, AMDX and the Shareholder in connection with the negotiated terms. Moreover, some of those representations and warranties may not be accurate or complete as of any specified date, may be subject to a contractual standard of materiality different from those generally applicable to stockholders or may have been used for purposes of allocating risk among the Company, AMDX and the Shareholder rather than establishing matters as facts. Investors are not third-party beneficiaries under the Exchange Agreement and should not rely on the representations, warranties and covenants in the Exchange Agreement or any description thereof as characterizations of the actual state of facts of the Company, AMDX and the Shareholder or any of their respective subsidiaries or affiliates.

 

In connection with the Exchange Agreement, on the Effective Date, the Company issued a convertible promissory note to Shareholder pursuant to which the Shareholder purchased a note with aggregate principal amount of $50,000 for an aggregate purchase price of $50,000 (the " Note "). The Note bears interest at 12% per annum and matures one year from the date of issuance. The Note will be convertible at the option of the Investor at any time into shares of common stock, at an initial conversion price equal to $0.20, subject to adjustment. The conversion price of the Note is subject to customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like. The Investor has contractually agreed to restrict its ability to convert the Note such that the number of shares of the Company common stock held by the Investor and their affiliates after such conversion does not exceed 4.99% of the Company's then issued and outstanding shares of common stock. The proceeds of the Note were used to fund working capital of THI (as defined below) prior to the closing of the THI Acquisition (as defined below). As of the date hereof, the Company is obligated on $50,000 face amount of the Note issued to the Shareholder. The Note is a debt obligation arising other than in the ordinary course of business which constitute a direct financial obligation of the Company.

 

Theranostics Health Acquisition

 

On the Effective Date, the Company entered into an Asset Purchase Agreement (the " Purchase Agreement ") between the Company and Theranostics Health, Inc., a Delaware corporation (" THI "). Pursuant to the terms of the Purchase Agreement, the Company purchased substantially all of the assets related to THI's business. In addition, the Company assumed (i) all accounts payable of THI to third parties in connection with THI's business (ii) all liabilities in respect of the contracts assumed from or related to the acquired assets in respect of the periods before, on or after the closing date, but only to the extent that such liabilities and obligations thereunder are required to be performed after the closing date, were incurred in the ordinary course of business and do not relate to any failure to perform, improper performance, warranty or other breach, default or violation by THI on or before the Effective Date, and (iii) the promissory note in the amount of $400,000 from THI to Shareholder, dated February 29, 2016, (iv) liabilities of the seller related to present and former employees, (v) THI's obligations under that certain Lease Agreement dated January 29, 2016 (the " Lease ") for approximately four thousand six hundred ninety-eight (4,698) rentable square feet of office space located at 217 Perry Parkway, Suite 8, Gaithersburg, Maryland 20877, as more particularly described in said Lease, and (v) such other liabilities as set forth in the Purchase Agreement (the " THI Acquisition "). The THI Acquisition closed upon the execution of the Purchase Agreement.

 

The Company paid aggregate consideration of 25,000,000 shares of its common stock for the THI Acquisition (the " THI Consideration "). Each share of Avant common stock received in connection with the THI Acquisition shall be subject to a lock-up beginning on the Effective Date and ending on the earlier of (i) eighteen (18) months after such date or (ii) a Change in Control (as defined in the Purchase Agreement) or (iii) written consent of the Company, at the Company's sole discretion.

 

 
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THI is a leading developer of proteomic technologies for measuring the activation status of key signaling pathways that are instrumental in the development of companion diagnostics for molecular-targeted therapies. THI has used these proteomic technologies to support the drug development programs of most major pharmaceutical and biotechnology drug development companies. THI is also providing these testing capabilities to clinical oncologists to advance personalized medicine through its TheraLink Ò Diagnostic Assays. 

 

The Purchase Agreement includes customary representations, warranties and covenants of the Company, and THI made solely for the benefit of the parties to the Purchase Agreement. The assertions embodied in those representations and warranties were made solely for purposes of the contract among the Company and THI and may be subject to important qualifications and limitations agreed to by the Company and THI in connection with the negotiated terms. Moreover, some of those representations and warranties may not be accurate or complete as of any specified date, may be subject to a contractual standard of materiality different from those generally applicable to stockholders or may have been used for purposes of allocating risk among the Company and THI rather than establishing matters as facts. Investors are not third-party beneficiaries under the Purchase Agreement and should not rely on the representations, warranties and covenants in the Purchase Agreement or any description thereof as characterizations of the actual state of facts of the Company and THI or any of their respective subsidiaries or affiliates.

 

The foregoing information is a summary of the agreements involved in the transactions described above, is not complete, and is qualified in its entirety by reference to the full text of such agreements, copies of which are attached as exhibits to this Current Report on Form 8-K. Readers should review such agreement for a complete understanding of the terms and conditions associated with this transaction.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant

 

The information reported above under Item 1.01 of this Current Report on Form 8-K regarding the Note is incorporated herein by reference.

 

Item 3.02   Unregistered Sales of Equity Securities.

 

The information reported above under Item 1.01 of this Current Report on Form 8-K regarding the AMDX Consideration, the Note and the THI Consideration is incorporated herein by reference.

 

The AMDX Consideration, the THI Consideration and the Note described above were not registered under the Securities Act of 1933, as amended (the " Securities Act "), or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded by Section 4(a)(2) or other appropriate exemptions promulgated under the Securities Act. This current report shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall such securities be offered or sold in the United States absent registration or an applicable exemption from the registration requirements and certificates evidencing such securities contain a legend stating the same.

 

 
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Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers.

 

On the Effective Date, the board of directors of the Company appointed Gerald Commissiong as a director of the Company, effective immediately. Mr. Commissiong does not have any family relationship with any director, executive officer or person nominated or chosen by us to become a director or executive officer. In connection with the transactions contemplated by the Exchange Agreement, the Shareholder has the right to appoint up to two (2) investors to the Company's board of directors. Mr. Commissiong is the President and CEO of the Shareholder. There are no transactions in which Mr. Commissiong has an interest requiring disclosure under Item 404(a) of Regulation S-K. Mr. Commissiong has not entered into any material plan, contract or arrangement in connection with his appointment as an executive officer.

 

Mr. Commissiong has served as the Chief Operating Officer and a Director of the Shareholder since April of 2011. On October 23, 2011, Mr. Commissiong was appointed to serve as the Shareholder's Chief Executive Officer and President. Mr. Commissiong was the co-founder and President and Chief Executive Officer of the Shareholder, which was formerly known as CNS Protein Therapeutics, Inc. He played a significant role in sourcing the seed funding for the Company in 2008, assisted in developing a strategic corporate development pathway that involved the recruitment of relevant expertise, identification of appropriate development strategy, liaising with expertise to define development pathway, creation of a technological mitigation strategy and the identification of appropriate funding partners with a strategic interest in the Company's technology. Mr. Commissiong also recruited senior executives to the board to guide the Shareholder's growth and generated its official marketing materials, including investor brochures, corporate handouts, email newsletters and other materials necessary to raise awareness of the company. Prior to co-founding the Shareholder, Mr. Commissiong played professional football for the Calgary Stampeders of the Canadian Football League. Mr. Commissiong holds a B.S. degree in Management Science and Engineering with a focus on Financial Decisions from Stanford University. Mr. Commissiong is qualified to serve as Director because of his history with the Company and his management and leadership qualities. In addition, Mr. Commissiong skills and knowledge of the financial markets makes him invaluable to the Shareholder.

 

Item 8.01. Other Events.

 

On May 11, 2016, the Company issued a press release announcing the AMBS Acquisition and the THI Acquisition. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

 

Item 9.01. Financial Statements and Exhibits.

 

(a) Financial Statements of Businesses Acquired.

 

As permitted by Item 9.01(a)(4) of Form 8-K, the financial statements required by this item will be filed by amendment to this Current Report on Form 8-K within 71 calendar days after the date on which this Current Report must be filed.

 

 
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(b) Pro Forma Financial Information.

 

As permitted by Item 9.01(a)(4) of Form 8-K, the pro forma financial statements required by this item will be filed by amendment to this Current Report on Form 8-K within 71 calendar days after the date on which this Current Report must be filed.

 

(c) Exhibits. The following exhibits are filed with this report:

 

Exhibit No.

Description of Exhibit

2.1

Share Exchange Agreement, dated May 11, 2016, by and between Avant Diagnostics, Inc., Amarantus Diagnostics, Inc. and Amarantus Biosciences Holdings, Inc.*

2.2

Asset Purchase Agreement, dated May 11, 2016, by and between Avant Diagnostics, Inc. and Theranostics Health, Inc.*

4.1

Convertible Promissory Note, dated May 11, 2016, issued to Amarantus Biosciences Holdings, Inc.

10.1

Assignment and First Amendment of Lease by and among Saul Holdings Limited Partnership, Theranostics Health, Inc. and Avant Diagnostics.

99.1

Press Release, dated May 12, 2016

 

* Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Avant will furnish the omitted schedules to the Securities and Exchange Commission upon request by the Commission.

  

 
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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

AVANT DIAGNOSTICS, INC.

 

       
Date: May 17, 2016 By:

/s/ Gregg Linn

 

 

Name:

Gregg Linn

 

 

Title:

Chief Executive Officer

 

 

 

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EXHIBIT 2.1

 

EXECUTION COPY

 

SHARE EXCHANGE AGREEMENT

 

This Share Exchange Agreement (the " Agreement "), is made and entered into as of May 11, 2016, by and among Avant Diagnostics, Inc. a Nevada corporation (" Buyer "), Amarantus Diagnostics Inc., a Delaware corporation (the " Company "), and Amarantus BioScience Holdings Inc., a Nevada corporation, the sole shareholder of the Company (" Shareholder "). Certain other capitalized terms used in this Agreement are defined in Exhibit A attached hereto.

 

RECITALS

 

WHEREAS , the Company has approximately 1,000 shares (the " Shares ") outstanding, 100% of which are held by the Shareholder. The Shareholder has agreed to transfer the Shares to Buyer in exchange for shares of common stock, par value $0.00001 per share, of Buyer (the " Buyer Common Stock "), as otherwise set forth herein;

 

WHEREAS , the exchange of shares for Buyer Common Stock is intended to constitute a reorganization within the meaning of Section 351 of the Internal Revenue Code of 1986, as amended (the " Code "), or such other tax free reorganization or restructuring provisions as may be available under the Code;

 

WHEREAS , the Board of Directors of each of the Buyer and the Company has determined that it is desirable and in the best interests of the shareholder of their respective companies to effect this plan of reorganization and share exchange.

 

AGREEMENT

 

NOW, THEREFORE , in consideration of the foregoing and the mutual promises, representations, warranties, covenants and agreements herein contained, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE 1

EXCHANGE OF SHARES

 

1.1. Exchange by the Shareholder . At the Closing, the Shareholder shall sell, transfer, convey, assign and deliver to the Buyer its Shares free and clear of all Liens (including for the liens of the Shareholder's Secured Parties (collectively, the " Secured Parties ")) of in exchange for Eighty Million (80,000,000) shares of Buyer Common Stock (the " Initial Consideration "). During the thirty-six (36) months from the Closing Date (the " Measurement Period "), if the Company generates sales of at least five million dollars ($5,000,000) with respect to MSPrecise Ò , during any consecutive 12-month period or twelve million dollars ($12,000,000) million cumulatively during the Measurement Period, the Buyer shall issue the Shareholder an additional 10,000,000 shares of the Buyer's Common Stock (the " Additional Consideration " and collectively with the Initial Consideration, the (" Exchange Consideration ").

 

 1.2. Closing . The closing (the " Closing ") of the transactions contemplated by this Agreement (the " Transactions ") shall take place at the offices of Sichenzia Ross Friedman Ference LLP in New York, New York, commencing upon the satisfaction or waiver of all conditions and obligations of the parties to consummate the transactions contemplated hereby (other than conditions and obligations with respect to the actions that the respective parties will take at Closing) or such other date and time as the parties may mutually determine (the " Closing Date ").

 

 
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1.3. Lock-Up of Buyer Common Stock . Each share of Buyer Common Stock received in connection with this Agreement shall be subject to a lock-up beginning on the Closing Date and ending on the earliest of (i) the eighteen (18) months after such date, (ii) a Change in Control, (iii) written consent of Buyer and the rights of the Secured Parties pursuant to the Escrow Agreement (as defined below) (the " Lockup Period "). During the Lockup Period, the Shareholder shall enter into a lock-up agreement, substantially in the form attached hereto as Exhibit D, pursuant to which Shareholder may not, , directly or indirectly, (i) offer, sell, offer to sell, contract to sell, hedge, pledge, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or sell (or announce any offer, sale, offer of sale, contract of sale, hedge, pledge, sale of any option or contract to purchase, purchase of any option or contract of sale, grant of any option, right or warrant to purchase or other sale or disposition), or otherwise transfer or dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future), any Buyer Common Stock acquired pursuant to this Agreement or (ii) enter into any swap or other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of any Buyer Common Stock, whether or not any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of any Buyer Common Stock. The terms of this provision shall convey to any subsequent holder of the Buyer's Common Stock.

 

During the Lock-up Period the Company and Shareholder shall not execute any purchases or sales of Buyer Common Stock that would constitute Short Sales (as defined in Rule 200 of Regulation SHO under the Exchange Act), including naked shorting, hard shorting or regular shorting.

 

1.4. Escrow . The parties agree that the Exchange Consideration shall be held in escrow and subject to restrictions on transfer for the term of the Lockup Period or as the parties may otherwise agree to, pursuant to the terms of an escrow agreement, such as the Exchange Consideration being held as security for Shareholder's obligations to the Secured Parties and being unconditionally released to the Secured Parties if the Shareholder is in default under this Agreement or under any of its agreements with the Secured Parties and such default occurs after six months from the date hereof, substantially in the form of which is attached hereto as Exhibit B (the " Escrow Agreement ") .

 

ARTICLE 2

REPRESENTATIONS OF THE SHAREHOLDER

 

Shareholder represents and warrants to the Buyer, as follows:

 

2.1 Good Title. The Shareholder is the record and beneficial owner, and has good and marketable title to its Shares being exchanged by such Shareholder pursuant to this Agreement, with the right and authority to sell and deliver such Shares to Buyer as provided herein. Upon registering of the Buyer as the new owner of such Shares in the share register of the Company, the Buyer will receive good title to such Shares, free and clear of all Liens.

 

2.2 Power and Authority. All acts required to be taken by the Shareholder to enter into this Agreement and to carry out the Transactions have been properly taken. The obligations of the Shareholder under this Agreement constitute legal, valid and binding obligations of the Shareholder, enforceable against Shareholder in accordance with the terms hereof.

 

 
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2.3 No Conflicts. The execution and delivery of this Agreement by the Shareholder and the performance by the Shareholder of its obligations hereunder in accordance with the terms hereof: (i) will not require the consent of any Governmental Entity under any Laws; (ii) will not violate any Laws applicable to Shareholder; and (iii) will not violate or breach any contractual obligation to which Shareholder is a party.

 

2.4 No Finder's Fee. The Shareholder has not created any obligation for any finder's, investment banker's or broker's fee in connection with the transactions contemplated under this Agreement that the Company or the Buyer will be responsible for.

 

2.5 Purchase Entirely for Own Account. The Buyer Common Stock proposed to be acquired by the Shareholder hereunder will be acquired for investment for its own account, and not with a view to the resale or distribution of any part thereof, and the Shareholder has no present intention of selling or otherwise distributing the Buyer Common Stock, except in compliance with applicable securities laws.

 

2.6 Available Information. The Shareholder has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Buyer. The foregoing, however, does not limit or modify the representations and warranties of the Company and the Buyer in Articles 3 and 4 of this Agreement, respectively, or the right of the Shareholder to rely thereon. Shareholder acknowledges that an investment in the Buyer Common Stock involves a high degree of risk, is speculative and there can be no assurance of any return on any such investment. The Shareholder has reviewed the Buyer's filings with the Securities and Exchange Commission including the Buyer's Annual Report on Form 10-K for the fiscal year ended September 30, 2015 and all reports filed by the Buyer since such 10-K.

 

2.7 Non-Registration. The Shareholder understands that the Exchange Consideration has not been registered under the Securities Act of 1933, as amended (the "Securities Act") and, if issued in accordance with the provisions of this Agreement, will be issued by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Shareholder's representations as expressed herein. The non-registration shall have no prejudice with respect to any rights, interests, benefits and entitlements attached to the Exchange Consideration in accordance with the Buyer charter documents or the laws of its jurisdiction of incorporation.

 

2.8 Restricted Securities. TheShareholder understands that the Exchange Consideration is characterized as "restricted securities" under the Securities Act inasmuch as this Agreement contemplates that, if acquired by the Shareholder pursuant hereto, the Exchange Consideration would be acquired in a transaction not involving a public offering. The Shareholder further acknowledges that if the Exchange Consideration is issued to the Shareholder in accordance with the provisions of this Agreement, such Exchange Consideration may not be resold without registration under the Securities Act or the existence of an exemption therefrom.

 

2.9 Legends. The Shareholder understands that the Exchange Consideration will bear the following legend or another legend that is similar to the following:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

 

and any legend required by the "blue sky" laws of any state to the extent such laws are applicable to the securities represented by the certificate so legended.

 

 
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2.10 Accredited Investor. Except as set forth on the signature page to this Agreement, the Shareholder is an "accredited investor" within the meaning of Rule 501 under the Securities Act.

 

2.11 Current Report. Shareholder shall file a Current Report on Form 8-K with the SEC within four (4) business days of the Closing Date containing information about the Transactions as required by Regulation S-K under the Exchange Act (the " 8-K Report ").

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SHAREHOLDER

 

The Shareholder and the Company jointly and severally represent and warrant to Buyer that, except as set forth in the disclosure schedules delivered by the Company to Buyer (the " Company Disclosure Schedule ") which have been provided to Buyer prior to the date hereof.

 

3.1. Organization, Standing and Corporate Power. The Company is duly organized, validly existing and in good standing under the Laws of the State of Delaware and has the requisite corporate power and authority and all government licenses, authorizations, Permits, consents and approvals required to own, lease and operate its properties and carry on its business as now being conducted. The Company is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a Material Adverse Effect.

 

3.2. Subsidiaries. The Company does not own directly or indirectly, any equity or other ownership interest in any company, corporation, partnership, joint venture or otherwise.

 

3.3. Capital Structure of the Company. As of the date of this Agreement, the number of shares and type of all authorized, issued and outstanding capital stock of the Company, and all shares of capital stock reserved for issuance under the Company's various option and incentive plans is specified on Schedule 3.3. Except as set forth in Schedule 3.3, no shares of capital stock or other equity securities of the Company are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.3, there are no outstanding bonds, debentures, notes or other indebtedness or other securities of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters. Except as set forth in Schedule 3.3, there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company is a party or by which it is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of the Company or obligating the Company to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. Except on Schedule 3.3, there are no outstanding contractual obligations, commitments, understandings or arrangements of the Company to repurchase, redeem or otherwise acquire or make any payment in respect of any shares of capital stock of the Company. Except as set forth on Schedule 3.3, there are no agreements or arrangements pursuant to which the Company is or could be required to register shares of Company Common Stock or other securities under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the " Securities Act ") or other agreements or arrangements with or among any security holders of the Company with respect to securities of the Company.

 

 
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3.4. Corporate Authority; Noncontravention. The Company and the Shareholder have all requisite corporate and other power and authority to enter into this Agreement and to consummate the Transactions contemplated hereunder. The execution and delivery of this Agreement by the Company and the Shareholder and the consummation by the Company of the Transactions have been (or at Closing will have been) duly authorized by all necessary corporate action on the part of the Company and the Shareholder. This Agreement has been duly executed and when delivered by the Company and the Shareholder shall constitute a valid and binding obligation of the Company and the Shareholder, enforceable against the Company and the Shareholder in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar Laws affecting the enforcement of creditors' rights generally or by general principles of equity. The execution and delivery of this Agreement do not, and the consummation of the Transactions and compliance with the provisions hereof will not, conflict with, or result in any breach or violation of, or Default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of or "put" right with respect to any obligation or to a loss of a material benefit under, or result in the creation of any Lien upon any of the properties or Assets of the Company under, (i) the Certificate of Incorporation, Bylaws or other organizational or charter documents of the Company (the " Company Charter Documents "), (ii) any, loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, Permit, concession, franchise or license applicable to the Company or the Shareholder, theirs properties or Assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, Order, decree, statute, Law, ordinance, rule, regulation or arbitration award applicable to the Company or the Shareholder, their properties or Assets, other than, in the case of clauses (ii) and (iii), any such conflicts, breaches, violations, Defaults, rights, losses or Liens that individually or in the aggregate could not have a Material Adverse Effect with respect to the Company or could not prevent, hinder or materially delay the ability of the Company or the Shareholder to consummate the Transactions.

 

3.5. Governmental Authorization. No consent, approval, Order or authorization of, or registration, declaration or filing with, or notice to, any Governmental Entity, is required by or with respect to the Company or the Shareholder in connection with the execution and delivery of this Agreement by the Company or the Shareholder or the consummation by the Company of the transactions contemplated hereby, except, with respect to this Agreement, any filings under the Securities Act or Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the " Exchange Act ").

 

3.6. Financial Statements.

 

(a) The Company has provided Buyer a copy of the audited consolidated financial statements of the Company for the years ended December 31, 2013 and 2012 and unaudited consolidated financial statements of the Company for the nine months ended September 30, 2014 and 2013 (the " Company Financial Statements "). The Company Financial Statements fairly present the financial condition of the Company at the dates indicated and its results of operations and cash flows for the periods then ended and, except as indicated therein, reflect all claims against, debts and liabilities of the Company, fixed or contingent, and of whatever nature, as of the dates indicated. The Company Financial Statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (" GAAP "), except as may be otherwise specified in the Company Financial Statements or the notes thereto and except that the unaudited Financial Statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and the other as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject to normal, immaterial, year-end audit adjustments.

 

 
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(b) Since September 30, 2014 (the " Company Balance Sheet Date "), (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company Financial Statements pursuant to GAAP, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any Contracts to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. Except for the issuance of the Shares contemplated by this Agreement no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its business, properties, operations, assets or financial condition, that would be required to be disclosed by the Company or the Shareholder under applicable securities laws at the time this representation is made or deemed made.

 

3.7. Absence of Certain Changes or Events. S ince the Company Balance Sheet Date, the Company has conducted its business only in the ordinary course consistent with past practice, and there is not and has not been any:

 

(a) Material Adverse Effect with respect to the Company;

 

(b) event which, if it had taken place following the execution of this Agreement, would not have been permitted by Section 5.1 without prior consent of Buyer;

 

(c) condition, event or occurrence which could reasonably be expected to prevent, hinder or materially delay the ability of the Company to consummate the Transactions;

 

(d) incurrence, assumption or guarantee by the Company of any indebtedness for borrowed money other than in the ordinary course and in amounts and on terms consistent with past practices;

 

(e) creation or other incurrence by the Company of any Lien on any asset other than in the ordinary course consistent with past practices;

 

(f) labor dispute, other than routine, individual grievances, or, to the Knowledge of the Company, any activity or proceeding by a labor union or representative thereof to organize any employees of the Company or any lockouts, strikes, slowdowns, work stoppages or threats by or with respect to such employees;

 

(g) payment, prepayment or discharge of liability other than in the ordinary course of business or any failure to pay any liability when due;

 

(h) material write-offs or write-downs of any Assets of the Company;

 

 
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(i) damage, destruction or loss having, or reasonably expected to have, a Material Adverse Effect on the Company;

 

(j) other condition, event or occurrence which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect or give rise to a Material Adverse Effect with respect to the Company;

 

(k) transaction or commitment made, or any Contract or agreement entered into, by the Company relating to its Assets or business (including the acquisition or disposition of any Assets) or any relinquishment by the Company or any Contract or other right, in either case, material to the Company, other than transactions and commitments in the ordinary course consistent with past practices and those contemplated in this Agreement; or

 

(l) agreement or commitment to do any of the foregoing.

 

Shareholder also represents and warrants that Shareholder can and does make the representation in this Section 3.8 as if it were applicable Shareholder.

 

3.8. Certain Fees. No brokerage or finder's fees or commissions are or will be payable by the Company or Shareholder to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the Transactions.

 

3.9. Litigation; Labor Matters; Compliance with Laws.

 

(a) There is no suit, action or proceeding or investigation pending or, to the Knowledge of the Company and the Shareholder, threatened against or affecting the Company or the Shareholder or any basis for any such suit, action, proceeding or investigation that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect with respect to the Company or the Shareholder or prevent, hinder or materially delay the ability of the Company or the Shareholder to consummate the Transactions, nor is there any judgment, decree, injunction, rule or Order of any Governmental Entity or arbitrator outstanding against the Company having, or which, insofar as reasonably could be foreseen by the Company, in the future could have, any such effect. Neither the Company, the Shareholder nor to the Company's Knowledge, the Shareholder's Knowledge any director or officer of the Company or the Shareholder thereof, is or has been the subject of any Order involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company and the Shareholder, there is not pending or contemplated, any investigation by the SEC involving the Company, the Shareholder or any current or former director or officer of the Company or the Shareholder.

 

(b) The Company is not a party to, or bound by, any collective bargaining agreement, Contract or other agreement or understanding with a labor union or labor organization, nor is it the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it to bargain with any labor organization as to wages or conditions of employment nor is there any strike, work stoppage or other labor dispute involving it pending or, to its Knowledge, threatened, any of which could have a Material Adverse Effect with respect to Company.

 

 
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(c) The conduct of the business of the Company and the Shareholder complies with all statutes, Laws, regulations, ordinances, rules, judgments, Orders, decrees or arbitration awards applicable thereto, except as would not have a Material Adverse Effect with respect to the Company or the Shareholder.

 

3.10. Benefit Plans. The Company is not a party to any Benefit Plan under which the Company currently has an obligation to provide benefits to any current or former employee, officer or director of the Company. As used herein, " Benefit Plan " shall mean any employee benefit plan, program, or arrangement of any kind, including any defined benefit or defined contribution plan, stock ownership plan, executive compensation program or arrangement, bonus plan, incentive compensation plan or arrangement, profit sharing plan or arrangement, deferred compensation plan, agreement or arrangement, supplemental retirement plan or arrangement, vacation pay, sickness, disability, or death benefit plan (whether provided through insurance, on a funded or unfunded basis, or otherwise), medical or life insurance plan providing benefits to employees, retirees, or former employees or any of their dependents, survivors, or beneficiaries, employee stock option or stock purchase plan, severance pay, termination, salary continuation, or employee assistance plan.

 

3.11. Tax Returns and Tax Payments.

 

(a) The Company and the Shareholder have not filed with the appropriate taxing authorities any Tax Returns required to be filed by it (taking into account all applicable extensions). No claim has ever been made in writing or otherwise addressed to the Company or the Shareholder by a taxing authority in a jurisdiction where the Company or the Shareholder does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. Since the Company Balance Sheet Date, neither the Company, the Shareholder nor any of their subsidiaries has incurred any liability for Taxes outside the ordinary course of business consistent with past custom and practice. Within 75 days from the date hereof, each of the Company and the Shareholder shall have duly filed all material federal, state, and local tax returns and shall have paid all amounts (inclusive of interest and penalties) shown to be due on such returns.

 

(b) No material claim for unpaid Taxes has been made or become a Lien against the property of the Company or the Shareholder or is being asserted against the Company or the Shareholder, no audit of any Tax Return of the Company or the Shareholder is being conducted by a tax authority, and no extension of the statute of limitations on the assessment of any Taxes has been granted by the Company or the Shareholder and is currently in effect. The Company and the Shareholder have withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder or other third party.

 

(c) As used herein, " Taxes " shall mean all taxes of any kind, including, without limitation, those on or measured by or referred to as income, gross receipts, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, value added, property or windfall profits taxes, customs, duties or similar fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any governmental authority, domestic or foreign. As used herein, " Tax Return " shall mean any return, report or statement required to be filed with any governmental authority with respect to Taxes.

 

 
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3.12. Environmental Matters. The Company and the Shareholder are in compliance with all Environmental Laws in all material respects. Neither Company nor the Shareholder have received any written notice regarding any violation of any Environmental Laws, including any investigatory, remedial or corrective obligations which, if determined adversely to the Company, would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. The Company holds all Permits and authorizations required under applicable Environmental Laws, unless the failure to hold such Permits and authorizations would not have a Material Adverse Effect on the Company, and is in compliance with all terms, conditions and provisions of all such Permits and authorizations in all material respects. No releases of Hazardous Materials have occurred at, from, in, to, on or under any real property currently or formerly owned, operated or leased by the Company or any predecessor thereof and no Hazardous Materials are present in, on, about or migrating to or from any such property which could result in any liability to the Company. Neither the Company nor the Shareholder have transported or arranged for the treatment, storage, handling, disposal, or transportation of any Hazardous Material to any off-site location which could result in any liability to the Company. The Company has no liability, absolute or contingent, under any Environmental Law that if enforced or collected would have a Material Adverse Effect on the Company. There are no past, pending or threatened claims under Environmental Laws against the Company and Company and the Shareholder are not aware of any facts or circumstances that could reasonably be expected to result in a liability or claim against the Company pursuant to Environmental Laws.

 

3.13. Material Agreements.

 

(a) Schedule 3.13 lists the following contracts and other agreements (" Material Agreements ") to which the Company is a party: (i) any agreement (or group of related agreements) for the lease of real or personal property, including capital leases, to or from any person providing for annual lease payments in excess of $25,000; (ii) any licensing agreement, or any agreement forming a partnership, strategic alliances, profit sharing or joint venture; (iii) any agreement (or group of related agreements) under which it has created, incurred, assumed, or guaranteed any indebtedness for borrowed money in excess of $10,000, or under which a security interest has been imposed on any of its Assets, tangible or intangible; (iv) any profit sharing, deferred compensation, severance, or other material plan or arrangement for the benefit of its current or former officers, directors and managers or any of the Company's employees; (v) any employment or independent contractor agreement providing annual compensation in excess of $10,000 or providing post-termination or severance payments or benefits or that cannot be cancelled without more than thirty (30) days' notice; (vi) any agreement with any current or former officer, director, shareholder, members, manager or affiliate of the Company; (vii) any agreements relating to the acquisition (by merger, purchase of units or assets or otherwise) by the Company of any operating business or material assets or the capital stock of any other person; (viii) any agreements for the sale of any of the Assets of the Company, other than in the ordinary course of business; (ix) any outstanding agreements of guaranty, surety or indemnification, direct or indirect, by the Company; (x) any royalty agreements, licenses or other agreements relating to Intellectual Property (excluding licenses pertaining to "off-the-shelf" commercially available software used pursuant to shrink-wrap or click-through license agreements on reasonable terms for a license fee of no more than $10,000); and (xi) any other agreement under which the consequences of a default or termination could reasonably be expected to have a Material Adverse Effect on the Company including any customer agreements.

 

(b) The Company has made available to Buyer either an original or a correct and complete copy of each written Material Agreement. With respect to each Material Agreement to which the Company is a party thereto: (i) the agreement is the legal, valid, binding, enforceable obligation of the Company and is in full force and effect in all material respects, subject to bankruptcy and equitable remedies exceptions; (ii) (A) the Company is not in material breach or default thereof and (B) no event has occurred which, with notice or lapse of time, would constitute a material breach or default of, or permit termination, modification, or acceleration under, the Material Agreement; and (iii) the Company has not repudiated any material provision of the agreement.

 

 
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3.14. Material Contract Defaults. The Company is not, or has not received any notice or has any Knowledge that any other party is, in Material Contract Default under any Company Material Contract; and there has not occurred any event that with the lapse of time or the giving of notice or both would constitute such a Material Contract Default. For purposes of this Agreement, a " Company Material Contract " means any Contract that is effective as of the Closing Date to which the Company is a party (i) with expected receipts or expenditures in excess of $10,000, (ii) requiring the Company to indemnify any person, (iii) granting exclusive rights to any party, or (iv) evidencing indebtedness for borrowed or loaned money in excess of $10,000, including guarantees of such indebtedness.

 

3.15. Accounts Receivable. All of the accounts receivable of the Company that are reflected on the Company Financial Statements or the accounting records of the Company as of the Closing (collectively, the " Accounts Receivable ") represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business and are not subject to any defenses, counterclaims, or rights of set off other than those arising in the ordinary course of business and for which adequate reserves have been established. The Accounts Receivable are fully collectible to the extent not reserved for on the balance sheet on which they are shown.

 

3.16. Reserved.

 

3.17. Intellectual Property.

 

(i) As used in this Agreement, " Intellectual Property " means all right, title and interest in or relating to all intellectual property, whether protected, created or arising under the laws of the United States or any other jurisdiction or under any international convention, including, but not limited to the following: (a) service marks, trademarks, trade names, trade dress, logos and corporate names (and any derivations, modifications or adaptations thereof), Internet domain names and Internet websites (and content thereof), together with the goodwill associated with any of the foregoing, and all applications, registrations, renewals and extensions thereof (collectively, " Marks "); (b) patents and patent applications, including all continuations, divisionals, continuations-in-part and provisionals and patents issuing thereon, and all reissues, reexaminations, substitutions, renewals and extensions thereof (collectively, " Patents "); (c) copyrights, works of authorship and moral rights, and all registrations, applications, renewals, extensions and reversions thereof (collectively, " Copyrights "); (d) confidential and proprietary information, trade secrets and non-public discoveries, concepts, ideas, research and development, technology, know-how, formulae, inventions (whether or not patentable and whether or not reduced to practice), compositions, processes, techniques, technical data and information, procedures, designs, drawings, specifications, databases, customer lists, supplier lists, pricing and cost information, and business and marketing plans and proposals, in each case excluding any rights in respect of any of the foregoing that comprise or are protected by Patents (collectively, " Trade Secrets "); and (e) Technology. For purposes of this Agreement, " Technology " means all Software, information, designs, formulae, algorithms, procedures, methods, techniques, ideas, know-how, research and development, technical data, programs, subroutines, tools, materials, specifications, processes, inventions (whether or not patentable and whether or not reduced to practice), apparatus, creations, improvements and other similar materials, and all recordings, graphs, drawings, reports, analyses, and other writings, and other embodiments of any of the foregoing, in any form or media whether or not specifically listed herein. Further, for purposes of this Agreement, " Software " means any and all computer programs, whether in source code or object code; databases and compilations, whether machine readable or otherwise; descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing; and all documentation, including user manuals and other training documentation, related to any of the foregoing. Without limiting the foregoing, Intellectual Property shall include but not be limited to all patents, patent applications and know how related to the MSPrecise Ò diagnostic assay; all patents, patent applications and know how related to the LymPro Test Ò diagnostic assay and all patents, patent applications and know how related to the NuroPro Ò diagnostic assays.

 

 
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(ii) Schedule 3.17 sets forth a list and description of the Intellectual Property required for the Company to operate, or used or held for use by the Company, in the operation of its business, including, but not limited to (a) all issued Patents and pending Patent applications, registered Marks, pending applications for registration of Marks, unregistered Marks, registered Copyrights of the Company and the record owner, registration or application date, serial or registration number, and jurisdiction of such registration or application of each such item of Intellectual Property, (b) all Software developed by or for the Company and (c) any Software not exclusively owned by the Company and incorporated, embedded or bundled with any Software listed in clause (b) above (except for commercially available software and so-called "shrink wrap" software licensed to the Company on reasonable terms through commercial distributors or in consumer retail stores for a license fee of no more than $10,000).

 

(iii) The Company is the exclusive owner of or has a valid and enforceable right to use all Intellectual Property listed for the Company in Schedule 3.17 (and any other Intellectual Property required to be listed in Schedule 3.17 ) as the same are used, sold, licensed and otherwise commercially exploited by the Company, free and clear of all Liens, security interests, encumbrances or any other obligations to others (other than obligations under the license agreements pursuant to which such Intellectual Property is licensed to the Company), and no such Intellectual Property has been abandoned. The Intellectual Property owned by the Company and the Intellectual Property licensed to it pursuant to valid and enforceable written license agreements include all of the Intellectual Property necessary and sufficient to enable the Company to conduct its business in the manner in which such business is currently being conducted. The Intellectual Property owned by the Company and its rights in and to such Intellectual Property are valid and enforceable.

 

(iv) Neither the Company nor the Shareholder has received, and neither is not aware of, any written or oral notice of any reasonable basis for an allegation against the Company or the Shareholder of any infringement, misappropriation, or violation by the Company or the Shareholder of any rights of any third party with respect to any Intellectual Property, and the Company and the Shareholder are not aware of any reasonable basis for any claim challenging the ownership, use, validity or enforceability of any Intellectual Property owned, used or held for use by the Company. Neither the Company nor the Shareholder has any knowledge (a) of any third-party use of any Intellectual Property owned by or exclusively licensed to the Company, (b) that any third-party has a right to use any such Intellectual Property, or (c) that any third party is infringing, misappropriating, or otherwise violating (or has infringed, misappropriated or violated) any such Intellectual Property.

 

(v) To the Company's and Shareholder's Knowledge, the Company has not infringed, misappropriated or otherwise violated any Intellectual Property rights of any third parties, and the Company and the Shareholder are not aware of any infringement, misappropriation or violation of any third party rights which will occur as a result of the continued operation of the Company as presently operated and/or the consummation of the Transactions.

 

(vi) The Company has taken adequate security measures to protect the confidentiality and value of its Trade Secrets (and any confidential information owned by a third party to whom the Company has a confidentiality obligation).

 

(vii) The consummation of the Transactions will not adversely affect the right of the Company to own or use any Intellectual Property owned, used or held for use by it.

 

(viii) Reserved.

 

 
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3.18. Board Recommendation. The Board of Directors of the Company and the Shareholder have determined that the terms of the Transactions are fair to and in the best interests of the respective shareholders of the Company and the Shareholder.

 

3.19. Undisclosed Liabilities; Assumed Liabilities. The Company has no liabilities or monetary obligations of any nature (whether fixed or unfixed, secured or unsecured, known or unknown and whether absolute, accrued, contingent, or otherwise) including any liabilities or obligations reflected or reserved against in the Company Financial Statements or any incurred in the ordinary course of business after the Company Balance Sheet Date except as set forth onin Schedule 3.19 . Upon execution of this Agreement, the Buyer shall assume the liabilities of the Company set forth on Schedule 3.19 hereto (the " Assumed Liabilities "). All liabilities of the Company included in the Assumed Liabilities arose in bona fide arm's length transactions in the ordinary course of business. The Company does not have any account payable to the Shareholder or any person who is an officer, director or 10% or greater shareholder of the Shareholder or the Company. Any Assumed Liabilities set forth herein or any liabilities that the Buyer is required to pay on behalf of the Company shall be entitled to a right of setoff against the Notes (as defined below), as set forth in accordance with Section 10.16 of this Agreement. The Buyer shall not be obligated to assume any liabilities of the Company not included on Schedule 3.19 hereto provided, that upon the consummation of a financing by the Buyer after the Closing Date, the Buyer and Shareholder shall mutually agree in writing to the liabilities of the Company to be transferred to Buyer. , Shareholder acknowledges and agrees that it shall be solely responsible for any liabilities of the Company not included on Schedule 3.19 and it shall indemnify and hold Buyer harmless from any cause of action, suit or claim brought or made against Buyer by a third party in connection with the payment of any such amounts, in accordance with the indemnification provisions of this Agreement.

 

3.20. No Registration of Securities. Except for those registration rights (on a prorata basis between the Shareholder and the Gregg Linn, the current CEO of the Buyer), agreed to by an underwriter in connection with the up-list of Avant's common stock to a national securities exchange, the Company and the Shareholder understand and acknowledge that except as set forth in this Agreement, the offering, exchange and issuance of the Exchange Consideration pursuant to this Agreement will not be registered under the Securities Act on the grounds that the offering, sale, exchange and issuance of securities contemplated by this Agreement are exempt from registration pursuant to Section 4(a)(2) of the Securities Act, and that Buyer's reliance upon such exemption is predicated in part upon the Company's and the Shareholder's representations herein and upon the representations contained in the Stockholder Representation Letters, the form of which is attached as Exhibit C to this Agreement.

 

3.21. Buyer Information. The Company and the Shareholder acknowledge that it has had access to the documents filed by Buyer under the Exchange Act, since the end of its most recently completed fiscal year to the date hereof, and has carefully reviewed the same (" Exchange Act Documents "). The Company and the Shareholder further acknowledge that Buyer has made available to it the opportunity to ask questions of and receive answers from Buyer's officers and directors concerning the terms and conditions of this Agreement and the business and financial condition of Buyer, and the Company has received to its satisfaction, such information about the business and financial condition of Buyer and the terms and conditions of the Agreement as it has requested. The Company and the Shareholder have carefully considered the potential risks relating to Buyer and investing in the Exchange Consideration, and fully understands that such securities are speculative investments, which involve a high degree of risk of loss of the Company and its stockholders' entire investment. Among others, the Company has carefully considered each of the risks identified under the caption "Risk Factors" in the Exchange Act Documents, which are incorporated herein by reference.

 

 
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3.22. Regulatory Permits . The Company possesses all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct its respective businesses, (" Material Permits "), and the Company has not received any notice of proceedings relating to the revocation or modification of any Material Permit.

 

3.23 Intentionally Omitted.

 

3.24. Title to Assets . Except as set forth on Schedule 3.24 , the Company has good and marketable title in fee simple to all real property owned by it and good and marketable title in all personal property owned by them that is material to the business of the Company, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company is held by the Company under valid, subsisting and enforceable leases with which the Company is in compliance.

 

3.25. Insurance . The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company is engaged. The Company does not have any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

 

3.26. Transactions With Affiliates and Employees. None of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from providing for the borrowing of money from or lending of money to, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $50,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

 

3.27. Certain Fees. No brokerage or finder's fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Company shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

 

3.28. Registration Rights . No Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company.

 

3.29. Application of Takeover Protections . The Company and the Company's Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company's certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Buyer as a result of the Buyer's and the Company fulfilling their obligations or exercising their rights under this Agreement, including without limitation as a result of the Company's issuance of the Shares and the Buyer's ownership of the Shares.

 

 
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3.30. Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by this Agreement, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyer or their agents or counsel with any information that it believes constitutes or might constitute material, non-public information. The Company and the Shareholder understand and confirm that the Buyer will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company and the Shareholder to the Buyer regarding the Company, the Shareholder, the Shareholder's business the Company's business and the transactions contemplated hereby, including the Company Disclosure Schedule, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company or by the Shareholder during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading. The Company and the Shareholder acknowledge and agrees that the Buyer has not made and is not making any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Article 4 hereof.

 

3.31. No Integrated Offering . Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Shares to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities under the Securities Act.

