1013-00006 · Client 1013 · Closing

sellers-closing-certificate.docx DOCUMENT M&A / Corporate

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OFFICER'S CERTIFICATE OF GENOME DX THERAPEUTICS INC.

Delivered Pursuant to Section 8.2(d) of the Asset Purchase Agreement

August 8, 2023

This Officer's Certificate (this "Certificate") is delivered pursuant to Section 8.2(d) of that certain Asset Purchase Agreement, dated as of May 11, 2023 (as the same may be amended, supplemented, or otherwise modified from time to time, the "Agreement"), by and between Genome Dx Therapeutics Inc., a corporation organized and existing under the laws of the State of Delaware ("Seller"), and Meridian Precision Diagnostics, Inc., a corporation organized and existing under the laws of the State of Delaware ("Buyer").

RECITALS

The undersigned, Martin Kowalski, is the Chief Financial Officer of Genome Dx Therapeutics Inc., a corporation duly organized and validly existing under the laws of the State of Delaware, with its principal place of business at 10250 Science Center Drive, Suite 600, San Diego, California 92121 (Employer Identification Number: 47-3892061). This Certificate is being delivered to Buyer as a condition precedent to Buyer's obligation to consummate the closing (the "Closing") of the transactions contemplated by the Agreement, as required by Section 8.2(d) thereof.

Capitalized terms used but not otherwise defined in this Certificate shall have the meanings ascribed to such terms in the Agreement.

The Agreement governs the sale, conveyance, transfer, assignment, and delivery by Seller to Buyer of all assets, intellectual property, contracts, inventory, equipment, regulatory filings, and goodwill exclusively related to Seller's OncuPath™ companion diagnostics assay line (collectively, the "OncuPath Business") for aggregate consideration of One Hundred Forty Million Dollars ($140,000,000), comprising One Hundred Twenty-Six Million Dollars ($126,000,000) in closing cash consideration (subject to the Net Working Capital adjustment described herein and in the Agreement) and up to Fourteen Million Dollars ($14,000,000) in contingent earnout payments, as more fully described in the Agreement and the Earnout Agreement.

The undersigned, Martin Kowalski, is duly authorized to execute and deliver this Certificate on behalf of Seller, and such authority has been duly conferred by the Board of Directors of Seller in connection with the approval of the transactions contemplated by the Agreement. The certifications set forth herein are made to the best of the undersigned's knowledge and belief, after due inquiry, in his capacity as Chief Financial Officer of Seller and not in his individual or personal capacity, and the undersigned shall have no personal liability in connection with the statements made herein except to the extent expressly provided in the Agreement.

NOW, THEREFORE, the undersigned hereby certifies to Buyer as follows:

Section 1. Representations and Warranties — Bring-Down Certification

1.1. The undersigned hereby certifies to Buyer that each of the representations and warranties of Seller contained in Article IV of the Agreement is true and correct in all material respects as of the date hereof, August 8, 2023 (the "Closing Date"), with the same force and effect as though such representations and warranties had been made on and as of the Closing Date; provided, however, that any representation or warranty that is qualified or limited by reference to "materiality," "Material Adverse Effect," or words of similar import shall be true and correct in all respects (without giving effect to any such qualification or limitation) as of the Closing Date; and provided, further, that to the extent any such representation or warranty expressly relates to a specific date or period of time, such representation or warranty shall be true and correct in all material respects (or, if so qualified, in all respects) as of such specified date or with respect to such specified period, as applicable.

1.2. The Disclosure Schedules delivered by Seller to Buyer on May 11, 2023, in connection with the execution and delivery of the Agreement, remain true, correct, and complete in all material respects as of the Closing Date. No event, occurrence, development, condition, or circumstance has arisen or come to the attention of Seller since the date of the Agreement that would require any update, amendment, modification, or supplement to the Disclosure Schedules in order to make the representations and warranties of Seller contained in Article IV of the Agreement true and correct in all material respects as of the Closing Date, and accordingly no such update has been delivered or is required to be delivered.

