Contract analysis

From: Andrew Fitzpatrick <afitzpatrick@calderwoodharkness.com> To: Martin Kowalski <mkowalski@genomedx.com> Cc: Tiffany Rosenthal <trosenthal@calderwoodharkness.com> Date: Tue, 15 Aug 2023 10:47:00 -0000 Subject: OncuPath™ Divestiture — Post-Closing Net Working Capital Adjustment Methodology

I hope this note finds you well. Now that closing on the OncuPath™ divestiture occurred on August 8, the post-closing net working capital adjustment process under the Asset Purchase Agreement (execution version dated May 11, 2023) between Genome Dx Therapeutics Inc. ("GDT") and Meridian Precision Diagnostics, Inc. ("Meridian") is formally underway.

The purpose of this email is to walk you through the NWC true-up methodology, key deadlines, and immediate next steps so that GDT's finance team and Haverford & Lane LLP can begin preparation of the final closing balance sheet in an organized and timely fashion. I have tried to lay this out in a structured way for easy reference, though I recognize much of the mechanics will be familiar to you.

As you know, the APA establishes a **Target Net Working Capital** for the OncuPath Business of **$6,800,000**. A collar of **±$350,000** applies to the adjustment calculation, which works as follows:

- If the final NWC falls **between $6,450,000 and $7,150,000** (i.e., within the collar), **no adjustment** is made to the purchase price. - If the final NWC **exceeds $7,150,000**, Meridian pays GDT the **full excess above the $6,800,000 Target** (not merely the amount above the upper collar boundary). - If the final NWC **falls below $6,450,000**, GDT pays Meridian the **full shortfall below the $6,800,000 Target**

I want to flag this point clearly because it is sometimes a source of confusion: the collar functions as a **de minimis threshold**, not as a deductible. Once the collar is breached in either direction, the adjustment is calculated from the Target NWC itself. This is the standard "true-up from target" approach reflected in the APA, and it is the methodology Haverford & Lane will apply.

**2. 90-Day Deadline for Delivery of Final Closing Balance Sheet**

Under the APA, the final closing balance sheet reflecting actual NWC of the OncuPath Business as of August 8, 2023 must be prepared and delivered to Meridian **within 90 days of closing**. That sets a firm contractual deadline of **November 6, 2023**.

I would strongly recommend that we target internal completion of the final closing balance sheet by **mid-to-late October** at the latest. This will give us adequate time for Calderwood & Harkness and your team to review the balance sheet before delivery to Meridian and to address any questions or adjustments before the clock starts running on Meridian's review period.

Haverford & Lane LLP (engagement partner: **Douglas Crane**) will prepare the final closing balance sheet for the OncuPath Business on a carve-out basis, consistent with the methodology and accounting policies used for the estimated closing balance sheet that was delivered at closing. I am coordinating with Douglas's team to schedule a **kickoff call for the week of August 21** to align on scope, timeline, and data r

In the meantime, it would be helpful for your finance team to begin assembling the underlying data for the OncuPath Business as of the August 8 closing date, including:

- OncuPath-specific accounts receivable - Inventory (finished goods, work-in-process, and raw materials attributable to OncuPath) - Prepaid expenses - Accounts payable - Accrued liabilities (including accrued compensation, warranty reserves, and deferred revenue) - Any other current asset or current liability line items attributable to the OncuPath Business under the APA's defined methodology

Additionally, I would ask that you **designate a point person on GDT's finance team** to liaise directly with Haverford & Lane on data requests and day-to-day questions. Having a single point of contact will streamline the process considerably and help us stay on schedule.

For completeness, I want to outline the dispute resolution mechanics that apply once the final closing balance sheet is delivered to Meridian:

- Meridian has a **30-day review period** (per the applicable APA section) following delivery to either accept the final closing balance sheet or deliver a written notice of objection specifying the disputed items and amounts. - If Meridian **accepts** the balance sheet—or **fails to deliver a timely objection**—the NWC as reflected on the final closing balance sheet becomes **final and binding** on both parties, and

Calderwood & Harkness will manage the legal aspects of any dispute process should one arise, but our expectation—and hope—is that thorough and well-documented preparation by Haverford & Lane will minimize the likelihood of material disputes with Meridian.

**5. Practical Next Steps / Action Items**

1. **Andrew Fitzpatrick (C&H):** Schedule kickoff call with Douglas Crane at Haverford & Lane for the week of August 21 and circulate a proposed agenda. 2. **Martin Kowalski (GDT):** Designate a GDT finance team point person and begin compiling OncuPath-specific closing-date financial data as outlined above. 3. **Calderwood & Harkness:** Circulate to you and your team (i) the relevant APA provisions governing the NWC

Martin, please let me know if you have any questions on any of the above, or if it would be helpful to schedule a call with you and/or Rebecca to discuss the process in more detail. I am happy to make myself available at your convenience.

Tiffany and James are copied here for visibility on Calderwood & Harkness's side. As a final note, we are continuing to track all post-closing obligations in parallel, including the **purchase price allocation deadline of December 6, 2023** (120 days post-closing) and ongoing **escrow administration at Ashgrove Equity Partners Escrow Services, Inc.** We will keep you apprised of each as the relevant deadlines approac

Thank you, Martin. Looking forward to getting this process underway smoothly.

Andrew Fitzpatrick Associate Calderwood & Harkness LLP 1900 Avenue of the Stars, Suite 2800 Los Angeles, CA 90067 T: (310) 555-4182 afitzpatrick@calderwoodharkness.com

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