 

3.32. Solvency. Based on the consolidated financial condition of the Company as of the date hereof (i) the fair saleable value of the Company's assets exceeds the amount that will be required to be paid on or in respect of the Company's existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company's assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. Except as set forth on Schedule 3.32, there is no outstanding secured or unsecured Indebtedness of the Company, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, " Indebtedness " means (x) any liabilities for borrowed money or amounts owed in excess of $5,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company's consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $1,000 due under leases required to be capitalized in accordance with GAAP. The Company is not in default with respect to any Indebtedness. To the extent, there is any Indebtedness of the Company as of the Closing Date which is assumed and required to be paid by Buyer, or any Indebtedness is incurred by the Company in connection with the transactions contemplated by this Agreement, including any costs associated with the preparation of the Financial Statements required to be delivered by the Shareholder as set forth in Section 8.2(f) below, any such amount(s) paid by Buyer shall be entitled to a right of setoff first against the promissory note in the amount of $100,000 from Buyer to Shareholder dated March 7, 2016 (the " Avant Note ") and then against the promissory note in the amount of $400,000 from Theranostics to Shareholder dated February 29, 2016 (as assumed by the Buyer in accordance with the terms of the Asset Purchase Agreement) and/or (the " Theranostics Note ") and finally against the promissory note in the amount of $50,000 from Shareholder to the Company issued pursuant to Section 8.2(i) of this Agreement (the " New Note ") and collectively with the Avant Note and the Theranostics Note, the " Notes "), as set forth in accordance with Section 10.16 of this Agreement.

 

 
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3.33. Bad Actor Disqualification. With respect to Buyer Common Stock to be issued hereunder in reliance on Rule 506 under the Securities Act (" Regulation D Securities "), none of the Shareholder, the Company, any of its predecessors, any affiliated issuer, any director, executive officer, any beneficial owner of 20% or more of the Shareholder's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an " Issuer Covered Person " and, together, " Issuer Covered Persons ") is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a " Disqualification Event "), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Shareholder has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to Buyer a copy of any disclosures provided thereunder. The Shareholder is not aware of any person that (i) has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of the Buyer Common Stock and (ii) who is subject to a Disqualification Event. The Company will notify the Buyer in writing of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person, prior to any Closing of this Offering .

 

3.34. Foreign Corrupt Practices. Neither the Company nor to the knowledge of the Company any agent or other person acting on behalf of the Company has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

3.35. Stock Option Plans. The Company has not granted any stock option under any stock option plan.

 

3.36. Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (" OFAC ").

 

3.37. Money Laundering. The operations of the Company are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the " Money Laundering Laws "), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company threatened.

 

3.38. Full Disclosure. All of the representations and warranties made by the Company and the Shareholder in this Agreement, including the Company Disclosure Schedules attached hereto, and all statements set forth in the certificates delivered by the Company at the Closing pursuant to this Agreement, are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such representations, warranties or statements, in light of the circumstances under which they were made, misleading. The copies of all documents furnished by the Company pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether furnished in written or electronic form, to Buyer or its representatives by or on behalf of any of the Company or its Affiliates in connection with the negotiation of this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.

 

 
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ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to the Company, and to the Shareholder that, except as set forth in Buyer Disclosure Schedule:

 

4.1. Organization, Standing, Corporate Power and Quotation of Common Stock. Buyer and each of its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has the requisite corporate power and authority and all government licenses, authorizations, Permits, consents and approvals required to own, lease and operate its properties and carry on its business as now being conducted. Buyer and each of its Subsidiaries is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a Material Adverse Effect with respect to Buyer. If the Buyer has no Subsidiaries, all other references to the Subsidiaries or any of them in this Agreement, shall be disregarded.

 

4.2. Subsidiaries. The Subsidiaries of the Buyer, and the authorized and outstanding capital stock of each are set forth on Schedule 4.2. All of the outstanding capital stock of the Buyer's Subsidiaries are owned by Buyer free and clear of all Liens. Other than as set forth on Schedule 4.2, Buyer does not own directly or indirectly, any equity or other ownership interest in any company, corporation, partnership, joint venture or otherwise.

 

4.3. Capital Structure of Buyer

 

Immediately prior to the issuance of the Exchange Consideration at Closing and any shares of the Buyer's common stock issuable in connection with the Asset Purchase Agreement, the authorized capital stock of Buyer will consist of 450,000,000 shares of Buyer Common Stock, $0.00001 par value, of which no more than 110,204,543 shares of Buyer Common Stock will be issued and outstanding, 50,000,000 shares of Buyer Preferred Stock, of which 3,000 shares have been designated as Series B preferred stock, $.001 par value and of which none are issued and outstanding. No Shares of Buyer Common Stock or Buyer Preferred Stock will be issuable upon the exercise of outstanding warrants, convertible notes, options or otherwise (except as described below). All outstanding shares of capital stock of Buyer and its Subsidiaries are, and all shares which may be issued pursuant to this Agreement will be, when issued, duly authorized, validly issued, fully paid and nonassessable, not subject to preemptive rights, and issued in compliance with all applicable state and federal Laws concerning the issuance of securities. Except for the Buyer Common Stock, there are no outstanding bonds, debentures, notes or other indebtedness or other securities of Buyer having the right to vote (or convertible into, or exchangeable for, securities having the right to vote). Other than pursuant to the Asset Purchase Agreement between Theranostics Health, Inc. and Buyer (the "Asset Purchase Agreement") and/or as set forth in the Buyer SEC Documents (as hereinafter defined) there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which Buyer or any of its Subsidiaries is a party or by which Buyer or any of its Subsidiaries is bound obligating Buyer or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity securities of Buyer or any of its Subsidiaries or obligating Buyer or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. Other than pursuant to the Asset Purchase Agreement or as described in the Buyer SEC Reports, there are no outstanding contractual obligations, commitments, understandings or arrangements of Buyer or any of its Subsidiaries to repurchase, redeem or otherwise acquire or make any payment in respect of any shares of capital stock of Buyer or any of its Subsidiaries. Other than as set forth in the Asset Purchase Agreement or the Buyer SEC Documents, as hereinafter defined, there are no agreements or arrangements pursuant to which the Buyer is or could be required to register shares of Buyer Common Stock or other securities under the Securities Act or other agreements or arrangements with or among any security holders of the Buyer with respect to securities of the Buyer

 

 
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4.4. Corporate Authority; Noncontravention. Buyer has all requisite corporate and other power and authority to enter into this Agreement and to consummate the Transactions. The execution and delivery of this Agreement by Buyer and the consummation by Buyer of the transactions contemplated hereby have been (or at Closing will have been) duly authorized by all necessary corporate action on the part of Buyer. This Agreement has been duly executed and when delivered by Buyer, shall constitute a valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar Laws affecting the enforcement of creditors' rights generally or by general principles of equity. The execution and delivery of this Agreement do not, and the consummation of the Transactions and compliance with the provisions hereof will not, conflict with, or result in any breach or violation of, or Default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of or "put" right with respect to any obligation or to a loss of a material benefit under, or result in the creation of any Lien upon any of the properties or Assets of Buyer under, (i) the Certificate of Incorporation, Bylaws, or other charter documents of Buyer, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, Permit, concession, franchise or license applicable to Buyer, its properties or Assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, Order, decree, statute, Law, ordinance, rule, regulation or arbitration award applicable to Buyer, its properties or Assets, other than, in the case of clauses (ii) and (iii), any such conflicts, breaches, violations, Defaults, rights, losses or Liens that individually or in the aggregate could not have a Material Adverse Effect with respect to Buyer or could not prevent, hinder or materially delay the ability of Buyer to consummate the Transactions.

 

4.5. Government Authorization. No consent, approval, Order or authorization of, or registration, declaration or filing with, or notice to, any Governmental Entity, is required by or with respect to Buyer in connection with the execution and delivery of this Agreement by Buyer, or the consummation by Buyer of the transactions contemplated hereby, except, with respect to this Agreement, any filings under the Securities Act or the Exchange Act.

 

4.6. SEC Documents; Undisclosed Liabilities; Financial Statements.

 

(a) Buyer has filed with the Securities and Exchange Commission (the " SEC ") all reports, schedules, forms, statements and other documents as required under the Exchange Act and Buyer has delivered or made available to the Company all reports, schedules, forms, statements and other documents filed with the SEC (collectively, and in each case including all exhibits and schedules thereto and documents incorporated by reference therein, the " Buyer SEC Documents "). As of their respective dates, the Buyer SEC Documents complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such Buyer SEC Documents. Except to the extent revised or superseded by a subsequent filing with the SEC, none of the Buyer SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The consolidated financial statements of Buyer included in such Buyer SEC Documents comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with GAAP (except, in the case of unaudited consolidated quarterly statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present the financial position of Buyer as of the dates thereof and the results of operations and changes in cash flows for the periods then ended (subject, in the case of unaudited quarterly statements, to normal year-end audit adjustments as determined by Buyer's independent accountants). Except as set forth in the Buyer SEC Documents, at the date of the most recent financial statements of Buyer included in the Buyer SEC Documents, Buyer has not incurred any liabilities or monetary obligations of any nature (whether accrued, absolute, contingent or otherwise), which, individually, or in the aggregate, could reasonably be expected to have a Material Adverse Effect on Buyer.

 

 
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(b) Except as disclosed in the Buyer SEC Documents filed prior to the date hereof or as set forth in this Agreement, since December 31, 2015 (the " Buyer Balance Sheet Date "), there has been no Material Adverse Effect with respect to Buyer.

 

(c) Except as disclosed in the Buyer SEC Documents filed prior to the date hereof or as provided in this Agreement, since the Buyer Balance Sheet Date, Buyer has not issued, sold or otherwise disposed of, or agreed to issue, sell or otherwise dispose of, any capital stock or any other security of Buyer and, has not granted or agreed to grant any option, warrant or other right to subscribe for or to purchase any capital stock or any other security of Buyer or has incurred or agreed to incur any indebtedness for borrowed money.

 

4.7. Absence of Certain Changes. Except as disclosed in the Buyer SEC Documents filed prior to the date hereof or pursuant to and in accordance with the Asset Purchase Agreement, since the Buyer Balance Sheet Date, Buyer has conducted its business only in the ordinary course consistent with past practice in light of its current business circumstances, and there is not and has not been any:

 

(a) Material Adverse Effect with respect to Buyer;

 

(b) condition, event or occurrence which could reasonably be expected to prevent, hinder or materially delay the ability of Buyer to consummate the Transactions;

 

(c) damage, destruction or loss having, or reasonably expected to have, a Material Adverse Effect on Buyer;

 

(d) other condition, event or occurrence which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect or give rise to a Material Adverse Effect with respect to Buyer;

 

4.8. Certain Fees. No brokerage or finder's fees or commissions are or will be payable by Buyer to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the Transactions.

 

4.9. Litigation; Labor Matters; Compliance with Laws.

 

(a) Except as set forth in the Buyer SEC Documents, there is no suit, action or proceeding or investigation pending or, to the Knowledge of Buyer, threatened against or affecting Buyer or any basis for any such suit, action, proceeding or investigation that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect with respect to Buyer or prevent, hinder or materially delay the ability of Buyer to consummate the Transactions, nor is there any judgment, decree, injunction, rule or Order of any Governmental Entity or arbitrator outstanding against Buyer having, or which, insofar as reasonably could be foreseen by Buyer, in the future could have, any such effect.

 

 
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(b) Buyer is not a party to, or bound by, any collective bargaining agreement, Contract or other agreement or understanding with a labor union or labor organization, nor is it the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it to bargain with any labor organization as to wages or conditions of employment nor is there any strike, work stoppage or other labor dispute involving it pending or, to its Knowledge, threatened, any of which could have a Material Adverse Effect with respect to Buyer.

 

(c) The conduct of the business of Buyer complies with all statutes, Laws, regulations, ordinances, rules, judgments, Orders, decrees or arbitration awards applicable thereto.

 

(d) Neither the Buyer nor to the Buyer's Knowledge, any director or officer thereof, is or has been the subject of any Order involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Buyer, there is not pending or contemplated, any investigation by the SEC involving the Buyer or any current or former director or officer of the Buyer.

 

4.10. Benefit Plans. Buyer is not a party to any Benefit Plan under which Buyer currently has an obligation to provide benefits to any current or former employee, officer or director of Buyer.

 

4.11. Tax Returns and Tax Payments.-

 

(a) Buyer has not filed any Tax Returns required to be filed by it (taking into account all applicable extensions). No claim has ever been made in writing or otherwise addressed to Buyer or any of its Subsidiaries by a taxing authority in a jurisdiction where Buyer does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. Since the Buyer Balance Sheet Date, Buyer has not incurred any liability for Taxes outside the ordinary course of business consistent with past custom and practice. Within 120 days from the date hereof, the Buyer shall have duly filed all material federal, state, and local tax returns and shall have paid all amounts (inclusive of interest and penalties) shown to be due on such returns.

 

(b) No material claim for unpaid Taxes has been made or become a Lien against the property of Buyer or any of its Subsidiaries or is being asserted against Buyer or any of its Subsidiaries, no audit of any Tax Return of Buyer or any of its Subsidiaries is being conducted by a tax authority, and no extension of the statute of limitations on the assessment of any Taxes has been granted by Buyer or any of its Subsidiaries and is currently in effect. Buyer has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party.

 

4.12. Environmental Matters. Buyer and each of its Subsidiaries is in compliance with all requisite Environmental Laws in all material respects. Neither Buyer nor any of its Subsidiaries has received any written notice regarding any violation of any Environmental Laws, including any investigatory, remedial or corrective obligations, which, if determined adversely to Buyer or any of its Subsidiaries, would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. Buyer and each its Subsidiaries holds all Permits and authorizations required under applicable Environmental Laws, unless the failure to hold such Permits and authorizations would not have a Material Adverse Effect on Buyer, and is compliance with all terms, conditions and provisions of all such Permits and authorizations in all material respects. No releases of Hazardous Materials have occurred at, from, in, to, on or under any real property currently or formerly owned, operated or leased by Buyer or any of its Subsidiaries or any predecessor thereof and no Hazardous Materials are present in, on, about or migrating to or from any such property which could result in any liability to Buyer or any of its Subsidiaries. Neither Buyer nor any of its Subsidiaries has transported or arranged for the treatment, storage, handling, disposal, or transportation of any Hazardous Material to any off-site location which could result in any liability to Buyer or any of its Subsidiaries. Neither Buyer nor any of its Subsidiaries has any liability, absolute or contingent, under any Environmental Law that if enforced or collected would have a Material Adverse Effect on Buyer or any of its Subsidiaries. There are no past, pending or threatened claims under Environmental Laws against Buyer or any of its Subsidiaries and neither Buyer nor any of its Subsidiaries is aware of any facts or circumstances that could reasonably be expected to result in a liability or claim against Buyer or any of its Subsidiaries pursuant to Environmental Laws.

 

 
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4.13. Properties. Buyer and each its Subsidiaries has valid land use rights for all real property that is material to its business and good, clear and marketable title to all the tangible properties and tangible Assets reflected in the latest balance sheet as being owned by Buyer or acquired after the date thereof which are, individually or in the aggregate, material to Buyer's business (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all Material Liens, encumbrances, claims, security interest, options and restrictions of any nature whatsoever. Any real property and facilities held under lease by Buyer or its Subsidiaries are held by them under valid, subsisting and enforceable leases of which Buyer and each of its Subsidiaries is in compliance, except as could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 

4.14. Intellectual Property. Except as set forth in the Buyer SEC Documents, Buyer and each of its Subsidiaries owns or has valid rights to use the Trademarks, trade names, domain names, copyrights, patents, logos, licenses and computer software programs (including, without limitation, the source codes thereto) that are necessary for the conduct of its business as now being conducted. All of Buyer's and its Subsidiaries' licenses to use Software programs are current and have been paid for the appropriate number of users. To the Knowledge of Buyer, none of Buyer's or its Subsidiaries' Intellectual Property infringe upon the rights of any third party that may give rise to a cause of action or claim against Buyer or each of its successors.

 

4.15. Board Determination. The Board of Directors of Buyer has unanimously determined as of the Closing Date that the terms of the Transactions are fair to and in the best interests of Buyer and its stockholders.

 

4.16. Due Authorization. Buyer represents that the issuance of the Exchange Consideration will be in compliance with the Nevada General Corporation Law and the Certificate of Incorporation and Bylaws of Buyer. The Exchange Consideration has been duly and validly authorized and, upon issuance in accordance with this Agreement, will be duly issued, fully paid and non-assessable and free (and not issued or sold in violation) of statutory and contractual preemptive rights, resale rights, rights of first refusal and similar rights, taxes, claims, liens, charges, encumbrances or other restrictions (other than as provided herein and restrictions under federal and applicable state securities laws).

 

4.17. Full Disclosure. All of the representations and warranties made by Buyer in this Agreement, including the Buyer Disclosure Schedules attached hereto, and all statements set forth in the certificates delivered by Buyer at the Closing pursuant to this Agreement, are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such representations, warranties or statements, in light of the circumstances under which they were made, misleading. The copies of all documents furnished by Buyer pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether in written or electronic form, to the Company or its representatives by or on behalf of Buyer or their Affiliates in connection with the negotiation of this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.

 

 
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ARTICLE 5

COVENANTS OF THE COMPANY AND SHAREHOLDER

 

5.1. Conduct of the Company Business. From the date of this Agreement and until the Closing Date, or until the prior termination of this Agreement, the Company shall not, unless agreed to in writing by Buyer:

 

(a) engage in any transaction, except in the normal and ordinary course of business, or create or suffer to exist any lien or other encumbrance upon any of its assets or which will not be discharged in full prior to the Closing Date;

 

(b) sell, assign or otherwise transfer any of its assets, or cancel or compromise any debts or claims relating to its assets, other than for fair value, in the ordinary course of business, and consistent with past practice;

 

(c) fail to use reasonable efforts to preserve intact its present business organizations, keep available the services of its employees and preserve its material relationships with customers, suppliers, licensors, licensees, distributors and others, to the end that its good will and ongoing business not be impaired prior to the Closing Date;

 

(d) intentionally permit any Material Adverse Effect to occur with respect to the Company;

 

(e) make any material change in its accounting or bookkeeping methods, principles or practices, except as required by GAAP; or

 

(f) authorize any, or commit or agree to take any of, the foregoing actions.

 

5.2. Satisfaction of Conditions Precedent. From and after the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, the Company will use its commercially reasonable efforts to satisfy or cause to be satisfied all the conditions precedent that are set forth in Article 8, and the Company will use its commercially reasonable efforts to cause the Transactions to be consummated.

 

5.3. No Other Negotiations. As of the date of this Agreement, the Company or the Shareholder have not entered into any agreement or understanding with, and is not engaging in any discussions with any third party concerning an Alternative Acquisition including, without limitation, any agreement or understanding that would require the Company to notify any third party of the terms of this Agreement. From and after the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, the Company shall not, directly or indirectly, (a) initiate, solicit, encourage, negotiate, accept or discuss any transaction or series of transactions with any Person, other than Buyer and its Affiliates involving any Alternative Acquisition, (b) provide information with respect to the Company to any Person, other than Buyer and its Affiliates, relating to a possible Alternative Acquisition by any Person, other than Buyer and its Affiliates, (c) enter into an agreement with any Person, other than Buyer and its Affiliates, providing for a possible Alternative Acquisition, or (d) make or authorize any statement, recommendation or solicitation in support of any possible Alternative Acquisition by any Person, other than by Buyer and its Affiliates.

 

 
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If the Company or the Shareholder receives any unsolicited offer, inquiry or proposal to enter into discussions or negotiations relating to an Alternative Acquisition, or that could reasonably expected to lead to an Alternative Acquisition, or any request for nonpublic information relating to the Company, the Company shall promptly notify Buyer thereof, including information as to the identity of the party making any such offer, inquiry or proposal and the specific terms of such offer, inquiry or proposal, as the case may be, and shall keep Buyer promptly informed of any developments with respect to same.

 

5.4. Access. The Company shall afford to Buyer, and to the officers, employees, accountants, counsel, financial advisors and other representatives of Buyer, reasonable access during normal business hours during the period prior to the Closing Date or the termination of this Agreement to all of the Company's properties, books, contracts, commitments, personnel and records and, during such period, the Company shall furnish promptly to Buyer, (a) a copy of each report, schedule, and other documents filed by it during such period pursuant to the requirements of federal or state securities Laws and (b) all other information concerning its business, properties and personnel as Buyer or its representatives may reasonably request.

 

5.5. Notification of Certain Matters. The Company shall give prompt notice to Buyer of (i) the occurrence or non-occurrence of any event the occurrence or non-occurrence of which would cause any Company representation or warranty contained in this Agreement to be untrue or inaccurate at or prior to the Closing Date and (ii) any failure of the Company to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 5.5 shall not limit or otherwise affect the remedies available hereunder to Buyer.

 

5.6. Director Appointments . As of the Closing Date, the Company shall have taken all actions to cause (a) the persons set forth on Schedule 5.6 to be appointed the Company's directors and officers and (b) the current officers and directors of the Company as set forth on Schedule 6.4 to resign from the Company.

 

5.7. Appointment of Directors to the Buyer's Board . As of the Closing Date, Buyer shall take all actions to cause the persons set forth on Schedule 5.7 designated by Shareholder to be appointed to Buyer's board of directors.

 

5.8 Developed IP . Except for a trademark filing due May 14, 2016 (including any fees required thereunder), the obligation to develop and maintain current patents, future patents and patent applications and the prosecution thereof for the assets of the Company after the date of this Agreement shall be the responsibility of Buyer provided all such filings shall have been reasonably completed and paid for on or prior to the Closing Date and provided further that all newly filed, patents, patent improvements and patent claims expansion will be paid for in cash by the Shareholder on two days' notice from the Buyer to the Shareholder.

 

 
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ARTICLE 6

COVENANTS OF THE BUYER

 

6.1. Conduct of the Buyer Business. From the date of this Agreement and until the Closing Date, or until the prior termination of this Agreement, Buyer shall not, unless agreed to in writing by the Company:

 

(a) except for the Asset Purchase Agreement , engage in any transaction, except in the normal and ordinary course of business, or create or suffer to exist any lien or other encumbrance upon any of its assets or which will not be discharged in full prior to the Closing Date;

 

(b) sell, assign or otherwise transfer any of its assets, or cancel or compromise any debts or claims relating to its assets, other than for fair value, in the ordinary course of business, and consistent with past practice;

 

(c) fail to use reasonable efforts to preserve intact its present business organizations, keep available the services of its employees and preserve its material relationships with customers, suppliers, licensors, licensees, distributors and others, to the end that its good will and ongoing business not be impaired prior to the Closing Date;

 

(d) intentionally permit any Material Adverse Effect to occur with respect to the Buyer;

 

(e) make any material change with respect in its accounting or bookkeeping methods, principles or practices, except as required by GAAP; or

 

(f) authorize any, or commit or agree to take any of, the foregoing actions.

 

6.2. Access. Buyer shall afford to the Company and the Shareholder, and to the officers, employees, accountants, counsel, financial advisors and other representatives of the Company and the Shareholder, reasonable access during normal business hours during the period prior to the Closing Date or the termination of this Agreement to all of the Buyer's properties, books, contracts, commitments, personnel and records and, during such period, the Buyer shall furnish promptly to the Company, (a) a copy of each report, schedule, registration statements and other documents filed by it during such period pursuant to the requirements of federal or state securities Laws and (b) all other information concerning its business, properties and personnel as the Company or its representatives may reasonably request.

 

 
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6.3. Notification of Certain Matters. Buyer shall give prompt notice to the Company of (i) the occurrence or non-occurrence of any event the occurrence or non-occurrence of which would cause any Buyer representation or warranty contained in this Agreement to be untrue or inaccurate at or prior to the Closing Date and (ii) any failure of Buyer to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 6.3 shall not limit or otherwise affect the remedies available hereunder to the Company.

 

6.4. Director and Officer Appointments. As of the Closing Date, Buyer shall have taken all action to cause (a) the persons as set forth on Schedule 6.4 to be appointed Buyer's directors and officers, and (b) the current officers and directors of the Company as set forth on Schedule 6.4 to resign from the Company.

 

6.5. Satisfaction of Conditions Precedent. During the term of this Agreement, Buyer will use its commercially reasonable efforts to satisfy or cause to be satisfied all the conditions precedent that are set forth in Article 8, and Buyer will use its commercially reasonable efforts to cause the Transactions to be consummated.

 

6.6. Delivery of Certificates for Exchange Consideration . Within 5 business days of the Closing, the Buyer shall deliver or cause to be delivered to the Shareholder certificates for the exchange Consideration.

 

ARTICLE 7

COVENANTS OF BUYER, THE SHAREHOLDER AND THE COMPANY

 

7.1. Notices of Certain Events. The Company and Buyer shall promptly notify each party of:

 

(a) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the Transactions;

 

(b) any notice or other communication from any Governmental Entity in connection with the Transactions; and

 

(c) any actions, suits, claims, investigations or proceedings commenced or, to its Knowledge, threatened against, relating to or involving or otherwise affecting such party that, if pending on the date of this Agreement, would have been required to be disclosed pursuant to Articles 3 or 4 or that relate to the consummation of the Transactions or any other development causing a breach of any representation or warranty made by a party hereunder. Delivery of notice pursuant to this Section 7.1 shall not limit or otherwise affect remedies available to any party hereunder.

 

 
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7.2. Public Announcements. No party shall have the right to issue any press release or other public statement with respect to this Agreement or the transactions contemplated herein without the prior written consent of each other party (not to be unreasonably withheld, delayed, denied or conditioned), except as required by Law.

 

7.3. Transfer Taxes. Buyer and the Company shall cooperate in the preparation, execution and filing of all returns, questionnaires, applications or other documents regarding any real property transfer or gains, sales, use, transfer, value added, stock transfer and stamp taxes, any transfer, recording, registration and other fees, and any similar taxes which become payable in connection with the transactions contemplated hereby that are required or permitted to be filed on or before the Closing Date. Buyer and the Company agree that the Company will pay any real property, transfer or gains tax, stamp tax, stock transfer tax, or other similar tax imposed on the Transactions or the surrender of the Shares pursuant thereto (collectively, " Transfer Taxes "), excluding any Transfer Taxes as may result from the transfer of beneficial interests in the Shares other than as a result of the transactions contemplated under this Agreement, and any penalties or interest with respect to the Transfer Taxes. The Company agrees to cooperate with Buyer in the filing of any returns with respect to the Transfer Taxes.

 

7.4. Reasonable Efforts. Without derogating from Section 10.16 below, the parties further agree to use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, and to satisfy all conditions to, in the most expeditious manner practicable, the Transactions, including (i) the obtaining of all other necessary actions or nonactions, waivers, consents, licenses, Permits, authorizations, Orders and approvals from Governmental Entities and the making of all other necessary registrations and filings, (ii) the obtaining of all consents, approvals or waivers from third parties related to or required in connection with the Transactions or required to prevent a Material Adverse Effect on the Company from occurring prior to or after the Closing Date, (iii) the satisfaction of all conditions precedent to the parties' obligations hereunder, and (iv) the execution and delivery of any additional instruments necessary to consummate the Transactions contemplated by, and to fully carry out the purposes of, this Agreement.

 

7.5. Fees and Expenses. Each party will be responsible for all of the legal, accounting and other expenses incurred by such party hereto in connection with the Transactions.

 

7.6. Regulatory Matters and Approvals. Each of the Shareholder, the Company and the Buyer will give any notices to, make any filings with, and use its commercially reasonable efforts to obtain any authorizations, consents, and approvals of governments and governmental agencies in connection with the matters referred to in Sections 2.3(i), 3.5 and 4.5 above, respectively.

 

7.7. Transfer Restrictions.

 

(a) The Company and the Shareholder each realize that the Exchange Consideration is not registered under the Securities Act, or any foreign or state securities Laws. The Company and the Shareholder agree that the Exchange Consideration will and may not be sold, offered for sale, pledged, hypothecated, or otherwise transferred (collectively, a " Transfer ") except in compliance with the Securities Act, if applicable, and applicable foreign and state securities Laws, and with an opinion of transferor's counsel or Buyer's counsel to such effect, the substance of which shall be reasonably acceptable to the Buyer and Buyer's transfer agent, provided that the Exchange Consideration may be pledged in connection with a bona fide margin account secured by such securities and released to Secured Parties in accordance with the terms of the Escrow Agreement. The Company and the Shareholder understand that the Exchange Consideration can only be Transferred pursuant to registration under the Securities Act or pursuant to an exemption therefrom. The Company and the Shareholder understand that to Transfer the Exchange Consideration may require in some jurisdictions specific approval by the appropriate governmental agency or commission in such jurisdiction.

 

 
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(b) To enable Buyer to enforce the transfer restrictions contained in Section 7.7(a), the Company and the Shareholder hereby consents to the placing of legally required legends upon, and stop-transfer orders with the transfer agent of the Common Stock with respect to the Exchange Consideration, including, without limitation, the following:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

 

7.8. Current Report. Buyer shall file a Current Report on Form 8-K with the SEC within four (4) business days of the Closing Date containing information about the Transactions (the " 8-K Report "). The Company and the Shareholder agree to provide any necessary information for preparation of 8-K Report, including any financial statements required to be included in any amended 8-K Report as set forth in Section 8.2(f) below.

 

7.9. Variable Rate Transaction . Buyer agrees that so long as the Shareholder holds Buyer Shares, Buyer shall not without consent of the one of the designees of Shareholder appointed pursuant to Section 6.4 of this Agreement (such consent not to be unreasonably withheld or delayed) , effect or enter into an agreement to effect any issuance of any of its Common Stock or any Common Stock Equivalent involving a Variable Rate Transaction. " Variable Rate Transaction " means a transaction in which Buyer (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of Buyer or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby Buyer may issue securities at a future determined price.

 

7.10. Agreement regarding Arrayit Corporation. On or prior to June 30, 2016, the Buyer and the Shareholder hall have reached an agreement with Arrayit Corporation (" Arrayit ") regarding OvaDx technology transfer, share ownership and restrictions on sales or transfer of shares of the Buyer Common Stock held, which could result in, among other things, (i) the cancellation of all agreements with Arrayit including, but not limited to, the Technology Assignment Agreement, dated July 18, 2009, share exchange agreement (ii) entry into a lockup agreement for all shares of Buyer Common Stock held by Arrayit and/or (iii) any such other agreements as the parties may agree upon on or after the Closing.

 

 
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7.11. Make-Whole Shares . At the end of the Lock-Up Period, in the event that the Buyer Common Stock issuable to Shareholder in accordance to this Agreement has a value equal to or less than $3,000,000 in the aggregate on the date the Lock-Up Period expires (based on the average closing "print' prices at 4:00 p.m. of the Buyer's Common Stock on the last five days prior to the date the Lock-Up Period expires as listed or quoted on any national securities exchange or over-the-counter market (including any tier maintained by the OTC Markets, Inc.), as the case may be (the " Lock-Up Termination Date Closing Price ") multiplied by the Initial Consideration) (the " Lock-Up Termination Date "), the Buyer shall issue Shareholder such number of additional shares of Buyer Common Stock (" Additional Buyer Common Stock ") equal to the lesser of (i) 9.99% of the outstanding shares of the Buyer's Common Stock (as confirmed by the Buyer's transfer agent) as of the Lock-Up Termination Date or (ii) the difference between $3,000,000 and the value of the Initial Consideration as of the Lock-Up Termination Date divided by the Lock-Up Termination Date Closing Price. Notwithstanding the foregoing, in lieu of issuance any Additional Buyer Common Stock in accordance with this Section, he Buyer may, in its sole discretion, pay to the Shareholder an amount in cash equal to the aggregate value of the Additional Buyer Common Stock to be issued in accordance with this Section (" Cash True-Up ").

 

7.12. Voting of Additional Buyer Common Stock . So long as the Shareholder hold any shares of Additional Buyer Common Stock, at any meeting of the stockholders of Buyer or any written action by consent of stockholders of the Company called for any matter, unless otherwise directed in writing by the Buyer, Shareholder shall vote or shall cause to be voted any issued and outstanding shares of Additional Buyer Common Stock owned by Shareholder as of the record date with respect to such meeting or consent as requested by the Buyer's chief executive officer. If Shareholder fails to comply with the provisions of this Section, Shareholder agrees that such failure shall result, without any further action by such Shareholder and effective as of the date of any such failure, in the appointment of the Buyer and each of its executive officers, from and after the date of determination of such failure until the Shareholder no longer holds any shares of Additional Buyer Common Stock, as Shareholder's attorney, agent and proxy, with full power of substitution, to vote and otherwise act with respect to all of the Additional Buyer Common Stock, at any meeting of the stockholders of the Company called and in any action by consent of the stockholders of the Company with respect to any matters. This power of attorney and proxy is irrevocable and coupled with an interest. Shareholder shall not enter into any tender, voting or other agreement, or grant a proxy or power of attorney, with respect to the Additional Buyer Common Stock that is inconsistent with this Section or otherwise take any other action with respect to the Additional Buyer Common Stock that would in any way restrict, limit or interfere with the performance of Shareholder's obligations hereunder or the transactions contemplated hereby.

 

ARTICLE 8

CONDITIONS TO CLOSING

 

8.1. Condition to Obligation of Each Party to Effect the Transactions. The respective obligations of Buyer, each Shareholder and the Company to consummate the transactions contemplated herein are subject to the satisfaction or waiver in writing at or prior to the Closing Date of the following conditions.

 

(a) No Injunctions . No temporary restraining Order, preliminary or permanent injunction issued by any court of competent jurisdiction preventing or prohibiting the consummation of the Transactions contemplated herein shall be in effect; provided, however, that each of Buyer and the Company shall have used its commercially reasonable efforts to prevent the entry of such Orders or injunctions and to appeal as promptly as possible any such Orders or injunctions and to appeal as promptly as possible any such Orders or injunctions that may be entered.

 

 
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(b) Stockholder Representation Letters . Shareholder shall have executed and delivered to Buyer and Company a stockholder representation letter in substantially the form attached hereto as Exhibit C , and Buyer and Company shall be reasonably satisfied that the issuance of Buyer Common Stock pursuant to the Transactions is exempt from the registration requirements of the Securities Act.

 

(c) Company Assets . As of the Closing Date, the Company shall have all right title and interest free and clear of any Liens.

 

(d) Lock Up Agreement. As of the Closing Date, the Buyer's chief executive officer and the Shareholder shall have entered into a lockup agreement in the form which is attached as Exhibit D to this Agreement .

 

8.2. Additional Conditions to Obligations of Buyer. The obligations of Buyer to consummate the Transactions are also subject to the satisfaction or waiver in writing at or prior to the Closing Date of the following conditions.

 

(a) Representations and Warranties . The representations and warranties of the Company and each Shareholder contained in this Agreement and in any certificate or other writing delivered to Buyer pursuant hereto shall be true and correct on and as of the Closing Date with the same force and effect as if made on and as of the Closing Date, and Buyer shall have received a certificate to such effect signed by the President and the Chief Executive Officer of the Company.

 

(b) Agreements and Covenants . The Company and each Shareholder shall have performed or complied with all agreements and covenants required by this Agreement to be performed or complied with by them on or prior to the Closing Date, and Buyer shall have received a certificate to such effect signed by the President and Chief Executive Officer of the Company.

 

(c) Certificate of Secretary . The Company and the Shareholder shall have delivered to Buyer a certificate executed by the Secretary of the Company certifying: (i) resolutions duly adopted by the Board of Directors of the Company and the Shareholder, as the case may be, authorizing this Agreement and the Transactions; (ii) the Company Charter Documents as in effect immediately prior to the Closing Date, including all amendments thereto; and (iii) the incumbency of the officers of the Company executing this Agreement and all agreements and documents contemplated hereby.

 

(d) Consents Obtained . All consents, waivers, approvals, authorizations or Orders required to be obtained, and all filings required to be made, by the Company for the authorization, execution and delivery of this Agreement and the consummation by it of the transactions contemplated hereby shall have been obtained and made by the Company, except for such consents, waivers, approvals, authorizations and Orders, and such filings, which would not be reasonably likely to have a Material Adverse Effect on the Company.

 

 
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(e) Absence of Material Adverse Effect . Since the date of this Agreement, there shall not have been any Material Adverse Effect on the Company other than any change that shall result from general economic conditions or conditions generally affecting the industry in which the Company conducts operations.

 

(f) Company Post-Closing Financial Statements . Within sixty (60) days following the Closing, the Company shall deliver to the Buyer the Financial Statements (as defined below) required for the amended 8-K Report and in compliance with applicable SEC rules and regulations, which include all notes and schedules attached thereto), all of which are true, complete and correct, have been prepared from the books and records of the Company in accordance with GAAP consistently applied with past practice and fairly present the financial condition, assets, liabilities and results of operations of the Company as of the dates thereof and for the periods covered thereby as well as any pro-forma financial statements required in accordance with any rule or regulation promulgated with the SEC in form and content required to be included in the amended 8-K Report. "Financial Statements" shall mean (i) the audited financial statements of the Company for the fiscal years ended December 31, 2015 and 2014, and (ii) the unaudited financial statements of the Company as of March 31, 2016, or any other financial statements required under the rules and regulations promulgated by the SEC. The Shareholder shall be solely responsible for the costs associated with the preparation and the audit of the Financial Statements to be delivered in accordance with this Section. If the Buyer shall be required to pay for any of the costs associated with the preparation and audit of the Financial Statements set forth in this Section, such amount(s) shall be entitled to a right of setoff against the Notes in accordance with Section 10.16 of this Agreement.

 

(g) Delivery of Stock Certificates. Shareholder shall have delivered to the Buyer (i) certificates representing the Shares, together with a stock power in blank for the transfer of the Shares to the Buyer or (ii) such other proof of ownership as shall be reasonably acceptable to the Buyer and Secured Parties;

 

(h) Intentionally Omitted.

 

(i) Funding of Additional Promissory Note. On or prior to the Closing Date, the Shareholder shall provide Buyer with $50,000 evidenced by a promissory note due one (1) year from the date of issuance, substantially in the form attached hereto as Exhibit E .

 

(j) Additional Deliveries . The Company and Shareholder will have delivered to the Buyer, on or prior to the Closing Date, (i) such pay-off letters and releases relating to liabilities as the Company may reasonably request to confirm that Buyer has no liabilities, (ii) a good standing certificates for Buyer from the State of Delaware, dated within 5 days of the Closing Date, and (iii) such other documents as the Buyer may reasonably request.

 

 
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8.3. Additional Conditions to Obligations of the Company and the Shareholder. The obligations of the Company and each Shareholder to consummate the Transactions are also subject to the satisfaction or waiver in writing at or prior to the Closing Date of the following conditions.

 

(a) Representations and Warranties . The representations and warranties of Buyer contained in this Agreement and in any certificate or other writing delivered to the Company pursuant hereto shall be true and correct on and as of the Closing Date with the same force and effect as if made on and as of the Closing Date, and the Company shall have received a certificate to such effect signed by the President and the Chief Executive Officer of Buyer.

 

(b) Agreements and Covenants . Buyer shall have performed or complied with all agreements and covenants required by this Agreement to be performed or complied with by them on or prior to the Closing Date, and the Company shall have received a certificate to such effect signed by the President and Chief Executive Officer of Buyer.

 

(c) Certificate of Secretary . Buyer shall have delivered to the Company a certificate executed by the Secretary of Buyer certifying: (i) resolutions duly adopted by the Board of Directors of Buyer authorizing this Agreement and the Transactions ( (ii) the Certificate of Incorporation and Bylaws of Buyer as in effect immediately prior to the Closing Date, including all amendments thereto; and (iii) the incumbency of the officers of Buyer executing this Agreement and all agreements and documents contemplated hereby.

 

(d) Consents Obtained . All consents, waivers, approvals, authorizations or Orders required to be obtained, and all filings required to be made, by Buyer for the authorization, execution and delivery of this Agreement and the consummation by it of the transactions contemplated hereby shall have been obtained and made by Buyer, except for such consents, waivers, approvals, authorizations and Orders, and such filings, which would not be reasonably likely to have a Material Adverse Effect on Buyer.

 

(e) Absence of Material Adverse Effect . Since the date of the this Agreement, there shall not have been any Material Adverse Effect on Buyer, other than any change that shall result from general economic conditions or conditions generally affecting the industry in which Buyer conducts operations.

 

(f) Common Stock . As of the Closing Date, the Buyer Common Stock shall be quoted on the OTC QB.

 

(g) Exchange Act Reporting . Buyer will have made all required filings with the SEC under the Exchange Act, and such filings will have complied in all material respects with applicable requirements under the Exchange Act.

 

 
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ARTICLE 9

TERMINATION; SURVIVAL; INDEMNIFICATION

 

9.1. Termination. This Agreement may be terminated at any time prior to the Closing Date:

 

(a) by mutual written agreement of the Company and Buyer duly authorized by the Boards of Directors of the Company and Buyer;

 

(b) by either the Company or Buyer, if the other party (which, in the case of Company, shall mean Company or any Shareholder) has breached any representation, warranty, covenant or agreement of such other party set forth in this Agreement and such breach has resulted or can reasonably be expected to result in a Material Adverse Effect on such other party or would prevent or materially delay the consummation of the Transactions;

 

(c) by any party, if all the conditions to the obligations of such party for Closing the Transactions shall not have been satisfied or waived on or before the Final Date (as defined below) other than as a result of a breach of this Agreement by the terminating party; or

 

(d) by any party, if a permanent injunction or other Order by any Federal or state court which would make illegal or otherwise restrain or prohibit the consummation of the Transactions shall have been issued and shall have become final and nonappealable.

 

As used herein, the " Final Date " shall be June 30, 2016.

 

9.2. Notice of Termination. Any termination of this Agreement under Section 9.1 above will be effective immediately upon by the delivery of written notice of the terminating party to the other parties hereto specifying with reasonable particularity the reason for such termination.

 

9.3. Effect of Termination. In the case of any termination of this Agreement as provided in this Section 9, this Agreement shall be of no further force and effect and nothing herein shall relieve any party from liability for any breach of this Agreement.

 

9.4. Survival of Provisions . The respective representations, warranties, covenants and agreements of each of the parties to this Agreement (except covenants and agreements which are expressly required to be performed and are performed in full on or before the Closing Date) shall (except as to the Secured Parties, which representations, warranties, covenants and agreements, including, without limitation, Secured Parties' right to shall run for the duration of the applicable statutes of limitation) expire on the last day of the third-year anniversary of the Closing Date (the " Survival Period "). The right to indemnification, payment of damages or other remedy based on such representations, warranties, covenants, and obligations will not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation. The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification, payment of damages, or other remedy based on such representations, warranties, covenants, and obligations.

 

 
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9.5. Indemnification .

 

(a)  Indemnification in favor of the Buyer . From and after the Closing Date until the expiration of the Survival Period (or in the case of any tax related matter until the running of the applicable statute of limitations), the Company and the Shareholder will, severally and jointly, indemnify and hold harmless the Buyer and its officers, directors, agents, attorneys and employees, and each person, if any, who controls or may "control" (within the meaning of the Securities Act) any of the forgoing persons or entities (hereinafter referred to individually as a " Buyer Indemnified Person ") from and against any and all losses, costs, damages, liabilities and expenses arising from claims, demands, actions, causes of action, including, without limitation, legal fees, (collectively, " Damages ") arising out of any (i) any breach of representation or warranty made by Company or the Shareholder in this Agreement, and in any certificate delivered by the Company or the Shareholder pursuant to this Agreement, (ii) any breach by the Company or the Shareholder of any covenant, obligation or other agreement made by the Company or the Shareholder in this Agreement, and (iii) a third-party claim based on any acts or omissions by the Company or the Shareholder. No claim for indemnification may be brought under this Section unless all claims for indemnification, in the aggregate, total more than $50,000. In no event shall any such indemnification payments exceed the value of the Exchange Consideration as of the Closing Date.