1.3. The undersigned further certifies that no Material Adverse Effect has occurred with respect to the OncuPath Business since the date of the Agreement. Without limiting the generality of the foregoing, there has been no event, change, development, circumstance, condition, fact, or occurrence that, individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect on the assets, liabilities, business, financial condition, results of operations, or prospects of the OncuPath Business, as such term is defined in Section 1.1(a)(65) of the Agreement.

Section 2. Covenants — Compliance Certification

2.1. The undersigned hereby certifies to Buyer that Seller has duly performed and complied in all material respects with all covenants, obligations, and agreements required by the Agreement to be performed or complied with by Seller at or prior to the Closing Date, including, without limitation, the covenants and agreements set forth in Article VI of the Agreement. Without limiting the foregoing, the undersigned specifically certifies as follows:

(a) Ordinary Course of Business. During the period between the date of the Agreement (May 11, 2023) and the Closing Date (August 8, 2023) (the "Interim Period"), Seller has operated the OncuPath Business in the ordinary course of business consistent with past practice in all material respects, including with respect to the maintenance of inventory levels, the management of accounts receivable and accounts payable, the conduct of research and development activities, the management of personnel, and the pursuit of commercial and regulatory objectives in a manner consistent with prudent industry practices and Seller's historical conduct of the OncuPath Business.

(b) Preservation of Business Relationships, Assets, and Employees. During the Interim Period, Seller has used commercially reasonable efforts to preserve intact the business organization, operations, and relationships of the OncuPath Business, to retain and maintain the goodwill of the OncuPath Business with its customers, suppliers, distributors, licensors, licensees, and other third parties with which the OncuPath Business has business relationships, and to retain the services of the key employees and other personnel of the OncuPath Business. Seller has maintained all assets included in the Acquired Assets in their current condition, ordinary wear and tear excepted, and has maintained all insurance policies relating to the OncuPath Business in full force and effect through the Closing Date.

(c) Cooperation in Obtaining Required Consents and Approvals. Seller has cooperated with Buyer, and has used commercially reasonable efforts, to obtain all consents, approvals, authorizations, waivers, orders, and filings required in connection with the consummation of the transactions contemplated by the Agreement, including the following:

(i) Hart-Scott-Rodino Antitrust Improvements Act. Seller duly filed its Premerger Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the rules and regulations promulgated thereunder, with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice on May 18, 2023. The applicable waiting period under the HSR Act was terminated by way of early termination granted on June 22, 2023. No request for additional information or documentary material ("Second Request") was issued in connection with such filing. Seller cooperated fully with Buyer in connection with the preparation and filing of such notification and in responding to all inquiries from the applicable governmental authorities.

(ii) Consent to Assignment of the Vantage Molecular Sciences License Agreement. Seller obtained the written consent of Vantage Molecular Sciences, Inc. ("Vantage") to the assignment by Seller to Buyer of the License Agreement dated September 12, 2019, by and between Seller and Vantage (the "Vantage License Agreement"), which governs the license of certain probe-labeling technology utilized in connection with the OncuPath Business. Such consent was duly executed and delivered by Vantage on July 14, 2023, and is unconditional and remains in full force and effect as of the Closing Date. A true, correct, and complete copy of such consent has been delivered to Buyer.

(iii) Landlord Consent — Towne Centre Properties LLC. Seller obtained the written consent of Towne Centre Properties LLC ("Towne Centre"), as landlord, to the assignment by Seller to Buyer of that certain Office Lease Agreement dated March 1, 2018, as amended, between Seller, as tenant, and Towne Centre, as landlord, for premises located at 4820 Towne Centre Drive, Suite 200, San Diego, California 92121 (the "Towne Centre Lease"). Such landlord consent was duly executed and delivered by Towne Centre on July 28, 2023, and is unconditional and remains in full force and effect as of the Closing Date. A true, correct, and complete copy of such consent has been delivered to Buyer.

