Contract analysis

From: Tiffany Rosenthal <trosenthal@calderwoodharkness.com> To: Rebecca Chiang <rchiang@genomedx.com> Cc: James Prentice <jprentice@calderwoodharkness.com> Date: Mon, 31 Jul 2023 06:47:00 -0000 Subject: OncuPath™ Divestiture — Closing Status Update and Remaining Items [C&H Matter No. 1013-00006&A-4471]

I hope this finds you well. I am writing to provide a comprehensive status update on the closing conditions and timeline for the divestiture of the OncuPath™ companion diagnostics assay line pursuant to the Asset Purchase Agreement dated May 11, 2023 (the "APA"), by and between Genome Dx Therapeutics Inc. ("GDT" or "Seller") and Meridian Precision Diagnostics, Inc. ("Meridian" or "Buyer"), for total consideration of

As you are aware, the original target closing date of August 1, 2023 has been revised to **August 8, 2023**. The one-week delay is attributable to coordination of final deliverables and lender requirements on Buyer's side with Summit National Bank, N.A. We do not anticipate any further delays and remain confident that closing is on track for the revised date. Below is a summary of all material items.

**I. CONSENTS AND GOVERNMENTAL APPROVALS — COMPLETED**

All required consents and governmental approvals have been obtained:

- ✅ **HSR Act Clearance:** HSR filing made May 18, 2023. Early termination of the waiting period was granted on June 22, 2023. No second request was issued. *This condition is satisfied.*

- ✅ **Vantage Molecular Sciences License Consent:** Consent to assignment of the September 12, 2019 probe-labeling technology license agreement obtained from Vantage Molecular Sciences, Inc. on July 14, 2023. Executed consent letter is in hand. *This condition is satisfied.*

- ✅ **Towne Centre Properties LLC Landlord Consent:** Consent to assignment of the lease at 4820 Towne Centre Drive, Suite 200, San Diego, CA 92121 (the OncuPath reference laboratory and R&D facility) obtained from Towne Centre Properties LLC on July 28, 2023. *This condition is satisfied.*

**II. REMAINING ITEMS / OUTSTANDING CLOSING DELIVERABLES**

The following items remain outstanding and are expected to be completed at or prior to closing on August 8:

- **Seller's Closing Certificate:** Officer's certificate to be signed by Martin Kowalski (CFO) certifying accuracy of representations and warranties, compliance with covenants, and satisfaction of closing conditions. Draft prepared by C&H and circulated to Martin for review. *To be executed at closing on August 8.*

- **Secretary's Certificate of GDT:** Certifying incumbency, board resolutions (approved May 8, 2023), certificate of incorporation, and bylaws. Draft finalized. *Needs execution by corporate secretary at closing.*

- **FIRPTA Certificate:** Non-foreign person affidavit under IRC § 1445 for GDT (EIN: 47-3892061). Draft prepared. *To be executed at closing.*

- **Bill of Sale:** Final form agreed. To convey all tangible Purchased Assets (equipment, inventory, and supplies at the 4820 Towne Centre Drive, San Diego and 925 Industrial Court, Carlsbad, CA 92010 facilities). *To be executed at closing.*

- **Assignment and Assumption Agreement:** Final form agreed. Assigns all Assumed Contracts and Assumed Liabilities. *To be executed at closing.*

- **intellectual Property Assignment Agreement:** Final form agreed. Covers 14 issued U.S. patents, 7 pending patent applications, registered trademarks (OncuPath™, OncuPath-HER3™, OncuPath-GENOMARK™), trade secrets, and associated goodwill. *To be executed at closing.*

- **Sublease Assignment — Carlsbad Facility:** Assignment of sublease at 925 Industrial Court, Carlsbad, CA 92010 (expires December 31, 2025). Final form agreed. *Awaiting execution at closing.*

- **Escrow Agreement Execution and Funding:** Escrow Agreement among GDT, Meridian, and Ashgrove Equity Partners Escrow Services, Inc. — final form agreed. $14,000,000 to be deposited at closing into Ashgrove Equity Partners Escrow Account No. 8841-7023-5500. C&H will transmit the executed agreement and wire instructions to Samantha Koh at Ashgrove Equity Partners in advance of closing. *To be executed and funded at

- **Transition Services Agreement:** Final form agreed. GDT to provide IT, facilities, and HR/payroll services to Meridian for up to 9 months post-closing at cost plus 5%. *To be executed at closing.*