 

(b) Indemnification in favor of the Company and Shareholder . From and after the Closing Date until the expiration of the Survival Period (or in the case of any tax related matter until the running of the applicable statute of limitations), the Buyer will indemnify and hold harmless the Company and the Shareholder and its respective officers, directors, agents, attorneys and employees, and each person, if any, who controls or may "control" (within the meaning of the Securities Act) any of the forgoing persons or entities (hereinafter referred to individually as a " Company Indemnified Person ") from and against any and all Damages arising out of any (i) any breach of representation or warranty made by the Buyer in this Agreement, and in any certificate delivered by the Buyer pursuant to this Agreement, including, but not limited to, any liability of the Company not expressly included on Schedule 3.19 hereto or any other liability of the Company which shall be assumed by the Buyer after the Closing Date, (ii) any breach by the Buyer of any covenant, obligation or other agreement made by the Buyer in this Agreement, and (iii) a third-party claim based on any acts or omissions by the Buyer. No claim for indemnification may be brought under this Section unless all claims for indemnification, in the aggregate, total more than $50,000. In no event shall any such indemnification payments exceed the value of the Exchange Consideration as of the Closing Date.

 

(c) From and after the Closing Date until the expiration of the applicable statute of limitations), the Buyer will indemnify and hold harmless the Secured Parties and their respective officers, directors, agents, attorneys and employees, and each person, if any, who controls or may "control" (within the meaning of the Securities Act) any of the forgoing persons or entities (hereinafter referred to individually as a " Secured Parties Indemnified Person ") from and against any and all Damages arising out of any (i) any breach of representation or warranty made by the Buyer in this Agreement and in any certificate delivered by the Buyer pursuant to this Agreement relative to taxes and tax returns, (ii) any breach by the Buyer of any covenant, obligation or other agreement made by the Buyer in this Agreement relative to taxes and tax returns, and (iii) a third-party claim based on any acts or omissions by the Buyer relative to taxes and tax returns.

 

 
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(d) If any action will be brought against any party in respect of which indemnity may be sought pursuant to this Agreement (the " Indemnified Party "), such Indemnified Party will promptly notify the party from whom indemnity is being sought (the " Indemnifying Party ") in writing, and the Indemnifying Party will have the right to assume the defense thereof with counsel of its own choosing. Any Indemnified Party will have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel will be at the expense of such Indemnified Party except to the extent that the employment thereof has been specifically authorized by the Indemnifying Party in writing, the Indemnifying Party has failed after a reasonable period of time to assume such defense and to employ counsel or in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of the Indemnifying Party and the position of such Indemnified Party. The Indemnifying Party will not be liable to any Indemnified Party under this Section for any settlement by an Indemnified Party effected without the Indemnifying Party's prior written consent, which consent will not be unreasonably withheld or delayed; or to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Indemnified Party's indemnification pursuant to this Section.

 

ARTICLE 10

GENERAL PROVISIONS

 

10.1. Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified; (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) two days after deposit with a nationally recognized overnight courier, specifying not later than two day delivery, with written verification of receipt. All communications shall be sent to the parties at the following addresses or facsimile numbers specified below (or at such other address or facsimile number for a party as shall be designated by ten days advance written notice to the other parties hereto):

 

(a)

If to Buyer:

 

Avant Diagnostics, Inc.

8561 East Anderson Drive

Suite 104

Scottsdale, AZ 85225

Fax:

Attention: Gregg Linn

 

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

 

Sichenzia Ross Friedman Ference LLP

61 Broadway

New York, New York 10006

Attn: Gregory Sichenzia, Esq.

Fax: (212) 930-9725

 

 
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(b)

If to the Company or Shareholder:

 

Amarantus Diagnostics Inc.

655 Montgomery Street, Suite 900 

San Francisco, CA 94111 

Fax: (408) 852-4427+ 

Attention: Gerald E. Commissiong

 

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

 

Sichenzia Ross Friedman Ference LLP

61 Broadway

New York, New York 10006 

Attn: Jeffrey J. Fessler, Esq. 

Fax: (212) 930-9725

 
(c)

If to the Secured Parties:

 

Delafield Investments Limited

c/o Magna Group  

40 Wall Street

New York, NY 10004

Attention: Marc Manuel

Telephone Number: (347) 491-4240

Fax: (646) 737-9948

Email: research@mag.na

 

With copies to (which shall not constitute notice):

 

Robinson Brog Leinwand Greene Genovese & Gluck P.C.

875 Third Avenue, 9 th Floor

New York, New York 10022

Attention: David E. Danovitch, Esq.

Phone: (212) 603-6391

Fax No.: (212) 956-2164

Email: ded@robinsonbrog.com

 

 
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10.2. Amendment. To the extent permitted by Law, this Agreement may be amended by a subsequent writing signed by each of the parties.

 

10.3. Waiver. At any time prior to the Closing, any party hereto may with respect to any other party hereto (a) extend the time for performance of any of the obligations or other acts, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto, or (c) waive compliance with any of the agreements or conditions contained herein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby.

 

10.4. Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the part of any party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor shall any single or partial exercise of any such right preclude other or further exercise thereof or of any other rights. Except as otherwise provided hereunder, all rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

10.5. Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

10.6. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any 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 transactions contemplated hereby 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 hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible, in a mutually acceptable manner, to the end that transactions contemplated hereby are fulfilled to the extent possible.

 

10.7. Entire Agreement. This Agreement (including the Company Disclosure Schedule and the Buyer Disclosure Schedule together with the Transaction Documents and the exhibits and schedules attached hereto and thereto and the certificates referenced herein) constitutes the entire agreement and supersedes all prior agreements and undertakings both oral and written, among the parties, or any of them, with respect to the subject matter hereof and, except as otherwise expressly provided herein.

 

10.8. Assignment. No party may assign this Agreement or assign its respective rights or delegate their duties (by operation of Law or otherwise), without the prior written consent of the other parties, provided however the parties may assign this agreement to an Affiliate or successor-in-interest to all or substantially all of such respective party's business provided such party agrees to be bound by the terms and conditions of this Agreement. This Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

 

 
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10.9. Parties In Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto and their permitted assigns and respective successors, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, including, without limitation, by way of subrogation.

 

10.10. Governing Law. This Agreement will be governed by, and construed and enforced in accordance with the Laws of the State of New York as applied to Contracts that are executed and performed in New York, without regard to the principles of conflicts of Law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the Transactions and any other Transaction Documents shall be commenced exclusively in the state and federal courts sitting in the County of New York.

 

10.11. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement. This Agreement, to the extent delivered by means of a facsimile machine or electronic mail (any such delivery, an " Electronic Delivery "), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other party hereto shall re-execute original forms hereof and deliver them in person to all other parties. No party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense related to lack of authenticity.

 

10.12. Attorneys' Fees. If any action or proceeding relating to this Agreement, or the enforcement of any provision of this Agreement is brought by a party hereto against any party hereto, the prevailing party shall be entitled to recover reasonable attorneys' fees, costs and disbursements (in addition to any other relief to which the prevailing party may be entitled).

 

10.13. Representation. Each party to this Agreement, severally, and not jointly and only as to itself, represents that it: (a) has been represented in connection with the negotiation and preparation of this Agreement by counsel of that party's choosing; (b) has authority to enter into and sign the Agreement; and (c) enters into and signs the same by its own free will.

 

10.14. Interpretation. For purposes of this Agreement, references to the masculine gender shall include feminine and neuter genders and entities. Where a reference in this Agreement is made to a Section, Exhibit or Schedule, such reference shall be to a Section of, Exhibit to or Schedule of this Agreement unless otherwise indicated. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." References to a "party" or "parties" shall mean Buyer, the Company and/or Shareholder, as applicable. The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. References to "this Agreement" shall include the Company Disclosure Schedule and the Buyer Disclosure Schedule.

 

 
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10.15. Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each Shareholder, Buyer and the Company will be entitled to specific performance under this Agreement. Each of the parties hereto agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

 

10.16 . Without limiting any other rights or remedies available to it, Buyer shall, upon mutual agreement in writing between the Company and the Shareholder and Secured Parties pursuant to Section 10.1 , be entitled to set off, for any Assumed Liabilities set forth in Section 3.19 or any Indebtedness assumed or paid by Buyer , as set forth in Section 3.23 hereunder, against payments due and payable to either the Company or the Shareholder under the Notes. Any good faith exercise of Buyer's right, upon mutual consent of the Company and the Shareholder and the Secured Parties, to set off against any amounts assumed or paid by Buyer shall not constitute a breach or an event of default under this Agreement or the Notes, regardless of whether such setoff is later determined to be unjustified or impermissible in arbitration, by a court or otherwise.

 

10.17. Third-party Beneficiaries . Each of the parties acknowledges and agrees that the Secured Parties are intended third party beneficiaries. Except as provided above, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

[ Remainder of Page Intentionally Left Blank; Signature Pages to Follow ]

 

 
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IN WITNESS WHEREOF, each of the parties has executed or caused this Share Exchange Agreement to be executed as of the date first written above.

 

 

Buyer:

AVANT DIAGNOSTICS, INC., a Nevada corporation

By:

/s/ Gregg Linn

Name:

Gregg Linn

Title:

Chief Executive Officer

Company:

AMARANTUS DIAGNOSTICS INC., a Delaware corporation

By:

/s/ Gerald Commissiong

Name:

Gerald Commissiong

Title:

Chief Executive Officer

 

Shareholder:

AMARANTUS BIOSCIENCE HOLDINGS, INC., a Nevada corporation

 
By:

/s/ Gerald Commissiong

Name:

Gerald Commissiong

Title:

Chief Executive Officer

 

 
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EXHIBIT A

 

CERTAIN DEFINITIONS

 

The following terms, as used in the Agreement, have the following meanings:

 

" Accounts Receivable " shall have the meaning set forth in Section 3.15 of the Agreement.

 

" Affiliate(s) " shall have the meaning set forth in Rule 12b-2 of the regulations promulgated under the Exchange Act.

 

" Alternative Acquisition " means any recapitalization, restructuring, financing, merger, consolidation, sale, license or encumbrance or other business combination transaction or extraordinary corporate transaction of the Company or the Buyer (as applicable) which would or could reasonably be expected to impede, interfere with, prevent or materially delay the Transactions, including a firm proposal to make such an acquisition.

 

" Agreement " shall have the meaning set forth in the Preamble.

 

" Assets " of a Person shall mean all of the assets, properties, businesses and rights of such Person of every kind, nature, character and description, whether real, personal or mixed, tangible or intangible, accrued or contingent, or otherwise relating to or utilized in such Person's business, directly or indirectly, in whole or in part, whether or not carried on the books and records of such Person, and whether or not owned in the name of such Person or any Affiliate of such Person and wherever located. Without limiting the foregoing Assets of the Company shall include, but not be limited to all patents, patent applications and know how related to the MSPrecise Ò diagnostic assay, all patents, patent applications and know how related to the LymPro Test Ò diagnostic assay and all patents, patent applications and know how related to the NuroPro Ò diagnostic assays.

 

" Benefit Plans " shall have the meaning set forth in Section 3.10 of the Agreement.

 

" Buyer " shall have the meaning set forth in the Preamble.

 

" Buyer Accounts Receivable " shall have the meaning set forth in Section 4.14 of the Agreement.

 

" Buyer Balance Sheet Date " shall have the meaning set forth in Section 4.6(b) of the Agreement.

 

" Buyer Common Stock " shall have the meaning set forth in Recitals to this Agreement.

 

" Buyer Disclosure Schedule " shall mean the written disclosure schedule delivered on or prior to the date hereof by Buyer to the Company that is arranged in paragraphs corresponding to the numbered and lettered paragraphs corresponding to the numbered and lettered paragraphs contained in the Agreement.

 

" Buyer Material Contract " shall have the meaning set forth in Section 4.13 of the Agreement.

 

 
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" Buyer SEC Documents " shall have the meaning set forth in Section 4.6(a) of the Agreement.

 

" Change of Control " means the occurrence after the date hereof of any of the following: (a) an acquisition after the date hereof by an individual or legal entity or "group" (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Buyer, by contract or otherwise) of in excess of 50% of the voting securities of the Company, (b) the Buyer merges into or consolidates with any other legal entity, or any legal entity merges into or consolidates with the Buyer and, after giving effect to such transaction, the stockholders of the Buyer immediately prior to such transaction own less than 50% of the aggregate voting power of the Buyer or the successor entity of such transaction, or (c) the Company sells or transfers all or substantially all of its assets to another legal entity and the stockholders of the Buyer of the acquiring entity immediately after the transaction.

 

" Closing " shall have the meaning set forth in Section 1.2 of the Agreement.

 

" Closing Date " shall have the meaning set forth in Section 1.2 of the Agreement.

 

" Code " means the Internal Revenue Code of 1986, as amended.

 

" Company " shall have the meaning set forth in the Preamble.

 

" Company Balance Sheet Date " shall have the meaning set forth in Section 3.6(b) of the Agreement.

 

" Company Disclosure Schedule " shall have the meaning set forth in the opening paragraph of Article 3 of the Agreement.

 

" Company Financial Statements " shall have the meaning set forth in Section 3.6(a) of the Agreement.

 

" Company Material Contract " shall have the meaning set forth in Section 3.14 of the Agreement.

 

" Company Stock " means the total outstanding capital stock of the Company as of the Closing Date.

 

" Contract " means any written or oral agreement, arrangement, commitment, contract, indenture, instrument, lease, obligation, plan, restriction, understanding or undertaking of any kind or character, or other document to which any Person is a party or by which such Person is bound or affecting such Person's capital stock, Assets or business.

 

" Copyrights " shall have the meaning set forth in Section 3.17(i) of the Agreement.

 

" Default " means (i) any breach or violation of or default under any Contract, Order or Permit, (ii) any occurrence of any event that with the passage of time or the giving of notice or both would constitute a breach or violation of or default under any Contract, Order or Permit, or (iii) any occurrence of any event that with or without the passage of time or the giving of notice would give rise to a right to terminate or revoke, change the current terms of, or renegotiate, or to accelerate, increase, or impose any liability under, any Contract, Order or Permit.

 

 
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" Electronic Delivery " shall have the meaning set forth in Section 10.11 of the Agreement.

 

" Environmental Laws " mean any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, codes, plans, injunctions, Permits, concessions, grants, franchises, licenses, agreements and governmental restrictions, relating to human health, the environment or to emissions, discharges or releases of pollutants, contaminants or other Hazardous Material or wastes into the environment, including without limitation ambient air, surface water, ground water or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants or other Hazardous Material or wastes or the clean-up or other remediation thereof.

 

" Exchange Act " has the meaning set forth in Section 3.5 of the Agreement.

 

" Exchange Act Documents " has the meaning set forth in Section 3.21 of the Agreement.

 

" Exchange Consideration " shall have the meaning as set forth in Section 1.1 of the Agreement.

 

" Final Date " shall have the meaning set forth in Section 9.1 of the Agreement.

 

" FINRA " means Financial Industry Regulatory Authority, Inc.

 

" GAAP " means U.S. generally accepted accounting principles.

 

" Governmental Entity " shall mean any government or any agency, bureau, board, directorate, commission, court, department, official, political subdivision, tribunal, or other instrumentality of any government, whether federal, state or local, domestic or foreign.

 

" Hazardous Material " means any toxic, radioactive, corrosive or otherwise hazardous substance, including petroleum, its derivatives, by-products and other hydrocarbons, or any substance having any constituent elements displaying any of the foregoing characteristics, which in any event is regulated under any Environmental Law.

 

" Intellectual Property " shall have the meaning as set forth in Section 3.17(i) of the Agreement.

 

" Knowledge " means the actual knowledge of the officers of a party, and knowledge that a reasonable person in such capacity should have after due inquiry.

 

 
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" Law " means any code, law, ordinance, regulation, reporting or licensing requirement, rule, or statute applicable to a Person or its Assets, liabilities or business, including those promulgated, interpreted or enforced by any Governmental Entity.

 

" Lien " means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect to such asset.

 

" Marks " shall have the meaning set forth in Section 3.17(i) of the Agreement.

 

" Material " and " Materially " for purposes of this Agreement shall be determined in light of the facts and circumstances of the matter in question; provided that any specific monetary amount stated in this Agreement shall determine materiality in that instance.

 

" Material Agreement " shall have the meaning set forth in Section 3.13 of the Agreement.

 

" Material Adverse Effect " means, with respect to any Person, a material adverse effect on the condition (financial or otherwise), business, Assets, liabilities or the reported or reasonably anticipated future results or prospects of such Person and its Subsidiaries taken as a whole; to be free from doubt, any breach of any agreement between the Company and/or the Shareholder and the Secured Parties shall be considered a Material Adverse Effect; provided, however, that any adverse change, event, development or effect arising from or relating to any of the following shall not be taken into account in determining whether there has been a Material Adverse Effect: (a) general business or economic conditions, (b) national or international political or social conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States, (c) financial, banking, or securities markets (including any disruption thereof and any decline in the price of any security or any market index), (d) changes in United States generally accepted accounting principles, (e) changes in laws, rules, regulations, orders, or other binding directives issued by any Governmental Entity or (f) the taking of any action required by this Agreement and the other agreements contemplated hereby.

 

" Material Contract Default " means a default under any Material Agreement which would (A) permit any other party to cancel or terminate the same (with or without notice of passage of time) or (B) provide a basis for any other party to claim money damages in excess of $50,000 (either individually or in the aggregate with all other such claims under that Material Agreement) or (C) give rise to a right of acceleration of any material obligation or loss of any material benefit under any such Material Agreement.

 

" Order " means any administrative decision or award, decree, injunction, judgment, order, quasi-judicial decision or award, ruling, or writ of any federal, state, local or foreign or other court, arbitrator, mediator, tribunal, administrative agency or Governmental Entity.

 

" Patents " shall have the meaning set forth in Section 3.17(i) of the Agreement.

 

" Person " means an individual, a corporation, a partnership, an association, a trust, a limited liability company or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.

 

" Permit " shall mean any federal, state, local, and foreign governmental approval, authorization, certificate, consent, easement, filing, franchise, letter of good standing, license, notice, permit, qualification, registration or right of or from any Governmental Entity (or any extension, modification, amendment or waiver of any of these) to which any Person is a party or that is or may be binding upon or inure to the benefit of any Person or its securities, Assets or business, or any notice, statement, filing or other communication to be filed with or delivered to any Governmental Entity.

 

 
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" SEC " shall have the meaning set forth in Section 4.6(a) of the Agreement.

 

" Secured Parties " means, collectively, Delafield Investments Limited, Dominion Capital ,LLC, Anson Investments Master Fund LP, and GEMG LLC.

 

" Securities Act " shall have the meaning set forth in Section 3.3 of the Agreement.

 

" Share " or " Shares " shall have the meaning set forth in the Recitals of the Agreement.

 

" Shareholder " shall have the meaning set forth in the Preamble.

 

" Software " shall have the meaning set forth in Section 3.17(i) of the Agreement.

 

" Subsidiary " means, with respect to any Person, (i) any corporation, limited liability company, association or other business entity of which more than 50% of the total voting power of shares of capital stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof) and (ii) any partnership (a) the sole general partner or managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof).

 

" Tax " or " Taxes " shall have the meaning set forth in Section 3.11(c) of the Agreement.

 

" Tax Return " shall have the meaning set forth in Section 3.11(c) of the Agreement.

 

" Technology " shall have the meaning set forth in Section 3.17(i) of the Agreement.

 

" Trade Secrets " shall have the meaning set forth in Section 3.17(i) of the Agreement.

 

" Transaction Documents " means the Agreement, and any other document executed and delivered pursuant hereto together with any exhibits or schedules to such documents.

 

" Transactions " shall have the meaning as set forth in Section 1.2 of the Agreement.

 

" Transfer " shall have the meaning as set forth in Section 7.7(a) of the Agreement.

 

" Transfer Taxes " shall have the meaning as set forth in Section 7.3 of the Agreement.

 

" 8-K Report " shall have the meaning as set forth in Section 7.8 of the Agreement.

 

 
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EXHIBIT B

 

ESCROW AGREEMENT

 

THIS ESCROW AGREEMENT (this " Agreement ") is made as of May 11, 2016 (this " Agreement "), is entered into by and among Avant Diagnostics, Inc. a Nevada corporation (" Avant "), Amarantus Diagnostics Inc., a Delaware corporation (the " Company "), Amarantus BioScience Holdings Inc., a Nevada corporation (the " Shareholder "); and the holders of the Company's 10% Original Issue Discount Senior Secured Convertible Promissory Notes, in the original aggregate principal amount of up to $1,350,000 (the " Notes ") signatory hereto, their endorsees, transferees and assigns (collectively, the " Notes Secured Parties "), and GEMG LLC (" GEMG " and together with the Notes Secured Parties, the " Secured Parties ") and Robinson Brog Leinwand Greene Genovese & Gluck P.C. , a professional corporation organized and existing under the laws of the State of New York (the " Escrow Agent "). The Secured Parties, Avant, Company and Shareholder shall collectively be referred to herein as the " Escrowing Parties "). Except as otherwise defined herein, capitalized terms used herein shall have the meanings as set forth in that certain Share Exchange Agreement of even date herewith (the "Exchange Agreement), by and among the Escrowing Parties.

 

W I T N E S S E T H

 

WHEREAS , Avant, the Company and the Shareholder (the " Exchange Parties ") have entered into that certain Share Exchange Agreement on even date herewith (the " Exchange Agreement ") whereby Avant will acquire from the Shareholder all of the outstanding shares of the Company in exchange for up to 90,000,000 shares of common stock, par value $0.00001 per share, of Avant (the " Exchange Consideration ");

 

WHEREAS , the Exchange Consideration is subject to a lock-up pursuant to Section 1.3 of the Exchange Agreement.

 

WHEREAS , pursuant to Section 1.4 of the Exchange Agreement, the parties agreed to deposit the Exchange Consideration with the Escrow Agent, to be held and disbursed by the Escrow Agent pursuant to this Agreement;

 

WHEREAS , Avant has delivered the Avant Shares (herein defined) to the Escrow Agent; and

 

WHEREAS , Escrow Agent is willing to hold the Exchange Consideration in escrow subject to the terms and conditions of this Agreement.

 

NOW, THEREFORE , in consideration of the premises and the mutual covenants and agreements herein contained, and in consideration of the parties thereto entering into the Asset Purchase Agreement, the parties hereto covenant and agree as follows:

 

I. Deposit of Stock . Concurrently with the execution and delivery of this Escrow Agreement, Avant shall deliver (a) the Avant Shares and (b) the Initial Consideration to the Escrow Agent, and Avant shall deliver the Additional Consideration to the Escrow Agent immediately upon being earned under the Exchange Agreement (collectively " Escrowed Stock "). The Shareholder shall deliver (i) stock power(s) (" Stock Power ") separate from the certificate evidencing the Exchange Consideration and the Avant Shares in a form attached hereto, as Exhibit A, executed in blank and medallion guaranteed; and (ii) such corporate resolution authorizing an officer of the Shareholder to take such actions as may be necessary to transfer the Escrowed Stock in accordance with the terms hereof. In addition, the Shareholder hereby agrees to execute such documents as the Escrow Agent may request to transfer the Escrowed Stock as may required pursuant to the terms of this Escrow Agreement.

 

 
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II. Notice of Claim; Release of Escrowed Stock.

 

(A) The Secured Parties to (i) seek the release of the 1.5 million shares of common stock issued by Avant to the Secured Parties (the "Avant Shares") to be held by the Escrow Agent for the duration of the Lockup Period or (ii) assert a claim with respect to the Escrowed Stock for any Event of Default, as defined under any agreement between the Company and the Secured Parties, accruing on or after the sixth month anniversary of the date hereof, shall deliver a Notice of Claim substantially in the form attached hereto to the Escrow Agent and other Escrowing Parties. Upon receipt of Notice of Claim, the Escrow Agent shall promptly deliver the indicated number of Escrowed Stock (accompanied by the requisite Stock Power(s) to the Secured Parties in accordance with the Notice of Claim.

 

(B) Subject to the rights of the Secured Parties and subject to complying with clause (C), the Shareholder shall have the right to seek release of the Escrowed Stock represented by the Exchange Consideration, if any, for only the following transfers from escrow,

 

1. Fourteen Million Five Hundred Thousand (14,500,000) shares of the Escrowed Stock as follows:

 

(i)

Seven Million Two Hundred Fifty Thousand (7,250,000) Shares to the holders of the Company's Senior Secured Promissory Notes (the "Notes") to repay such outstanding Notes and/or to the holders of the Company's debt other than the holders of the Company's Notes to repay such outstanding debt.

(ii)

Seven Million Two Hundred Fifty Thousand (7,250,000) Shares as payment of a stock dividend to the holders of the Shareholder's issued and outstanding shares of common stock. And

 

2. To sell transfer and assign its interests in Seventy-Four Million (74,000,000) shares of the Escrowed Stock; provided that no less than 70% of the net proceeds from any such sale shall be used to repay the Notes or redeem outstanding shares of preferred stock of the Shareholder held by the holders of the Notes.

 

(C) To effect the release of (i) the Avant Shares prior to the expiration of the Lock-up Period pursuant to clause (B) of this Section II or (ii) the Escrowed Stock pursuant to clause (B) of this Section II, the Escrowing Parties, shall deliver written instructions (the " Escrow Release Instruction ") to the Escrow Agent signed by each of the Escrowing Parties directing the release of the Escrowed Stock. Within five (5) days of the receipt by the Escrow Agent of the Escrow Release Instruction, the Escrow Agent shall deliver the Escrowed Stock in accordance with the instructions set forth therein,

 

 
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(D). Release upon Expiration of Term. Subject to the other provisions of this Section II, upon expiration of a period of the Lockup Period the Escrow Agent shall release to the Shareholder or the Secured Parties, as applicable, such number of shares of the Escrowed Stock which it is holding pursuant to this Agreement and this Escrow Agreement shall be deemed terminated and this Escrow Agreement shall be released and discharged from all further obligations hereunder.

 

III. Termination by the Escrowing Parties

 

If at any time the Escrow Agent shall receive a notice signed by or on behalf of the each of the Escrowing Parties that this Agreement has been terminated and instructing the Escrow Agent with respect to the disposition of the Escrowed Stock, the Escrow Agent shall release the Escrowed Stock in accordance with the instructions contained in such notice, and upon such release this Escrow Agreement shall be deemed terminated, and the Escrow Agent shall be released and discharged from all further obligations hereunder.

 

IV. Nature of Duties; No Conflict; Liability

 

It is understood and agreed that the duties of the Escrow Agent hereunder are purely ministerial in nature and do not represent a conflict of interest for the Escrow Agent to act, or continue to act, as counsel for any party to this Escrow Agreement with respect to any litigation or other matters arising out of this Escrow Agreement or otherwise. The Escrow Agent shall not be liable for any error of judgment, fact, or law, or any act done or omitted to be done, except for its own willful misconduct or gross negligence or that of its partners, employees, and agents. The Escrow Agent's determination as to whether an event or condition has occurred, or been met or satisfied, or as to whether a provision of this Escrow Agreement has been complied with, or as to whether sufficient evidence of the event or condition or compliance with the provision has been furnished to it, shall not subject the Escrow Agent to any claim, liability, or obligation whatsoever, even if it shall be found that such determination was improper and incorrect; provided that the Escrow Agent and its partners, employees, and agents shall not have been guilty of willful misconduct or gross negligence in making such determination.

 

V. Indemnification

 

The Exchange Parties each jointly and severally agree to indemnify the Escrow Agent for, and to hold it harmless against, any loss, liability, or expense (" Cost ") incurred without gross negligence or willful misconduct on the part of the Escrow Agent, arising out of or in connection with its entering into this Escrow Agreement and carrying out its duties hereunder, including costs and expenses of defending itself against any claim of liability in connection herewith or therewith. The right to indemnification set forth in the preceding sentence shall include the right to be paid by the Exchange Parties in respect of Costs as they are incurred (including Costs incurred in connection with defending itself against any claim of liability in connection herewith). The Escrow Agent shall repay any amounts so paid if it shall ultimately be determined by a final order of a court of competent jurisdiction from which no appeal is or can be taken that the Escrow Agent is not entitled to such indemnification.

 

 
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VI. Documents and Instructions

 

The Escrow Agent may act in reliance upon any notice, instruction, certificate, statement, request, consent, confirmation, agreement or other instrument which it believes to be genuine and to have been signed by a proper person or persons, and may assume that any of the officers of the Company purporting to act on behalf of the Company in giving any such notice or other instrument in connection with the provisions hereof has been duly authorized to do so. The Escrow Agent acts hereunder as a depository only and shall not be responsible or liable in any manner whatsoever for the genuineness, sufficiency, correctness, or validity of any agreement, document, certificate, instrument, or item deposited with it or any notice, consent, approval, direction, or instruction given to it, and the Escrow Agent shall be fully protected, under Sections IV and V above, for all acts taken in accordance with any written instruction or instrument given to it hereunder, and reasonably believed by the Escrow Agent to be genuine and what it purports to be.

 

VII. Conflicting Notices, Claims, Demands, or Instructions

 

If at any time the Escrow Agent shall receive conflicting notices, claims, demands, or instructions with respect to the Escrowed Stock, or if for any other reason it shall in good faith be unable to determine the party or parties entitled to receive the Escrowed Stock, or any part thereof, the Escrow Agent may refuse to make any distribution and may retain the Escrowed Stock in its possession until it shall have received instructions in writing concurred in by all parties in interest, or until directed by a final order or judgment of a court of competent jurisdiction from which no appeal is or can be taken, whereupon the Escrow Agent shall make such disposition in accordance with such instructions or such order. The Escrow Agent shall also be entitled to commence as interpleader action in any court of competent jurisdiction to seek an adjudication of the rights of the Escrowing Parties.

 

VIII. Advice of Counsel

 

The Escrow Agent may consult with, and obtain advice from, legal counsel in the event of any dispute or question as to the construction of any of the provisions hereof or its duties hereunder, and it shall incur no liability and shall be fully protected and indemnified under Section V above for all acts taken, in the absence of gross negligence or willful misconduct, in accordance with the advice and instructions of such counsel. In the event that the Escrow Agent retains counsel or otherwise incurs any legal fees by virtue of any provision of this Escrow Agreement, the reasonable fees and disbursements of such counsel and any other liability, loss or expense which the Escrow Agent may thereafter suffer or incur in connection with this Escrow Agreement or the performance or attempted performance in good faith of its duties hereunder shall be paid (or reimbursed to it) by the Escrowing Parties jointly and severally. In the event that the Escrow Agent shall become a party to any litigation in connection with its functions as Escrow Agent pursuant to this Escrow Agreement, whether such litigation shall be brought by or against it, the reasonable fees and disbursements of counsel to the Escrow Agent including the amounts attributable to services rendered by partners or associates of Escrow Agent at the then prevailing hourly rate charged by them and disbursements incurred by them, together with any other liability, loss or expense which it may suffer or incur in connection therewith, shall be paid (or reimbursed to it) by the Escrowing Parties, jointly and severally, unless such loss, liability or expense is due to the willful breach by the Escrow Agent of its duties hereunder.

 

 
47
 

 

IX. Compensation and Expenses

 

The Escrow Agent agrees to serve without compensation for its services. All expenses of the Escrow Agent incurred in the performance of its duties hereunder shall be paid by the Company.

 

X. Resignation of Escrow Agent

 

The Escrow Agent may resign at any time upon giving the other parties hereto thirty (30) days' notice to that effect. In that event the successor Escrow Agent shall be such person, firm, or corporation as the Escrowing Parties shall mutually select. It is understood and agreed that the Escrow Agent's resignation shall not be effective until a successor Escrow Agent agrees to act hereunder; provided, however, that in the event no successor Escrow Agent is appointed and acting hereunder within thirty (30) days of such notice, the Escrow Agent may deliver the Escrowed Stock to a court of competent jurisdiction; and provided, further, that the Escrow Agent may appoint a successor escrow agent hereunder at any time so long as such successor shall accept and agree to be bound by the terms of this Escrow Agreement (except that any such successor escrow agent shall be entitled to customary fees which shall be payable by the Company) and shall be a bank or trust company insured by the Federal Deposit Insurance Corporation.

 

XI. Escrow Agent as Counsel to Certain of the Secured Parties

 

Each of the Company, the Shareholder and Avant hereby acknowledges that the Escrow Agent is counsel to certain of the Secured Parties and agrees that it will not seek to disqualify the Escrow Agent from acting and continuing to act as counsel to one or more of the Secured Parties in the event of a dispute hereunder or in the course of the defense or prosecution of any claim relating to the transactions contemplated hereby or by the Exchange Agreement.

 

XII. Notices

 

All notices, consents, approvals, directions, and instructions required or permitted under this Escrow Agreement shall be effective when received and shall be given in writing and delivered either by hand or by generally recognized overnight courier, postage prepaid, or by telecopier, and addressed as follows:

 

 

If to Avant:

 

Avant Diagnostics, Inc.

8561 East Anderson Drive

Suite 104

Scottsdale, AZ 85225

Fax:

Attention: Gregg Linn

 

 
48
 

  

 

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

 

Sichenzia Ross Friedman Ference LLP

61 Broadway

New York, New York 10006  

Attn: Gregory Sichenzia, Esq.

Fax: (212) 930-9725

 

If to the Shareholder:

 

Amarantus BioScience Holdings, Inc.

655 Montgomery Street, Suite 900

San Francisco, CA 94111

Fax: (408) 852-4427+

Attention: Gerald E. Commissiong

 

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

 

Sichenzia Ross Friedman Ference LLP

61 Broadway  

New York, New York 10006

Attn: Jeffrey J. Fessler, Esq.  

Fax: (212) 930-9725

 

If to the Secured Parties:

 

Delafield Investments Limited

c/o Magna Group

40 Wall Street

New York, NY 10004

Attention: Marc Manuel

Telephone Number: (347) 491-4240

Fax: (646) 737-9948

Email: research@mag.na

 

With copies to

(which shall not constitute notice):

 

Robinson Brog Leinwand Greene Genovese & Gluck P.C.

875 Third Avenue, 9 th Floor

New York, New York 10022

Attention: David E. Danovitch, Esq.

Phone: (212) 603-6391

Fax No.: (212) 956-2164

Email: ded@robinsonbrog.com

 

or to such other persons or addresses as any party may have furnished in writing to the other parties. Copies of all communications hereunder shall be sent to the Escrow Agent.

 

 
49
 

  

XIII. Entire Agreement, Etc.

 

This Escrow Agreement contains the entire agreement among the parties with respect to the subject matter hereof. This Escrow Agreement may not be amended, supplemented, or discharged, and no provision hereof may be modified or waived, except by an instrument in writing signed by all of the parties hereto. No waiver of any provision hereof by any party shall be deemed a continuing waiver of any matter by such party. If a conflict between the terms and provisions hereof and of the Purchase Agreement occurs, the terms and provisions hereof shall govern the rights, obligations, and liabilities of the Escrow Agent.

 

XIV. Successors and Assigns

 

This Escrow Agreement shall be binding upon and shall inure to the benefit of each of the parties hereto, and their respective heirs, successors, assigns, distributees, and legal representatives.

 

XV. Counterparts

 

This Escrow Agreement may be executed in several counterparts, each of which shall be deemed original, but such counterparts together shall constitute one and the same instrument.

 

XVI. Governing Law

 

This Escrow Agreement shall be governed by and construed and enforced in accordance with the law (other than the law governing conflict of law questions) of the State of New York. Any action to enforce, arising out of, or relating in any way to any of the provisions of this Escrow Agreement may be brought and prosecuted in such court or courts located within New York County, New York as is provided by law; and the parties hereto consent to the jurisdiction of the court or courts located within New York, New York and to service of process by registered or certified mail, return receipt requested, or by any other manner provided by law.

 

XVII. Additional Documents and Act

 

The Escrowing Parties shall, from time to time, execute such documents and perform such acts as Escrow Agent may reasonably request and as may be necessary to enable Escrow Agent to perform its duties hereunder or effectuate the transactions contemplated by this Escrow Agreement.

 

[Signature page follows.]

 

 
50
 

 

IN WITNESS WHEREOF, the parties hereto have executed or caused this Agreement to be duly executed as a sealed instrument as of the day and year first above written.

 

 

AVANT DIAGNOSTICS, INC., a Nevada corporation

By:

/s/ Gregg Linn

Name:

Gregg Linn

Title:

Chief Executive Officer

AMARANTUS DIAGNOSTICS INC., a Delaware corporation

By:

/s/ Gerald Commissiong

Name:

Gerald Commissiong

Title:

President & Chief Executive Officer

 

AMARANTUS BIOSCIENCE HOLDINGS, INC., a Nevada corporation

 
By:

/s/ Gerald Commissiong

Name:

Gerald Commissiong

Title:

President & Chief Executive Officer

ROBINSON BROG LEINWAND GREENE GENOVESE & GLUCK P.C.

By:

/s/ David E. Danovitch

Name:

David E. Danovitch

Title:

Shareholder

 

[SIGNATURE PAGE OF SECURED PARTIES TO THE ESCROW AGREEMENT FOLLOWS]

 

 
51
 

 

[SIGNATURE PAGE OF SECURED PARTIES TO ESCROW AGREEMENT]

 

 

Name of Secured Party:

Delafield Investments Limited

 

       

Signature of Authorized Signatory of Secured Party:

/s/ David E. Danovitch

 

 

Name of Authorized Signatory:

David E. Danovitch

 

 

Title of Authorized Signatory:

Authorized Person

 

 

 
52
 

 

[SIGNATURE PAGE OF SECURED PARTIES TO ESCROW AGREEMENT]

 

 

Name of Secured Party:

Dominion Capital, LLC

 

 

 

 

 

 

Signature of Authorized Signatory of Secured Party:

/s/ Mikhail Gurevich

 

 

Name of Authorized Signatory:

Mikhail Gurevich

 

 

Title of Authorized Signatory:

Managing Member

 

 

 
53
 

 

[SIGNATURE PAGE OF SECURED PARTIES TO ESCROW AGREEMENT]

 

 

Name of Secured Party:

Anson Investments Master Fund LP

 

 

 

 

 

 

Signature of Authorized Signatory of Secured Party:

/s/ Amin Nathoo

 

 

Name of Authorized Signatory:

Amin Nathoo

 

 

Title of Authorized Signatory:

Advising Rep, MSV Advisors Inc.

 

 

 
54
 

 

[SIGNATURE PAGE OF SECURED PARTIES TO ESCROW AGREEMENT]

 

 

Name of Secured Party:

GEMG LLC

 

 

 

 

 

 

Signature of Authorized Signatory of Secured Party:

/s/ Mikhail Gurevich

 

 

Name of Authorized Signatory:

Mikhail Gurevich

 

 

Title of Authorized Signatory:

Managing Member

 

 

 
55
 

  

Notice of Claim

 

[Claimant's Letterhead]

 

Robinson Brog Leinwand Greene Genovese & Gluck P.C.

875 Third Avenue, 9 th Floor

New York, New York 10022

 

Gentlemen:

 

You are hereby instructed to release from escrow the number of shares (the "Shares") specified below. The Company is entitled to receive the Shares as payment for the claims specified below:

 

Number of Shares: ____________________

 

Nature of Claim: ______________________

 

Dollar Value of Claim: __________________

 

Dated: _____________________________

  

 

Name of Company

 

       
By:

 

 

Name:

 

 

Title:

 

 

 
56
 

   

EXHIBIT A

Forms of Stock Power

 

IRREVOCABLE STOCK POWER

 

FOR VALUE RECEIVED, Amarantus Bioscience Holdings, Inc., a Nevada corporation,hereby sells, assigns, and transfers unto , ( ) shares of the common stock, par value $0.00001 per share ("Common Stock"), of Avant Diagnostics, Inc. , a Nevada corporation (the "Corporation"), standing in the name of the undersigned on the books and records of the Corporation represented by Certificate No. , and does hereby irrevocably constitute and appoint , its attorney-in-fact, to transfer the said stock on the Corporation's books with full power of substitution in the premises.

 

IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Stock Power on this ____ day of ___________, 20___.

 

 

 

Amarantus Bioscience Holdings, Inc.

 

       
By:

 

 

 

Name:

Gerald Commissiong

 

 

Title:

President & Chief Executive Officer

 

 

 
57
 

  

Exhibit C

Stockholder Representation Letter

 

Ladies and Gentlemen:

 

Pursuant to the Exchange Agreement (the " Agreement ") dated as of May 11, 2016 (the " Agreement Date "), the undersigned (the " Stockholder ") expects to receive from Avant Diagnostics, Inc. ., a Nevada corporation (" Parent "), shares of Parent Common Stock (the " Securities ") in exchange for the Stockholder's ownership of capital stock of Amarantus BioScience Holdings Inc. a Nevada corporation (the " Company "). Capitalized terms used herein but not defined will have the meanings ascribed to them in the Agreement. Stockholder whose signature appears below, represents and warrants to Parent that, as of the date first written above and as of the Closing Date, the statements contained in this Representation Letter are, and will be, correct and complete:

 

1. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER.

 

1.1. "Accredited" Investor . The distribution of the Securities to the Stockholder at the Closing is intended to be exempt from registration under the Securities Act of 1933, as amended (the " Act "). Unless Stockholder checks the "no" box on the signature page hereof indicating that Stockholder is not an Accredited Investor, Stockholder represents and warrants that Stockholder falls within one of the following definitions of Accredited Investor:

 

(Please initial the category that applies)

 

¨

(a)

Stockholder is a natural person whose individual net worth, or joint net worth with spouse, exceeds US$1,000,000 (including homes (excluding value of your primary residence), home furnishings and automobiles).

Explanation. In calculating net worth, you include all of your assets (other than your primary residence) whether liquid or illiquid, such as cash, stock, securities, personal property and real estate based on the fair market value of such property MINUS all debts and liabilities (other than a mortgage or other debt secured by your primary residence).

In the event that the amount of any mortgage or other indebtedness secured by your primary residence exceeds the fair market value of the residence, that excess liability should also be deducted from your net worth. Any mortgage or indebtedness secured by your primary residence incurred within 60 days before the time of the sale of the securities offered hereunder, other than as a result of the acquisition of the primary residence, shall also be deducted from your net worth.

 

¨

(b)

Stockholder is a natural person who had an individual income in excess of US$200,000 in each of the last two years or joint income with spouse in excess of US$300,000 in each of those years and reasonably expects to reach the same income level in the current year.

¨

(c)

Stockholder is either a director or executive officer of Parent.

x

(d)

Stockholder is a corporation or other entity with total assets in excess of US$5,000,000, not formed for the specific purpose of acquiring the Securities.

¨

(e)

Stockholder is an entity, all of the equity owners of which are as specified in (a) or (b) above.

 

[Signature Page Follows]

 

 
58
 

 

STOCKHOLDER

Amarantus Bioscience Holdings, Inc.