(iv) Assignment of Sublease — 925 Industrial Court, Carlsbad. Seller has duly arranged for the assignment to Buyer of that certain Sublease Agreement for premises located at 925 Industrial Court, Carlsbad, California 92010, where certain manufacturing, packaging, and quality control operations of the OncuPath Business are conducted. The executed assignment of such sublease is included among the Closing deliverables referenced herein.

(d) Compliance with Interim Operating Covenants. During the Interim Period, Seller has not taken any action, or failed to take any action, that would have required the prior written consent of Buyer under Section 6.1 of the Agreement (Interim Operating Covenants), including, without limitation, any action that would have resulted in (i) the sale, transfer, lease, license, or other disposition of any Acquired Asset outside the ordinary course of business, (ii) the amendment, modification, termination, or waiver of any material provision of any Assumed Contract, (iii) the incurrence of any indebtedness or liens on any Acquired Asset, (iv) any material change in accounting methods, principles, or practices relating to the OncuPath Business, (v) any material increase in compensation, benefits, or severance arrangements applicable to employees of the OncuPath Business, or (vi) any settlement or compromise of any material litigation, claim, or proceeding relating to the OncuPath Business.

(e) Timely Delivery of Closing Deliverables. Seller has delivered, or is delivering concurrently with the Closing, all documents, instruments, agreements, certificates, and other items required to be delivered by Seller at or prior to the Closing pursuant to Section 3.2 and Section 8.2 of the Agreement, as more fully described in Section 5 of this Certificate.

Section 3. Closing Conditions — Satisfaction Certification

3.1. The undersigned hereby certifies to Buyer that all conditions to the obligations of Buyer and Seller to consummate the Closing set forth in Sections 8.1 and 8.2 of the Agreement that are required to be satisfied by or on behalf of Seller have been duly satisfied (or, where applicable, have been waived in writing by Buyer) as of the Closing Date. Without limiting the foregoing, the undersigned specifically certifies as follows:

(a) HSR Clearance. The applicable waiting period under the HSR Act with respect to the transactions contemplated by the Agreement has been terminated. Early termination of the waiting period was granted by the Federal Trade Commission on June 22, 2023, as reflected in the notice of early termination delivered to the parties on such date. No governmental authority has issued, enacted, promulgated, enforced, or entered any order, injunction, judgment, decree, ruling, assessment, or writ (whether temporary, preliminary, or permanent) that is in effect and that restrains, enjoins, prevents, prohibits, or otherwise makes illegal the consummation of the transactions contemplated by the Agreement.

(b) No Litigation. As of the Closing Date, no action, suit, claim, investigation, arbitration, or proceeding (each, a "Proceeding") is pending or, to Seller's knowledge after due inquiry, threatened by or before any court, tribunal, governmental authority, or arbitral body that seeks to (i) restrain, enjoin, prevent, prohibit, or otherwise challenge the consummation of any of the transactions contemplated by the Agreement, (ii) impose any material conditions on or in connection with the consummation of the transactions, or (iii) obtain damages or other relief that would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect on the OncuPath Business or materially impair Buyer's ability to operate the OncuPath Business following the Closing. Seller has not received any written or oral communication from any governmental authority indicating an intention to commence, or the commencement of, any such Proceeding.

(c) Third-Party Consents. All material consents, waivers, approvals, authorizations, and notices from third parties that are required for the lawful consummation of the transactions contemplated by the Agreement and the assignment to Buyer of the Assumed Contracts, Acquired Assets, and other rights and obligations related to the OncuPath Business have been obtained or given, as applicable. Without limitation, the following material consents have been obtained:

(i) Consent to assignment of the Vantage License Agreement, executed by Vantage Molecular Sciences, Inc. on July 14, 2023;

(ii) Landlord consent to assignment of the Towne Centre Lease, executed by Towne Centre Properties LLC on July 28, 2023; and

(iii) Such other consents and approvals as are identified on Schedule 3.2(c) of the Agreement.