- **Non-Competition and Non-Solicitation Agreement:** Final form agreed (3-year non-compete in companion diagnostics within the U.S.; 2-year non-solicitation of transferred employees). *To be executed at closing.*

- **R&W Insurance Policy Binding:** Apex Mutual Insurance Company buyer-side RWI policy (Policy No. RWI-2023-07182) — $28,000,000 limit, $1,400,000 retention. C&H is coordinating with Philip Aldridge at Apex Mutual to confirm binding effective as of closing. Premium of $840,000 to be split 50/50 ($420,000 each, Seller and Buyer). *Expect binding confirmation by August 6.*

- **Buyer's Closing Deliverables (Meridian / Whitfield Sayer & Gregg LLP):** C&H is tracking with Jonathan Whitfield and Rachel Dempsey at Whitfield Sayer & Gregg LLP. Buyer's closing certificate, secretary's certificate, and evidence of Summit National Bank financing (term loan commitment of $95,000,000) are expected to be delivered on or before closing. *No concerns flagged to date.*

Andrew Fitzpatrick is preparing the Closing Funds Flow Memorandum with detailed wire instructions. At a high level, the closing funds flow is as follows:

- **$126,000,000** closing cash consideration - Less **$14,000,000** escrow deposit to Ashgrove Equity Partners Escrow Account No. 8841-7023-5500 - Equals **$112,000,000** net wire to GDT - **$14,000,000** to Ashgrove Equity Partners Escrow Services, Inc. (Escrow Account No. 8841-7023-5500) - **R&W Insurance Premium:** $420,000 from GDT and $420,000 from Meridian, each payable to Apex Mutual Insurance Company

The estimated net working capital adjustment will be trued up post-closing based on the final closing balance sheet to be prepared by Haverford & Lane LLP (Douglas Crane). The target NWC is $6,800,000, with a ±$350,000 collar and a 90-day true-up deadline of November 6, 2023.

We will circulate the funds flow memo to you and Martin Kowalski for review and confirmation of GDT's wire instructions later this week.

Of the 83 OncuPath Business employees who received employment offers from Meridian, 78 have accepted as of today. Meridian's HR team is coordinating onboarding. Key transferring personnel include:

- Dr. Lara Okonkwo, VP, OncuPath R&D - Samuel Briggs, Director, OncuPath Commercial Operations - Yuki Tanabe, Head of Regulatory Affairs, OncuPath

No WARN Act notification is required, as fewer than 100 employees are affected at a single site.

**V. REGULATORY TRANSITION ITEMS (POST-CLOSING)**

For awareness, the following items are not conditions to closing but will require attention post-closing:

- Meridian will need to update the FDA establishment registration and CLIA certificate (ID: 05D2178493) for the OncuPath reference laboratory. - The OncuPath-HER3™ PMA supplement (P230014, submitted January 30, 2023) remains pending with FDA. Regulatory responsibility transfers to Meridian at closing. Note that earnout Milestone 1 ($8,000,000) is tied to FDA clearance/approval by August 8, 2025.

C&H is tracking both items and can assist with coordination as needed.

- **August 6:** R&W insurance binding confirmation from Apex Mutual; final funds flow memo circulated for review - **August 7:** Escrow instructions transmitted to Ashgrove Equity Partners Escrow Services; pre-closing deliverable packages exchanged between C&H and Whitfield Sayer & Gregg LLP - **August 8:** Closing — execution and delivery of all closing documents; wire transfers initiated; closing confirmed

1. **Confirm GDT's wire instructions** for inclusion in the funds flow memo at your earliest convenience. 2. **Review the draft Officer's Certificate and Secretary's Certificate** previously circulated and advise of any comments.

On our end, C&H will circulate a final closing checklist with all items and responsibility assignments in the coming days. We are also coordinating with Brindoval Partners (Victor Sandoval and Elaine Cho) on closing mechanics and Pinnacle notifications.

If you, Martin, and Dr. Vasquez would find it helpful, we are happy to schedule a call to walk through the remaining items in detail. Please let us know your availability and we will coordinate.

We feel very good about where things stand and look forward to getting this across the finish line next week.

Tiffany Rosenthal Senior Associate Calderwood & Harkness LLP 555 South Hope Street, Suite 4400 Los Angeles, CA 90071 T: (213) 555-4218 | M: (310) 555-7943 trosenthal@calderwoodharkness.com

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