Gerald Commissiong

Name (Please Type or Print)

President & Chief Executive Officer

Title (Please Type or Print) (if applicable)

655 Montgomery Street, Suite 900

Street Address

San Francisco, CA 94111

City, State, Zip Code

U.S.A.

Country

26-0690857

Social Security Number

(or tax I.D. Number, if an entity)

Accredited Investor:

(Please Check One of the Following Boxes)

 

 
59
 

 

Exhibit D

Form of Lockup Agreement

 

LOCK-UP AGREEMENT

 

May 11, 2016

 

Avant Diagnostics, Inc.

8561 East Anderson Drive, Suite 104

Scottsdale, AZ 85225

 

Dear Sirs:

 

This Agreement is being delivered to you in accordance with Section 8.1(d) of the Share Exchange Agreement (the "Exchange Agreement") between Avant Diagnostics, Inc., a Nevada corporation corporation (the "Buyer") Amarantus Diagnostics, Inc., a Delaware corporation corporation (the "Company") and Amarantus Biosciences Holdings, Inc., a Nevada corporation (the "Shareholder"), relating to the proposed acquisition of the Company by the Buyer.

 

In order to induce Buyer to enter into the Exchange Agreement and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with the Buyer that, during the period beginning on and including the date of this Exchange Agreement through and including the earlier of (i) the date that is the eighteen (18) month anniversary of the date of the Exchange Agreement, (ii) a Change of Control (as defined below), and (iii) subject to the written consent of the Buyer, and the rights of the Secured Parties pursuant to the Escrow Agreement (as defined in the Exchange Agreement) (the "Lock-Up Period"), the undersigned will not, without the prior written consent of the Buyer and the Secured Parties, directly or indirectly, (i) offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose of, or announce the intention to otherwise dispose of, any shares of Common Stock now owed or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (including, without limitation, Common Stock which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations promulgated under the Securities Act of 1933, as amended, and as the same may be amended or supplemented on or after the date hereof from time to time (the "Securities Act") (such shares, the "Beneficially Owned Shares")) or securities convertible into or exercisable or exchangeable for Common Stock, (ii) enter into any swap, hedge or similar agreement or arrangement that transfers in whole or in part, the economic risk of ownership of the Beneficially Owned Shares or securities convertible into or exercisable or exchangeable for Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition.

 

For purposes of this Agreement, "Change of Control" means the occurrence after the date hereof of any of the following: (a) an acquisition after the date hereof by an individual or legal entity or "group" (as described in Rule 13d-5(b)(1) promulgated under the Securities Exchange Act of 1934, as amended) of effective control (whether through legal or beneficial ownership of capital stock of the Buyer, by contract or otherwise) of in excess of 50% of the voting securities of the Company, (b) the Buyer merges into or consolidates with any other legal entity, or any legal entity merges into or consolidates with the Buyer and, after giving effect to such transaction, the stockholders of the Buyer immediately prior to such transaction own less than 50% of the aggregate voting power of the Buyer or the successor entity of such transaction, or (c) the Company sells or transfers all or substantially all of its assets to another legal entity and the stockholders of the Buyer of the acquiring entity immediately after the transaction.

 

 
60
 

 

The undersigned further agrees that (i) it will not, during the Lock-Up Period (as the same may be extended as described above), make any demand or request for or exercise any right with respect to the registration under the Securities Act of any shares of Common Stock or other Beneficially Owned Shares or any securities convertible into or exercisable or exchangeable for Common Stock or other Beneficially Owned Shares, and (ii) the Company may, with respect to any Common Stock or other Beneficially Owned Shares or any securities convertible into or exercisable or exchangeable for Common Stock or other Beneficially Owned Shares owned or held (of record or beneficially) by the undersigned, cause the transfer agent or other registrar to enter stop transfer instructions and implement stop transfer procedures with respect to such securities during the Lock-Up Period (as the same may be extended as described above). In addition, the undersigned hereby waives, from the date hereof until the expiration of the Lock-Up Period and any extension of such period pursuant to the terms hereof, any and all rights, if any, to request or demand registration pursuant to the Securities Act of any shares of Common Stock that are registered in the name of the undersigned or that are Beneficially Owned Shares.

 

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Agreement and that this Agreement has been duly authorized (if the undersigned is not a natural person), executed and delivered by the undersigned and is a valid and binding agreement of the undersigned. This Agreement and all authority herein conferred are irrevocable and shall survive the death or incapacity of the undersigned (if a natural person) and shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.

 

Very truly yours,

 

(Name of Stockholder - Please Print)

 

(Signature)

(Name of Signatory if Stockholder is an entity - Please Print)

 

(Title of Signatory if Stockholder is an entity - Please Print)

Address:

 

 
61
 

 

Exhibit E

 

Form of Promissory Note

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO BORROWER.

 

Original Issue Date: May 11, 2016

Principal Amount: $ 50,000

 

12% CONVERTIBLE NOTE

DUE MAY 11, 2017

 

FOR VALUE RECEIVED, the undersigned, Avant Diagnostics, Inc., a Nevada corporation (the " Borrower ") promises to pay to Amarantus Bioscience Holdings, Inc. or its registered assigns (the " Holder "), or shall have paid pursuant to the terms hereunder, the principal sum of Fifty Thousand Dollars and Zero Cents ($50,000.00) on May 11, 2017 (the " Maturity Date ") or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest, if any, to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions hereof.

 

This Note is subject to the following additional provisions:

 

Section 1 . Definitions . For the purposes hereof, in addition to the terms defined elsewhere in this Note, the following terms shall have the following meanings:

 

" Bankruptcy Event " means any of the following events: (a) Borrower or any Subsidiary thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to Borrower or any Subsidiary thereof, (b) there is commenced against Borrower or any Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) Borrower or any Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) Borrower or any Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, or (e) Borrower or any Subsidiary thereof makes a general assignment for the benefit of creditors.

 

 
62
 

 

" Business Day " means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

" Conversion " shall have the meaning ascribed to such term in Section 4.

 

" Conversion Date " shall have the meaning set forth in Section 4.

 

" Conversion Price " shall have the meaning set forth in Section 4.

 

" Conversion Shares " means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms hereof.

 

" Event of Default " shall have the meaning set forth in Section 7(a).

 

" New York Courts " shall have the meaning set forth in Section 11(d).

 

" Note Register " shall have the meaning set forth in Section 2(c).

 

" Notice of Conversion " shall have the meaning set forth in Section 4(a).

 

" Original Issue Date " means the date of the first issuance of this Note, regardless of any transfers of this Note and regardless of the number of instruments which may be issued to evidence such Note.

 

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

 

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

 

Section 2 . Interest .

 

a) Interest . Holders shall be entitled to receive, and Borrower shall pay, simple interest on the outstanding principal amount of this Note at the annual rate of twelve percent (12%) per annum payable in cash on the Maturity Date.

 

b) Payment Grace Period . The Borrower shall have a ten Business Day grace period to pay any monetary amounts due under this Note except as specifically set forth herein.

 

c) Calculations . Interest shall be calculated on the basis of a 365-day year, and shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made.

 

d) Manner and Place of Payment . Principal and interest on this Note and other payments in connection with this Note shall be payable at the Borrower's offices as designated above in lawful money of the United States of America in immediately available funds without set-off, deduction or counterclaim. Upon assignment of the interest of Holder in this Note, Borrower shall instead make its payment pursuant to the assignee's instructions upon receipt of written notice thereof.

 

 
63
 

 

Section 3 . Registration of Transfers and Exchanges .

 

a) Different Denominations . This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.

 

b) Investment Representations . This Note has been issued subject to certain investment representations of the original Holder set forth in the Investor Representations annexed hereto as Exhibit A may be transferred or exchanged only in compliance with the terms contained herein and applicable federal and state securities laws and regulations to successor Holders who provide the same investment representations to the Borrower.

 

c) Reliance on Note Register . Prior to due presentment for transfer to Borrower of this Note, Borrower and any agent of Borrower may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither Borrower nor any such agent shall be affected by notice to the contrary.

 

Section 4 . Conversion .

 

a) Voluntary Conversion . This Note shall be convertible at any time, in whole or in part, into shares of Common Stock at the option of the Holder, at the Conversion Price. The Holder shall effect conversions by delivering to Borrower a Notice of Conversion, the form of which is attached hereto as Annex A (each, a " Notice of Conversion "), specifying therein the principal amount of this Note to be converted and the date on which such conversion shall be effected (such date, the " Conversion Date "). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to Borrower unless the entire principal amount of this Note has been so converted. The Holder and Borrower shall maintain records showing the principal amount(s) and interest converted and the date of such conversion(s). Borrower may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Borrower shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

 

c) Conversion Price . The conversion price shall be equal to $0.20, subject to adjustment in accordance with Section 5 (the " Conversion Price ").

 

d) Conversion Limitation . Notwithstanding anything to the contrary contained herein, the number of Conversion Shares that may be acquired by the Holder upon conversion of this Debenture (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder's for purposes of Section 13(d) of the Securities and Exchange Act of 1934, as amended (the " Exchange Act " ), does not exceed 4.99% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such conversion). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. By written notice to the Company, the Holder may increase, decrease or waive the provisions of this Section 2.2 as to itself but any such waiver will not be effective until the 61 st day after delivery thereof

 

 
64
 

 

d) Mechanics of Conversion .

 

i. Conversion Shares Issuable Upon Conversion . The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note and accrued but unpaid interest thereon to be converted by (y) the Conversion Price.

 

ii. Delivery of Certificate Upon Conversion . Not later than five Trading Days after each Conversion Date (the " Share Delivery Date "), Borrower shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates representing the Conversion Shares and (B) a bank check in the amount of accrued and unpaid interest.

 

iii. Reservation of Shares Issuable Upon Conversion . Borrower covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than one hundred (100%) percent of the aggregate number of shares of the Common Stock as shall be issuable (taking into account the adjustments and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Note at the Initial Conversion Price (as adjusted from time to time) , assuming such principal amount was not converted through the Maturity Date. Borrower covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

 

iv. Fractional Shares . No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, Borrower shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.

 

v. Transfer Taxes and Expenses . The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that, Borrower shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note so converted and Borrower shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to Borrower the amount of such tax or shall have established to the satisfaction of Borrower that such tax has been paid. Borrower shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion.

 

 
65
 

 

Section 5 . Certain Adjustments .

 

a) Stock Dividends and Stock Splits . If Borrower, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by Borrower upon conversion of the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of Borrower, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of Borrower) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b) Reorganization, Reclassification, Consolidation, Merger, Sale; Company Not Survivor . If any capital reorganization, reclassification of the capital stock of the Company, combination, continuation, consolidation or merger of the Company with another corporation in which the Company is not the survivor, or sale, transfer or other disposition (i.e. license, lease or contractual arrangement) of all or substantially all of the assets to another corporation shall be effected by the Company, then, as a condition of such reorganization, reclassification, combination, continuation, consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall be made whereby the Holder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion of the Note, such shares of stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of shares of Common Stock equal to the number of shares of Common Stock immediately theretofore issuable upon conversion of the Note, had such reorganization, reclassification, combination, continuation, consolidation, merger, sale, transfer or other disposition not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of Holder to the end that the provisions hereof (including, without limitation, provision for adjustment of the Conversion Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. The provisions of this Section 5(b) shall similarly apply to successive reorganizations, reclassifications, combinations, continuations, consolidations, mergers, sales, transfers or other dispositions.

 

c) Calculations . All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of Borrower) issued and outstanding.

 

d) Notice to the Holder . Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, Borrower shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

 
66
 

 

Section 6 . Prepayment. The Borrower shall have the option of paying the principal sum of this Note to Holder in advance in full or in part at any time and from time to time without premium or penalty; provided, however, that together with such payment in full the Borrower shall pay to the Holder all interest and all other amounts owing pursuant to this Note and remaining unpaid.

 

Section 7 . Events of Default .

 

a) " Event of Default " means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

 

i. any default in the payment of (A) the principal amount of any Note or (B) interest and other amounts owing to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within ten (10) Trading Days;

 

ii. the Borrower or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event; or

 

iii. any monetary judgment, writ or similar final process shall be entered or filed against the Borrower, any Subsidiary or any of their respective property or other assets for more than $1,000,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days.

 

b) Remedies Upon Event of Default . If any Event of Default occurs, the outstanding principal amount of this Note, interests and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder's election, immediately due and payable in cash. Commencing on the Maturity Date and also five (5) days after the occurrence of any Event of Default interest on this Note shall accrue at an interest rate of 10%. Upon the payment in full, the Holder shall promptly surrender this Note to or as directed by Borrower. In connection with such acceleration described herein, the Holder need not provide, and Borrower hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 7(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

Section 9 . Borrower's Representations . The Borrower is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full power and authority to own, lease, license and use its properties and assets and to carry out the business in which it proposes to engage. The Borrower has the requisite corporate power and authority to execute, deliver and perform its obligations under this Note and to issue and sell this Note. All necessary proceedings of the Borrower have been duly taken to authorize the execution, delivery, and performance of this Note. When this Note is executed and delivered by the Borrower, it will constitute the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with their terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

 

 
67
 

 

Section 10 . Terms of Future Financings . So long as this Note is outstanding, upon any issuance by Company of any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to Holder in this Note, then Company shall notify Holder of such additional or more favorable term and such term, at Holder option, shall become a part of this Note. Notwithstanding the foregoing, this Section shall not apply with respect to (i) an Exempt Issuance (as defined below) or (ii) an underwritten public offering of the Company's securities. For purposes of this Section, "Exempt Issuance" means (a) any shares of common stock, options, or convertible securities issued or issuable in connection with any stock option plan which has been approved by the board of directors, (b) securities upon the exchange of or conversion of this Note and/or other securities exercisable or exchangeable for or convertible into shares of common stock issued and outstanding on the date of this Note and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the directors of the Company, provided that any such issuance shall only be to a person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital.

 

Section 11 . Miscellaneous .

 

a) Notices . All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to Borrower, to: Avant Diagnostics, Inc., 8561 East Anderson Drive, Suite 104, Scottsdale, AZ 85225, Attn: Gregg Linn, Chief Executive Officer, email:glinn@avantdiagnostics.com, and (ii) if to the Holder, to: the address and email address indicated in Exhibit A .

 

b) Absolute Obligation . Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of Borrower, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of Borrower.

 

c) Lost or Mutilated Note . If this Note shall be mutilated, lost, stolen or destroyed, Borrower shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to Borrower.

 

 
68
 

 

d) Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by the Note (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the " New York Courts "). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts 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 such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. Each party shall be responsible for its own legal fees and costs in the event any party shall commence an action or proceeding to enforce any provisions of this Note.

 

e) Waiver . Any waiver by Borrower or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of Borrower or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion. Any waiver by Borrower or the Holder must be in writing.

 

f) Severability . If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.

 

g) Usury . If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

 

h) Next Business Day . Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

 

i) Headings . The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

 

j) Amendment . Unless otherwise provided for hereunder, this Note may not be modified or amended or the provisions hereof waived without the written consent of Borrower and the Holder.

 

k) Facsimile Signature . In the event that the Borrower's signature is delivered by facsimile transmission, PDF, electronic signature or other similar electronic means, such signature shall create a valid and binding obligation of the Borrower with the same force and effect as if such signature page were an original thereof.

 

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

 

(Signature Pages Follow)

 

 
69
 

 

IN WITNESS WHEREOF , Borrower has caused this Note to be signed in its name by an authorized officer as of the 11 th day of May, 2016.

 

 

 

AVANT DIAGNOSTICS, INC.

 

       
By: /s/ Gregg Linn

 

 

Name:

Gregg Linn

 

 

Title:

Chief Executive Officer

 

 

 
70
 

 

ANNEX A

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal and interest under the 12% Convertible Note due May 11, 2017 of Avant Diagnostics, Inc., a Nevada corporation (the " Borrower "), into shares of common stock (the " Common Stock "), of Borrower according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by Borrower in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.

 

By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts specified under Section 4(d) of this Note, as determined in accordance with Section 13(d) of the Exchange Act.

 

The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock.

 

 

Date to Effect Conversion: __________________________________________

Principal Amount of Note to be Converted: $____________________________

Number of shares to be issued: ______________________________________

Signature: ______________________________________________________

Name: _________________________________________________________

Address for Delivery of Common Stock Certificates: ______________________

______________________________________________________________ 

______________________________________________________________

Or

DWAC Instructions: ______________________________________________

Broker No:______________________________________________________

Account No: ____________________________________________________

 

 
71
 

 

Exhibit A

Investment Representations for Accredited Investor

 

The Holder hereby acknowledges, agrees with and represents, warrants and covenants to the Company, as follows:

 

(a)  Accredited Investor . The Holder is an "accredited investor" as that term is defined in Regulation D promulgated under the Securities Act by virtual of being (initial all applicable responses below):

 

¨

an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000. For purposes of calculating net worth under this paragraph, (i) the primary residence shall not be included as an asset, (ii) to the extent that the indebtedness that is secured by the primary residence is in excess of the fair market value of the primary residence, the excess amount shall be included as a liability, and (iii) if the amount of outstanding indebtedness that is secured by the primary residence exceeds the amount outstanding 60 days prior to the execution of this Subscription Agreement, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability.

¨

an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year

¨

a bank as defined in section 3(a)(2) of the Act, or a savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; a broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; a insurance company as defined in section 2(a)(13) of the Act; an investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors.

¨

a private business development company as defined in section 202(a)(22) of the Investment Advisors Act of 1940.

¨

a corporation, partnership, Massachusetts business trust, or nonprofit organization within the meaning of Section 501(c)(3) of the Internal Revenue Code, in each case not formed for the specific purpose of acquiring the securities being offered and with total assets in excess of $5,000,000.

¨

a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Notes, whose purchase is directed by a "sophisticated investor" as defined in Regulation 506(b)(2)(ii) under the Act.

¨

an entity in which all of the equity owners are "accredited investors" within one or more of the above categories.

 

 
72
 

 

(b)  Experience . The Holder is sufficiently experienced in financial and business matters to be capable of evaluating the merits and risks of its investments, and to make an informed decision relating thereto, and to protect its own interests in connection with the purchase of the Note.

 

(c)  Own Account . The Holder is purchasing the Note as principal for its own account, for investment purposes only and not with an intent or view towards further sale or distribution (as such term is used in Section 2(11) of the Securities Act) thereof, and has not pre-arranged any sale with any other person and has no plans to enter into any such agreement or arrangement.

 

(d)  Exemption . The Holder understands that the offer and sale of the Note is not being registered under the Securities Act or any state securities laws and is intended to be exempt from registration provided by Rule 506 promulgated under Regulation D and/or Section 4(a)(2) of the Securities Act;

 

(e)  Importance of Representations . The Holder understands that the Note is being offered and sold to it in reliance on an exemption from the registration requirements of the Securities Act, and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Holder set forth herein in order to determine the applicability of such safe harbor and the suitability of the Holder to acquire the Notes;

 

(f)  No Registration . The Notes have not been registered under the Securities Act or any state securities laws and may not be transferred, sold, assigned, hypothecated or otherwise disposed of unless registered under the Securities Act and applicable state securities laws or unless an exemption from such registration is available (including, without limitation, under Rule 144 of the Securities Act, as such rule may be amended, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect ("Rule 144")). The Holder represents and warrants and hereby agrees that all offers and sales of the Notes and the Notes shall be made only pursuant to such registration or to such exemption from registration.

 

(g)  Risk . The Holder acknowledges that the purchase of the Notes involves a high degree of risk, is aware of the risks and further acknowledges that it can bear the economic risk of the Note, including the total loss of its investment. The Holder has adequate means of providing for its financial needs and foreseeable contingencies and has no need for liquidity of its investment in the Notes for an indefinite period of time.

 

(h)  Company Information . The Holder and its Holder representatives, if any, have reviewed all the Company's filings with the Securities and Exchange Commission and all other documents requested by the Holder, have carefully reviewed them and understand the information contained therein.

 

(i)  Independent Investigation . The Holder, in making the decision to purchase the Note subscribed for, has relied upon independent investigations made by it and its representatives, if any, and the Holder and such representatives, if any, have prior to any sale to it been given access and the opportunity to examine all material contracts and documents relating to this investment and an opportunity to ask questions of, and to receive answers from, the Company or any person acting on its behalf concerning the terms and conditions of this investment. The Holder and its advisors, if any, have been furnished with access to all materials relating to the business, finances and operation of the Company and materials relating to the offer and sale of the Note (including, without limitation, the Company's filings with the Securities and Exchange Commission) which have been requested. The Holder and its advisors, if any, have received complete and satisfactory answers to any such inquiries.

 

(j)  No Recommendation or Endorsement . The Holder understands that no federal, state or other regulatory authority has passed on or made any recommendation or endorsement of the Note. Any representation to the contrary is a criminal offense.

 

(k)  No Representation . In evaluating the suitability of an investment in the Company, the Holder has not relied upon any representation or information (oral or written) other than as stated in the Note or the Company's filings with the Securities and Exchange Commission.

 

(l)  No Tax, Legal, Etc. Advice . The Holder is not relying on the Company or any of its employees or agents with respect to the legal, tax, economic and related considerations of an investment in the Notes, and the Holder has relied on the advice of, or has consulted with, only its own advisers.

 

 
73
 

 

(m)  No Advertisement or General Solicitation . Holder acknowledges that it is not aware of, is in no way relying on, and did not become aware of the offering of the Notes through or as a result of any form of general solicitation or general advertising, including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or through any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

 

___________________________________

 

Name of Holder (Print)

 

___________________________________

 

Signature of Holder

 

___________________________________

 

Capacity of Signatory (for entities)

 

Address: ___________________________

 

___________________________________

 

___________________________________

 

Email Address: _______________________

 

Fax: _______________________________

 

Tax ID: _____________________________

 

___________________________________ 

Date

 

 

74


EXHIBIT 2.2

 

ASSET PURCHASE AGREEMENT

 

BETWEEN

 

THERANOSTICS HEALTH, INC.

 

(as Seller)

 

AND

 

AVANT DIAGNOSTICS, INC.

 

(as Buyer)

 

May 11, 2016

 

 
1
 

 

ASSET PURCHASE AGREEMENT

9

  

RECITALS

9

 

ARTICLE I DEFINITIONS

9

  

ARTICLE II PURCHASE AND SALE

17

 

Section 2.01

Purchase and Sale of Assets.

17

  

Section 2.02

Excluded Assets.

17

  

Section 2.03

Assumed Liabilities.

17

  

Section 2.04

Excluded Liabilities.

19

 

Section 2.05

Closing Consideration.

20

  

Section 2.06

Third Party Consents.

21

 

ARTICLE III CLOSING

22

  

Section 3.01

Closing. .

22

 

Section 3.02

Closing Deliverables.

22

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER

23

 

Section 4.01

Organization and Qualification of Seller..

23

 

Section 4.02

Authority of Seller..

23

 

Section 4.03

No Conflicts; Consents.

23

 

Section 4.04

Financial Statements.

24

 

 
2
 

 

Section 4.05

Undisclosed Liabilities.

24

 

Section 4.06

Absence of Certain Changes, Events and Conditions.

24

 

Section 4.07

Material Contracts.

27

 

Section 4.08

Title to Purchased Assets.

27

 

Section 4.09

Condition and Sufficiency of Assets.

27

 

Section 4.10

R eal Property

28

 

Section 4.11

Intellectual Property.

28

  

Section 4.12

Inventory.

29

 

Section 4.13

Accounts Receivable.

30

 

Section 4.14

Customers and Suppliers.

30

 

Section 4.15

Insurance.

30

 

Section 4.16

Legal Proceedings; Governmental Orders.

31

 

Section 4.17

Compliance With Laws; Permits.

31

 

Section 4.18

Environmental Matters.

31

 

Section 4.19

Employee Benefit Matters.

33

 

Section 4.20

Employment Matters.

35

  

Section 4.21

Taxes. Except as set forth in Section 4.21 of the Disclosure Schedules:

35

 

 
3
 

 

Section 4.22

Brokers.

36

 

Section 4.23

Securities Laws Representations.

36

  

Section 4.24

Disclosure.

37

 

Section 4.25

Full Disclosure.

37

 

ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER

38

  

Section 5.01

Organization of Buyer.

38

  

Section 5.02

Authority of Buyer.

38

 

Section 5.03

No Conflicts; Consents. .

38

 

Section 5.04

Brokers.

38

 

Section 5.05

Sufficiency of Closing Consideration..

38

 

Section 5.06

Capitalization.

39

 

Section 5.07

SEC Filings.

39

 

Section 5.08

Compliance With Laws.

40

 

ARTICLE VI COVENANTS

40

 

Section 6.01

Conduct of Business Prior to the Closing.

40

 

Section 6.02

Access to Information.

41

 

Section 6.03

No Solicitation of Other Bids.

41

   

Section 6.04

Notice of Certain Events.

41

 

 
4
 

 

Section 6.05

Employees and Employee Benefits.

42

  

Section 6.06

Confidentiality..

42

  

Section 6.07

Non-competition; Non-solicitation

43

  

Section 6.08

Governmental Approvals and Consents

43

  

Section 6.09

Books and Records.

45

  

Section 6.10

Closing Conditions.

45

  

Section 6.11

Public Announcements.

45

 

Section 6.12

Bulk Sales Laws.

45

  

Section 6.13

Receivables.

45

  

Section 6.14

Transfer Taxes

46

  

Section 6.15

Tax Clearance Certificates.

46

 

Section 6.16

Further Assurances.

46

 

Section 6.17

Use of CLIA license.

46

  

Section 6.18

IP Development.

46

 

Section 6.19

SEC Filings.

46

 

Section 6.20

Registration Statement.

47

 

 
5
 

 

ARTICLE VII CONDITIONS TO CLOSING

48

  

Section 7.01

Conditions to Obligations of All Parties.

48

  

Section 7.02

Conditions to Obligations of Buyer.

48

  

Section 7.03

Conditions to Obligations of Seller.

49

  

ARTICLE VIII INDEMNIFICATION

51

  

Section 8.01

Survival.

51

  

Section 8.02

Indemnification By Seller.

51

  

Section 8.03

Indemnification By Buyer.

51

  

Section 8.04

Certain Limitations.

52

  

Section 8.05

Indemnification Procedures.

52

  

Section 8.06

Payments.

54

  

Section 8.07

Effect of Investigation.

54

  

Section 8.08

Exclusive Remedies.

54

  

ARTICLE IX TERMINATION

55

  

Section 9.01

Termination.

55

  

Section 9.02

Effect of Termination.

55

 

 
6
 

 

ARTICLE X MISCELLANEOUS

56

  

Section 10.01

Expenses.

56

  

Section 10.02

Notices.

56

  

Section 10.03

Interpretation.

57

  

Section 10.04

Headings.

57

  

Section 10.05

Severability.

57

 

Section 10.06

Entire Agreement.

57

 

Section 10.07

Successors and Assigns.

57

  

Section 10.08

No Third-party Beneficiaries.

57

  

Section 10.09

Amendment and Modification; Waiver.

57

  

Section 10.10

Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

58

  

Section 10.11

Specific Performance.

58

   

Section 10.12

Counterparts.

58

 

 
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EXHIBITS

 

Exhibit A

Bill of Sale

Exhibit B

Assignment and Assumption Agreement

Exhibit C

Intellectual Property Assignments

Exhibit D

Assignment and Assumption Lease

Exhibit E

Promissory Note

 

 
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ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (this " Agreement "), dated as of May 11, 2016, is entered into between Theranostics Health, Inc., a Delaware corporation (" Seller ") and Avant Diagnostics, Inc., a Nevada corporation (" Buyer ").

 

RECITALS

 

WHEREAS, Seller is engaged in the business of providing proteomic and other testing services to the healthcare and pharmaceutical industries and developing diagnostics based on proteomics technology (the " Business "); and

 

WHEREAS, Seller wishes to sell and assign to Buyer, (or Buyer's wholly owned subsidiary) and Buyer wishes to purchase and assume from Seller, substantially all the assets, and certain specified liabilities, of the Business, subject to the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I
DEFINITIONS

 

The following terms have the meanings specified or referred to in this Article I :

 

" Accounts Receivable " has the meaning set forth in Section 2.01(a) .

 

" Acquisition Proposal " has the meaning set forth in Section 6.03(a) .

 

" Action " means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.

 

" Adverse Effect " has the meaning set forth in Section 6.20(a) .

 

" Affiliate " of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term "control" (including the terms "controlled by" and "under common control with") 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.

 

 
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" Agreement " has the meaning set forth in the preamble.

 

" Amarantus Diagnostics "means the Amarantus Diagnostics division of Amarantus BioScience Holdings Inc.

 

" Amarantus Diagnostics Acquisition "means the acquisition of Amarantus Diagnostics by Buyer from Amarantus BioScience Holdings Inc. in accordance with the terms of Buyer's press release dated January 19, 2016.

 

" Annual Financial Statements "has the meaning set forth in Section 4.04 .

 

" Assigned Contracts " has the meaning set forth in Section 2.01(c) .

 

" Assignment and Assumption Agreement " has the meaning set forth in Section 3.02(a)(ii) .

 

" Assignment and Assumption of Lease " has the meaning set forth in Section 3.02(a)(iv) .

 

" Assumed Liabilities " has the meaning set forth in Section 2.03 .

 

" Balance Sheet " has the meaning set forth in Section 4.04 .

 

" Balance Sheet Date " has the meaning set forth in Section 4.04 .

 

" Basket " has the meaning set forth in Section 8.04(a) .

 

" Benefit Plan " has the meaning set forth in Section 4.19(a) .

 

" Bill of Sale " has the meaning set forth in Section 3.02(a)(i) .

 

" Books and Records " has the meaning set forth in Section 2.01(k).

 

" Business " has the meaning set forth in the recitals.

 

" Business Day " means any day except Saturday, Sunday or any other day on which commercial banks located in New York, New York are authorized or required by Law to be closed for business.

 

" Buyer " has the meaning set forth in the preamble.

 

" Buyer Common Stock " shall mean the common stock, par value $0.00001 per share, of Buyer.

 

 
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" Buyer Closing Certificate " has the meaning set forth in Section 7.03(f) .

 

" Buyer Indemnitees " has the meaning set forth in Section 8.02 .

 

" Buyer SEC Reports " has the meaning set forth in Section 5.07.

 

" Cap " has the meaning set forth in Section 8.04(a) .

 

" CERCLA " means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.

 

" CLIA " shall mean the Clinical Laboratory Improvement Amendments.

 

" Closing " has the meaning set forth in Section 3.01 .

 

" Closing Date " has the meaning set forth in Section 3.01 .

 

" Code " means the Internal Revenue Code of 1986, as amended.

 

" Contracts " means all contracts, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures and all other agreements, commitments and legally binding arrangements, whether written or oral.

 

" Direct Claim " has the meaning set forth in Section 8.05(c) .

 

" Disclosure Schedules " means the Disclosure Schedules delivered by Seller and Buyer concurrently with the execution and delivery of this Agreement.

 

" Dollars or $ " means the lawful currency of the United States.

 

" Encumbrance " means any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

 

" Environmental Attributes " means any emissions and renewable energy credits, energy conservation credits, benefits, offsets and allowances, emission reduction credits or words of similar import or regulatory effect (including emissions reduction credits or allowances under all applicable emission trading, compliance or budget programs, or any other federal, state or regional emission, renewable energy or energy conservation trading or budget program) that have been held, allocated to or acquired for the development, construction, ownership, lease, operation, use or maintenance of the Business or the Purchased Assets or as of: (a) the date of this Agreement; and (b) future years for which allocations have been established and are in effect as of the date of this Agreement.

 

 
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" Environmental Claim " means any Action, Governmental Order, lien, fine, penalty, or, as to each, any settlement or judgment arising therefrom, by or from any Person alleging liability of whatever kind or nature (including liability or responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural resources damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from: (a) the presence, Release of, or exposure to, any Hazardous Materials; or (b) any actual or alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit.

 

" Environmental Law " means any applicable Law, and any Governmental Order or binding agreement with any Governmental Authority: (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 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. The term "Environmental Law" includes, without limitation, the following (including their implementing regulations and any state analogs): the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.

 

" Environmental Notice " means any written directive, notice of violation or infraction, or notice respecting any Environmental Claim relating to actual or alleged non-compliance with any Environmental Law or any term or condition of any Environmental Permit.

 

" Environmental Permit " means any Permit, letter, clearance, consent, waiver, closure, exemption, decision or other action required under or issued, granted, given, authorized by or made pursuant to Environmental Law.

 

" ERISA " means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

 

" ERISA Affiliate " means all employers (whether or not incorporated) that would be treated together with the Seller or any of its Affiliates as a "single employer" within the meaning of Section 414 of the Code.

 

" Exchange Act " has the meaning set forth in Section 5.07.

 

" Excluded Assets " has the meaning set forth in Section 2.02 .

 

" Excluded Claims " means all rights to any Actions of any nature available to or being pursued by Seller to the extent related to Sorrento, Nantomics and the professional advisors and officers of Seller.

 

" Excluded Contracts " has the meaning set forth in Section 2.02(a) .

 

" Excluded Insurance Policies " has the meaning set forth in Section 2.02(a).

 

" Excluded Liabilities " has the meaning set forth in Section 2.04 .

 

" Financial Statements " has the meaning set forth in Section 4.04 .

 

 
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" FIRPTA Certificate " has the meaning set forth in Section 7.02(m) .

 

" GAAP " means United States generally accepted accounting principles in effect from time to time.

 

" Government Contracts " has the meaning set forth in Section 4.07(a)(viii)

 

" Governmental Authority " means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

 

" Governmental Order " means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

 

" Hazardous Materials " means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or manmade, that is hazardous, acutely hazardous, toxic, or words of similar import or regulatory effect 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.

 

" Indemnified Party " has the meaning set forth in Section 8.05 .

 

" Indemnifying Party " has the meaning set forth in Section 8.05 .

 

" Insurance Policies " has the meaning set forth in Section 4.15 .

 

" Intellectual Property " means all intellectual property and industrial property rights and assets, and all rights, interests and protections that are associated with, similar to, or required for the exercise of, any of the foregoing, however arising, pursuant to the Laws of any jurisdiction throughout the world, whether registered or unregistered, including any and all: (a) trademarks, service marks, trade names, brand names, logos, trade dress, design rights and other similar designations of source, sponsorship, association or origin, together with the goodwill connected with the use of and symbolized by, and all registrations, applications and renewals for, any of the foregoing; (b) internet domain names, whether or not trademarks, registered in any top-level domain by any authorized private registrar or Governmental Authority, web addresses, web pages, websites and related content, accounts with Twitter, Facebook and other social media companies and the content found thereon and related thereto, and URLs; (c) works of authorship, expressions, designs and design registrations, whether or not copyrightable, including copyrights, author, performer, moral and neighboring rights, and all registrations, applications for registration and renewals of such copyrights; (d) inventions, discoveries, trade secrets, business and technical information and know-how, databases, data collections and other confidential and proprietary information and all rights therein; (e) patents (including all reissues, divisionals, provisionals, continuations and continuations-in-part, re-examinations, renewals, substitutions and extensions thereof), patent applications, and other patent rights and any other Governmental Authority-issued indicia of invention ownership (including inventor's certificates, petty patents and patent utility models); (f) software and firmware, including data files, source code, object code, application programming interfaces, architecture, files, records, schematics, computerized databases and other related specifications and documentation (g) royalties, fees, income, payments and other proceeds now or hereafter due or payable with respect to any and all of the foregoing; and (h) all rights to any Actions of any nature available to or being pursued by Seller to the extent related to the foregoing, whether accruing before, on or after the date hereof, including all rights to and claims for damages, restitution and injunctive relief for infringement, dilution, misappropriation, violation, misuse, breach or default, with the right but no obligation to sue for such legal and equitable relief, and to collect, or otherwise recover, any such damages.

 

 
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" Intellectual Property Agreements " means all licenses, sublicenses, consent to use agreements, settlements, coexistence agreements, covenants not to sue, permissions and other Contracts (including any right to receive or obligation to pay royalties or any other consideration), whether written or oral, relating to any Intellectual Property that is used in or necessary for the conduct of the Business as currently conducted to which Seller is a party, beneficiary or otherwise bound.

 

" Intellectual Property Assets " means all Intellectual Property that is owned by Seller and used in or necessary for the conduct of the Business as currently conducted.

 

" Intellectual Property Assignments " has the meaning set forth in Section 3.02(a)(iii) .

 

" Intellectual Property Registrations " means all Intellectual Property Assets that are subject to any issuance, registration, application or other filing by, to or with any Governmental Authority or authorized private registrar in any jurisdiction, including registered trademarks, domain names and copyrights, issued and reissued patents and pending applications for any of the foregoing.

 

" Interim Balance Sheet " has the meaning set forth in Section 4.04 .

 

" Interim Balance Sheet Date " has the meaning set forth in Section 4.04 .

 

" Interim Financial Statements " has the meaning set forth in Section 4.04 .

 

" Inventory " has the meaning set forth in Section 2.01(b) .

 

" Knowledge of Seller or Seller's Knowledge " or any other similar knowledge qualification, means the actual or constructive knowledge of any director or officer of Seller, after due inquiry.

 

" Law " means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

 

" Liabilities " means liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise.

 

" Losses " means losses, damages, liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys' fees and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers; provided, however , that "Losses" shall not include punitive damages, except in the case of fraud or to the extent actually awarded to a Governmental Authority or other third party.

 

" Material Adverse Effect " means any event, occurrence, fact, condition or change that is, or could reasonably be expected to become, individually or in the aggregate, materially adverse to (a) the business, results of operations, condition (financial or otherwise) or assets of the Business, (b) the value of the Purchased Assets, or (c) the ability of Seller to consummate the transactions contemplated hereby on a timely basis; provided, however, that "Material Adverse Effect" shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions; (ii) conditions generally affecting the industries in which the Business operates; (iii) any changes in financial or securities markets in general; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any changes in applicable Laws or accounting rules, including GAAP; or (vi) the public announcement, pendency or completion of the transactions contemplated by this Agreement; provided further, however, that any event, occurrence, fact, condition or change referred to in clauses (i) through (iv) immediately above shall be taken into account in determining whether a Material Adverse Effect has occurred or could reasonably be expected to occur to the extent that such event, occurrence, fact, condition or change has a disproportionate effect on the Business compared to other participants in the industries in which the Business operates.

 

 
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" Material Contracts " has the meaning set forth in Section 4.07(a) .

 

" Material Customers " has the meaning set forth in Section 4.14(a) .

 

" Material Suppliers " has the meaning set forth in Section 4.14(b) .

 

" Multiemployer Plan " has the meaning set forth in Section 4.19(c) .

 

" Office Lease " means that certain Flex Space Office Lease, dated January 29, 2016, by and between Seller and Saul Holdings Limited Partnership for the premises located at 217 Perry Parkway, Gaithersburg, Maryland.

 

" Permits " means all permits, licenses (including, without limitation, the CLIA license for use in the Business), franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained, or required to be obtained, from Governmental Authorities.

 

" Permitted Encumbrances " has the meaning set forth in Section 4.08(a) .

 

" Person " means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

 

" Post-Closing Tax Period " means any taxable period beginning after the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period beginning after the Closing Date.

 

" Pre-Closing Tax Period " means any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date.

 

" Prepaid Insurance Premiums " means all advance payments made by Seller in connection with all insurance policies under which it is an insured.

 

" Purchased Assets " has the meaning set forth in Section 2.01 .

 

" Qualified Benefit Plan " has the meaning set forth in Section 4.19(c) .

 

" Registration Statement " shall mean any registration statement of the Buyer filed under the Securities Act that covers the resale of any of the shares of Closing Consideration pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

 

" Release " means any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including, without limitation, ambient air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture).

 

" Representative " means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

 

 
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" Restricted Business " means providing proteomic and other testing services to the healthcare and pharmaceutical industries and developing diagnostics based on proteomics technology.

 

" Restricted Period " has the meaning set forth in Section 6.07 .

 

" SEC " has the meaning set forth in Section 5.07.

 

" Securities Act "has the meaning set forth in Section 4.23(a).

 

" Seller " has the meaning set forth in the preamble.

 

" Seller Closing Certificate " has the meaning set forth in Section 7.02(j) .

 

" Seller Indemnitees " has the meaning set forth in Section 8.03 .

 

" Seller Stockholder Approval "has the meaning set forth in Section 4.02 .

 

" Tangible Personal Property " has the meaning set forth in Section 2.01(e) .

 

" Taxes " means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, documentary, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.

 

" Tax Return " means any return, declaration, report, claim for refund, information return or statement or other document relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

" Territory " means United States of America. .

 

" Third Party Claim " has the meaning set forth in Section 8.05(a) .

 

" Transaction Documents " means this Agreement, the Bill of Sale, the Assignment and Assumption Agreement, Intellectual Property Assignments, Assignment and Assumption of Office Leases, and the other agreements, instruments and documents required to be delivered at the Closing.

 

" Union " has the meaning set forth in Section 4.20(b) .

 

" WARN Act " means the federal Worker Adjustment and Retraining Notification Act of 1988, and similar state, local and foreign laws related to plant closings, relocations, mass layoffs and employment losses.

 

 
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ARTICLE II
PURCHASE AND SALE

 

Section 2.01 Purchase and Sale of Assets. Subject to the terms and conditions set forth herein, at the Closing, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, free and clear of any Encumbrances other than Permitted Encumbrances, all of Seller's right, title and interest in, to and under all of the assets, properties and rights of every kind and nature, whether real, personal or mixed, tangible or intangible (including goodwill), wherever located and whether now existing or hereafter acquired (other than the Excluded Assets), which relate to, or are used or held for use in connection with, the Business (collectively, the " Purchased Assets "), including, without limitation, the following:

 

(a) all accounts or notes receivable held by Seller, and any security, claim, remedy or other right related to any of the foregoing ( the " Accounts Receivable ");

 

(b) all inventory, finished goods, raw materials, work in progress, packaging, supplies, parts and other inventories ( the " Inventory ");

 

(c) all Contracts, including but not limited to Intellectual Property Agreements, set forth on Section 2.01(c) of the Disclosure Schedules other than Excluded Contracts (the " Assigned Contracts ");

 

(d) all Intellectual Property Assets, including but not limited to the name Theranostics Health;

 

(e) all furniture, fixtures, equipment, machinery, tools, vehicles, office equipment, supplies, computers, telephones and other tangible personal property (the " Tangible Personal Property ");

 

(f) all Permits, including Environmental Permits, which are held by Seller and required for the conduct of the Business as currently conducted or for the ownership and use of the Purchased Assets, including, without limitation, those listed on Section 4.17(b) and Section 4.18(b) of the Disclosure Schedules;

 

(g) all rights to any Actions of any nature available to or being pursued by Seller to the extent related to the Business, the Purchased Assets or the Assumed Liabilities, whether arising by way of counterclaim or otherwise, other than the Excluded Claims;

 

(h) all prepaid expenses, credits, advance payments, claims, security, refunds, rights of recovery, rights of set-off, rights of recoupment, deposits, charges, sums and fees (including any such item relating to the payment of Taxes and Seller's right to a refund of approximately $44,000 relating to the cancellation of a standby letter of credit issued by Bank of America as security for Seller's terminated lease of its former Rockville, Maryland facility), other than the Prepaid Insurance Premiums related to Excluded Insurance Policies;

 

(i) all of Seller's rights under warranties, indemnities and all similar rights against third parties to the extent related to any Purchased Assets;

 

(j) all insurance benefits, including rights and proceeds, arising from or relating to the Business, the Purchased Assets or the Assumed Liabilities other than those that arise from or relate to coverage for Excluded Liabilities including under the Excluded Insurance Policies;

 

 
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(k) originals, or where not available, copies, of all books and records, that are not documentation relating to stockholder ownership of Seller, including, but not limited to, books of account, ledgers and general, financial and accounting records, machinery and equipment maintenance files, customer lists, customer purchasing histories, price lists, distribution lists, supplier lists, production data, quality control records and procedures, customer complaints and inquiry files, research and development files, records and data (including all correspondence with any Governmental Authority), sales material and records (including pricing history, total sales, terms and conditions of sale, sales and pricing policies and practices), strategic plans, internal financial statements, marketing and promotional surveys, material and research and files relating to the Intellectual Property Assets and the Intellectual Property Agreements (" Books and Records ");

 

(l) all goodwill and the going concern value of the Business; and

 

(m) all cash and cash equivalents in excess of $150,000 of such cash and cash equivalents.