(d) Board Approval. The Board of Directors of Seller duly authorized and approved the execution, delivery, and performance by Seller of the Agreement and each of the Ancillary Agreements to which Seller is a party, and the consummation of all transactions contemplated thereby, by resolutions duly adopted at a meeting of the Board of Directors held on May 8, 2023, at which a quorum was present throughout and acted throughout. Such resolutions have not been rescinded, modified, supplemented, or amended in any respect and remain in full force and effect as of the Closing Date.

(e) Closing Deliverables. Seller has delivered to Buyer (or, in the case of documents to be executed and delivered simultaneously at the Closing, stands ready to deliver) at or prior to the Closing all of the following documents, instruments, and agreements required pursuant to Section 3.2 and Section 8.2 of the Agreement:

(i) This Officer's Certificate, duly executed by the undersigned;

(ii) Secretary's Certificate of Genome Dx Therapeutics Inc., duly executed by Rachel Han, Secretary of Seller, certifying as to the charter documents, bylaws, and board resolutions of Seller;

(iii) Bill of Sale in the form attached to the Agreement as Exhibit A, duly executed by Seller, conveying to Buyer all right, title, and interest of Seller in and to the tangible personal property included in the Acquired Assets;

(iv) Assignment and Assumption Agreement in the form attached to the Agreement as Exhibit B, duly executed by Seller, assigning to Buyer all of Seller's right, title, and interest in and to the Assumed Contracts and Buyer's assumption of the Assumed Liabilities;

(v) intellectual Property Assignment Agreement in the form attached to the Agreement as Exhibit C, duly executed by Seller, assigning to Buyer all of Seller's right, title, and interest in and to the Transferred intellectual Property, including without limitation (A) fourteen (14) issued United States patents, (B) seven (7) pending United States patent applications, (C) the following registered trademarks: OncuPath™ (U.S. Trademark Registration No. 5,847,321), OncuPath-HER3™ (U.S. Trademark Registration No. 6,412,088), and OncuPath-GENOMARK™ (U.S. Trademark Registration No. 6,118,754), (D) all trade secrets, proprietary data, and know-how exclusively related to the OncuPath Business, and (E) all associated goodwill;

(vi) Escrow Agreement in the form attached to the Agreement as Exhibit D, duly executed by Seller, Buyer, and Ashgrove Equity Partners Escrow Services, Inc., as escrow agent, pursuant to which Fourteen Million Dollars ($14,000,000) of the closing cash consideration shall be deposited into escrow (Ashgrove Equity Partners Escrow Account No. 8841-7023-5500) to secure Seller's indemnification obligations under the Agreement;

(vii) Transition Services Agreement in the form attached to the Agreement as Exhibit E, duly executed by Seller, pursuant to which Seller will provide to Buyer certain transitional services with respect to information technology, facilities management, and human resources/payroll administration for a period of up to nine (9) months following the Closing Date, at a rate of cost-plus-five-percent (cost + 5%);

(viii) Non-Competition and Non-Solicitation Agreement in the form attached to the Agreement as Exhibit F, duly executed by Seller, pursuant to which Seller has agreed to (A) a three (3)-year covenant not to compete in the companion diagnostics field within the United States, commencing on the Closing Date, and (B) a two (2)-year covenant not to solicit for employment any Transferred Employee, commencing on the Closing Date;

(ix) Earnout Agreement in the form attached to the Agreement as Exhibit G, duly executed by Seller, providing for contingent earnout payments to Seller based on the achievement of the following milestones: (A) Milestone 1 — Eight Million Dollars ($8,000,000), payable upon the receipt of clearance or approval from the U.S. Food and Drug Administration for OncuPath-HER3™ on or before August 8, 2025, and (B) Milestone 2 — Six Million Dollars ($6,000,000), payable upon the assignment of a CMS Healthcare Common Procedure Coding System (HCPCS) code and the receipt of first Medicare reimbursement for OncuPath-HER3™ on or before August 8, 2026;

(x) FIRPTA Certificate of Seller, executed by Seller under penalties of perjury and in compliance with the requirements of Section 1445 of the Internal Revenue Code of 1986, as amended, and Treasury Regulations Section 1.1445-2(b)(2), certifying that Seller is not a foreign person within the meaning of Section 1445 of the Code;