 

Section 2.02 Excluded Assets. Notwithstanding the foregoing, the Purchased Assets shall not include the following assets (collectively, the " Excluded Assets "):

 

(a) other than those contracts of insurance listed in item 2 of Section 4.20(a) of the Disclosure Schedules (which are Assigned Contracts), Contracts of insurance, including the employment practices and directors and officers liability insurance policies procured by Seller (the " Excluded Insurance Policies ") and any Intellectual Property Agreements, that are not Assigned Contracts (collectively, the " Excluded Contracts ");

 

(b) the corporate seals, organizational documents, minute books, stock books, Tax Returns, books of account or other records having to do with the corporate organization, governance and capital structure of Seller, including but not limited to all documentation relating to the common stock, stock options and warrants of Seller and any Books and Records that relate to the Excluded Assets or the Excluded Liabilities.

 

(c) all Benefit Plans and assets attributable thereto;

 

(d) the assets, properties and rights specifically set forth on Section 2.02(d) of the Disclosure Schedules;

 

(e) the Prepaid Insurance Premiums related to Excluded Insurance Policies;

 

(f) the rights which accrue or will accrue to Seller under the Transaction Documents and;

 

(g) all Insurance Policies.

 

Section 2.03 Assumed Liabilities. Subject to the terms and conditions set forth herein, Buyer (or it's designee Avant Theranostics Health Acquisitions Corporation) shall assume and agree to pay, perform and discharge only the following Liabilities of Seller (collectively, the " Assumed Liabilities "), and no other Liabilities:

 

(a) all trade accounts payable of Seller to third parties in connection with the Business that remain unpaid as of the Closing Date and that are set forth on Section 2.03(a) of the Disclosure Schedules or incurred by Seller after the date set forth on Section 2.03(a) of the Disclosure Schedules and prior to the Closing in the ordinary course of the operation of the Business;

 

 
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(b) all Liabilities in respect of the Assigned Contracts but only to the extent that such Liabilities thereunder are required to be performed after the Closing Date, were incurred in the ordinary course of business and do not relate to any failure to perform, improper performance, warranty or other breach, default or violation by Seller on or prior to the Closing;

 

(c) the promissory note in the amount of $400,000 from Seller to Amarantus BioScience Holdings Inc. dated February 29, 2016;

 

(d) Liabilities of Seller related to present or former employees of Seller set forth on 2.03(d) of the Disclosure Schedules in up to the amounts set forth on such Section 2.03(d) of the Disclosure Schedules, which amounts shall be payable as set forth in Section 2.03(d) of the Disclosure Schedules;

 

(e) those Liabilities of Seller set forth on Section 2.03(e) of the Disclosure Schedules.

 

Section 2.04 Excluded Liabilities. Notwithstanding the provisions of Section 2.03 or any other provision in this Agreement to the contrary, Buyer shall not assume and shall not be responsible to pay, perform or discharge any Liabilities of Seller or any of its Affiliates of any kind or nature whatsoever other than the Assumed Liabilities (the " Excluded Liabilities "). Seller shall, and shall cause each of its Affiliates to, pay and satisfy in due course all Excluded Liabilities which they are obligated to pay and satisfy. Without limiting the generality of the foregoing, the Excluded Liabilities shall include, but not be limited to, the following:

 

(a) any Liabilities of Seller arising or incurred in connection with the negotiation, preparation, investigation and performance of this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby, including, without limitation, fees and expenses of counsel, accountants, consultants, advisers and others;

 

(b) any Liability for (i) Taxes of Seller (or any stockholder or Affiliate of Seller) or relating to the Business, the Purchased Assets or the Assumed Liabilities for any Pre-Closing Tax Period; (ii) Taxes that arise out of the consummation of the transactions contemplated hereby or that are the responsibility of Seller pursuant to Section 6.14; or (iii) other Taxes of Seller (or any stockholder or Affiliate of Seller) of any kind or description (including any Liability for Taxes of Seller (or any stockholder or Affiliate of Seller) that becomes a Liability of Buyer under any common law doctrine of de facto merger or transferee or successor liability or otherwise by operation of contract or Law);

 

(c) any Liabilities relating to or arising out of the Excluded Assets;

 

(d) any Liabilities in respect of any pending or threatened Action arising out of, relating to or otherwise in respect of the operation of the Business or the Purchased Assets to the extent such Action relates to such operation on or prior to the Closing Date;

 

(e) any product Liability or similar claim for injury to a Person or property which arises out of or is based upon any express or implied representation, warranty, agreement or guaranty made by Seller, or by reason of the improper performance or malfunctioning of a product, improper design or manufacture, failure to adequately package, label or warn of hazards or other related product defects of any products at any time manufactured or sold or any service performed by Seller;

 

(f) any Liabilities of Seller arising under or in connection with any Benefit Plan providing benefits to any present or former employee of Seller;

 

 
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(g) any Liabilities of Seller for any present or former employees, officers, directors, retirees, independent contractors or consultants of Seller, including, without limitation, any Liabilities associated with any claims for wages or other benefits, bonuses, accrued vacation, workers' compensation, severance, retention, termination or other payments other than those set forth on Section 2.03(d) of the Disclosure Schedules;

 

(h) any Environmental Claims, or Liabilities under Environmental Laws, to the extent arising out of or relating to facts, circumstances or conditions existing on or prior to the Closing or otherwise to the extent arising out of any actions or omissions of Seller;

 

(i) any trade accounts payable of Seller (i) that are not set forth on Schedule Section 2.03(a) to the Disclosure Schedules or are incurred by Seller after the date set forth on Schedule Section 2.03(a) to the Disclosure Schedules and prior to the Closing in the ordinary course of the operation of the Business; (ii) which constitute intercompany payables owing to Affiliates of Seller; (iii) which constitute debt, loans or credit facilities to financial institutions or (iv) any trade accounts payable that are incurred by the Seller after the Closing;

 

(j) any Liabilities of the Business relating or arising from unfulfilled commitments, quotations, purchase orders, customer orders or work orders that (i) do not constitute part of the Purchased Assets issued by the Business' customers to Seller on or before the Closing; (ii) did not arise in the ordinary course of business; or (iii) are not validly and effectively assigned to Buyer pursuant to this Agreement;

 

(k) any Liabilities to indemnify, reimburse or advance amounts to any present or former officer, director, employee or agent of Seller (including with respect to any breach of fiduciary obligations by same), except for indemnification of same pursuant to Section 8.03 as Seller Indemnitees;

 

(l) any Liabilities under the Excluded Contracts or any other Contracts, including Intellectual Property Agreements, (i) which are not validly and effectively assigned to Buyer pursuant to this Agreement; (ii) which do not conform to the representations and warranties with respect thereto contained in this Agreement; or (iii) to the extent such Liabilities arise out of or relate to a breach by Seller of such Contracts prior to Closing;

 

(m) any Liabilities associated with debt, loans or credit facilities of Seller and/or the Business owing to financial institutions;

 

(n) any Liabilities arising out of, in respect of or in connection with the failure by Seller or any of its Affiliates to comply with any Law or Governmental Order; and

 

(o) those Liabilities of Seller set forth on Section 2.04(o)Section 2.03(e) of the Disclosure Schedules.

 

Section 2.05 Closing Consideration.

 

(a) At the Closing and as consideration for the sale of the Purchased Assets to Buyer by Seller, Buyer shall issue to Seller 25,000,000 shares of Buyer Common Stock (the " Closing Consideration " ), which shares will be deemed fully paid and nonassessable upon issuance. The Seller may transfer or distribute the shares of Closing Consideration only in accordance with applicable law, rules and regulations and at Seller's own expense.

 

 
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(b) Each share of Buyer Common Stock received in connection with this Agreement shall be subject to a lock-up beginning on the Closing Date and ending on the earlier of (i) the eighteen (18) months after such date, (ii) a Change in Control, as defined below, or (iii) written consent of Buyer, at Buyer's sole discretion, provided Buyer's consent shall apply to all shares of Buyer Common Stock issued pursuant to this Agreement (the " Lockup Period "); provided, however that the terms and conditions of such Lockup Period shall be no less favorable than the terms and conditions of the lockup period provided to Amarantus BioScience Holdings Inc. in connection with the Amarantus Diagnostics Acquisition. During the Lockup Period, the Seller shall not without prior written consent of Buyer, directly or indirectly, (i) offer, sell, offer to sell, contract to sell, hedge, pledge, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or sell (or announce any offer, sale, offer of sale, contract of sale, hedge, pledge, sale of any option or contract to purchase, purchase of any option or contract of sale, grant of any option, right or warrant to purchase or other sale or disposition), or otherwise transfer or dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future), any Buyer Common Stock acquired pursuant to this Agreement or (ii) enter into any swap or other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of any Buyer Common Stock, whether or not any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of any Buyer Common Stock. During the Lockup Period, the Seller shall not without prior written consent of Buyer, directly or indirectly, execute any purchases or sales of Buyer Common Stock that would constitute Short Sales (as defined in Rule 200 of Regulation SHO under the Exchange Act), including naked shorting, hard shorting or regular shorting.

 

(c) Until all amounts due under any Promissory Note issued by Seller pursuant to Section 6.21 have been paid in full, Seller shall not distribute any shares of Closing Consideration to its stockholders and shall use all proceeds of Seller's sale of any such shares solely to pay the amounts due under any such Promissory Note.

 

Section 2.06 Third Party Consents. To the extent that Seller's rights under any Contract or Permit constituting a Purchased Asset, or any other Purchased Asset, may not be assigned to Buyer without the consent of another Person which has not been obtained, this Agreement shall not constitute an agreement to assign the same if an attempted assignment would constitute a breach thereof or be unlawful, and Seller, at its expense, shall use its reasonable best efforts to obtain any such required consent(s) as promptly as possible. If any such consent shall not be obtained or if any attempted assignment would be ineffective or would impair Buyer's rights under the Purchased Asset in question so that Buyer would not in effect acquire the benefit of all such rights, Seller, to the maximum extent permitted by law and the Purchased Asset, shall act after the Closing as Buyer's agent in order to obtain for it the benefits thereunder and shall cooperate, to the maximum extent permitted by Law and the Purchased Asset, with Buyer in any other reasonable arrangement designed to provide such benefits to Buyer. Notwithstanding any provision in this Section 2.06 to the contrary, Buyer shall not be deemed to have waived its rights under Section 7.02(d) hereof unless and until Buyer either provides written waivers thereof or elects to proceed to consummate the transactions contemplated by this Agreement at Closing.

 

 
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ARTICLE III
CLOSING

 

Section 3.01 Closing. Subject to the terms and conditions of this Agreement, the consummation of the transactions contemplated by this Agreement (the " Closing ") shall take place at the offices of Sichenzia Ross Friedman Ference LLP, 61 Broadway, 32 nd Floor, New York, New York 10006, at 10:00AM, Eastern Standard time, on the second Business Day after all of the conditions to Closing set forth in Article VII are either satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date), or at such other time, date or place as Seller and Buyer may mutually agree upon in writing. The date on which the Closing is to occur is herein referred to as the " Closing Date ".

 

Section 3.02 Closing Deliverables.

 

(a) At the Closing, Seller shall deliver to Buyer the following:

 

(i) a bill of sale in the form of Exhibit A (the " Bill of Sale ") and duly executed by Seller, transferring the tangible personal property included in the Purchased Assets to Buyer;

 

(ii) an assignment and assumption agreement in the form of Exhibit B (the " Assignment and Assumption Agreement ") and duly executed by Seller, effecting the assignment to and assumption by Buyer of the Purchased Assets and the Assumed Liabilities;

 

(iii) an assignment in the form of Exhibit C (the " Intellectual Property Assignments ") and duly executed by Seller, transferring all of Seller's right, title and interest in and to the Intellectual Property Assets to Buyer;

 

(iv) with respect to the Office Lease, an Assignment and Assumption of Lease in the form of Exhibit D (the " Assignment and Assumption of Lease ") and duly executed by Seller;

 

(v) agreements signed by each Person named in a recorded financing statement evidencing a security interest that encumbers any of the Purchased Assets agreeing to the termination and release of such security interest and authorizing the filing of termination statements evidencing such termination and release;

 

(vi) the Seller Closing Certificate;

 

(vii) the FIRPTA Certificate;

 

(viii) the certificates of the Secretary or Assistant Secretary of Seller required by Section 7.02(k) and Section 7.02(l) ; and

 

(ix) such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to Buyer, as may be required to give effect to this Agreement.

 

(b) At the Closing, Buyer shall deliver to Seller the following:

 

(i) the Closing Consideration;

 

(ii) the Assignment and Assumption Agreement duly executed by Buyer;

 

(iii) with respect to each Lease, an Assignment and Assumption of Lease duly executed by Buyer;

 

(iv) the Buyer Closing Certificate; and

 

(v) the certificates of the Secretary or Assistant Secretary of Buyer required by Section 7.03(g) and Section 7.03(h) .

 

 
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except as set forth in the correspondingly numbered Section of the Disclosure Schedules, Seller represents and warrants to Buyer that the statements contained in this Article IV are true and correct as of the date hereof.

 

Section 4.01 Organization and Qualification of Seller. Seller is a corporation duly organized, validly existing and in good standing under the Laws of the state of Delaware and has full corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on the Business as currently conducted. Section 4.01 of the Disclosure Schedules sets forth each jurisdiction in which Seller is licensed or qualified to do business, and Seller is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the ownership of the Purchased Assets or the operation of the Business as currently conducted makes such licensing or qualification necessary.

 

Section 4.02 Authority of Seller. Seller has full corporate power and authority to enter into this Agreement and the other Transaction Documents to which Seller is a party, to carry out its obligations hereunder and thereunder and, upon the receipt of the approval of the holders of a majority of the outstanding shares of the Seller's common stock entitled to vote thereon ("Seller Stockholder Approval"), to consummate the transactions contemplated hereby and thereby. The execution and delivery by Seller of this Agreement and any other Transaction Document to which Seller is a party, the performance by Seller of its obligations hereunder and thereunder and the consummation by Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Seller subject to Seller Stockholder Approval. This Agreement has been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Buyer) this Agreement constitutes a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms. When each other Transaction Document to which Seller is or will be a party has been duly executed and delivered by Seller (assuming due authorization, execution and delivery by each other party thereto), such Transaction Document will constitute a legal and binding obligation of Seller enforceable against it in accordance with its terms.

 

Section 4.03 No Conflicts; Consents. The execution, delivery and performance by Seller of this Agreement and the other Transaction Documents to which it is a party, and, following Seller Stockholder Approval, the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the certificate of incorporation, by-laws or other organizational documents of Seller; (b) conflict with or result in a violation or breach of any provision of any Law or Governmental Order applicable to Seller, the Business or the Purchased Assets; (c) except as set forth in Section 4.03 of the Disclosure Schedules, require the notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, result in the acceleration of or create in any party the right to accelerate, terminate, modify or cancel any Contract or Permit to which Seller is a party or by which Seller or the Business is bound or to which any of the Purchased Assets are subject (including any Assigned Contract); or (d) result in the creation or imposition of any Encumbrance other than Permitted Encumbrances on the Purchased Assets. The failure to provide any notice or to obtain any consent or other action by any Person required by any Contract or Permit set forth in Section 4.03 of the Disclosure Schedules, other than those set forth in in Section 7.02(d) of the Disclosure Schedules, will not result in a Material Adverse Effect. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Seller in connection with the execution and delivery of this Agreement or any of the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby.

 

 
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Section 4.04 Financial Statements. Complete copies of the audited financial statements consisting of the balance sheet of the Business as at December 31 in each of the years 2013 and 2014 and the unaudited financial statements consisting of the balance sheet of the Business as of December 31, 2015 and, in each case, the related statements of income and retained earnings, stockholders' equity and cash flow for the years then ended (the " Annual Financial Statements "), and unaudited financial statements consisting of the balance sheet of the Business as at March 31, 2016 and the related statements of income and retained earnings, stockholders' equity and cash flow for the three-month period then ended (the " Interim Financial Statements " and together with the Annual Financial Statements, the " Financial Statements ") are included in the Disclosure Schedules/have been delivered to Buyer. The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the period involved, subject, in the cases of the 2015 Annual Financial Statements and the Interim Financial Statements, to normal and recurring year-end adjustments (the effect of which will not be materially adverse) and the absence of notes (that, if presented, would not differ materially from those presented in the 2013 and 2014 Annual Financial Statements). The Financial Statements are based on the books and records of the Business, and fairly present in all material respects the financial condition of the Business as of the respective dates they were prepared and the results of the operations of the Business for the periods indicated. The balance sheet of the Business as of December 31, 2015 is referred to herein as the " Balance Sheet " and the date thereof as the " Balance Sheet Date " and the balance sheet of the Business as of March 31, 2016 is referred to herein as the " Interim Balance Sheet " and the date thereof as the " Interim Balance Sheet Date ". Seller maintains a standard system of accounting for the Business established and administered in accordance with GAAP.

 

Section 4.05 Undisclosed Liabilities. Seller has no Liabilities with respect to the Business, except (a) those which are adequately reflected or reserved against in the Balance Sheet as of the Balance Sheet Date, and (b) those which have been incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date and which are not, individually or in the aggregate, material in amount and (c) those set forth on Section 4.05 of the Disclosure Schedules.

 

Section 4.06 Absence of Certain Changes, Events and Conditions. Since the Balance Sheet Date, and other than in the ordinary course of business consistent with past practice, there has not been any:

 

(a) event, occurrence or development that has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

 

(b) declaration or payment of any dividends or distributions on or in respect of any of Seller's capital stock or redemption, purchase or acquisition of Seller's capital stock;

 

(c) material change in any method of accounting or accounting practice for the Business, except as required by GAAP or as disclosed in the notes to the Financial Statements;

 

(d) material change in cash management practices and policies, practices and procedures with respect to collection of Accounts Receivable, establishment of reserves for uncollectible Accounts Receivable, accrual of Accounts Receivable, inventory control, prepayment of expenses, payment of trade accounts payable, accrual of other expenses, deferral of revenue and acceptance of customer deposits;

 

(e) entry into any Contract that would constitute a Material Contract;

 

(f) incurrence, assumption or guarantee of any indebtedness for borrowed money in connection with the Business except unsecured current obligations and Liabilities incurred in the ordinary course of business consistent with past practice;

 

(g) transfer, assignment, sale or other disposition of any of the Purchased Assets shown or reflected in the Balance Sheet, except for the sale of Inventory in the ordinary course of business;

 

 
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(h) cancellation of any debts or claims or amendment, termination or waiver of any rights constituting Purchased Assets;

 

(i) transfer, assignment or grant of any license or sublicense of any material rights under or with respect to any Intellectual Property Assets or Intellectual Property Agreements;

 

(j) material damage, destruction or loss, or any material interruption in use, of any Purchased Assets, whether or not covered by insurance;

 

(k) acceleration, termination, material modification to or cancellation of any Assigned Contract or Permit;

 

(l) material capital expenditures which would constitute an Assumed Liability;

 

(m) imposition of any Encumbrance upon any of the Purchased Assets;

 

(n) (i) grant of any bonuses, whether monetary or otherwise, or increase in any wages, salary, severance, pension or other compensation or benefits in respect of any current or former employees, officers, directors, independent contractors or consultants of the Business, other than as provided for in any written agreements or required by applicable Law, (ii) change in the terms of employment for any employee of the Business or any termination of any employees for which the aggregate costs and expenses exceed $10,000, or (iii) action to accelerate the vesting or payment of any compensation or benefit for any current or former employee, officer, director, consultant or independent contractor of the Business;

 

(o) hiring or promoting any person as or to (as the case may be) an officer or hiring or promoting any employee below officer except to fill a vacancy in the ordinary course of business;

 

(p) adoption, modification or termination of any: (i) employment, severance, retention or other agreement with any current or former employee, officer, director, independent contractor or consultant of the Business, (ii) Benefit Plan, or (iii) collective bargaining or other agreement with a Union, in each case whether written or oral;

 

(q) any loan to (or forgiveness of any loan to), or entry into any other transaction with, any current or former directors, officers or employees of the Business;

 

(r) adoption of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consent to the filing of any bankruptcy petition against it under any similar Law;

 

(s) purchase, lease or other acquisition of the right to own, use or lease any property or assets in connection with the Business for an amount in excess of $5,000, individually (in the case of a lease, per annum) or $10,000 in the aggregate (in the case of a lease, for the entire term of the lease, not including any option term), except for purchases of Inventory or supplies in the ordinary course of business consistent with past practice;

 

(t) any Contract to do any of the foregoing, or any action or omission that would result in any of the foregoing.

 

 
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Section 4.07 Material Contracts.

 

(a) Section 4.07(a) of the Disclosure Schedules lists each of the following Contracts (x) by which any of the Purchased Assets are bound or affected or (y) to which Seller is a party or by which it is bound in connection with the Business or the Purchased Assets (such Contracts, together with all Contracts concerning the occupancy, management or operation of any real property (including without limitation, brokerage contracts) listed or otherwise disclosed in Section 4.10(a) of the Disclosure Schedules and all Intellectual Property Agreements set forth in Section 4.11(b) of the Disclosure Schedules, being " Material Contracts "):

 

(i) all Contracts involving aggregate consideration in excess of $10,000 and which, in each case, cannot be cancelled without penalty or without more than 90 days' notice;

 

(ii) all Contracts that require Seller to purchase or sell a stated portion of the requirements or outputs of the Business or that contain "take or pay" provisions;

 

(iii) all Contracts that provide for the indemnification of any Person or the assumption of any Tax, environmental or other Liability of any Person;

 

(iv) all Contracts that relate to the acquisition or disposition of any business, a material amount of stock or assets of any other Person or any real property (whether by merger, sale of stock, sale of assets or otherwise);

 

(v) all broker, distributor, dealer, manufacturer's representative, franchise, agency, sales promotion, market research, marketing consulting and advertising Contracts;

 

(vi) all employment agreements and Contracts with independent contractors or consultants (or similar arrangements) and which are not cancellable without material penalty or without more than 90 days' notice;

 

(vii) except for Contracts relating to trade receivables, all Contracts relating to indebtedness (including, without limitation, guarantees);

 

(viii) all Contracts with any Governmental Authority (" Government Contracts ");

 

(ix) all Contracts that limit or purport to limit the ability of Seller to compete in any line of business or with any Person or in any geographic area or during any period of time;

 

(x) all joint venture, partnership or similar Contracts;

 

(xi) all Contracts for the sale of any of the Purchased Assets or for the grant to any Person of any option, right of first refusal or preferential or similar right to purchase any of the Purchased Assets;

 

(xii) all powers of attorney with respect to the Business or any Purchased Asset;

 

(xiii) all collective bargaining agreements or Contracts with any Union; and

 

(xiv) all other Contracts that are material to the Purchased Assets or the operation of the Business and not previously disclosed pursuant to this Section 4.07 .

 

 
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(b) Each Material Contract is valid and binding on Seller in accordance with its terms and is in full force and effect. None of Seller or, to Seller's Knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under), or has provided or received any notice of any intention to terminate, any Material Contract. No event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any Material Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any benefit thereunder. Complete and correct copies of each Material Contract (including all modifications, amendments and supplements thereto and waivers thereunder) have been made available to Buyer. There are no material disputes pending or threatened under any Contract included in the Purchased Assets. Except as set forth in Section 4.14(a) of the Disclosure Schedules, Seller has not received any notice, and has no reason to believe, that any of the Material Customers has ceased, or intends to cease after the Closing, to use the goods or services of the Business or to otherwise terminate or materially reduce its relationship with the Business and to the Knowledge of the Seller, there is no believe that Seller's 2016 revenues from Contracts with Material Customers will be materially less than its 2015 revenues from such Contracts.

 

Section 4.08 Title to Purchased Assets. Seller has good and valid title to, or a valid leasehold interest in, all of the Purchased Assets. All such Purchased Assets (including leasehold interests) are free and clear of Encumbrances except for the following (collectively referred to as " Permitted Encumbrances "):

 

(a) those items set forth in Section 4.08 of the Disclosure Schedules;

 

(b) liens for Taxes not yet due and payable;

 

(c) mechanics', carriers', workmen's, repairmen's or other like liens arising or incurred in the ordinary course of business consistent with past practice or amounts that are not delinquent and which are not, individually or in the aggregate, material to the Business or the Purchased Assets;

 

(d) easements, rights of way, zoning ordinances and other similar encumbrances affecting real property which are not, individually or in the aggregate, material to the Business or the Purchased Assets, which do not prohibit or interfere with the current operation of any real property and which do not render title to any real property unmarketable; or

 

(e) liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business consistent with past practice which are not, individually or in the aggregate, material to the Business or the Purchased Assets.

 

Section 4.09 Condition and Sufficiency of Assets. Except as set forth in Section 4.09 of the Disclosure Schedules, the buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property included in the Purchased Assets are structurally sound, are in good operating condition and repair, and are adequate for the uses to which they are being put, and none of such buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost. The Purchased Assets are sufficient for the continued conduct of the Business after the Closing in substantially the same manner as conducted prior to the Closing and constitute all of the rights, property and assets necessary to conduct the Business as currently conducted. None of the Excluded Assets are material to the Business.

 

 
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Section 4.10 Real Property

 

(a) Seller does not own any real property.

 

(b) The real property leased by Seller pursuant to the Office Lease is the only parcel of real property leased by Seller and used in or necessary for the conduct of the Business as currently conducted (together with all rights, title and interest of Seller in and to leasehold improvements relating thereto, including, but not limited to, security deposits, reserves or prepaid rents paid in connection therewith, collectively, the and a true and complete list of all leases, subleases, licenses, concessions and other agreements (whether written or oral), including all amendments, extensions renewals, guaranties and other agreements with respect thereto, pursuant to which Seller holds Office Lease . Seller has delivered to Buyer a true and complete copy of the Office Lease. With respect to each Lease:

 

(i) Such Office Lease is valid, binding, enforceable and in full force and effect, and Seller enjoys peaceful and undisturbed possession of the real property leased by Seller pursuant to the Office Lease;

 

(ii) Seller is not in breach or default under such Office Lease, and no event has occurred or circumstance exists which, with the delivery of notice, passage of time or both, would constitute such a breach or default, and Seller has paid all rent due and payable under such Office Lease;

 

(iii) Seller has not received nor given any notice of any default or event that with notice or lapse of time, or both, would constitute a default by Seller under the Office Leases and, to the Knowledge of Seller, no other party is in default thereof, and no party to the Office Lease has exercised any termination rights with respect thereto;

 

(iv) Seller has not subleased, assigned or otherwise granted to any Person the right to use or occupy the real property leased by Seller pursuant to the Office Lease or any portion thereof; and

 

(v) Seller has not pledged, mortgaged or otherwise granted an Encumbrance on its leasehold interest in the Office Lease

 

(c) Seller has not received any written notice of (i) material violations of building codes and/or zoning ordinances or other governmental or regulatory Laws affecting the real property leased by Seller pursuant to the Office Lease, (ii) existing, pending or threatened condemnation proceedings affecting real property leased by Seller pursuant to the Office Lease, or (iii) existing, pending or threatened zoning, building code or other moratorium proceedings, or similar matters which could reasonably be expected to materially and adversely affect the ability to operate the real property leased by Seller pursuant to the Office Lease as currently operated. Neither the whole nor any material portion of the real property leased by Seller pursuant to the Office Lease has been damaged or destroyed by fire or other casualty.

 

(d) The real property leased by Seller pursuant to the Office Lease is sufficient for the continued conduct of the Business after the Closing in substantially the same manner as conducted prior to the Closing and constitutes all of the real property necessary to conduct the Business as currently conducted.

 

Section 4.11 Intellectual Property.

 

(a) Section 4.11(a) of the Disclosure Schedules lists all (i) Intellectual Property Registrations and (ii) Intellectual Property Assets, including software, that are not registered but that are material to the operation of the Business. All required filings and fees related to the Intellectual Property Registrations have been timely filed with and paid to the relevant Governmental Authorities and authorized registrars, and all Intellectual Property Registrations are otherwise in good standing. Seller has provided Buyer with true and complete copies of file histories, documents, certificates, office actions, correspondence and other materials related to all Intellectual Property Registrations.

 

 
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(b) Section 4.11(b) of the Disclosure Schedules lists all Intellectual Property Agreements. Seller has provided Buyer with true and complete copies of all such Intellectual Property Agreements, including all modifications, amendments and supplements thereto and waivers thereunder. Each Intellectual Property Agreement is valid and binding on Seller in accordance with its terms and is in full force and effect. None of Seller or, to Seller's Knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under) in any material respect, or has provided or received any notice of breach or default of or any intention to terminate, any Intellectual Property Agreement. No event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any Intellectual Property Agreement or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any benefit thereunder.

 

(c) Except as set forth in Section 4.11(c) of the Disclosure Schedules, Seller is the sole and exclusive legal and beneficial, and with respect to the Intellectual Property Registrations, record, owner of all right, title and interest in and to the Intellectual Property Assets, and has the valid right to use all other Intellectual Property used in or necessary for the conduct of the Business as currently conducted, in each case, free and clear of Encumbrances other than Permitted Encumbrances.

 

(d) The Intellectual Property Assets and Intellectual Property licensed under the Intellectual Property Agreements are all of the Intellectual Property necessary to operate the Business as presently conducted. Other than as set forth on Section 4.11(d) of the Disclosure Schedules, the consummation of the transactions contemplated hereunder will not result in the loss or impairment of or payment of any additional amounts with respect to, nor require the consent of any other Person in respect of, the Buyer's right to own, use or hold for use any Intellectual Property as owned, used or held for use in the conduct of the Business as currently conducted.

 

(e) Seller's rights in the Intellectual Property Assets are valid, subsisting and enforceable. Seller has taken all reasonable steps to maintain the Intellectual Property Assets and to protect and preserve the confidentiality of all trade secrets included in the Intellectual Property Assets.

 

(f) Seller has not received any written notice, nor to Seller's Knowledge, oral notice that the conduct of the Business as currently and formerly conducted, and the Intellectual Property Assets and Intellectual Property licensed under the Intellectual Property Agreements as currently or formerly owned, licensed or used by Seller, have not infringed, misappropriated, diluted or otherwise violated, and have not, do not and will not infringe, dilute, misappropriate or otherwise violate, the Intellectual Property or other rights of any Person. To Seller's Knowledge, no Person has infringed, misappropriated, diluted or otherwise violated, or is currently infringing, misappropriating, diluting or otherwise violating, any Intellectual Property Assets.

 

(g) There are no Actions (including any oppositions, interferences or re-examinations) settled or pending, nor to Seller's Knowledge, are there any Actions pending or threatened (including in the form of offers to obtain a license): (i) alleging any infringement, misappropriation, dilution or violation of the Intellectual Property of any Person by Seller in connection with the Business; (ii) challenging the validity, enforceability, registrability or ownership of any Intellectual Property Assets or Seller's rights with respect to any Intellectual Property Assets; or (iii) by Seller or any other Person alleging any infringement, misappropriation, dilution or violation by any Person of any Intellectual Property Assets. Seller has not received any written notice, nor to Seller's Knowledge, oral notice that Seller is subject to any outstanding or prospective Governmental Order (including any motion or petition therefor) that does or would restrict or impair the use of any Intellectual Property Assets.

 

Section 4.12 Inventory. All Inventory, whether or not reflected in the Balance Sheet, consists of a quality and quantity usable and salable in the ordinary course of business consistent with past practice, except for obsolete, damaged, defective or slow-moving items that have been written off or written down to fair market value or for which adequate reserves have been established. All Inventory is owned by Seller free and clear of all Encumbrances, and no Inventory is held on a consignment basis. The quantities of each item of Inventory (whether raw materials, work-in-process or finished goods) are not excessive, but are reasonable in the present circumstances of Seller.

 

 
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Section 4.13 Accounts Receivable. The Accounts Receivable reflected on the Interim Balance Sheet and the Accounts Receivable arising after the date thereof (a) have arisen from bona fide transactions entered into by Seller involving the sale of goods or the rendering of services in the ordinary course of business consistent with past practice; (b) constitute only valid, undisputed claims of Seller not subject to claims of set-off or other defenses or counterclaims other than normal cash discounts accrued in the ordinary course of business consistent with past practice; and (c) subject to a reserve for bad debts shown on the Interim Balance Sheet or, with respect to Accounts Receivable arising after the Interim Balance Sheet Date, on the accounting records of the Business, are collectible in full within 90 days after billing. The reserve for bad debts shown on the Interim Balance Sheet or, with respect to Accounts Receivable arising after the Interim Balance Sheet Date, on the accounting records of the Business have been determined in accordance with GAAP, consistently applied, subject to normal year-end adjustments and the absence of disclosures normally made in footnotes.

 

Section 4.14 Customers and Suppliers.

 

(a) Section 4.14(a) of the Disclosure Schedules sets forth with respect to the Business (i) each customer who has paid aggregate consideration to Seller for goods or services rendered in an amount greater than or equal to $10,000 in either of the two most recent fiscal years (collectively, the " Material Customers "); and (ii) the amount of consideration paid by each Material Customer during such periods. Except as set forth in Section 4.14(a) of the Disclosure Schedules, Seller has not received any notice, and has no reason to believe, that any of the Material Customers has ceased, or intends to cease after the Closing, to use the goods or services of the Business or to otherwise terminate or materially reduce its relationship with the Business.

 

(b) Section 4.14(b) of the Disclosure Schedules sets forth with respect to the Business (i) each supplier to whom Seller has paid consideration for goods or services rendered in an amount greater than or equal to $10,000 in either of the two most recent fiscal years (collectively, the " Material Suppliers "); and (ii) the amount of purchases from each Material Supplier during such periods. Seller has not received any notice, and has no reason to believe, that any of the Material Customers has ceased, or intends to cease after the Closing, to use the goods or services of the Business or to otherwise terminate or materially reduce its relationship with the Business and, to the Knowledge of the Seller, there is no reason to believe that Seller's 2016 revenues from Contracts with Material Customers will be materially less than its 2015 revenues from such Contracts.

 

Section 4.15 Insurance. Section 4.15 of the Disclosure Schedules sets forth (a) a true and complete list of all current policies or binders of any and all fire, liability, product liability, umbrella liability, real and personal property, workers' compensation, vehicular, fiduciary liability and other casualty and property insurance maintained by Seller or its Affiliates and relating to the Business, the Purchased Assets or the Assumed Liabilities (collectively, the " Insurance Policies "); and (b) with respect to the Business, the Purchased Assets or the Assumed Liabilities, a list of all pending claims and the claims history for Seller since January 1, 2013. Except as set forth on Section 4.15 of the Disclosure Schedules, there are no claims related to the Business, the Purchased Assets or the Assumed Liabilities pending under any such Insurance Policies as to which coverage has been questioned, denied or disputed or in respect of which there is an outstanding reservation of rights. Neither Seller nor any of its Affiliates has received any written notice of cancellation of, premium increase with respect to, or alteration of coverage under, any of such Insurance Policies. All premiums due on such Insurance Policies have either been paid or, if not yet due, accrued. All such Insurance Policies (a) are in full force and effect and enforceable in accordance with their terms; (b) are to Seller's Knowledge, provided by carriers who are financially solvent; and (c) have not been subject to any lapse in coverage. None of Seller or any of its Affiliates is in default under, or has otherwise failed to comply with, in any material respect, any provision contained in any such Insurance Policy. The Insurance Policies are of the type and in the amounts customarily carried by Persons conducting a business similar to the Business and are sufficient for compliance with all applicable Laws and Contracts to which Seller is a party or by which it is bound. True and complete copies of the Insurance Policies have been made available to Buyer.

 

 
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Section 4.16 Legal Proceedings; Governmental Orders.

 

(a) Except as set forth in Section 4.16(a) of the Disclosure Schedules, there are no Actions pending or, to Seller's Knowledge, threatened against or by Seller (a) relating to or affecting the Business, the Purchased Assets or the Assumed Liabilities; or (b) that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. To Seller's Knowledge, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

 

(b) There are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against, relating to or affecting the Business. Seller is in compliance with the terms of each Governmental Order set forth in Section 4.16(b) of the Disclosure Schedules. To Seller's Knowledge, no event has occurred or circumstances exist that may constitute or result in (with or without notice or lapse of time) a violation of any such Governmental Order.

 

Section 4.17 Compliance With Laws; Permits.

 

(a) Seller has complied, and is now complying, in all material respects with all Laws applicable to the conduct of the Business as currently conducted or the ownership and use of the Purchased Assets.

 

(b) All Permits required for Seller to conduct the Business as currently conducted or for the ownership and use of the Purchased Assets have been obtained by Seller and are valid and in full force and effect. All fees and charges with respect to such Permits as of the date hereof have been paid in full. Section 4.17(b) of the Disclosure Schedules lists all current Permits issued to Seller which are related to the conduct of the Business as currently conducted or the ownership and use of the Purchased Assets, including the names of the Permits and their respective dates of issuance and expiration. To Seller's Knowledge, no event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation of any Permit set forth in Section 4.17(b) of the Disclosure Schedules. Seller has a (i) CLIA Permit and (ii) College of American Pathologists certification, each of which is valid and in good standing. The Purchased Assets (including without limitation, the laboratory facilities, instrumentation, diagnostic tests and services, and reagents) are properly validated, serviced and fit for their current use in a CLIA laboratory .

 

Section 4.18 Environmental Matters.

 

(a) The operations of Seller with respect to the Business and the Purchased Assets are currently and have been in compliance in all material respects with all Environmental Laws. To Seller's Knowledge, Seller has not received from any Person, with respect to the Business or the Purchased Assets, any: (i) Environmental Notice or Environmental Claim; or (ii) written request for information pursuant to Environmental Law, which, in each case, either remains pending or unresolved, or is the source of ongoing obligations or requirements as of the Closing Date.

 

(b) Seller has obtained and is in material compliance with all Environmental Permits (each of which is disclosed in Section 4.18(b) of the Disclosure Schedules) necessary for the conduct of the Business as currently conducted or the ownership, lease, operation or use of the Purchased Assets and all such Environmental Permits are in full force and effect and shall be maintained in full force and effect by Seller through the Closing Date in accordance with Environmental Law, and Seller is not aware of any condition, event or circumstance that might prevent or impede, after the Closing Date, the conduct of the Business as currently conducted or the ownership, lease, operation or use of the Purchased Assets. With respect to any such Environmental Permits, Seller has undertaken, or will undertake prior to the Closing Date, all measures necessary to facilitate transferability of the same, and Seller is not aware of any condition, event or circumstance that might prevent or impede the transferability of the same, and has not received any Environmental Notice or written communication regarding any material adverse change in the status or terms and conditions of the same.

 

 
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(c) None of the Business or the Purchased Assets or any real property currently or formerly owned, leased or operated by Seller in connection with the Business is listed on, or has been proposed for listing on, the National Priorities List (or CERCLIS) under CERCLA, or any similar state list.

 

(d) To Seller's Knowledge, there has been no Release of Hazardous Materials in contravention of Environmental Law with respect to the Business or the Purchased Assets or any real property currently or formerly owned, leased or operated by Seller in connection with the Business, and Seller has not received an Environmental Notice that any of the Business or the Purchased Assets or real property currently or formerly owned, leased or operated by Seller in connection with the Business (including soils, groundwater, surface water, buildings and other structure located thereon) has been contaminated with any Hazardous Material which could reasonably be expected to result in an Environmental Claim against, or a violation of Environmental Law or term of any Environmental Permit by, Seller.

 

(e) Section 4.18(e) of the Disclosure Schedules contains a complete and accurate list of all active or abandoned aboveground or underground storage tanks owned or operated by Seller in connection with the Business or the Purchased Assets.

 

(f) Section 4.18(f) of the Disclosure Schedules contains a complete and accurate list of all off-site Hazardous Materials treatment, storage, or disposal facilities or locations used by Seller and any predecessors in connection with the Business or the Purchased Assets as to which Seller may retain liability, and none of these facilities or locations has been placed or proposed for placement on the National Priorities List (or CERCLIS) under CERCLA, or any similar state list, and Seller has not received any Environmental Notice regarding potential liabilities with respect to such off-site Hazardous Materials treatment, storage, or disposal facilities or locations used by Seller.

 

(g) Seller has not retained or assumed, by contract or operation of Law, any liabilities or obligations of third parties under Environmental Law.

 

(h) Seller has provided or otherwise made available to Buyer and listed in Section 4.18(h) of the Disclosure Schedules: (i) any and all environmental reports, studies, audits, records, sampling data, site assessments, risk assessments, economic models and other similar documents with respect to the Business or the Purchased Assets or any real property currently or formerly owned, leased or operated by Seller in connection with the Business which are in the possession or control of Seller related to compliance with Environmental Laws, Environmental Claims or an Environmental Notice or the Release of Hazardous Materials; and (ii) any and all material documents concerning planned or anticipated capital expenditures required to reduce, offset, limit or otherwise control pollution and/or emissions, manage waste or otherwise ensure compliance with current or future Environmental Laws by Seller (including, without limitation, costs of remediation, pollution control equipment and operational changes).

 

(i) Seller is not aware of or reasonably anticipates, as of the Closing Date, any condition, event or circumstance concerning the Release or regulation of Hazardous Materials that might, after the Closing Date, prevent, impede or materially increase the costs associated with the ownership, lease, operation, performance or use of the Business or the Purchased Assets as currently carried out.

 

(j) Seller does not own nor control any Environmental Attributes and has not entered into any contract or pledge to transfer, lease, license, guarantee, sell, mortgage, pledge or otherwise dispose of or encumber any Environmental Attributes as of the date hereof.

 

 
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Section 4.19 Employee Benefit Matters.

 

(a) Section 4.19(a) of the Disclosure Schedules contains a true and complete list of each pension, benefit, retirement, compensation, employment, consulting, profit-sharing, deferred compensation, incentive, bonus, performance award, phantom equity, stock or stock-based, change in control, retention, severance, vacation, paid time off, welfare, fringe-benefit and other similar agreement, plan, policy, program or arrangement (and any amendments thereto), in each case whether or not reduced to writing and whether funded or unfunded, including each "employee benefit plan" within the meaning of Section 3(3) of ERISA, whether or not tax-qualified and whether or not subject to ERISA, which is or has been maintained, sponsored, contributed to, or required to be contributed to by Seller for the benefit of any current or former employee, officer, director, retiree, independent contractor or consultant of the Business or any spouse or dependent of such individual, or under which Seller or any of its ERISA Affiliates has or may have any Liability, or with respect to which Buyer or any of its Affiliates would reasonably be expected to have any Liability, contingent or otherwise (as listed on Section 4.19(a) of the Disclosure Schedules, each, a " Benefit Plan ").

 

(b) With respect to each Benefit Plan, Seller has made available to Buyer accurate, current and complete copies of each of the following: (i) where the Benefit Plan has been reduced to writing, the plan document together with all amendments; (ii) where the Benefit Plan has not been reduced to writing, a written summary of all material plan terms; (iii) where applicable, copies of any trust agreements or other funding arrangements, custodial agreements, insurance policies and contracts, administration agreements and similar agreements, and investment management or investment advisory agreements, now in effect or required in the future as a result of the transactions contemplated by this Agreement or otherwise; (iv) copies of any summary plan descriptions, summaries of material modifications, employee handbooks and any other written communications (or a description of any oral communications) relating to any Benefit Plan; (v) in the case of any Benefit Plan that is intended to be qualified under Section 401(a) of the Code, a copy of the most recent determination, opinion or advisory letter from the Internal Revenue Service; (vi) in the case of any Benefit Plan for which a Form 5500 is required to be filed, a copy of the two most recently filed Form 5500, with schedules and financial statements attached; (vii) actuarial valuations and reports related to any Benefit Plans with respect to the most recently completed plan years; (viii) the most recent nondiscrimination tests performed under the Code; and (ix) copies of material notices, letters or other correspondence from the Internal Revenue Service, Department of Labor, Pension Benefit Guaranty Corporation or other Governmental Authority relating to the Benefit Plan.

 

(c) Except as set forth in Section 4.19(c) of the Disclosure Schedules, each Benefit Plan and related trust (other than any multiemployer plan within the meaning of Section 3(37) of ERISA (each a " Multiemployer Plan ")) has been established, administered and maintained in accordance with its terms and in compliance with all applicable Laws (including ERISA, the Code and any applicable local Laws). Each Benefit Plan that is intended to be qualified under Section 401(a) of the Code (a " Qualified Benefit Plan ") is so qualified and has received a favorable and current determination letter from the Internal Revenue Service, or with respect to a prototype plan, can rely on an opinion letter from the Internal Revenue Service to the prototype plan sponsor, to the effect that such Qualified Benefit Plan is so qualified and that the plan and the trust related thereto are exempt from federal income taxes under Sections 401(a) and 501(a), respectively, of the Code, and nothing has occurred that could reasonably be expected to adversely affect the qualified status of any Qualified Benefit Plan. Nothing has occurred with respect to any Benefit Plan that has subjected or could reasonably be expected to subject Seller or any of its ERISA Affiliates or, with respect to any period on or after the Closing Date, Buyer or any of its Affiliates, to a penalty under Section 502 of ERISA or to tax or penalty under Section 4975 of the Code. Except as set forth in Section 4.19(c) of the Disclosure Schedules, all benefits, contributions and premiums relating to each Benefit Plan have been timely paid in accordance with the terms of such Benefit Plan and all applicable Laws and accounting principles, and all benefits accrued under any unfunded Benefit Plan have been paid, accrued or otherwise adequately reserved to the extent required by, and in accordance with GAAP.

 

(d) Neither Seller nor any of its ERISA Affiliates has (i) incurred or reasonably expects to incur, either directly or indirectly, any material Liability under Title I or Title IV of ERISA or related provisions of the Code or applicable local Law relating to employee benefit plans; (ii) failed to timely pay premiums to the Pension Benefit Guaranty Corporation; (iii) withdrawn from any Benefit Plan; or (iv) engaged in any transaction which would give rise to liability under Section 4069 or Section 4212(c) of ERISA.

 

 
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(e) With respect to each Benefit Plan (i) except as set forth in Section 4.19(e) of the Disclosure Schedules, no such plan is a Multiemployer Plan, and (A) all contributions required to be paid by Seller or its ERISA Affiliates have been timely paid to the applicable Multiemployer Plan, (B) neither Seller nor any ERISA Affiliate has incurred any withdrawal liability under Title IV of ERISA which remains unsatisfied, and (C) a complete withdrawal from all such Multiemployer Plans at the Effective Time would not result in any material liability to Seller; (ii) no such plan is a "multiple employer plan" within the meaning of Section 413(c) of the Code or a "multiple employer welfare arrangement" (as defined in Section 3(40) of ERISA); (iii) no Action has been initiated by the Pension Benefit Guaranty Corporation to terminate any such plan or to appoint a trustee for any such plan; (iv) no such plan is subject to the minimum funding standards of Section 412 of the Code or Title IV of ERISA, and none of the Purchased Assets is, or may reasonably be expected to become, the subject of any lien arising under Section 302 of ERISA or Section 412(a) of the Code/except as set forth in Section 4.19(e) of the Disclosure Schedules, no such plan is subject to the minimum funding standards of Section 412 of the Code or Title IV of ERISA, and no plan listed in Section 4.19(e) of the Disclosure Schedules has failed to satisfy the minimum funding standards of Section 302 of ERISA or Section 412 of the Code; and (v) no "reportable event," as defined in Section 4043 of ERISA, has occurred with respect to any such plan.

 

(f) Other than as required under Section 601 et. seq. of ERISA or other applicable Law, no Benefit Plan or other arrangement provides post-termination or retiree welfare benefits to any individual for any reason.

 

(g) Except as set forth in Section 4.19(g) of the Disclosure Schedules, there is no pending or, to Seller's Knowledge, threatened Action relating to a Benefit Plan (other than routine claims for benefits), and no Benefit Plan has within the three years prior to the date hereof been the subject of an examination or audit by a Governmental Authority or the subject of an application or filing under, or is a participant in, an amnesty, voluntary compliance, self-correction or similar program sponsored by any Governmental Authority.

 

(h) There has been no amendment to, announcement by Seller or any of its Affiliates relating to, or change in employee participation or coverage under, any Benefit Plan or collective bargaining agreement that would increase the annual expense of maintaining such plan above the level of the expense incurred for the most recently completed fiscal year with respect to any director, officer, employee, consultant or independent contractor of the Business, as applicable. Neither Seller nor any of its Affiliates has any commitment or obligation or has made any representations to any director, officer, employee, consultant or independent contractor of the Business, whether or not legally binding, to adopt, amend, modify or terminate any Benefit Plan or any collective bargaining agreement.

 

(i) Each Benefit Plan that is subject to Section 409A of the Code has been administered in compliance with its terms and the operational and documentary requirements of Section 409A of the Code and all applicable regulatory guidance (including, notices, rulings and proposed and final regulations) thereunder. Seller does not have any obligation to gross up, indemnify or otherwise reimburse any individual for any excise taxes, interest or penalties incurred pursuant to Section 409A of the Code.

 

(j) Except as set forth in Section 4.19(j) of the Disclosure Schedules, neither the execution of this Agreement nor any of the transactions contemplated by this Agreement will (either alone or upon the occurrence of any additional or subsequent events): (i) entitle any current or former director, officer, employee, independent contractor or consultant of the Business to severance pay or any other payment; (ii) accelerate the time of payment, funding or vesting, or increase the amount of compensation due to any such individual; (iii) increase the amount payable under or result in any other material obligation pursuant to any Benefit Plan; (iv) result in "excess parachute payments" within the meaning of Section 280G(b) of the Code; or (v) require a "gross-up" or other payment to any "disqualified individual" within the meaning of Section 280G(c) of the Code. Seller has made available to Buyer true and complete copies of any Section 280G calculations prepared (whether or not final) with respect to any disqualified individual in connection with the transactions.

 

 
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Section 4.20 Employment Matters.

 

(a) Section 4.20(a) of the Disclosure Schedules contains a list of all persons who are employees, independent contractors or consultants of the Business as of the date hereof, including any employee who is on a leave of absence of any nature, paid or unpaid, authorized or unauthorized, and sets forth for each such individual the following: (i) name; (ii) title or position (including whether full or part time); (iii) hire date; (iv) current annual base compensation rate; (v) commission, bonus or other incentive-based compensation; and (vi) a description of the fringe benefits provided to each such individual as of the date hereof. Except as set forth in Section 4.20(a) of the Disclosure Schedules, as of the date hereof, all compensation, including wages, commissions and bonuses payable to all employees, independent contractors or consultants of the Business for services performed on or prior to the date hereof have been paid in full and there are no outstanding agreements, understandings or commitments of Seller with respect to any compensation, commissions or bonuses.

 

(b) Except as set forth in Section 4.20(b) of the Disclosure Schedules, Seller is not, and has not been for the past five (5) years, a party to, bound by, or negotiating any collective bargaining agreement or other Contract with a union, works council or labor organization (collectively, " Union "), and there is not, and has not been for the past five (5) years, any Union representing or purporting to represent any employee of Seller, and, to Seller's Knowledge, no Union or group of employees is seeking or has sought to organize employees for the purpose of collective bargaining. Except as set forth in Section 4.20(b) of the Disclosure Schedules, there has never been, nor has there been any threat of, any strike, slowdown, work stoppage, lockout, concerted refusal to work overtime or other similar labor disruption or dispute affecting Seller or any employees of the Business. Seller has no duty to bargain with any Union.

 

(c) Seller is and has been in compliance in all material respects with the terms of the collective bargaining agreements and other Contracts listed on Section 4.20(b) of the Disclosure Schedules and all applicable Laws pertaining to employment and employment practices to the extent they relate to employees of the Business, including all Laws relating to labor relations, equal employment opportunities, fair employment practices, employment discrimination, harassment, retaliation, reasonable accommodation, disability rights or benefits, immigration, wages, hours, overtime compensation, child labor, hiring, promotion and termination of employees, working conditions, meal and break periods, privacy, health and safety, workers' compensation, leaves of absence and unemployment insurance. All individuals characterized and treated by Seller as consultants or independent contractors of the Business are properly treated as independent contractors under all applicable Laws. All employees of the Business classified as exempt under the Fair Labor Standards Act and state and local wage and hour laws are properly classified. Except as set forth in Section 4.20(c) , there are no Actions against Seller pending, or to the Seller's Knowledge, threatened to be brought or filed, by or with any Governmental Authority or arbitrator in connection with the employment of any current or former applicant, employee, consultant, volunteer, intern or independent contractor of the Business, including, without limitation, any claim relating to unfair labor practices, employment discrimination, harassment, retaliation, equal pay, wages and hours or any other employment related matter arising under applicable Laws.

 

Section 4.21 Taxes. Except as set forth in Section 4.21 of the Disclosure Schedules:

 

(a) All Tax Returns with respect to the Business required to be filed by Seller for any Pre-Closing Tax Period have been, or will be, timely filed. Such Tax Returns are, or will be, true, complete and correct in all respects. All Taxes due and owing by Seller (whether or not shown on any Tax Return) have been, or will be, timely paid.

 

(b) Seller has withheld and paid each Tax required to have been withheld and paid in connection with amounts paid or owing to any Employee, independent contractor, creditor, customer, stockholder or other party, and complied with all information reporting and backup withholding provisions of applicable Law.

 

(c) No extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes of Seller.

 

 
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(d) All deficiencies asserted, or assessments made, against Seller as a result of any examinations by any taxing authority have been fully paid.

 

(e) Seller is not a party to any Action by any taxing authority. There are no pending or to Seller's Knowledge, threatened Actions by any taxing authority.

 

(f) There are no Encumbrances for Taxes upon any of the Purchased Assets nor is any taxing authority in the process of imposing any Encumbrances for Taxes on any of the Purchased Assets (other than for current Taxes not yet due and payable).

 

(g) Seller is not a "foreign person" as that term is used in Treasury Regulations Section 1.1445-2.

 

(h) Seller is not, and has not been, a party to, or a promoter of, a "reportable transaction" within the meaning of Section 6707A(c)(1) of the Code and Treasury Regulations Section 1.6011 4(b).

 

(i) None of the Purchased Assets is (i) required to be treated as being owned by another person pursuant to the so-called "safe harbor lease" provisions of former Section 168(f)(8) of the Internal Revenue Code of 1954, as amended, (ii) subject to Section 168(g)(1)(A) of the Code, or (iii) subject to a disqualified leaseback or long-term agreement as defined in Section 467 of the Code.

 

(j) None of the Purchased Assets is tax-exempt use property within the meaning of Section 168(h) of the Code.

 

Section 4.22 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Seller, other than Ernst & Young Capital Advisors, LLC which amount is included in the Excluded Liabilities set forth in Section 2.04(o) of the Disclosure Schedules and for which Seller is solely responsible for paying.

 

Section 4.23 Securities Laws Representations.

 

(a) The shares of Buyer Common Stock issuable as Closing Consideration being acquired by Seller hereunder (collectively, the " Buyer Securities ") will be acquired for investment purposes for Seller's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof.  Seller has neither any present intention of effecting, nor any Contract with any Person regarding, the sale, the granting of any participation in or any other distribution or transfer of any of the Buyer Securities.

 

(b) Seller has had an opportunity to ask questions and receive answers from Buyer regarding the terms and conditions of the offering of the Buyer Securities pursuant to this Agreement and the business, operations, properties and assets of Buyer.

 

(c) Seller acknowledges that it is able to fend for itself, can bear the economic risk of its investment in the Buyer Securities and has such knowledge and experience in financial or business matters such that it is capable of evaluating the merits and risks of the investment in Buyer Securities.  Seller has not been organized for the purpose of acquiring the Buyer Securities.

 

 
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(d) Seller understands that the Buyer Securities are characterized as "restricted securities" under United States federal securities laws inasmuch as they are being acquired from Buyer in a transaction not involving a public offering and that, under such laws and applicable regulations, such Buyer Securities may be resold without registration under the Securities Act only in certain limited circumstances.  Seller is familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.  Seller understands that an investment in the Buyer Securities involves an extremely high degree of risk and may result in a complete loss of Seller's investment.  Seller understands that the Buyer Securities have not been and will not be registered under the Securities Act and have not been and will not be registered or qualified in any state in which they are offered, and thus Seller will not be able to resell or otherwise transfer such Buyer Securities unless such Buyer Securities are subsequently registered under the Securities Act and registered or qualified under applicable state securities laws, or an exemption from such registration or qualification is available.

 

(e) Seller has no immediate need for liquidity in connection with such Seller's investment in the Buyer Securities, does not anticipate that it will be required to sell the Buyer Securities in the foreseeable future and has the capacity to sustain a complete loss of its investment in the Buyer Securities.

 

(f) Seller understands that the instruments evidencing the Buyer Securities may bear a legend substantially in the following form:

 

"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF THE SECURITIES ACT."

 

Section 4.24   RESERVED.

 

Section 4.25 Full Disclosure. No representation or warranty by Seller in this Agreement and no statement contained in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

 

 
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER

 

Except as set forth in the correspondingly numbered Section of the Disclosure Schedules, Buyer represents and warrants to Seller that the statements contained in this Article V are true and correct as of the date hereof.

 

Section 5.01 Organization of Buyer. Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the state of Nevada.

 

Section 5.02 Authority of Buyer. Buyer has full corporate power and authority to enter into this Agreement and the other Transaction Documents to which Buyer is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and any other Transaction Document to which Buyer is a party, the performance by Buyer of its obligations hereunder and thereunder and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by Seller) this Agreement constitutes a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms. When each other Transaction Document to which Buyer is or will be a party has been duly executed and delivered by Buyer (assuming due authorization, execution and delivery by each other party thereto), such Transaction Document will constitute a legal and binding obligation of Buyer enforceable against it in accordance with its terms.

 

Section 5.03 No Conflicts; Consents. The execution, delivery and performance by Buyer of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the certificate of incorporation, by-laws or other organizational documents of Buyer; (b) conflict with or result in a violation or breach of any provision of any Law or Governmental Order applicable to Buyer; or (c) except as set forth in Section 5.03 of the Disclosure Schedules, require the consent, notice or other action by any Person under any Contract to which Buyer is a party. Other than any required Permit, Governmental Orders, declarations or filings with a Governmental Authority, or license transfer required for the Business, no consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Buyer in connection with the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, except for such consents, approvals, Permits, Governmental Orders, declarations, filings or notices which, in the aggregate, would not have a Material Adverse Effect.

 

Section 5.04 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Buyer.

 

Section 5.05 Sufficiency of Closing Consideration. Buyer has sufficient authorized shares of Buyer Common Stock to enable it to make payment of the Closing Consideration and consummate the transactions contemplated by this Agreement.

 

 
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Section 5.06 Capitalization. The authorized capital stock of Buyer consists solely of 450,000,000 shares of common stock, $.00001 par value per share, 50,000,000 shares of preferred stock, $.001 par value per share and 3,000 shares of Series B preferred stock, $.001 par value per share. Section 5.06 of the Disclosure Schedules or the Buyer SEC Reports (as hereinafter defined) sets forth (A) the number of issued and outstanding shares of Buyer Common Stock, (B) the number of shares of Buyer Common Stock subject to or reserved for issuance upon the exercise of outstanding options (and the expiration date and exercise or conversion price related thereto), (C) the number of shares of Buyer Common Stock subject to or reserved for issuance upon the exercise of outstanding warrants (and the expiration date and exercise or conversion price related thereto), and (D) the number of shares of Buyer Common Stock subject to or reserved for issuance upon the conversion of any loan, borrowing or other indebtedness of Buyer that grants the holder thereof the right to convert such indebtedness into shares of Buyer Common Stock. As of the date of this Agreement, other than as set forth in the SEC Reports, there are no shares of Buyer preferred stock issued or outstanding and there are no shares of Buyer Common Stock held in treasury. Other than as set forth in the SEC Reports, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, phantom stock rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate Buyer or to issue or sell any shares of capital stock or other securities of or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of Buyer, and no securities or obligations evidencing such rights are authorized, issued or outstanding.

 

(a) RESERVED.

 

(b) All outstanding shares of Buyer Common Stock have been duly authorized and are validly issued, fully paid and non-assessable, and are not subject to any pre-emptive rights.

 

(c) Except as set forth in the Buyer SEC Reports, there are no outstanding contractual obligations of Buyer to repurchase, redeem or otherwise acquire any shares of Buyer Common Stock.

 

(d) Except as set forth in the Buyer SEC Reports, there are no voting trusts, proxies or similar agreements, arrangements or commitments to which Buyer is a party with respect to the voting of any shares of capital stock of Buyer. Other than as set forth in the Buyer SEC Reports, there are no bonds, debentures, notes or other instruments of indebtedness of Buyer, or that are convertible or exchangeable into or exercisable for securities having the right to vote, on any matters on which stockholders of Buyer may vote.

 

(e) Except as set forth in the Buyer SEC Reports Buyer has not, since, declared or paid any dividend, or declared or made any distribution on, or set aside for payment for, or authorized the creation or issuance of, or issued, or authorized or effected any stock split or any other recapitalization of, any of its capital stock, or directly or indirectly redeemed, purchased or otherwise acquired any of its outstanding stock.

 

Section 5.07 SEC Filings. Buyer is required to file the Buyer SEC Reports (as defined below) pursuant to Section 13 or 15(d) of the Exchange Act (as defined below) and continues to be subject to such filing requirements. Buyer has timely furnished or filed with the with the Securities and Exchange Commission the (the " SEC ") (including following any extensions of time for filing provided by Rule 12b-25 promulgated under the Securities Exchange Act of 1934 (the " Exchange Act ")) all forms, reports, schedules, statements, and other documents (including all exhibits and other information incorporated therein) required to be furnished or filed by Buyer with the SEC (collectively, the " Buyer SEC Reports ") since January 1, 2015 and has filed with the SEC all of the material information that would be required by SEC Form 10 to register Buyer Common Stock. Each of the Buyer SEC Reports (a) was prepared in accordance in all material respects with the applicable requirements of the Securities Act, the Exchange Act, the rules and regulations of the SEC promulgated under the Securities Act and the Exchange Act applicable to such Buyer SEC Report, and other applicable Law, and (b) did not, at the time such Buyer SEC Report was filed, or if amended or restated, at the time of such later amendment or restatement, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which such statements were made, not misleading. As of the date hereof, there are no outstanding or unresolved comments in comment letters or written notices from the SEC staff with respect to any of the Buyer SEC Reports. None of the Buyer SEC Reports is the subject of ongoing SEC review of which the Buyer has Knowledge, outstanding written SEC comment or outstanding SEC investigation. Buyer has not been shell company pursuant to Rule 144 promulgated under the Securities Act since December 31, 2014.

 

 
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Section 5.08 Compliance With Laws. Except as set forth in Buyer SEC Reports of the Disclosure Schedules, Buyer has complied, and is now complying, in all material respects with all Laws applicable to the conduct of the business of Buyer (without taking into account the Business) as currently conducted or the ownership and use of its assets.

 

Section 5.09 Full Disclosure. No representation or warranty by Buyer in this Agreement and no statement contained in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Seller pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

 

ARTICLE VI
COVENANTS

 

Section 6.01 Conduct of Business Prior to the Closing. From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by Buyer (which consent shall not be unreasonably withheld or delayed), Seller shall (x) conduct the Business in the ordinary course of business consistent with past practice; and (y) use reasonable best efforts to maintain and preserve intact its current Business organization, operations and franchise and to preserve the rights, franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having relationships with the Business. Without limiting the foregoing, from the date hereof until the Closing Date, Seller shall:

 

(a) preserve and maintain all Permits required for the conduct of the Business as currently conducted or the ownership and use of the Purchased Assets;

 

(b) other than as set forth on Section 6.01(b) of the Disclosure Schedules pay the debts, current accounts payable, current employee wages, Taxes and other reasonably undisputed obligations of the Business when due;

 

(c) continue to collect Accounts Receivable in a manner consistent with past practice, without discounting such Accounts Receivable;

 

(d) maintain the properties and assets included in the Purchased Assets in the same condition as they were on the date of this Agreement, subject to reasonable wear and tear;

 

(e) continue in full force and effect without modification all Insurance Policies, except as required by applicable Law;

 

(f) defend and protect the properties and assets included in the Purchased Assets from infringement or usurpation;

 

(g) perform all of its obligations under all Assigned Contracts;

 

(h) maintain the Books and Records in accordance with past practice;

 

(i) comply in all material respects with all Laws applicable to the conduct of the Business or the ownership and use of the Purchased Assets; and

 

(j) not take or permit any action that would cause any of the changes, events or conditions described in Section 4.06 to occur.

 

 
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Section 6.02 Access to Information. From the date hereof until the Closing, Seller shall (a) afford Buyer and its Representatives full and free access to and the right to inspect all of the real property, properties, assets, premises, Books and Records, Contracts and other documents and data related to the Business; (b) furnish Buyer and its Representatives with such financial, operating and other data and information related to the Business as Buyer or any of its Representatives may reasonably request; and (c) instruct the Representatives of Seller to cooperate with Buyer in its investigation of the Business. Any investigation pursuant to this Section 6.02 shall be conducted in such manner as not to interfere unreasonably with the conduct of the Business or any other businesses of Seller. No investigation by Buyer or other information received by Buyer shall operate as a waiver or otherwise affect any representation, warranty or agreement given or made by Seller in this Agreement.

 

Section 6.03 No Solicitation of Other Bids.

 

(a) Seller shall not, and shall not authorize or permit any of its Affiliates or any of its or their Representatives to, directly or indirectly, (i) encourage, solicit, initiate, facilitate or continue inquiries regarding an Acquisition Proposal; (ii) enter into discussions or negotiations with, or provide any information to, any Person concerning a possible Acquisition Proposal; or (iii) enter into any agreements or other instruments (whether or not binding) regarding an Acquisition Proposal. Seller shall immediately cease and cause to be terminated, and shall cause its Affiliates and all of its and their Representatives to immediately cease and cause to be terminated, all existing discussions or negotiations with any Persons conducted heretofore with respect to, or that could lead to, an Acquisition Proposal. For purposes hereof, " Acquisition Proposal " means any inquiry, proposal or offer from any Person (other than Buyer or any of its Affiliates) relating to the direct or indirect disposition, whether by sale, merger or otherwise, of all or any portion of the Business or the Purchased Assets.

 

(b) In addition to the other obligations under this Section 6.03 , Seller shall promptly (and in any event within three Business Days after receipt thereof by Seller or its Representatives) advise Buyer orally and in writing of any Acquisition Proposal, any request for information with respect to any Acquisition Proposal, or any inquiry with respect to or which could reasonably be expected to result in an Acquisition Proposal, the material terms and conditions of such request, Acquisition Proposal or inquiry, and the identity of the Person making the same.

 

(c) Seller agrees that the rights and remedies for noncompliance with this Section 6.03 shall include having such provision specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to Buyer and that money damages would not provide an adequate remedy to Buyer.

 

Section 6.04 Notice of Certain Events.

 

(a) From the date hereof until the Closing, Seller shall promptly notify Buyer in writing of:

 

(i) any fact, circumstance, event or action the existence, occurrence or taking of which (A) has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (B) has resulted in, or could reasonably be expected to result in, any representation or warranty made by Seller hereunder not being true and correct or (C) has resulted in, or could reasonably be expected to result in, the failure of any of the conditions set forth in Section 7.02 to be satisfied;

 

(ii) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;

 

(iii) any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement; and

 

(iv) any Actions commenced or, to Seller's Knowledge, threatened against, relating to or involving or otherwise affecting the Business, the Purchased Assets or the Assumed Liabilities that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to Section 4.16 or that relates to the consummation of the transactions contemplated by this Agreement.

 

(b) Buyer's receipt of information pursuant to this Section 6.04 shall not operate as a waiver or otherwise affect any representation, warranty or agreement given or made by Seller in this Agreement (including Section 8.02 and Section 9.01(b) ) and shall not be deemed to amend or supplement the Disclosure Schedules.

 

 
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Section 6.05 Employees and Employee Benefits.

 

(a) Commencing on the Closing Date, Seller shall terminate all employees of the Business who are actively at work on the Closing Date, and, at Buyer's sole discretion, Buyer shall offer employment, on an "at will" basis, to the employees set forth on Schedule 6.05 of the Disclosure Schedules.

 

(b) Except to the extent that it is an Assumed Liability , Seller shall be solely responsible, and Buyer shall have no obligations whatsoever for, any compensation or other amounts payable to any current or former employee, officer, director, independent contractor or consultant of the Business including, without limitation, hourly pay, commission, bonus, salary, accrued vacation, fringe, pension or profit sharing benefits or severance pay for any period relating to the service with Seller at any time on or prior to the Closing Date and Seller shall pay all such amounts for which it is solely responsible to all entitled persons on or prior to the Closing Date.

 

(c) Seller shall remain solely responsible for the satisfaction of all claims for medical, dental, life insurance, health accident or disability benefits brought by or in respect of current or former employees, officers, directors, independent contractors or consultants of the Business or the spouses, dependents or beneficiaries thereof, which claims relate to events occurring on or prior to the Closing Date. Seller also shall remain solely responsible for all worker's compensation claims of any current or former employees, officers, directors, independent contractors or consultants of the Business which relate to events occurring on or prior to the Closing Date. Seller shall pay, or cause to be paid, all such amounts to the appropriate persons as and when due.

 

(d) Effective as soon as practicable following the Closing Date, Seller, or any applicable Affiliate, shall effect a transfer of assets and liabilities (including outstanding loans) from the defined contribution retirement plan that it maintains, to the defined contribution retirement plan maintained by Buyer, with respect to those employees of the Business who become employed by Buyer, or an Affiliate of Buyer, in connection with the transactions contemplated by this Agreement. Any such transfer shall be in an amount sufficient to satisfy Section 414(l) of the Code.

 

(e) Each employee of the Business who becomes employed by Buyer in connection with the transactions contemplated by this Agreement shall be eligible to receive the salary and benefits maintained for employees of Buyer on substantially similar terms and conditions in the aggregate as are provided to similarly situated employees of Buyer.

 

(f) Each employee of the Business who becomes employed by Buyer in connection with the transaction shall be given service credit for the purpose of eligibility under the group health plan and eligibility and vesting only under the defined contribution retirement plan for his or her period of service with the Seller prior to the Closing Date; provided, however , that (i) such credit shall be given pursuant to payroll or plan records, at the election of Buyer, in its sole and absolute discretion; and (ii) such service crediting shall be permitted and consistent with Buyer's defined contribution retirement plan.

 

Section 6.06 Confidentiality. From and after the Closing, Seller shall hold, and shall use its reasonable best efforts to cause its or their respective Representatives to hold, in confidence any and all information, whether written or oral, concerning the Business, except to the extent that Seller can show that such information (a) is generally available to and known by the public through no fault of Seller or its Representatives; or (b) is lawfully acquired by Seller or its Representatives from and after the Closing from sources which are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation. If Seller or its Representatives are compelled to disclose any information by judicial or administrative process or by other requirements of Law, Seller shall promptly notify Buyer in writing and shall disclose only that portion of such information which Seller is advised by its counsel in writing is legally required to be disclosed, provided that Seller shall use reasonable best efforts to obtain an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such information.

 

 
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Section 6.07 Non-competition; Non-solicitation

 

(a) For a period of five (5) commencing on the Closing Date (the " Restricted Period "), Seller shall not, directly or indirectly, (i) engage in or assist others in engaging in the Restricted Business in the Territory; (ii) have an interest in any Person that engages directly or indirectly in the Restricted Business in the Territory in any capacity, including as a partner, shareholder, member, employee, principal, agent, trustee or consultant; or (iii) cause, induce or encourage any material actual or prospective client, customer, supplier or licensor of the Business (including any existing or former client or customer of Seller and any Person that becomes a client or customer of the Business after the Closing), or any other Person who has a material business relationship with the Business, to terminate or modify any such actual or prospective relationship. Notwithstanding the foregoing, Seller may own, directly or indirectly, solely as an investment, securities of any Person traded on any national securities exchange if Seller is not a controlling Person of, or a member of a group which controls, such Person and does not, directly or indirectly, own 5% or more of any class of securities of such Person.

 

(b) During the Restricted Period, Seller shall not, directly or indirectly, hire or solicit any person who is offered employment by Buyer pursuant to Section 6.05(a) or is or was employed in the Business during the Restricted Period, or encourage any such employee to leave such employment or hire any such employee who has left such employment, except pursuant to a general solicitation which is not directed specifically to any such employees; provided, that nothing in this Section 6.07(b) shall prevent Seller from hiring (i) any employee whose employment has been terminated by Buyer or (ii) after 180 days from the date of termination of employment, any employee whose employment has been terminated by the employee. During the Restricted Period, Seller shall not divert any business of the Buyer and/or its Affiliates or any customers or suppliers of the Buyer and/or the Buyer's and/or its Affiliates' business to any other person, entity or competitor.

 

(c) Seller acknowledges that a breach or threatened breach of this Section 6.07 would give rise to irreparable harm to Buyer, for which monetary damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by Seller of any such obligations, Buyer shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond).

 

(d) Seller acknowledges that the restrictions contained in this Section 6.07 are reasonable and necessary to protect the legitimate interests of Buyer and constitute a material inducement to Buyer to enter into this Agreement and consummate the transactions contemplated by this Agreement. In the event that any covenant contained in this Section 6.07 should ever be adjudicated to exceed the time, geographic, product or service or other limitations permitted by applicable Law in any jurisdiction, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service or other limitations permitted by applicable Law. The covenants contained in this Section 6.07 and each provision hereof are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.

 

Section 6.08 Governmental Approvals and Consents

 

(a) Each party hereto shall, as promptly as possible, (i) make, or cause or be made, all filings and submissions required under any Law applicable to such party or any of its Affiliates; and (ii) use reasonable best efforts to obtain, or cause to be obtained, all consents, authorizations, orders and approvals from all Governmental Authorities that may be or become necessary for its execution and delivery of this Agreement and the performance of its obligations pursuant to this Agreement and the other Transaction Documents. Each party shall cooperate fully with the other party and its Affiliates in promptly seeking to obtain all such consents, authorizations, orders and approvals. The parties hereto shall not willfully take any action that will have the effect of delaying, impairing or impeding the receipt of any required consents, authorizations, orders and approvals.

 

 
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(b) Seller and Buyer shall use reasonable best efforts to give all notices to, and obtain all consents from, all third parties that are described in Section 4.03 and Section 5.03 of the Disclosure Schedules.

 

(c) Without limiting the generality of the parties' undertakings pursuant to subsections (a) and (b) above, each of the parties hereto shall use all reasonable best efforts to:

 

(i) respond to any inquiries by any Governmental Authority regarding antitrust or other matters with respect to the transactions contemplated by this Agreement or any other Transaction Document;

 

(ii) avoid the imposition of any order or the taking of any action that would restrain, alter or enjoin the transactions contemplated by this Agreement or any other Transaction Document; and

 

(iii) in the event any Governmental Order adversely affecting the ability of the parties to consummate the transactions contemplated by this Agreement or any other Transaction Document has been issued, to have such Governmental Order vacated or lifted.

 

(d) All analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals made by or on behalf of either party before any Governmental Authority or the staff or regulators of any Governmental Authority, in connection with the transactions contemplated hereunder (but, for the avoidance of doubt, not including any interactions between Seller with Governmental Authorities in the ordinary course of business, any disclosure which is not permitted by Law or any disclosure containing confidential information) shall be disclosed to the other party hereunder in advance of any filing, submission or attendance, it being the intent that the parties will consult and cooperate with one another, and consider in good faith the views of one another, in connection with any such analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals. Each party shall give notice to the other party with respect to any meeting, discussion, appearance or contact with any Governmental Authority or the staff or regulators of any Governmental Authority, with such notice being sufficient to provide the other party with the opportunity to attend and participate in such meeting, discussion, appearance or contact.

 

(e) Notwithstanding the foregoing, nothing in this Section 6.08 shall require, or be construed to require, Buyer or any of its Affiliates to agree to (i) sell, hold, divest, discontinue or limit, before or after the Closing Date, any assets, businesses or interests of Buyer or any of its Affiliates; (ii) any conditions relating to, or changes or restrictions in, the operations of any such assets, businesses or interests which, in either case, could reasonably be expected to result in a Material Adverse Effect or materially and adversely impact the economic or business benefits to Buyer of the transactions contemplated by this Agreement and the other Transaction Documents; or (iii) any material modification or waiver of the terms and conditions of this Agreement.

 

(f) Within 45 days of the Closing, the Seller shall deliver to the Buyer such financial statements as is required by the Exchange Act to be filed by the Buyer including without limitation audited financial statements for the year ended December 31, 2015 and unaudited financial statements consisting of the balance sheet of the Business as at March 31, 2016 and the related statements of income and retained earnings, stockholders' equity and cash flow for the three-month period then ended that comply with Section 4.04. Buyer shall promptly provide Seller with a list of such required financial statements and shall be solely responsible for paying the costs incurred by Seller in procuring such financial statements.

 

 
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Section 6.09 Books and Records.

 

(a) In order to facilitate the resolution of any claims made against or incurred by Seller prior to the Closing, or for any other reasonable purpose, for a period of three (3) years after the Closing, Buyer shall:

 

(i) retain the Books and Records (including personnel files) relating to periods prior to the Closing in a manner reasonably consistent with the prior practices of Seller; and

 

(ii) upon reasonable notice, afford the Seller's Representatives reasonable access (including the right to make, at Seller's expense, photocopies), during normal business hours, to such Books and Records.

 

(b) In order to facilitate the resolution of any claims made by or against or incurred by Buyer after the Closing, or for any other reasonable purpose, for a period of three (3) years following the Closing, Seller shall:

 

(i) retain the books and records (including personnel files) of Seller which relate to the Business and its operations for periods prior to the Closing; and

 

(ii) upon reasonable notice, afford the Buyer's Representatives reasonable access (including the right to make, at Buyer's expense, photocopies), during normal business hours, to such books and records.

 

(c) Neither Buyer nor Seller shall be obligated to provide the other party with access to any books or records (including personnel files) pursuant to this Section 6.09 where such access would violate any Law.

 

Section 6.10 Closing Conditions From the date hereof until the Closing, each party hereto shall use reasonable best efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in Article VII hereof.

 

Section 6.11 Public Announcements. Unless otherwise required by applicable Law or stock exchange requirements (based upon the reasonable advice of counsel), no party to this Agreement shall make any public announcements in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of the other party (which consent shall not be unreasonably withheld or delayed), and the parties shall cooperate as to the timing and contents of any such announcement.

 

Section 6.12 Bulk Sales Laws. The parties hereby waive compliance with the provisions of any bulk sales, bulk transfer or similar Laws of any jurisdiction that may otherwise be applicable with respect to the sale of any or all of the Purchased Assets to Buyer; it being understood that any Liabilities arising out of the failure of Seller to comply with the requirements and provisions of any bulk sales, bulk transfer or similar Laws of any jurisdiction which would not otherwise constitute Assumed Liabilities shall be treated as Excluded Liabilities.

 

Section 6.13 Receivables. From and after the Closing, if Seller or any of its Affiliates receives or collects any funds relating to any Accounts Receivable or any other Purchased Asset, Seller or its Affiliate shall remit such funds to Buyer within five Business Days after its receipt thereof. From and after the Closing, if Buyer or its Affiliate receives or collects any funds relating to any Excluded Asset, Buyer or its Affiliate shall remit any such funds to Seller within five Business Days after its receipt thereof.

 

 
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Section 6.14 Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the other Transaction Documents (including any real property transfer Tax and any other similar Tax) shall be borne and paid by Seller when due. Seller shall, at its own expense, timely file any Tax Return or other document with respect to such Taxes or fees (and Buyer shall cooperate with respect thereto as necessary). Buyer and Seller shall take commercially reasonable efforts to eliminate or reduce the amount of any such transfer Taxes imposed on the purchase and sale of the Purchased Assets.

 

Section 6.15 Tax Clearance Certificates. If requested by Buyer, Seller shall notify all of the taxing authorities in the jurisdictions that impose Taxes on Seller or where Seller has a duty to file Tax Returns of the transactions contemplated by this Agreement in the form and manner required by such taxing authorities, if the failure to make such notifications or receive any available tax clearance certificate (a " Tax Clearance Certificate ") could subject the Buyer to any Taxes of Seller. If any taxing authority asserts that Seller is liable for any Tax, Seller shall promptly pay any and all such amounts and shall provide evidence to the Buyer that such liabilities have been paid in full or otherwise satisfied.

 

Section 6.16 Further Assurances. Following the Closing, each of the parties hereto shall, and shall cause their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the other Transaction Documents. Without limiting the generality of the foregoing, Seller shall use its best efforts to obtain any required third party consents to the assignment to of any Assigned Contracts or Permit described in Section 2.06.

 

Section 6.17 Use of CLIA license . Commencing immediately following the Closing, Buyer shall use commercially reasonable efforts to take all steps necessary under applicable Law with respect to use of the CLIA license transferred under this Agreement, including, without limitation, with respect to obtaining a "Doing Business As" registration for "Theranostics Health" or such other name as Buyer shall designate, if and to the extent necessary under applicable Law.

 

Section 6.18 IP Development. Following the Closing:

 

(a) Buyer shall use commercially reasonable efforts to obtain CLIA certification of the MSPrecise assay and further develop the LymPro Test Ò , in addition to growing the pharmaceutical services-based component of the Business;

 

(b) Buyer will invest the majority of its seed resources towards integrating, maintaining and growing the diagnostics services-based component of the Business;

 

(c) Buyer will endeavor to raise additional capital to fund final clinical validation development and CLIA launch of Buyer's and Amarantus Diagnostics' diagnostics programs; and

 

(d) Buyer will develop and maintain current patents, future patents and patent applications and prosecution thereof for Seller's and Amarantus Diagnostic's Intellectual Property at the sole expense of Buyer.

 

Section 6.19 SEC Matters. Following the closing and during the entire period that Buyer owns at least 10% of the shares of the Closing Consideration, Buyer (i) will timely furnish or file with the SEC (including any extensions of time for filing provided by Rule 12b-25 promulgated under the Exchange Act) all forms, reports, schedules, statements, and other documents (including all exhibits and other information incorporated therein) required to be furnished or filed by Buyer with the SEC in accordance in all material respects with the applicable requirements of the Securities Act, the Exchange Act, the rules and regulations of the SEC promulgated under the Securities Act and the Exchange Act and other applicable Law; and (ii) will not be a "shell company" (as defined by the SEC). In connection with the sale by the Seller of any of the shares of the Buyer Common Stock received in connection with this Agreement that is exempt from the registration requirements of Section 5 of the Securities Act at the request of Seller and subject to Seller's compliance with applicable laws, rules and regulations, Buyer shall cause the removal of any applicable restrictive legend from the certificates for such shares provided that the Seller at their own expense furnishes to Buyer, its counsel or its transfer agent such certificate and other supporting documentation including an opinion of counsel as any such person reasonably requests.

 

 
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Section 6.20 Registration Statement.

 

(a) Following the Closing if during the period beginning on the expiration of the Lockup Period and ending two years from the expiration of the Lockup Period the Buyer proposes to register (including for this purpose a registration effected by the Buyer for stockholders other than the Seller) any of its stock or other securities under the Securities Act in connection with the public offering of such securities (other than a registration statement on Form S-8, Form S-4 and /or registration relating solely to the sale of securities to participants in a Buyer stock plan, a registration relating to a corporate reorganization or other transaction under Rule 145 of the Securities Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the shares of Closing Consideration, or a registration in which the only Buyer Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered), the Buyer shall, at such time, promptly give the Seller written notice of such registration. Upon the written request of Seller given within ten (10) days after mailing of such notice by the Buyer, the Buyer shall use commercially reasonable efforts to cause to be registered under the Securities Act all of the shares of Closing Consideration that Seller has requested to be registered, provided, however, if the managing underwriter of an underwritten offering shall advise the Buyer that the inclusion of shares of Closing Consideration requested to be included in the registration statement would cause an adverse effect on the success of any such offering, based on market conditions or otherwise (an " Adverse Effect "), then the Buyer shall be required to use commercially reasonable efforts to include in such registration statement, to the extent of the amount of securities that the managing underwriters advise may be sold without causing such Adverse Effect, (i) first securities proposed by the Company to be sold for its own account, (ii) second shares of Closing Consideration and (iii) securities of other selling security holders requested to be included in such registration.

 

(b) Cooperation by Seller . Seller shall furnish to the Company such information regarding the Seller and the distribution proposed by it as the Buyer may reasonably request in connection with any registration or offering referred to in this Section. Seller shall cooperate as reasonably requested by the Buyer in connection with the preparation of the Registration Statement with respect to such registration, and for so long as the Buyer is obligated to file and keep effective such Registration Statement, shall provide to the Buyer, in writing, for use in the Registration Statement, all such information regarding the Seller and its plan of distribution of the shares of Closing Consideration, included in such registration as may be reasonably necessary to enable the Buyer to prepare such Registration Statement, to maintain the currency and effectiveness thereof and otherwise to comply with all applicable requirements of law in connection therewith.