(xi) Executed Consent to Assignment of the Vantage Molecular Sciences License Agreement, duly executed by Vantage Molecular Sciences, Inc. on July 14, 2023;

(xii) Executed Consent to Assignment of Lease from Towne Centre Properties LLC, duly executed by Towne Centre Properties LLC on July 28, 2023; and

(xiii) Executed Assignment of Sublease for the premises located at 925 Industrial Court, Carlsbad, California 92010, duly executed by Seller and the applicable sublandlord.

(f) No Material Adverse Effect. No Material Adverse Effect has occurred with respect to the OncuPath Business since the date of the Agreement. The undersigned is not aware of any event, change, development, circumstance, condition, or occurrence that, individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect on the OncuPath Business.

(g) Regulatory Matters. All required regulatory filings, notifications, and submissions in connection with the transfer of the OncuPath Business from Seller to Buyer have been duly made or are in the process of being made as of the Closing Date, including without limitation:

(i) the filing of an application for transfer of the Clinical Laboratory Improvement Amendments of 1988 ("CLIA") certificate associated with the OncuPath Business (CLIA ID: 05D2178493) from Seller to Buyer with the Centers for Medicare and Medicaid Services;

(ii) the updating of the FDA establishment registration information to reflect the change in ownership of the OncuPath Business;

(iii) notification to the FDA regarding the pending OncuPath-HER3™ Premarket Approval ("PMA") supplement (PMA Supplement No. P230014, initially submitted by Seller on January 30, 2023) and the change of ownership of the sponsor and applicant with respect thereto; and

(iv) such other regulatory notifications and filings as are described in Schedule 8.2(g) of the Agreement.

Section 4. Employee Transfer Confirmation

4.1. The undersigned hereby certifies that Seller has complied in all material respects with its obligations under Section 7.4 of the Agreement with respect to the identification, notification, and transfer of OncuPath Business employees to Buyer as of the Closing Date.

4.2. In accordance with Section 7.4 of the Agreement, Seller extended (or caused to be extended) offers of employment on behalf of Buyer to eighty-three (83) employees of the OncuPath Business (the "Designated Employees"), which represents all of the employees exclusively dedicated to the OncuPath Business as identified on Schedule 7.4(a) of the Agreement. Of such Designated Employees, seventy-eight (78) individuals have accepted offers of employment with Buyer and will transfer to Buyer's employment effective as of the Closing Date (the "Transferred Employees"). The remaining five (5) Designated Employees declined the offers of employment extended to them, and Seller has provided Buyer with a schedule identifying such individuals and their respective positions, as required by Section 7.4(c) of the Agreement.

4.3. Among the key personnel transferring to Buyer as Transferred Employees are:

(a) Dr. Lara Okonkwo, Vice President, OncuPath Research and Development;

(b) Samuel Briggs, Director, OncuPath Commercial Operations; and

4.4. Seller has determined that no notification was required to be given under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the "WARN Act"), or any comparable state or local "mini-WARN" statute, in connection with the transactions contemplated by the Agreement, as the number of employees affected at any single site of employment did not meet or exceed the threshold of one hundred (100) employees established under the WARN Act. Seller has not effectuated a "plant closing" or "mass layoff" (each as defined under the WARN Act) within the ninety (90)-day period preceding the Closing Date.

Section 5. Working Capital Confirmation

5.1. The undersigned hereby certifies that the estimated Net Working Capital of the OncuPath Business as of the Closing Date (the "Estimated Closing NWC") has been calculated by Seller in good faith and in accordance with the methodology, principles, procedures, and definitions set forth in Section 2.4 and Schedule 2.4 of the Agreement, applied on a basis consistent with the preparation of the Reference Balance Sheet.