 

(c) Registration Statement Expenses . Buyer shall pay all Registration Expenses (as defined below) incurred in connection with a registration of shares of Closing Consideration, whether or not such Registration Statement shall become effective; provided that Seller shall pay all underwriting discounts, commissions and transfer taxes, and their own counsel and accounting fees, if any, relating to the sale or disposition of the shares of Closing Consideration pursuant to such Registration Statement. As used herein, " Registration Expenses " means any and all reasonable and customary expenses incident to performance of or compliance with the registration rights set forth herein, including, without limitation, (i) all SEC and stock exchange or Financial Industry Regulatory Authority registration and filing fees, (ii) all fees and expenses of complying with state securities or blue sky laws (including reasonable fees and disbursements of counsel for the underwriters in connection with blue sky qualifications of the shares of Closing Consideration but no other expenses of or disbursements by the underwriters or their counsel), (iii) all printing, messenger and delivery expenses, and (iv) the reasonable fees and disbursements of counsel for the Buyer and the Buyer's independent public accountants.

 

Section 6.21 Litigation Defense Loan. In the event that on or before the expiration of the Lockup Period and provided that there has not been a material breach or default by the Seller of this Agreement or any of the Transaction Documents and provided that there is no event that would constitute an event of Default (as defined in the Promissory Note), Dendy Young and/or his company, McClain Capital, institutes an Action against the Seller, its officers or directors, Buyer shall lend incrementally to the Seller up to $75,000, with each such loan being upon the terms and conditions of the Promissory Note (the " Promissory Note ") attached hereto as Exhibit E, which funds shall be used by Seller as reasonably required with respect to the legal defense of such Action.

 

 
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ARTICLE VII
CONDITIONS TO CLOSING

 

Section 7.01 Conditions to Obligations of All Parties. The obligations of each party to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions:

 

(a) No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.

 

(b) Seller shall have received all consents, authorizations, orders and approvals from the Governmental Authorities referred to in Section 7.02(d) of the Disclosure Schedules and Buyer shall have received all consents, authorizations, orders and approvals from the Governmental Authorities referred to in Section 5.03 , in each case, in form and substance reasonably satisfactory to Buyer and Seller, and no such consent, authorization, order and approval shall have been revoked.

 

Section 7.02 Conditions to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Buyer's waiver, at or prior to the Closing, of each of the following conditions:

 

(a) Other than the representations and warranties of Seller contained in Section 4.01 , Section 4.02 , Section 4.04 and Section 4.22 , the representations and warranties of Seller contained in this Agreement, the other Transaction Documents and any certificate or other writing delivered pursuant hereto shall be true and correct in all respects (in the case of any representation or warranty qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty not qualified by materiality or Material Adverse Effect) on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects). The representations and warranties of Seller contained in Section 4.01 , Section 4.02 , Section 4.04 and Section 4.22 shall be true and correct in all respects on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).

 

(b) Seller shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and each of the other Transaction Documents to be performed or complied with by it prior to or on the Closing Date; provided, that , with respect to agreements, covenants and conditions that are qualified by materiality, Seller shall have performed such agreements, covenants and conditions, as so qualified, in all respects.

 

(c) No Action shall have been commenced against Buyer or Seller, which would prevent the Closing. No injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, which restrains or prohibits any transaction contemplated hereby.

 

(d) All approvals, consents and waivers that are listed on Section 7.02(d) of the Disclosure Schedules shall have been received, and executed counterparts thereof shall have been delivered to Buyer at or prior to the Closing.

 

 
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(e) From the date of this Agreement, there shall not have occurred any Material Adverse Effect, nor shall any event or events have occurred that, individually or in the aggregate, with or without the lapse of time, could reasonably be expected to result in a Material Adverse Effect.

 

(f) Seller shall have delivered to Buyer duly executed counterparts to the Transaction Documents (other than this Agreement) and such other documents and deliveries set forth in Section 3.02(a) .

 

(g) Buyer shall have received all Permits that are necessary for it to conduct the Business as conducted by Seller as of the Closing Date.

 

(h) Buyer shall have consummated the Amarantus Diagnostics Acquisition;

 

(i) All Encumbrances relating to the Purchased Assets shall have been released in full, other than Permitted Encumbrances, and Seller shall have delivered to Buyer written evidence, in form satisfactory to Buyer in its sole discretion, of the release of such Encumbrances.

 

(j) Buyer shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Seller, that each of the conditions set forth in Section 7.02(a) , Section 7.02(b) , Section 7.02(c) and Section 7.02(d) have been satisfied (the " Seller Closing Certificate ").

 

(k) Buyer shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Seller certifying that attached thereto are true and complete copies of all resolutions adopted by the board of directors of Seller authorizing the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby and thereby.

 

(l) Buyer shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Seller certifying the names and signatures of the officers of Seller authorized to sign this Agreement, the Transaction Documents and the other documents to be delivered hereunder and thereunder.

 

(m) Buyer shall have received a certificate pursuant to Treasury Regulations Section 1.1445-2(b) (the " FIRPTA Certificate ") that Seller is not a foreign person within the meaning of Section 1445 of the Code duly executed by Seller.

 

(n) Seller shall have delivered to Buyer such other documents or instruments as Buyer reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement.

 

Section 7.03 Conditions to Obligations of Seller. The obligations of Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Seller's waiver, at or prior to the Closing, of each of the following conditions:

 

(a) Other than the representations and warranties of Buyer contained in Section 5.01 , Section 5.02 and Section 5.04 , the representations and warranties of Buyer contained in this Agreement, the other Transaction Documents and any certificate or other writing delivered pursuant hereto shall be true and correct in all respects (in the case of any representation or warranty qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty not qualified by materiality or Material Adverse Effect) on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects). The representations and warranties of Buyer contained in Section 5.01 , Section 5.02 and Section 5.04 shall be true and correct in all respects on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date.

 

 
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(b) Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and each of the other Transaction Documents to be performed or complied with by it prior to or on the Closing Date; provided, that , with respect to agreements, covenants and conditions that are qualified by materiality, Buyer shall have performed such agreements, covenants and conditions, as so qualified, in all respects.

 

(c) No Action shall be been commenced against Buyer or Seller, which would prevent the Closing. No injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, which restrains or prohibits any material transaction contemplated hereby.

 

(d) All approvals, consents and waivers that are listed on Section 5.03 of the Disclosure Schedules shall have been received, and executed counterparts thereof shall have been delivered to Seller at or prior to the Closing.

 

(e) Buyer shall have delivered to Seller duly executed counterparts to the Transaction Documents (other than this Agreement) and such other documents and deliveries set forth in Section 3.02(b) .

 

(f) Seller shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Buyer, that each of the conditions set forth in Section 7.03(a) , Section 7.03(b) , Section 7.03(c) and Section 7.03(d) have been satisfied (the " Buyer Closing Certificate ").

 

(g) Seller shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer certifying that attached thereto are true and complete copies of all resolutions adopted by the board of directors of Buyer authorizing the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby and thereby.

 

(h) Seller shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer certifying the names and signatures of the officers of Buyer authorized to sign this Agreement, the Transaction Documents and the other documents to be delivered hereunder and thereunder.

 

(i) Buyer shall have delivered to Seller such other documents or instruments as Seller reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement.

 

(j) Seller shall have received the Seller Stockholder Approval.

 

(k) Buyer shall have consummated the Amarantus Diagnostics Acquisition.

 

 
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ARTICLE VIII
INDEMNIFICATION

 

Section 8.01 Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein shall survive the Closing and shall remain in full force and effect until the date that is eighteen (18) months from the Closing Date; provided, that the representations and warranties in (i) Section 4.01 , Section 4.02 , Section 4.08 , Section 4.09 , Section 4.22 , Section 5.01 , Section 5.02 and Section 5.04 shall survive indefinitely, (ii) Section 4.18 shall survive for a period of six (6) years after the Closing, and (iii) Section 4.19 and Section 4.21 shall survive for the full period of all applicable statutes of limitations (giving effect to any waiver, mitigation or extension thereof) plus 60 days. All covenants and agreements of the parties contained herein shall survive the Closing indefinitely or for the period explicitly specified therein. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching party to the breaching party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of the relevant representation or warranty and such claims shall survive until finally resolved.

 

Section 8.02 Indemnification By Seller. Subject to the other terms and conditions of this Article VIII , Seller shall indemnify and defend each of Buyer and its Affiliates and their respective Representatives (collectively, the " Buyer Indemnitees ") against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon, arising out of, with respect to or by reason of:

 

(a) any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement, the other Transaction Documents or in any certificate or instrument delivered by or on behalf of Seller pursuant to this Agreement, as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified date);

 

(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement, the other Transaction Documents or any certificate or instrument delivered by or on behalf of Seller pursuant to this Agreement;

 

(c) any Excluded Asset or any Excluded Liability; or

 

(d) any Third Party Claim based upon, resulting from or arising out of the business, operations, properties, assets or obligations of Seller or any of its Affiliates (other than the Purchased Assets or Assumed Liabilities) conducted, existing or arising on or prior to the Closing Date.

 

Section 8.03 Indemnification By Buyer. Subject to the other terms and conditions of this Article VIII , Buyer shall indemnify and defend each of Seller and its Affiliates and their respective Representatives (collectively, the " Seller Indemnitees ") against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Seller Indemnitees based upon, arising out of, with respect to or by reason of:

 

(a) any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or in any certificate or instrument delivered by or on behalf of Buyer pursuant to this Agreement, as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified date);

 

 
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(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement; or

 

(c) any Assumed Liability.

 

(d) Any Liability based upon, resulting from or arising out of the operation of the Business or ownership of the Purchased Assets by the Buyer following the Closing Date.

 

Section 8.04 Certain Limitations. The indemnification provided for in Section 8.02 and Section 8.03 shall be subject to the following limitations:

 

(a) Seller shall not be liable to the Buyer Indemnitees for indemnification under Section 8.02(a) until the aggregate amount of all Losses in respect of indemnification under Section 8.02(a) exceeds $50,000 (the " Basket "), in which event Seller shall be required to pay or be liable for all such Losses from the first dollar. The aggregate amount of all Losses for which Seller shall be liable pursuant to Section 8.02(a) shall not exceed $50,000 (the " Cap ").

 

(b) Buyer shall not be liable to the Seller Indemnitees for indemnification under Section 8.03(a) until the aggregate amount of all Losses in respect of indemnification under Section 8.03(a) exceeds the Basket, in which event Buyer shall be required to pay or be liable for all such Losses from the first dollar. The aggregate amount of all Losses for which Buyer shall be liable pursuant to Section 8.03(a) shall not exceed the Cap.

 

(c) Notwithstanding the foregoing, the limitations set forth in Section 8.04(a) and Section 8.04(b) shall not apply to Losses based upon, arising out of, with respect to or by reason of any inaccuracy in or breach of any representation or warranty in Section 4.01 , Section 4.02 , Section 4.08 , Section 4.09 , Section 4.18 , Section 4.19 , Section 4.21 , Section 4.22 , Section 5.01 , Section 5.02 and Section 5.04 .

 

(d) For purposes of this Article VIII , any inaccuracy in or breach of any representation or warranty shall be determined without regard to any materiality, Material Adverse Effect or other similar qualification contained in or otherwise applicable to such representation or warranty.

 

Section 8.05 Indemnification Procedures. The party making a claim under this Article VIII is referred to as the " Indemnified Party ", and the party against whom such claims are asserted under this Article VIII is referred to as the " Indemnifying Party ".

 

 
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(a) Third Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any Action made or brought by any Person who is not a party to this Agreement or an Affiliate of a party to this Agreement or a Representative of the foregoing (a " Third Party Claim ") against such Indemnified Party with respect to which the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than 30 calendar days after receipt of such notice of such Third Party Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Third Party Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume the defense of any Third Party Claim at the Indemnifying Party's expense and by the Indemnifying Party's own counsel, and the Indemnified Party shall cooperate in good faith in such defense; provided, that if the Indemnifying Party is Seller, such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that (x) is asserted directly by or on behalf of a Person that is a supplier or customer of the Business, or (y) seeks an injunction or other equitable relief against the Indemnified Party. In the event that the Indemnifying Party assumes the defense of any Third Party Claim, subject to Section 8.05(b) , it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third Party Claim in the name and on behalf of the Indemnified Party. The Indemnified Party shall have the right to participate in the defense of any Third Party Claim with counsel selected by it subject to the Indemnifying Party's right to control the defense thereof. The fees and disbursements of such counsel shall be at the expense of the Indemnified Party, provided, that if in the reasonable opinion of counsel to the Indemnified Party, (A) there are legal defenses available to an Indemnified Party that are different from or additional to those available to the Indemnifying Party; or (B) there exists a conflict of interest between the Indemnifying Party and the Indemnified Party that cannot be waived, the Indemnifying Party shall be liable for the reasonable fees and expenses of counsel to the Indemnified Party in each jurisdiction for which the Indemnified Party determines counsel is required. If the Indemnifying Party elects not to compromise or defend such Third Party Claim, fails to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement, or fails to diligently prosecute the defense of such Third Party Claim, the Indemnified Party may, subject to Section 8.05(b) , pay, compromise, defend such Third Party Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third Party Claim. Seller and Buyer shall cooperate with each other in all reasonable respects in connection with the defense of any Third Party Claim, including making available (subject to the provisions of Section 6.06 ) records relating to such Third Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third Party Claim.

 

(b) Settlement of Third Party Claims. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into settlement of any Third Party Claim without the prior written consent of the Indemnified Party, except as provided in this Section 8.05(b) . If a firm offer is made to settle a Third Party Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides, in customary form, for the unconditional release of each Indemnified Party from all liabilities and obligations in connection with such Third Party Claim and the Indemnifying Party desires to accept and agree to such offer, the Indemnifying Party shall give written notice to that effect to the Indemnified Party. If the Indemnified Party fails to consent to such firm offer within ten days after its receipt of such notice, the Indemnified Party may continue to contest or defend such Third Party Claim and in such event, the maximum liability of the Indemnifying Party as to such Third Party Claim shall not exceed the amount of such settlement offer. If the Indemnified Party fails to consent to such firm offer and also fails to assume defense of such Third Party Claim, the Indemnifying Party may settle the Third Party Claim upon the terms set forth in such firm offer to settle such Third Party Claim. If the Indemnified Party has assumed the defense pursuant to Section 8.05(a) , it shall not agree to any settlement without the written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed).

 

 
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(c) Direct Claims. Any Action by an Indemnified Party on account of a Loss which does not result from a Third Party Claim (a " Direct Claim ") shall be asserted by the Indemnified Party giving the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than 30 days after the Indemnified Party becomes aware of such Direct Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have 30 days after its receipt of such notice to respond in writing to such Direct Claim. The Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the Indemnified Party shall assist the Indemnifying Party's investigation by giving such information and assistance (including access to the Indemnified Party's premises and personnel and the right to examine and copy any accounts, documents or records) as the Indemnifying Party or any of its professional advisors may reasonably request. If the Indemnifying Party does not so respond within such 30 day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.

 

Section 8.06 Payments. Once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article VIII , the Indemnifying Party shall satisfy its obligations within 15 Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds. The parties hereto agree that should an Indemnifying Party not make full payment of any such obligations within such 15 Business Day period, any amount payable shall accrue interest from and including the date of agreement of the Indemnifying Party or final, non-appealable adjudication to and including the date such payment has been made at a rate per annum equal to eight percent (8%). Such interest shall be calculated daily on the basis of a 365 day year and the actual number of days elapsed, without compounding.

 

Section 8.07 Effect of Investigation. The representations, warranties and covenants of the Indemnifying Party, and the Indemnified Party's right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or on behalf of the Indemnified Party (including by any of its Representatives) or by reason of the fact that the Indemnified Party or any of its Representatives knew or should have known that any such representation or warranty is, was or might be inaccurate or by reason of the Indemnified Party's waiver of any condition set forth in Section 7.02 or Section 7.03 , as the case may be.

 

Section 8.08 Exclusive Remedies. Subject to Section 6.07 and Section 10.11 , the parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims arising from fraud, criminal activity or willful misconduct on the part of a party hereto in connection with the transactions contemplated by this Agreement) for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in this Article VIII . In furtherance of the foregoing, each party hereby waives, to the fullest extent permitted under Law, any and all rights, claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement it may have against the other parties hereto and their Affiliates and each of their respective Representatives arising under or based upon any Law, except pursuant to the indemnification provisions set forth in this Article VIII . Nothing in this Section 8.08 shall limit any Person's right to seek and obtain any equitable relief to which any Person shall be entitled or to seek any remedy on account of any party's fraudulent, criminal or intentional misconduct.

 

 
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ARTICLE IX
TERMINATION

 

Section 9.01 Termination. This Agreement may be terminated at any time prior to the Closing:

 

(a) by the mutual written consent of Seller and Buyer;

 

(b) by Buyer by written notice to Seller if:

 

(i) Buyer is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Seller pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article VII and such breach, inaccuracy or failure has not been cured by Seller within ten days of Seller's receipt of written notice of such breach from Buyer; or

 

(ii) any of the conditions set forth in Section 7.01 or Section 7.02 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by May 12, 2016, unless such failure shall be due to the failure of Buyer to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing;

 

(c) by Seller by written notice to Buyer if:

 

(i) Seller is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article VII and such breach, inaccuracy or failure has not been cured by Buyer within ten days of Buyer's receipt of written notice of such breach from Seller; or

 

(ii) any of the conditions set forth in Section 7.01 or Section 7.03 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by May 12, 2016, unless such failure shall be due to the failure of Seller to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing; or

 

(d) by Buyer or Seller in the event that (i) there shall be any Law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited or (ii) any Governmental Authority shall have issued a Governmental Order restraining or enjoining the transactions contemplated by this Agreement, and such Governmental Order shall have become final and non-appealable.

 

Section 9.02 Effect of Termination. In the event of the termination of this Agreement in accordance with this Article, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except:

 

(a) as set forth in this Article IX and Section 6.06 and Article X hereof; and

  

(b) that nothing herein shall relieve any party hereto from liability for any willful breach of any provision hereof.

 

 
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ARTICLE X
MISCELLANEOUS

 

Section 10.01 Expenses. Except as otherwise expressly provided herein, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred.

 

Section 10.02 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 10.02 ):

 

If to Seller:

Theranostics Health, Inc.

15010 Broschart Road, Suite 200

Rockville, MD 20850

E-mail: rhencin@theranosticshealth.com

Attention: Ron Hencin

with a copy to:

Miles & Stockbridge P.C.

101 Bay Street, Suite 2

Easton, MD 21601

Facsimile: (410) 819-8176

E-mail: rcattane@milesstockbridge.com

Attention: Robert M. Cattaneo :

If to Buyer:

Avant Diagnostics, Inc.

8561 East Anderson Drive, Suite 104

Scottsdale, Arizona 85225

Facsimile:

E-mail: glinn@avantdiagnostics.com

Attention: Gregg Linn, CEO

with a copy to:

Sichenzia Ross Friedman Ference LLP

61 Broadway, 32 nd Floor

New York, New York 10006

Facsimile: (212) 930-9725

E-mail: gsichenzia@srff.com

Attention: Gregory Sichenzia, Esq.

 

 
56
 

 

Section 10.03 Interpretation. For purposes of this Agreement, (a) the words "include," "includes" and "including" shall be deemed to be followed by the words "without limitation"; (b) the word "or" is not exclusive; and (c) the words "herein," "hereof," "hereby," "hereto" and "hereunder" refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to Articles, Sections, Disclosure Schedules and Exhibits mean the Articles and Sections of, and Disclosure Schedules and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The Disclosure Schedules and Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.

 

Section 10.04 Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

 

Section 10.05 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Except as provided in Section 6.07(d) , upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

 

Section 10.06 Entire Agreement. This Agreement and the other Transaction Documents constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the other Transaction Documents, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.

 

Section 10.07 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed; provided, however , that prior to the Closing Date, Buyer may, without the prior written consent of Seller, assign all or any portion of its rights under this Agreement to one or more of its direct or indirect wholly-owned subsidiaries and without limiting the generality of the foregoing Buyer may designate its subsidiary, Avant Diagnostics Acquisition Corporation, to be the entity to acquire the Purchased Assets and to assume the Assumed Liabilities. No such assignment or designation shall relieve the assigning or designating party of any of its obligations hereunder.

 

Section 10.08 No Third-party Beneficiaries. Except as provided in Article VIII , this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section 10.09 Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

 
57
 

 

Section 10.10 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a) This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction).

 

(b) ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF NEW YORK IN EACH CASE LOCATED IN THE CITY OF NEW YORK AND COUNTY OF NEW YORK, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY'S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.10(c).

 

Section 10.11 Specific Performance. The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

 

Section 10.12 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

(Signature pages follows)

 

 
58
 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

 

THERANOSTICS HEALTH, INC.

By:

/s/ James N. Cooper

Name:

James N. Cooper MD

Title:

Chairman

AVANT DIAGNOSTICS, INC.

By:

/s/ Gregg Linn

Name:

Gregg Linn

Title:

Chief Executive Officer

 

 
59
 

 

EXHIBIT A

 

EXECUTION VERSION

 
BILL OF SALE

 

In accordance with the provisions of that certain Asset Purchase Agreement, made and dated as of May 11, 2016 (the " Purchase Agreement "), by and between THERANOSTICS HEALTH, INC., a Delaware corporation (" Seller "), and AVANT DIAGNOSTICS, INC., a Nevada corporation (" Buyer "), AVANT DIAGNOSTICS ACQUISITION CORPORATION, as Buyer's designee, and Seller do hereby execute and deliver this BILL OF SALE as of the 11th day of May, 2016 (the " Effective Date "). Capitalized terms, unless otherwise defined herein, have the meanings assigned to them in the Purchase Agreement.

 

For consideration recited in the Purchase Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller hereby sells, assigns, transfers, delivers, and conveys to Buyer, free and clear of all Encumbrances other than Permitted Encumbrances, all right, title and interest in and to the Purchased Assets.

 

Seller agrees that from time to time, whether on or after the date hereof, it will execute and deliver such other documents and take such other actions as may reasonably be requested in writing by Buyer and required to distribute and convey more effectively the Purchased Assets from Seller to Buyer.

 

The identity and content of the Purchased Assets, and the representations and warranties of Seller applicable to the Purchased Assets, together with all limitations, restrictions, disclaimers and other provisions thereof, are contained in the Purchase Agreement.

 

THIS BILL OF SALE DOES NOT, NOR SHALL IT BE DEEMED TO, SUPERSEDE, SUPPLANT, EXTINGUISH, MERGE OR EXPAND ANY OF THE TERMS AND CONDITIONS, REPRESENTATIONS, WARRANTIES, COVENANTS, INDEMNITIES OR LIMITATIONS CONTAINED IN THE PURCHASE AGREEMENT. IN THE EVENT OF A CONFLICT BETWEEN THIS BILL OF SALE AND THE PURCHASE AGREEMENT, THE PARTIES AGREE THAT THE PURCHASE AGREEMENT SHALL CONTROL.

 

This Bill of Sale may not be changed, modified, discharged, or terminated orally or in any other manner than by an agreement in writing executed by the parties hereto or their respective successors and assigns.

 

This Bill of Sale shall be governed by the laws of the State of New York, without regard to any choice or conflicts of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any other jurisdiction. 

 

This Bill of Sale may be executed in any number of counterparts, each of which of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Delivery of a signature page to this Bill of Sale by facsimile or other electronic means (e.g., electronic mail or PDF) shall be effective as delivery of a manually executed counterpart to this Bill of Sale.

 

[SIGNATURE PAGE FOLLOWS]

 

 
60
 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Bill of Sale to be executed by its duly authorized officer to be effective as of the Effective Date.

 

 

 

THERANOSTICS HEALTH, INC.

 

       
By: /s/ Ronald S. Hencin

 

 

Name:

Ronald S. Hencin

 

 

Title:

VP Business Development

 

AVANT DIAGNOSTICS ACQUISITION CORPORATION

By: /s/ Gregg Linn

Name:

Gregg Linn
Title: Chief Executive Officer

 

 
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EXHIBIT B

 

EXECUTION VERSION

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND ASSUMPTION (this " Assignment ") is entered into this 11th day of May, 2016, by and between THERANOSTICS HEALTH, INC., a Delaware corporation (" Assignor "), and AVANT DIAGNOSTICS ACQUISITION CORPORATION, a Nevada corporation (" Assignee "), as the designee of AVANT DIAGNOSTICS, INC., a Nevada corporation and the parent company of Assignee (" Parent "). All capitalized terms herein that are not otherwise defined shall have the same meaning as prescribed to them in the Asset Purchase Agreement (defined below).

 

W I T N E S S E T H:

 

WHEREAS, Assignor has agreed to transfer, assign and deliver to Assignee all rights, titles and interests of Assignor in and to the Assigned Contracts, and Assignee has agreed to purchase such rights, titles and interests to the Assigned Contracts, pursuant to that certain Asset Purchase Agreement dated as of May 11, 2016, by and between Assignor and Parent (the " Asset Purchase Agreement ").

 

NOW, THEREFORE, in consideration of the premises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows:

 

1.

Assignor hereby irrevocably assigns, grants, conveys and transfers to Assignee and its respective successors and assigns, all of Assignor's legal and beneficial rights, titles and interests of any kind or character, whether or not such rights are now existing or come into existence hereafter, and whether or not such rights are now known, recognized or contemplated, in and to the Assigned Contracts and any and all goodwill associated with the foregoing.

2.

Assignee hereby accepts the foregoing assignment of the Assigned Contracts and assumes and agrees to pay, perform and discharge all of the Assumed Liabilities.

3.

Assignor hereby acknowledges Assignee shall incur by its signature hereto no responsibility to pay, perform or discharge any Excluded Liabilities.

4.

The respective rights of Assignor, on the one hand, and Assignee, on the other, with respect to the Assigned Contracts assigned and assumed hereby shall be governed by the Asset Purchase Agreement. In the event of a conflict between this Assignment and the Asset Purchase Agreement, the parties agree that the Asset Purchase Agreement shall control.

5.

This Assignment shall be binding upon, and inure to the benefit of, the parties hereto, their respective successors in interest, and their respective assigns.

6.

This Assignment may not be changed, modified, discharged, or terminated orally or in any other manner than by an agreement in writing executed by the parties hereto or their respective successors and assigns.

7.

This Assignment shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to choice of law principles thereof.

8.

This Assignment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Counterparts delivered by facsimile, e-mail or other electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

   

 
62
 

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Assignment to be executed by its duly authorized representatives as of the date first written above.

 

 

 

THERANOSTICS HEALTH, INC.

 

       
By: /s/ Ronald S. Hencin

 

 

Name:

Ronald S. Hencin

 

 

Title:    

VP Business Development

 

AVANT DIAGNOSTICS ACQUISITION CORPORATION

By: /s/ Gregg Linn

Name:

Gregg Linn
Title:  Chief Executive Officer
 

 
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EXHIBIT C

 

EXECUTION VERSION

 


INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT

 

THIS INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT (the " Agreement ") is made as of May 11, 2016 by and between THERANOSTICS HEALTH, INC., a Delaware corporation (" Assignor "), and AVANT DIAGNOSTICS ACQUISITION CORPORATION, a Nevada corporation (" Assignee "). All capitalized terms herein that are not otherwise defined shall have the same meaning as prescribed to them in that certain Asset Purchase Agreement by and between Assignor and Avant Diagnostics, Inc., a Nevada corporation (" Parent "), dated May 11, 2016 (the " Asset Purchase Agreement ").

 

RECITALS

 

WHEREAS, Assignee is a wholly-owned subsidiary of Parent, formed for the purpose of completing the transactions contemplated by the Asset Purchase Agreement;

 

WHEREAS, pursuant to the Asset Purchase Agreement, Assignor agreed to sell, transfer, convey, assign and deliver to Assignee all of Assignor's right, title and interest in and to all of the Intellectual Property Assets and all of the Intellectual Property Agreements that are include in the Assigned Contracts (together, the " Assigned Intellectual Property "); and

 

WHEREAS, Assignee wishes to acquire, and Assignor wishes to transfer, all right, title and interest in and to the Assigned Intellectual Property, including all rights to sue and recover for past infringement or wrongful use thereof everywhere in the world.

 

NOW, THEREFORE, in consideration of and in exchange for the Closing Consideration, as set forth in the Asset Purchase Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, effective as of the Closing Date of the Asset Purchase Agreement, Assignor sells, assigns, transfers and conveys to Assignee all right, title and interest in and to the Assigned Intellectual Property in accordance with the Asset Purchase Agreement, and with any and all renewals and extensions of registrations for the Assigned Intellectual Property that may be secured under any applicable law now or hereafter in effect.

 

1. Assignor will provide to Assignee, its successors, assigns or other legal representatives, reasonable cooperation and assistance (including the execution and delivery of any and all affidavits, declarations, oaths and other documentation, and the delivery of any and all samples, exhibits, specimens and the like in the control of Assignor):

 

(a) in the preparation and prosecution of any applications for registration or any applications for renewal of registrations covering the Assigned Intellectual Property; and

 

(b) in the implementation or perfection of this Agreement.

 

2. Assignor will cooperate to the extent reasonably necessary for Assignee to make any and all required filings to effectuate the transfer of the Assigned Intellectual Property.

 

3. This Agreement is being delivered in connection with and subject to the Asset Purchase Agreement and to the extent of any conflict between this Agreement and the Asset Purchase Agreement, the Asset Purchase Agreement shall control.

 

4. This Agreement may not be changed, modified, discharged, or terminated orally or in any other manner than by an agreement in writing executed by the parties hereto or their respective successors and assigns.

 

5. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to choice of law principles thereof.

 

6. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Counterparts delivered by facsimile, e-mail or other electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

  

[SIGNATURE PAGE FOLLOWS]

  

 
64
 

   

IN WITNESS WHEREOF, each of the parties hereto has caused this Intellectual Property Assignment Agreement to be executed by its duly authorized representatives as of the date first written above.

 

 

 

THERANOSTICS HEALTH, INC.

 

       
By: /s/ Ronald S. Hencin

 

 

Name:

Ronald S. Hencin

 

 

Title:    

VP Business Development

 

 

 

 

 

AVANT DIAGNOSTICS ACQUISITION CORPORATION

By: /s/ Gregg Linn

Name:

Gregg Linn
Title:  Chief Executive Officer
 

 
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EXHIBIT D

 

ASSIGNMENT AND FIRST AMENDMENT OF LEASE

 

THIS ASSIGNMENT AND FIRST AMENDMENT OF LEASE (the " Assignment ") is made and entered into this 26 th day of April, 2016 (" Assignment Date "), by and among (i) Saul Holdings Limited Partnership, a Maryland limited partnership (hereinafter referred to as " Landlord "); (ii) Theranostics Health, Inc., a Delaware corporation (hereinafter referred to as " Original Tenant "); and (iii) Avant Diagnostics, Inc., a Nevada corporation (hereinafter referred to as " Assignee ").

 

WHEREAS , Landlord and Original Tenant have heretofore entered into that certain Lease Agreement dated January 29, 2016 (the " Lease ") for approximately four thousand six hundred ninety-eight (4,698) rentable square feet of office space known as Suite 8 (" Premises ") in Phase IV of the Avenel Business Park ("Property") located at 217 Perry Parkway, Gaithersburg, Maryland 20877 (" Building "), as more particularly described in said Lease; and

 

WHEREAS , Original Tenant desires to assign all of its right, title and interest in and to the Lease unto Assignee; and

 

WHEREAS , the parties desire to amend the Lease as hereinafter provided;

 

WHEREAS , as of May 1, 2016, monthly Base Rent and Additional Rent for the first Lease Year is $5,899.90 subject to the terms of the Lease.

 

NOW, THEREFORE , in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

 

1. ASSIGNMENT .

 

(a) Original Tenant hereby assigns all of Original Tenant's right, title and interest in and to the Lease unto Assignee, and Assignee hereby assumes all of the obligations of Original Tenant under said Lease to the same extent as if Assignee were the original tenant thereunder. The foregoing Assignment includes Original Tenant's interest in any security deposit or other security held by Landlord to secure Original Tenant's obligations under the Lease, and Original Tenant hereby waives and releases all rights in any such security or deposits, it being the intention of the parties that such security or deposits be held by Landlord to secure the performance of Assignee, as tenant under the Lease, and that such security or deposits be and remain subject to the rights of Landlord in such security or deposits under the Lease or otherwise at law or in equity. The foregoing Assignment includes Original Tenant's interest in any security deposit or other security held by Landlord to secure Original Tenant's obligations under the Lease, and Original Tenant hereby waives and releases all rights in any such security or deposits, it being the intention of the parties that such security or deposits be held by Landlord to secure the performance of Assignee, as tenant under the Lease, and that such security or deposits be and remain subject to the rights of Landlord in such security or deposits under the Lease or otherwise at law or in equity.

 

(b) Original Tenant agrees to remain bound and fully liable for the full and faithful performance of all covenants, obligations and acts of said Lease, as amended hereby, notwithstanding the Assignment of the Lease.

 

(c) Landlord hereby consents to this Assignment without releasing Original Tenant from any of their obligations under the Lease, and in the event of any default under the terms and conditions of said Lease, Landlord shall have the right to enforce any of the remedies provided to it thereunder against Original Tenant or Assignee either severally or jointly at its election. Landlord's consent to this Assignment shall not be deemed to relieve Original Tenant or Assignee from the requirement of obtaining Landlord's consent to any further assignment of the Lease.

 

 
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2. NOTICES. Article 33 of the Lease captioned "Notices" is hereby modified to provide that all notices regarding rent or other payments required or desired to be given hereunder by either party to the other shall be sent by first class mail, postage prepaid, or by a reputable commercial messenger service, except that notices of default and notices related to the exercise of options or other rights under this Lease shall be sent by certified mail, return receipt requested or by a receipted overnight commercial messenger service (such as Federal Express, UPS, or DHL Express) for delivery on the next following business day. Notices sent by mail shall be deemed to be received on the date of actual receipt by the recipient or on the date delivery is refused. Notices sent by a receipted overnight commercial messenger service shall be deemed received on the next business day after depositing with such delivery service. Notices to the respective parties, and any amounts required to be paid hereunder, shall be addressed and sent as follows:

 

IF TO LANDLORD: NOTICES AND CORRESPONDENCE

Saul Holdings Limited Partnership

Attention: Legal Department

7501 Wisconsin Avenue, Suite 1500E

Bethesda, Maryland 20814

Main Phone: (301) 986-6000

Rent, Payments, Etc.

Saul Holdings Limited Partnership

PO Box 64288

Baltimore, Maryland 21264-4288

IF TO ASSIGNEE: AVANT DIAGNOSTICS, INC.

Attention: Gregg Linn

8561 East Anderson Drive, Suite 104

Scottsdale, AZ 85225

Main Phone : (480) 478-6660

IF TO ORIGINAL TENANT: THERANOSTICS HEALTH, INC.

Attention: Ronald S. Hencin

217 Perry Parkway, Ste. 8

Gaithersburg, MD 20899

Main Phone: (301) 251-4443

 

3. FEE. Pursuant to Article 19(c) of the Lease, Landlord hereby acknowledges receipt of One Thousand and No/100 Dollars ($1,000.00) (the " Assignment Fee ") from Assignee.

 

4. NO DEFAULT . Original Tenant hereby represents and warrants to Landlord that as, of the Assignment Date, to the best of its knowledge, neither Landlord nor Original Tenant is in default of its any of its respective agreements, covenants, or obligations under the Master Lease.

 

 
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5. EFFECTIVE DATE. This Assignment, for all purposes, shall be subject to and  effective upon the consummation of the closing for the acquisition of substantially all of the assets of the Original Tenant by the Assignee, notice of which shall be provided to Landlord promptly following such closing.

 

6. MISCELLANEOUS. Except as specifically modified hereby, the Lease shall remain in full force and effect in accordance with the terms contained therein and is hereby ratified, approved and confirmed in all respects. Any agreement, obligation or liability made, entered into or incurred by or on behalf of Landlord binds only its property and no shareholder, trustee, officer, director, employee, partner or agent of the Landlord assumes or shall be held to any liability therefor. The provisions of this Assignment to Lease shall be binding upon the parties hereto, their successors, and to the extent permitted under the Lease, their assigns. The submission of this Assignment for examination does not constitute an agreement, an option or an offer, and this Assignment becomes effective only upon execution and delivery thereof by Landlord. Neither party shall have any legal obligation to the other in the event that the Assignment contemplated herein is not consummated for any reason. Discussions between the parties respecting the proposed Assignment described herein, shall not serve as a basis for a claim against either party or any officer, director or agent of either party. Captions and headings are for convenience and reference only and shall not in any way define, limit or describe the scope or content of any provision of this Assignment. Whenever in this Assignment (i) any printed portion, or any part thereof, has been stricken out, or (ii) any portion of the Lease (as the same may have been previously amended) or any part thereof, has been modified or stricken out, then, in either of such events, whether or not any replacement provision has been added, this Assignment and the Lease shall hereafter be read and construed as if the material so stricken out were not included, and no implication shall be drawn from the text of the material so stricken out which would be inconsistent in any way with the construction or interpretation which would be appropriate if such material had never been contained herein or in the Lease. The Exhibits referred to in this Assignment and attached hereto are a substantive part of this Assignment and are incorporated herein by reference. If drafts of this Assignment or other communications between the parties were sent by email or other electronic methods, then the following additional provisions shall also apply: (i) any typewritten signature included with any e-mail or any document attached to any email is not an electronic signature within the meaning of Electronic Signatures in Global and National Commerce Act or any other law of similar import, including without limitation, the Uniform Electronic Transactions Act (" UETA "), as the same may be enacted in any State, (ii) any transmission of this Assignment is not intended as an "electronic signature" to a "record" of such transaction (as those terms are defined under UETA); instead, it is Landlord's intention that a record of such transaction shall be created only upon manually-affixed original signatures on an original document, and (iii) the final, definitive version of this Assignment shall be created by Landlord (the " Final Draft "), and Original Tenant authorizes Landlord to affix to the Final Draft the original, manually executed signature pages attached by Original Tenant to the executed document submitted by Original Tenant to Landlord.

 

6. INTERPRETATION . The submission of this Assignment for examination does not constitute an agreement, an option or an offer, and this Assignment becomes effective only upon execution and delivery thereof by Landlord. Neither party shall have any legal obligation to the other in the event that the Assignment contemplated herein is not consummated for any reason. Discussions between the parties respecting the proposed Assignment described herein, shall not serve as a basis for a claim against either party or any officer, director or agent of either party. Captions and headings are for convenience and reference only and shall not in any way define, limit or describe the scope or content of any provision of this Assignment. Except as otherwise provided herein, capitalized terms shall have the same meaning as set forth in the Lease. Whenever in this Assignment (i) any printed portion, or any part thereof, has been stricken out, or (ii) any portion of the Lease (as the same may have been previously amended) or any part thereof, has been modified or stricken out, then, in either of such events, whether or not any replacement provision has been added, this Assignment and the Lease shall hereafter be read and construed as if the material so stricken out were not included, and no implication shall be drawn from the text of the material so stricken out which would be inconsistent in any way with the construction or interpretation which would be appropriate if such material had never been contained herein or in the Lease. The Exhibits referred to in this Assignment and attached hereto are a substantive part of this Assignment and are incorporated herein by reference.

 

 
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IN WITNESS WHEREOF , the parties hereto do hereby execute this Assignment under seal on the day and year first above written.

 

 

ATTEST:  

 

LANDLORD: Saul Holdings Limited Partnership

 

By: Saul Centers, Inc., General Partner

By: /s/ Amy E. Spencer

 

By:

/s/ J. Page Lansdale

 

 

Printed Name:

J. Page Lansdale

 

 

Title:  

President & Chief Operating Officer

 

 

 

[REMAINDER OF PAGE INTENTIONALLY BLANK]  

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

 

 
69
 

 

ATTEST/WITNESS:

 

ORIGINAL TENANT: Theranositics Health, Inc.

 

 

By:

/s/ Ronald S. Hencin

 

 

Printed Name:

Ronald S. Hencin

 

 

Title:  

VP Business Development

 

Tenant's Tax Identification Number:

 

STATE OF MARYLAND:

 

: ss.

 

COUNTY OF MONTGOMERY:

 

On this, the 19 th day of April, 2016, before me, a notary public in and for the state and county aforesaid, personally appeared Ronald S. Hencin (name) who acknowledged himself/herself to be the VP Business Development (title) of the corporation which executed the foregoing, and that he/she as such officer(s), being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the corporation as such officer.

 

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal in the County and State aforesaid, the day and year first above written.

 

/s/ Tamara Henry                         

Notary Public

 

3/9/2020  

My term expires:  

(SEAL) 

  

 

 

[REMAINDER OF PAGE INTENTIONALLY BLANK]

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

   

 
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ATTEST/WITNESS:

 

ASSIGNEE: Avant Diagnostics, Inc.

 

By: /s/ Melanie D. Linn

 

By:

/s/ Gregg Linn

 

 

Printed Name:

Gregg Linn

 

 

Title:  

CEO/President

 

Tenant's Tax Identification Number:

 

STATE OF ARIZONA:

 

: ss.

 

COUNTY OF MARICOPA:

 

On this, the 18 th day of April, 2016, before me, a notary public in and for the state and county aforesaid, personally appeared Gregg A. Linn (name) who acknowledged himself/herself to be the CEO/President (title) of the corporation which executed the foregoing, and that he/she as such officer(s), being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the corporation as such officer.

 

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal in the County and State aforesaid, the day and year first above written.

 

/s/ Mikhail Balakirskty                   

Notary Public

 

02/08/2019  

My term expires:  

(SEAL)

 

 
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EXHIBIT E

 

THERANOSTICS HEALTH, INC.

 

10% PROMISSORY NOTE

 

$____________[UP TO $75,000]

ii) Original Issuance Date: ___

 

THERANOSTICS HEALTH, INC. a Delaware corporation (the " Company "), for value received, hereby promises to pay to Avant Diagnostics, Inc. or its assigns (the " Holder "), the principal amount of ________________ ( ) (the " Principal Amount "), together with interest thereon (" Interest "). Interest shall be computed on the basis of a 365-day year for the actual number of days elapsed and shall accrue from the date hereof at the rate of eight percent (10%) per annum (" Interest Rate ") until this Note and all amounts due hereunder are paid in full as provided herein.

 

1. Repayment of the Note . Subject to earlier payment as required or permitted by this Note, the Principal Amount outstanding hereunder and any and all unpaid sums due on this Note, including any unpaid Interest, shall be paid on _________2017 [18 months and 15 days from the Closing] from the closing date of the Asset Purchase Agreement, as defined below] (the " Maturity Date "). Notwithstanding anything to the contrary herein, the unpaid Principal Amount and all accrued and unpaid Interest shall be due and payable on the earlier of (1) the Maturity Date or (2) the occurrence of an Event of Default (as defined below). All amounts due under this Note shall be tendered by wire transfer payable to Avant Diagnostics Health, Inc. in immediately available funds to:

 

[wire instructions to be inserted]

 

2. Prepayment of the Note . The Company may prepay any outstanding amounts owing under this Note, in whole or in part, at any time prior to the Maturity Date.

 

3. Event of Default .

 

(a) Events of Default . Each of the following events, individually, shall constitute an " Event of Default ":

 

(i)

the Company shall fail to pay any amount under this Note when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

 
(ii)

the Company shall fail to pay any accrued but unpaid Interest when and as the same shall become due and payable;

 
(iii)

an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Company or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for ninety (90) days or an order or decree approving or ordering any of the foregoing shall be entered;

 
(iv)

the Company shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (iii) of this Section, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

 

 
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(v)

the Company shall be unable, admit in writing its inability, or fail generally, to pay its debts as they become due;

 
(vi)

one or more final judgments for the payment of money in an aggregate amount in excess of $5,000 shall be rendered against the Company and the same shall remain undischarged for a period of ten (10) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Company to enforce any such judgment;

 
(vii)

any default by the Company under, or the occurrence of any event of defaultunder, any other material agreement, lease, document, instrument by which the Company or any of its subsidiaries is obligated, or any other indebtedness owed by the Company;

 
(viii)

this Note shall cease to be, or shall be asserted by the Company or other obligor thereunder not to be, in full force and effect;

 
(ix)

the Company shall fail to observe or perform any covenant, agreement or obligation of the Company contained in that certain Asset Purchase Agreement between Theranostics Health, Inc. and Avant Diagnostics, Inc. dated as of May 11, 2016 (the "Asset Purchase Agreement"); or

 
(x)

any representation or warranty made in the Asset Purchase Agreement shall have been untrue or incorrect in any material respect as of the date when made or deemed made.

 

(b) Remedies . Upon the occurrence of an Event of Default the Interest Rate shall become 17% per annum (the " Default Interest Rate ") and in every such event, Holder may, at its sole election, by notice to the Company, declare all amounts under the Note then outstanding to be due and payable in whole and thereupon the outstanding amount under the Note so declared to be due and payable, together with all fees and other payment obligations of the Company accrued but unpaid under the Note, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company.

 

4. Non-Waiver . The failure of the Holder to enforce or exercise any right or remedy provided in this Note or at law or in equity upon any default or breach shall not be construed as waiving the rights to enforce or exercise such or any other right or remedy at any later date. No exercise of the rights and powers granted in or held pursuant to this Note by the Holder, and no delays or omission in the exercise of such rights and powers shall be held to exhaust the same or be construed as a waiver thereof, and every such right and power may be exercised at any time and from time to time.

 

5. Waiver by the Company . The Company hereby waives presentment, protest, notice of protest, notice of nonpayment, notice of dishonor and any and all other notices or demands relative to this Note, except as specifically provided herein. The Company shall have no right of set off or counterclaim with respect to the monies owing under this Note.

 

6. Usury Savings Clause . The Company and the Holder intend to comply at all times with applicable usury laws. If at any time such laws would render usurious any amounts due under this Note under applicable law, then it is the Company's and Holder's express intention that the Company not be required to pay Interest on this Note at a rate in excess of the maximum lawful rate, that the provisions of this Section shall control over all other provisions of this Note which may be in apparent conflict hereunder, that such excess amount shall be immediately credited to the balance of the Principal Amount of this Note, and the provisions hereof shall immediately be reformed and the amounts thereafter decreased, so as to comply with the then applicable usury law, but so as to permit the recovery of the fullest amount otherwise due under this Note.

 

7. Miscellaneous .

 

(a) Governing Law; Venue . This Note shall be enforced, governed and construed in all respects in accordance with the laws of the State of New York as such laws are applied by the New York courts to contracts solely performed within its borders, except with respect to the conflicts of law provisions thereof. Any legal suit, action or proceeding arising out of or relating to this Note or the transactions contemplated hereby shall be instituted exclusively in New York County, New York. The parties hereto hereby: (i) waive any objection which they may now have or hereafter have to the venue of any such suit, action or proceeding, and (ii) irrevocably consent to the jurisdiction of the federal and state courts located in New York County, New York in any such suit, action or proceeding. The parties further agree to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the federal and state courts located in New York County, New York. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

 
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(b) Successors and Assigns. This Note and the obligations hereunder shall inure to the benefit of and be binding upon the respective successors and assigns of the parties; provided, however, that the Holder may assign all or any portion of this Note without the consent of the Company.

 

(c) Notices. Any notice or other document required or permitted to be given or delivered to the parties hereto shall be in writing and sent: (i) by fax, if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail, with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid), to the following addresses:

 

(i)

If to the Company, at:

Theranostics Health, Inc.

15010 Broschart Road, Suite 200

Rockville, MD 20850

E-mail: rhencin@theranosticshealth.com

Attention: Ron Hencin

(ii) If to the Holder, at:

Avant Diagnostics, Inc.

8561 East Anderson Drive, Suite 104

Attention: Gregg Linn, CEO

Email: glinn@avantdiagnostics.com

 

With a copy to:

 

Sichenzia Ross Friedman Ference LLP

61 Broadway, 32 nd Floor

New York, New York 10006

Facsimile: (212) 930-9725

E-mail: gsichenzia@srff.com

Attention: Gregory Sichenzia, Esq.

 

(d) Amendment; Waiver . No modification, amendment or waiver of any provision of this Note shall be effective unless in writing and approved by the Company and the Holder.

 

(e) Invalidity . Any provision of this Note which may be determined by a court of competent authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invaliding the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

(f) Section and Paragraph Headings . The section and paragraph headings contained herein are for convenience only and shall not be construed as part of this Note.

  

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGE FOLLOWS]

   

 
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IN WITNESS WHEREOF , this Note has been executed and delivered on the date first above written by the duly authorized representative of the Company.

 

 

THERANOSTICS HEALTH, INC.

 

     
By:

 

Name:

Name

 

Title:

Title

 

 

 

75


EXHIBIT 4.1

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO BORROWER.

 

Original Issue Date: May 11, 2016

Principal Amount: $ 50,000

 

12% CONVERTIBLE NOTE

DUE MAY 11, 2017

 

FOR VALUE RECEIVED, the undersigned, Avant Diagnostics, Inc., a Nevada corporation (the " Borrower ") promises to pay to Amarantus Bioscience Holdings, Inc. or its registered assigns (the " Holder "), or shall have paid pursuant to the terms hereunder, the principal sum of Fifty Thousand Dollars and Zero Cents ($50,000.00) on May 11, 2017 (the " Maturity Date ") or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest, if any, to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions hereof.

 

This Note is subject to the following additional provisions:

 

Section 1 . Definitions . For the purposes hereof, in addition to the terms defined elsewhere in this Note, the following terms shall have the following meanings:

 

" Bankruptcy Event " means any of the following events: (a) Borrower or any Subsidiary thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to Borrower or any Subsidiary thereof, (b) there is commenced against Borrower or any Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) Borrower or any Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) Borrower or any Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, or (e) Borrower or any Subsidiary thereof makes a general assignment for the benefit of creditors.

 

" Business Day " means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

" Conversion " shall have the meaning ascribed to such term in Section 4.

 

" Conversion Date " shall have the meaning set forth in Section 4.

 

 
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" Conversion Price " shall have the meaning set forth in Section 4.

 

" Conversion Shares " means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms hereof.

 

" Event of Default " shall have the meaning set forth in Section 7(a).

 

" New York Courts " shall have the meaning set forth in Section 11(d).

 

" Note Register " shall have the meaning set forth in Section 2(c).

 

" Notice of Conversion " shall have the meaning set forth in Section 4(a).

 

" Original Issue Date " means the date of the first issuance of this Note, regardless of any transfers of this Note and regardless of the number of instruments which may be issued to evidence such Note.

 

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

 

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

 

Section 2 . Interest .

 

a) Interest . Holders shall be entitled to receive, and Borrower shall pay, simple interest on the outstanding principal amount of this Note at the annual rate of twelve percent (12%) per annum payable in cash on the Maturity Date.

 

b) Payment Grace Period . The Borrower shall have a ten Business Day grace period to pay any monetary amounts due under this Note except as specifically set forth herein.

 

c) Calculations . Interest shall be calculated on the basis of a 365-day year, and shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made.

 

d) Manner and Place of Payment . Principal and interest on this Note and other payments in connection with this Note shall be payable at the Borrower's offices as designated above in lawful money of the United States of America in immediately available funds without set-off, deduction or counterclaim. Upon assignment of the interest of Holder in this Note, Borrower shall instead make its payment pursuant to the assignee's instructions upon receipt of written notice thereof.

 

Section 3 . Registration of Transfers and Exchanges .

 

a) Different Denominations . This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.

 

 
2
 

 

b) Investment Representations . This Note has been issued subject to certain investment representations of the original Holder set forth in the Investor Representations annexed hereto as Exhibit A may be transferred or exchanged only in compliance with the terms contained herein and applicable federal and state securities laws and regulations to successor Holders who provide the same investment representations to the Borrower.

 

c) Reliance on Note Register . Prior to due presentment for transfer to Borrower of this Note, Borrower and any agent of Borrower may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither Borrower nor any such agent shall be affected by notice to the contrary.

 

Section 4 . Conversion .

 

a) Voluntary Conversion . This Note shall be convertible at any time, in whole or in part, into shares of Common Stock at the option of the Holder, at the Conversion Price. The Holder shall effect conversions by delivering to Borrower a Notice of Conversion, the form of which is attached hereto as Annex A (each, a " Notice of Conversion "), specifying therein the principal amount of this Note to be converted and the date on which such conversion shall be effected (such date, the " Conversion Date "). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to Borrower unless the entire principal amount of this Note has been so converted. The Holder and Borrower shall maintain records showing the principal amount(s) and interest converted and the date of such conversion(s). Borrower may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Borrower shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

 

c) Conversion Price . The conversion price shall be equal to $0.20, subject to adjustment in accordance with Section 5 (the " Conversion Price ").

 

d) Conversion Limitation . Notwithstanding anything to the contrary contained herein, the number of Conversion Shares that may be acquired by the Holder upon conversion of this Debenture (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder's for purposes of Section 13(d) of the Securities and Exchange Act of 1934, as amended (the " Exchange Act " ), does not exceed 4.99% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such conversion). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. By written notice to the Company, the Holder may increase, decrease or waive the provisions of this Section 2.2 as to itself but any such waiver will not be effective until the 61 st day after delivery thereof

 

d) Mechanics of Conversion .

 

i. Conversion Shares Issuable Upon Conversion . The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note and accrued but unpaid interest thereon to be converted by (y) the Conversion Price.

 

 
3
 

 

ii. Delivery of Certificate Upon Conversion . Not later than five Trading Days after each Conversion Date (the " Share Delivery Date "), Borrower shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates representing the Conversion Shares and (B) a bank check in the amount of accrued and unpaid interest.

 

iii. Reservation of Shares Issuable Upon Conversion . Borrower covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than one hundred (100%) percent of the aggregate number of shares of the Common Stock as shall be issuable (taking into account the adjustments and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Note at the Initial Conversion Price (as adjusted from time to time) , assuming such principal amount was not converted through the Maturity Date. Borrower covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

 

iv. Fractional Shares . No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, Borrower shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.

 

v. Transfer Taxes and Expenses . The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that, Borrower shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note so converted and Borrower shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to Borrower the amount of such tax or shall have established to the satisfaction of Borrower that such tax has been paid. Borrower shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion.

 

Section 5 . Certain Adjustments .

 

a) Stock Dividends and Stock Splits . If Borrower, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by Borrower upon conversion of the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of Borrower, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of Borrower) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

 
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b) Reorganization, Reclassification, Consolidation, Merger, Sale; Company Not Survivor . If any capital reorganization, reclassification of the capital stock of the Company, combination, continuation, consolidation or merger of the Company with another corporation in which the Company is not the survivor, or sale, transfer or other disposition (i.e. license, lease or contractual arrangement) of all or substantially all of the assets to another corporation shall be effected by the Company, then, as a condition of such reorganization, reclassification, combination, continuation, consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall be made whereby the Holder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion of the Note, such shares of stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of shares of Common Stock equal to the number of shares of Common Stock immediately theretofore issuable upon conversion of the Note, had such reorganization, reclassification, combination, continuation, consolidation, merger, sale, transfer or other disposition not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of Holder to the end that the provisions hereof (including, without limitation, provision for adjustment of the Conversion Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. The provisions of this Section 5(b) shall similarly apply to successive reorganizations, reclassifications, combinations, continuations, consolidations, mergers, sales, transfers or other dispositions.

 

c) Calculations . All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of Borrower) issued and outstanding.

 

d) Notice to the Holder . Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, Borrower shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

Section 6 . Prepayment. The Borrower shall have the option of paying the principal sum of this Note to Holder in advance in full or in part at any time and from time to time without premium or penalty; provided, however, that together with such payment in full the Borrower shall pay to the Holder all interest and all other amounts owing pursuant to this Note and remaining unpaid.

 

Section 7 . Events of Default .

 

a) " Event of Default " means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

 

i. any default in the payment of (A) the principal amount of any Note or (B) interest and other amounts owing to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within ten (10) Trading Days;

 

ii. the Borrower or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event; or

 

 
5
 

 

iii. any monetary judgment, writ or similar final process shall be entered or filed against the Borrower, any Subsidiary or any of their respective property or other assets for more than $1,000,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days.

 

b) Remedies Upon Event of Default . If any Event of Default occurs, the outstanding principal amount of this Note, interests and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder's election, immediately due and payable in cash. Commencing on the Maturity Date and also five (5) days after the occurrence of any Event of Default interest on this Note shall accrue at an interest rate of 10%. Upon the payment in full, the Holder shall promptly surrender this Note to or as directed by Borrower. In connection with such acceleration described herein, the Holder need not provide, and Borrower hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 7(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

Section 9 . Borrower's Representations . The Borrower is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full power and authority to own, lease, license and use its properties and assets and to carry out the business in which it proposes to engage. The Borrower has the requisite corporate power and authority to execute, deliver and perform its obligations under this Note and to issue and sell this Note. All necessary proceedings of the Borrower have been duly taken to authorize the execution, delivery, and performance of this Note. When this Note is executed and delivered by the Borrower, it will constitute the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with their terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

 

Section 10 . Terms of Future Financings . So long as this Note is outstanding, upon any issuance by Company of any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to Holder in this Note, then Company shall notify Holder of such additional or more favorable term and such term, at Holder option, shall become a part of this Note. Notwithstanding the foregoing, this Section shall not apply with respect to (i) an Exempt Issuance (as defined below) or (ii) an underwritten public offering of the Company's securities. For purposes of this Section, "Exempt Issuance" means (a) any shares of common stock, options, or convertible securities issued or issuable in connection with any stock option plan which has been approved by the board of directors, (b) securities upon the exchange of or conversion of this Note and/or other securities exercisable or exchangeable for or convertible into shares of common stock issued and outstanding on the date of this Note and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the directors of the Company, provided that any such issuance shall only be to a person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital.

 

 
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Section 11 . Miscellaneous .

 

a) Notices . All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to Borrower, to: Avant Diagnostics, Inc., 8561 East Anderson Drive, Suite 104, Scottsdale, AZ 85225, Attn: Gregg Linn, Chief Executive Officer, email:glinn@avantdiagnostics.com, and (ii) if to the Holder, to: the address and email address indicated in Exhibit A .

 

b) Absolute Obligation . Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of Borrower, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of Borrower.

 

c) Lost or Mutilated Note . If this Note shall be mutilated, lost, stolen or destroyed, Borrower shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to Borrower.

 

d) Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by the Note (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the " New York Courts "). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts 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 such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. Each party shall be responsible for its own legal fees and costs in the event any party shall commence an action or proceeding to enforce any provisions of this Note.

 

 
7
 

 

e) Waiver . Any waiver by Borrower or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of Borrower or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion. Any waiver by Borrower or the Holder must be in writing.

 

f) Severability . If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.

 

g) Usury . If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

 

h) Next Business Day . Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

 

i) Headings . The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

 

j) Amendment . Unless otherwise provided for hereunder, this Note may not be modified or amended or the provisions hereof waived without the written consent of Borrower and the Holder.

 

k) Facsimile Signature . In the event that the Borrower's signature is delivered by facsimile transmission, PDF, electronic signature or other similar electronic means, such signature shall create a valid and binding obligation of the Borrower with the same force and effect as if such signature page were an original thereof.

 

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

(Signature Pages Follow)

 

 
8
 

 

IN WITNESS WHEREOF , Borrower has caused this Note to be signed in its name by an authorized officer as of the 11 th day of May, 2016.

 

 

AVANT DIAGNOSTICS, INC.

 

       
By: /s/ Gregg Linn

 

 

Name:

Gregg Linn

 

 

Title:

Chief Executive Officer

 

 

 
9
 

 

ANNEX A

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal and interest under the 12% Convertible Note due May 11, 2017 of Avant Diagnostics, Inc., a Nevada corporation (the " Borrower "), into shares of common stock (the " Common Stock "), of Borrower according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by Borrower in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.

 

By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts specified under Section 4(d) of this Note, as determined in accordance with Section 13(d) of the Exchange Act.

 

The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock.

 

Date to Effect Conversion: ______________________________________

Principal Amount of Note to be Converted: $_________________________

Number of shares to be issued: ___________________________________

Signature: ___________________________________________________

Name: ______________________________________________________

Address for Delivery of Common Stock Certificates: ____________________

____________________________________________________________ 

____________________________________________________________

Or

DWAC Instructions: ____________________________________________

Broker No:____________________________________________________

Account No: __________________________________________________

 

 
10
 

 

Exhibit A

Investment Representations for Accredited Investor

 

The Holder hereby acknowledges, agrees with and represents, warrants and covenants to the Company, as follows:

 

(a)  Accredited Investor . The Holder is an "accredited investor" as that term is defined in Regulation D promulgated under the Securities Act by virtual of being (initial all applicable responses below):

 

¨

an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000. For purposes of calculating net worth under this paragraph, (i) the primary residence shall not be included as an asset, (ii) to the extent that the indebtedness that is secured by the primary residence is in excess of the fair market value of the primary residence, the excess amount shall be included as a liability, and (iii) if the amount of outstanding indebtedness that is secured by the primary residence exceeds the amount outstanding 60 days prior to the execution of this Subscription Agreement, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability.

¨

an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year

¨

a bank as defined in section 3(a)(2) of the Act, or a savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; a broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; a insurance company as defined in section 2(a)(13) of the Act; an investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors.

¨

a private business development company as defined in section 202(a)(22) of the Investment Advisors Act of 1940.

¨

a corporation, partnership, Massachusetts business trust, or nonprofit organization within the meaning of Section 501(c)(3) of the Internal Revenue Code, in each case not formed for the specific purpose of acquiring the securities being offered and with total assets in excess of $5,000,000.

¨

a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Notes, whose purchase is directed by a "sophisticated investor" as defined in Regulation 506(b)(2)(ii) under the Act.

¨

an entity in which all of the equity owners are "accredited investors" within one or more of the above categories.

 

 
11
 

 

(b)  Experience . The Holder is sufficiently experienced in financial and business matters to be capable of evaluating the merits and risks of its investments, and to make an informed decision relating thereto, and to protect its own interests in connection with the purchase of the Note.

 

(c)  Own Account . The Holder is purchasing the Note as principal for its own account, for investment purposes only and not with an intent or view towards further sale or distribution (as such term is used in Section 2(11) of the Securities Act) thereof, and has not pre-arranged any sale with any other person and has no plans to enter into any such agreement or arrangement.

 

(d)  Exemption . The Holder understands that the offer and sale of the Note is not being registered under the Securities Act or any state securities laws and is intended to be exempt from registration provided by Rule 506 promulgated under Regulation D and/or Section 4(a)(2) of the Securities Act;

 

(e)  Importance of Representations . The Holder understands that the Note is being offered and sold to it in reliance on an exemption from the registration requirements of the Securities Act, and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Holder set forth herein in order to determine the applicability of such safe harbor and the suitability of the Holder to acquire the Notes;

 

(f)  No Registration . The Notes have not been registered under the Securities Act or any state securities laws and may not be transferred, sold, assigned, hypothecated or otherwise disposed of unless registered under the Securities Act and applicable state securities laws or unless an exemption from such registration is available (including, without limitation, under Rule 144 of the Securities Act, as such rule may be amended, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect ("Rule 144")). The Holder represents and warrants and hereby agrees that all offers and sales of the Notes and the Notes shall be made only pursuant to such registration or to such exemption from registration.

 

(g)  Risk . The Holder acknowledges that the purchase of the Notes involves a high degree of risk, is aware of the risks and further acknowledges that it can bear the economic risk of the Note, including the total loss of its investment. The Holder has adequate means of providing for its financial needs and foreseeable contingencies and has no need for liquidity of its investment in the Notes for an indefinite period of time.

 

(h)  Company Information . The Holder and its Holder representatives, if any, have reviewed all the Company's filings with the Securities and Exchange Commission and all other documents requested by the Holder, have carefully reviewed them and understand the information contained therein.

 

(i)  Independent Investigation . The Holder, in making the decision to purchase the Note subscribed for, has relied upon independent investigations made by it and its representatives, if any, and the Holder and such representatives, if any, have prior to any sale to it been given access and the opportunity to examine all material contracts and documents relating to this investment and an opportunity to ask questions of, and to receive answers from, the Company or any person acting on its behalf concerning the terms and conditions of this investment. The Holder and its advisors, if any, have been furnished with access to all materials relating to the business, finances and operation of the Company and materials relating to the offer and sale of the Note (including, without limitation, the Company's filings with the Securities and Exchange Commission) which have been requested. The Holder and its advisors, if any, have received complete and satisfactory answers to any such inquiries.

 

 
12
 

 

(j)  No Recommendation or Endorsement . The Holder understands that no federal, state or other regulatory authority has passed on or made any recommendation or endorsement of the Note. Any representation to the contrary is a criminal offense.

 

(k)  No Representation . In evaluating the suitability of an investment in the Company, the Holder has not relied upon any representation or information (oral or written) other than as stated in the Note or the Company's filings with the Securities and Exchange Commission.

 

(l)  No Tax, Legal, Etc. Advice . The Holder is not relying on the Company or any of its employees or agents with respect to the legal, tax, economic and related considerations of an investment in the Notes, and the Holder has relied on the advice of, or has consulted with, only its own advisers.

 

(m)  No Advertisement or General Solicitation . Holder acknowledges that it is not aware of, is in no way relying on, and did not become aware of the offering of the Notes through or as a result of any form of general solicitation or general advertising, including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or through any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

 

___________________________________  

Name of Holder (Print)

 

___________________________________

Signature of Holder

 

___________________________________

Capacity of Signatory (for entities)

 

Address: ___________________________

 

___________________________________

 

___________________________________

 

Email Address: _______________________

 

Fax: _______________________________

 

Tax ID: _____________________________

 

___________________________________

Date

 

 

13


 

EXHIBIT 10.1

 

ASSIGNMENT AND FIRST AMENDMENT OF LEASE

 

THIS ASSIGNMENT AND FIRST AMENDMENT OF LEASE (the " Assignment ") is made and entered into this 26 th day of April, 2016 (" Assignment Date "), by and among (i) Saul Holdings Limited Partnership, a Maryland limited partnership (hereinafter referred to as " Landlord "); (ii) Theranostics Health, Inc., a Delaware corporation (hereinafter referred to as " Original Tenant "); and (iii) Avant Diagnostics, Inc., a Nevada corporation (hereinafter referred to as " Assignee ").

 

WHEREAS , Landlord and Original Tenant have heretofore entered into that certain Lease Agreement dated January 29, 2016 (the " Lease ") for approximately four thousand six hundred ninety-eight (4,698) rentable square feet of office space known as Suite 8 (" Premises ") in Phase IV of the Avenel Business Park ("Property") located at 217 Perry Parkway, Gaithersburg, Maryland 20877 (" Building "), as more particularly described in said Lease; and

 

WHEREAS , Original Tenant desires to assign all of its right, title and interest in and to the Lease unto Assignee; and

 

WHEREAS , the parties desire to amend the Lease as hereinafter provided;

 

WHEREAS, as of May 1, 2016, monthly Base Rent and Additional Rent for the first Lease Year is $5,899.90 subject to the terms of the Lease.

 

NOW, THEREFORE , in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

 

1. ASSIGNMENT .

 

(a) Original Tenant hereby assigns all of Original Tenant's right, title and interest in and to the Lease unto Assignee, and Assignee hereby assumes all of the obligations of Original Tenant under said Lease to the same extent as if Assignee were the original tenant thereunder. The foregoing Assignment includes Original Tenant's interest in any security deposit or other security held by Landlord to secure Original Tenant's obligations under the Lease, and Original Tenant hereby waives and releases all rights in any such security or deposits, it being the intention of the parties that such security or deposits be held by Landlord to secure the performance of Assignee, as tenant under the Lease, and that such security or deposits be and remain subject to the rights of Landlord in such security or deposits under the Lease or otherwise at law or in equity. The foregoing Assignment includes Original Tenant's interest in any security deposit or other security held by Landlord to secure Original Tenant's obligations under the Lease, and Original Tenant hereby waives and releases all rights in any such security or deposits, it being the intention of the parties that such security or deposits be held by Landlord to secure the performance of Assignee, as tenant under the Lease, and that such security or deposits be and remain subject to the rights of Landlord in such security or deposits under the Lease or otherwise at law or in equity.

 

 
1
 

 

(b) Original Tenant agrees to remain bound and fully liable for the full and faithful performance of all covenants, obligations and acts of said Lease, as amended hereby, notwithstanding the Assignment of the Lease.

 

(c) Landlord hereby consents to this Assignment without releasing Original Tenant from any of their obligations under the Lease, and in the event of any default under the terms and conditions of said Lease, Landlord shall have the right to enforce any of the remedies provided to it thereunder against Original Tenant or Assignee either severally or jointly at its election. Landlord's consent to this Assignment shall not be deemed to relieve Original Tenant or Assignee from the requirement of obtaining Landlord's consent to any further assignment of the Lease.

 

2. NOTICES. Article 33 of the Lease captioned "Notices" is hereby modified to provide that all notices regarding rent or other payments required or desired to be given hereunder by either party to the other shall be sent by first class mail, postage prepaid, or by a reputable commercial messenger service, except that notices of default and notices related to the exercise of options or other rights under this Lease shall be sent by certified mail, return receipt requested or by a receipted overnight commercial messenger service (such as Federal Express, UPS, or DHL Express) for delivery on the next following business day. Notices sent by mail shall be deemed to be received on the date of actual receipt by the recipient or on the date delivery is refused. Notices sent by a receipted overnight commercial messenger service shall be deemed received on the next business day after depositing with such delivery service. Notices to the respective parties, and any amounts required to be paid hereunder, shall be addressed and sent as follows:

 

 IF TO LANDLORD:

NOTICES AND CORRESPONDENCE

Saul Holdings Limited Partnership

Attention: Legal Department

7501 Wisconsin Avenue, Suite 1500E

Bethesda, Maryland 20814

Main Phone: (301) 986-6000

 

Rent, Payments, Etc.

Saul Holdings Limited Partnership

PO Box 64288

Baltimore, Maryland 21264-4288

 

 
2
 

 

If to Assignee: Avant Diagnostics, Inc.

Attention : Gregg Linn

8561 East Anderson Drive, Suite 104

Scottsdale, AZ 85225

Main Phone : (480) 478-6660

    
If to Original Tenant:  Theranostics Health, Inc.

Attention: Ronald S. Hencin

217 Perry Parkway, Ste. 8

Gaithersburg, MD 20899

Main Phone: (301) 251-4443

 

3. FEE. Pursuant to Article 19(c) of the Lease, Landlord hereby acknowledges receipt of One Thousand and No/100 Dollars ($1,000.00) (the " Assignment Fee ") from Assignee.

 

4. NO DEFAULT . Original Tenant hereby represents and warrants to Landlord that as, of the Assignment Date, to the best of its knowledge, neither Landlord nor Original Tenant is in default of its any of its respective agreements, covenants, or obligations under the Master Lease.

 

5. EFFECTIVE DATE. This Assignment, for all purposes, shall be subject to and effective upon the consummation of the closing for the acquisition of substantially all of the assets of the Original Tenant by the Assignee, notice of which shall be provided to Landlord promptly following such closing.

 

6. MISCELLANEOUS. Except as specifically modified hereby, the Lease shall remain in full force and effect in accordance with the terms contained therein and is hereby ratified, approved and confirmed in all respects. Any agreement, obligation or liability made, entered into or incurred by or on behalf of Landlord binds only its property and no shareholder, trustee, officer, director, employee, partner or agent of the Landlord assumes or shall be held to any liability therefor. The provisions of this Assignment to Lease shall be binding upon the parties hereto, their successors, and to the extent permitted under the Lease, their assigns. The submission of this Assignment for examination does not constitute an agreement, an option or an offer, and this Assignment becomes effective only upon execution and delivery thereof by Landlord. Neither party shall have any legal obligation to the other in the event that the Assignment contemplated herein is not consummated for any reason. Discussions between the parties respecting the proposed Assignment described herein, shall not serve as a basis for a claim against either party or any officer, director or agent of either party. Captions and headings are for convenience and reference only and shall not in any way define, limit or describe the scope or content of any provision of this Assignment. Whenever in this Assignment (i) any printed portion, or any part thereof, has been stricken out, or (ii) any portion of the Lease (as the same may have been previously amended) or any part thereof, has been modified or stricken out, then, in either of such events, whether or not any replacement provision has been added, this Assignment and the Lease shall hereafter be read and construed as if the material so stricken out were not included, and no implication shall be drawn from the text of the material so stricken out which would be inconsistent in any way with the construction or interpretation which would be appropriate if such material had never been contained herein or in the Lease. The Exhibits referred to in this Assignment and attached hereto are a substantive part of this Assignment and are incorporated herein by reference. If drafts of this Assignment or other communications between the parties were sent by email or other electronic methods, then the following additional provisions shall also apply: (i) any typewritten signature included with any e-mail or any document attached to any email is not an electronic signature within the meaning of Electronic Signatures in Global and National Commerce Act or any other law of similar import, including without limitation, the Uniform Electronic Transactions Act (" UETA "), as the same may be enacted in any State, (ii) any transmission of this Assignment is not intended as an "electronic signature" to a "record" of such transaction (as those terms are defined under UETA); instead, it is Landlord's intention that a record of such transaction shall be created only upon manually-affixed original signatures on an original document, and (iii) the final, definitive version of this Assignment shall be created by Landlord (the " Final Draft "), and Original Tenant authorizes Landlord to affix to the Final Draft the original, manually executed signature pages attached by Original Tenant to the executed document submitted by Original Tenant to Landlord.

 

 
3
 

 

6. INTERPRETATION . The submission of this Assignment for examination does not constitute an agreement, an option or an offer, and this Assignment becomes effective only upon execution and delivery thereof by Landlord. Neither party shall have any legal obligation to the other in the event that the Assignment contemplated herein is not consummated for any reason. Discussions between the parties respecting the proposed Assignment described herein, shall not serve as a basis for a claim against either party or any officer, director or agent of either party. Captions and headings are for convenience and reference only and shall not in any way define, limit or describe the scope or content of any provision of this Assignment. Except as otherwise provided herein, capitalized terms shall have the same meaning as set forth in the Lease. Whenever in this Assignment (i) any printed portion, or any part thereof, has been stricken out, or (ii) any portion of the Lease (as the same may have been previously amended) or any part thereof, has been modified or stricken out, then, in either of such events, whether or not any replacement provision has been added, this Assignment and the Lease shall hereafter be read and construed as if the material so stricken out were not included, and no implication shall be drawn from the text of the material so stricken out which would be inconsistent in any way with the construction or interpretation which would be appropriate if such material had never been contained herein or in the Lease. The Exhibits referred to in this Assignment and attached hereto are a substantive part of this Assignment and are incorporated herein by reference.

 

IN WITNESS WHEREOF , the parties hereto do hereby execute this Assignment under seal on the day and year first above written.

 

 

ATTEST:

LANDLORD: Saul Holdings Limited Partnership

By: Saul Centers, Inc., General Partner

 

       
/s/ Amy E. Spencer  By /s/ J. Page Lansdale

 

 

Printed Name:

J. Page Lansdale

 

 

Title:

President & Chief Operating Officer

 

 

 

 

 

   

[REMAINDER OF PAGE INTENTIONALLY BLANK]

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

  

 
5
 

 

ATTEST/WITNESS:

ORIGINAL TENANT: Theranositics Health, Inc.

 

       
  By /s/ Ronald S. Hencin

 

 

Printed Name:

Ronald S. Hencin

 

 

Title:

VP Business Development

 

 

 

Tenant's Tax Identification Number:

 

26-4136417

 

STATE OF MARYLAND:

 

: ss.

 

COUNTY OF MONTGOMERY:

 

On this, the 19 th day of April, 2016, before me, a notary public in and for the state and county aforesaid, personally appeared Ronald S. Hencin (name) who acknowledged himself/herself to be the VP Business Development (title) of the corporation which executed the foregoing, and that he/she as such officer(s), being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the corporation as such officer.

 

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal in the County and State aforesaid, the day and year first above written.

 

/s/ Tamara Henry                                               

Notary Public

 

3/9/2020                                                              

My term expires:

(SEAL)

  

 

[REMAINDER OF PAGE INTENTIONALLY BLANK]

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

   

 
6
 

 

ATTEST/WITNESS: ASSIGNEE: Avant Diagnostics, Inc.

 

       
/s/ Melanie D. Linn By /s/ Gregg Linn

 

 

Printed Name:

Gregg Linn

 

 

Title:

CEO/President

 

 

 

Tenant's Tax Identification Number:

 

27-1062556

 

STATE OF ARIZONA:

 

: ss.

 

COUNTY OF MARICOPA:

 

On this, the 18 th day of April, 2016, before me, a notary public in and for the state and county aforesaid, personally appeared Gregg A. Linn (name) who acknowledged himself/herself to be the CEO/President (title) of the corporation which executed the foregoing, and that he/she as such officer(s), being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the corporation as such officer.

 

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal in the County and State aforesaid, the day and year first above written.

 

/s/ Mikhail Balakirskty                                                         

Notary Public

 

02/08/2019                                                                               

My term expires:

(SEAL)

 

 

7


EXHIBIT 99.1

 

 

Avant Diagnostics Simultaneously Completes Acquisitions of Amarantus

Diagnostics and Theranostics Health

 

 

·

Operations of Amarantus Diagnostics and Theranostics Health have consolidated into Avant Diagnostics (OTCQB:AVDX)

 

·

Diagnostics pipeline in Alzheimer's disease (LymPro Test™), Ovarian cancer (OvaDx™) and Multiple Sclerosis (MSPrecise™) added to already available Breast cancer test (TheraLink Ò ) in Maryland-based CLIA/CAP facility

 

SCOTTSDALE, AZ, SAN FRANCISCO, CA and GAITHERSBERG, MD – May 11, 2016 - Avant Diagnostics, Inc. ("Avant") (OTCQB: AVDX), an innovative molecular diagnostics company, today announced it has completed the acquisition of Amarantus Diagnostics, Inc. ("AMDX"), a wholly-owned subsidiary of Amarantus BioScience Holdings, Inc. ("AMBS") (OTCQX: AMBS), and the business of Theranostics Health, Incorporated ("THI"). In connection with the acquisition of THI, Avant intends to appoint Glenn Hoke, PhD, President & CEO of THI, as Chief Scientific Officer. In connection with the acquisition of AMDX, Gerald Commissiong, President & CEO of AMBS, has been appointed to the Board of Directors of Avant.

 

Under the terms of the agreement for the acquisition of AMDX, Avant has acquired all of the outstanding shares of common stock of AMDX for an aggregate of 80,000,000 shares of Avant common stock, subject to issuance of additional shares upon the occurrence of certain future events. Under the terms of the agreement for the acquisition of THI, Avant acquired the assets and operations of THI for an aggregate of 25,000,000 shares of Avant common stock. Each share of Avant common stock issued to AMBS and THI will be subject to an eighteen (18) month lock-up, subject to certain exceptions.

 

Avant will initially look to grow THI's pharma services revenue by expanding existing relationships with pharmaceutical customers, particularly in the area of immune-oncology, and moving into new areas in neuro-immunology, specifically Alzheimer's disease. In parallel, the Company will be preparing for CLIA validation studies for the Company's proprietary diagnostic tests in the areas of Alzheimer's disease (LymPro Test™), ovarian cancer (OvaDx™) and multiple sclerosis (MSPrecise™). THI's TheraLink Ò assay is currently available under CLIA. Overall, the Company has within its CLIA/CAP certified facility the ability to perform microarray, Western blot, flow cytometry, ELISA and next-gen sequencing assays.

 

"The closing of these acquisitions marks a pivotal moment for Avant," said Gregg A. Linn, President & CEO of Avant. "We have simultaneously expanded our product pipeline into new areas of oncology with the acquisition of THI's business, as well as moved into neurology with the acquisition of AMDX. Moreover we have acquired the appropriate CLIA/CAP infrastructure required to commercialize our pipeline while also gaining access to a growing pharma services revenue stream with the very same sales, distribution channels, commercial relationships and overall scientific focus (immunology and cell cycle biology) required for successful introduction of our additional proprietary assets to the pharma services market. We now have a clear path towards building a robust diagnostic laboratory testing business while also furthering our proprietary tests towards market entry."

 

 
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Post-merger Avant Pipeline for CLIA and Pharma Services  

  1. TheraLink Ò Assay includes phospho-activation markers for known drug targets of over 30 FDA-approved therapies for treating breast cancer patients that are likely responders to specific treatment regimens. In addition, the TheraLink Ò Assay panel includes other biomarkers that have utility in directing patients to clinical trials involving new investigational therapeutic agents as likely responders. Research programs and clinical trials are underway at leading institutions to validate the TheraLink Ò Assay panel for managing cancer treatment decision-making in other clinically significant areas such as colorectal, lung, pancreatic and ovarian cancer. TheraLink Ò is available now under CLIA and additional phospho-activation marker testing services are provided to the pharmaceutical industry.
  1. LymPro Test™ neuroimmunology-based flow cytometry assay for Alzheimer's Disease (AD), offers an early, accurate, and scalable diagnostic result for physicians seeking to provide the best information and treatment plan for patients from the earliest stages of this devastating disease. AD diagnosis has an approximately 30% misdiagnosis rate. AD costs the healthcare system approximately $200 B in direct costs per year, and these costs are expected to exceed $1.2T by 2050 according to the current spending and demographics trajectories.
  1. OvaDx Ò immuno-oncology diagnostic assay is a protein-based test, potentially representing a significant improvement in the screening and diagnosis for ovarian cancer. OvaDx offers the possibility to make a clear improvement to the current diagnostic standard that generates over $2B in sales annually by substantially improving the accuracy of diagnosis, and allowing for a more effective therapeutic triaging and intervention strategy. Longer term, the assay could become a much-needed early screening tool for all women as part of a standard screening paradigm.
  1. MSPrecise™ neuroimmunology-basednext-gen sequencing (NGS) diagnostic assay for multiple sclerosis (MS) offers a potentially highly accurate and actionable result that will substantially improve upon the high mis-diagnosis rate of this degenerative disease. More specifically, MS has an approximately 40% misdiagnosis rate, meaning that improving diagnostic accuracy will be a key driver to adopt more effective therapeutic strategies that will reduce costs for payers and improve outcomes for patients.

About Avant Diagnostics, Inc.

 

Avant is a medical diagnostic technology company that specializes in biomarker tests that are based on querying large panels of proteins with exquisite precision. Avant's first test, OvaDx Ò , is proposed for use in monitoring women diagnosed previously with ovarian cancer. OvaDx Ò is a sophisticated microarray-based test that measures the activation of the immune system in blood samples in response to ovarian tumor cell development. Pre-clinical research studies with OvaDx Ò indicate high sensitivity and specificity for all types and stages of ovarian cancer including stage IA-IV borderline serous, clear cell, endometrioid, mixed epithelial, mucinous, serous, and ovarian adenocarcinoma. Upon FDA 510(k) clearance, Avant intends to sell or license OvaDx Ò . Avant intends to utilize its public company stage to expand its portfolio of diagnostic tests in the future.

 

 
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About Theranostics Health

 

THI is a leading developer of proteomic technologies for measuring the activation status of key signaling pathways that are instrumental in the development of companion diagnostics for molecular-targeted therapies. THI has used these proteomic technologies to support the drug development programs of most major pharmaceutical and biotechnology drug development companies. THI is also providing these testing capabilities to clinical oncologists to advance personalized medicine through its TheraLink Ò Diagnostic Assays. For more information please visit www.theranosticshealth.com.

 

About Amarantus BioScience Holdings, Inc.

 

AMBS is a biotechnology company developing treatments and diagnostics for diseases in the areas of neurology, regenerative medicine and orphan diseases. AMBS' Therapeutics division has development rights to eltoprazine, a Phase 2b-ready small molecule indicated for Parkinson's disease levodopa-induced dyskinesia, adult ADHD and Alzheimer's aggression, and owns the intellectual property rights to a therapeutic protein known as mesencephalic-astrocyte-derived neurotrophic factor (MANF) and is developing MANF-based products as treatments for brain and ophthalmic disorders. More recently, AMBS acquired the rights to the Engineered Skin Substitute program (ESS), a regenerative medicine-based approach for treating severe burns with full thickness autologous skin grown in tissue culture. ESS is entering Phase 2 clinical studies under a CRADA agreement with the US Army. AMBS' Diagnostics division owns the rights to MSPrecise Ò , a proprietary next-generation DNA sequencing (NGS) assay for the identification of patients with relapsing-remitting multiple sclerosis (RRMS) at first clinical presentation, has an exclusive worldwide license to the Lymphocyte Proliferation test (LymPro Test Ò ) for Alzheimer's disease, which was developed by Prof. Thomas Arendt, Ph.D., from the University of Leipzig, and owns intellectual property for the diagnosis of Parkinson's disease (NuroPro). AMBS also owns the discovery of neurotrophic factors (PhenoGuard ) that led to MANF's discovery.

 

For further information please visit www.Amarantus.com, or connect with the Company on Facebook, LinkedIn, Twitter and Google+.

 

Forward-Looking Statements

 

Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as "anticipate," "believe," "forecast," "estimated" and "intend," among others. These forward-looking statements are based on Avant's current expectations and actual results could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, substantial competition; our ability to continue as a going concern; our need for additional financing; uncertainties with respect to lengthy and expensive clinical trials, that results of earlier studies and trials may not be predictive of future trial results; and risks related to failure to obtain FDA clearances or approvals and noncompliance with FDA regulations. There are no guarantees that future clinical trials discussed in this press release will be completed or successful, or that any product will receive regulatory approval for any indication or prove to be commercially successful. Avant does not undertake an obligation to update or revise any forward-looking statement except as required by law. Investors should read the risk factors set forth in Avant's Form 10-K filed with the Securities and Exchange Commission on January 13, 2016, and other periodic reports filed with the Securities and Exchange Commission.

 

Investor and Media Contact:

Ascendant Partners, LLC

Fred Sommer

732-410-9810

fred@ascendantpartnersllc.com

 

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