5.2. As set forth in the Agreement, the target Net Working Capital for the OncuPath Business (the "Target NWC") is Six Million Eight Hundred Thousand Dollars ($6,800,000). The Estimated Closing NWC, as delivered by Seller to Buyer in the Estimated Closing Statement on August 4, 2023, falls within the collar of plus or minus Three Hundred Fifty Thousand Dollars (±$350,000) of the Target NWC, and accordingly no adjustment to the closing cash consideration at Closing is required under Section 2.4(b) of the Agreement.

5.3. The undersigned acknowledges that the final closing balance sheet of the OncuPath Business will be prepared by Haverford & Lane LLP, the independent accounting firm designated pursuant to Section 2.4(c) of the Agreement, and that the post-closing Net Working Capital true-up process will be completed within ninety (90) days of the Closing Date (i.e., on or before November 6, 2023). Any adjustment resulting from such true-up shall be made in accordance with the procedures set forth in Section 2.4(d) of the Agreement.

Section 6. Funds Flow Confirmation

6.1. The undersigned hereby certifies that Seller has delivered to Buyer wire transfer instructions for the receipt of the closing cash consideration, as required by Section 3.2(k) of the Agreement, and that Seller is prepared to execute the funds flow in accordance with the Closing Funds Flow Memorandum, dated August 7, 2023, as agreed upon by Seller, Buyer, and their respective counsel (the "Funds Flow Memorandum").

6.2. A summary of the anticipated closing funds flow, consistent with the Funds Flow Memorandum, is as follows:

6.3. Seller further confirms that it will pay its pro rata share of the premium for the representation and warranty insurance policy procured in connection with the transactions contemplated by the Agreement, in the amount of Four Hundred Twenty Thousand Dollars ($420,000), to Apex Mutual Insurance Company (Policy No. RWI-2023-07182), in accordance with the terms and conditions set forth in Section 7.9 of the Agreement and the Funds Flow Memorandum. Such payment will be made by wire transfer on the Closing Date concurrently with the consummation of the Closing.

Section 7. No Other Agreements or Understandings

7.1. The undersigned hereby certifies that, as of the date hereof, neither Seller nor any of its Affiliates, directors, officers, employees, agents, or representatives has entered into any agreement, arrangement, understanding, commitment, or undertaking (whether written or oral, express or implied, formal or informal) with any third party that would, or would reasonably be expected to, (a) conflict with, be inconsistent with, or contravene the terms and conditions of the Agreement or any Ancillary Agreement, (b) adversely affect Buyer's rights, interests, or remedies under the Agreement or any Ancillary Agreement, (c) adversely affect Buyer's ability to own, hold, or operate the OncuPath Business or any of the Acquired Assets following the Closing, or (d) impose any obligation, liability, restriction, or encumbrance on the OncuPath Business or any of the Acquired Assets that is not reflected in the Agreement, the Disclosure Schedules, or the Ancillary Agreements.

Section 8. Governing Law

8.1. This Certificate shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware, consistent with Section 11.8 of the Agreement.

8.2. This Certificate is delivered pursuant to, and forms a part of the Closing deliverables required under, the Agreement. Nothing in this Certificate is intended to, and nothing herein shall be construed to, create any rights, remedies, claims, or causes of action in favor of any Person other than Buyer, except to the extent expressly provided in the Agreement. The remedies of Buyer with respect to the certifications set forth herein shall be exclusively governed by Article X of the Agreement.

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned has executed and delivered this Officer's Certificate as of the date first written above, in his capacity as Chief Financial Officer of Genome Dx Therapeutics Inc. and not in his individual capacity.

GENOME DX THERAPEUTICS INC.

By: ________

Name: Martin Kowalski

Title: Chief Financial Officer

Date: August 8, 2023

Address:

10250 Science Center Drive, Suite 600 San Diego, California 92121

NOTICE AND DELIVERY

This Certificate has been delivered to:

Buyer:

Meridian Precision Diagnostics, Inc.

Attn: David Pruitt, General Counsel

2400 Meridian Parkway, Suite 300 Durham, North Carolina 27713

With a copy to Buyer's counsel:

Whitfield Sayer & Gregg LLP

Attn: Jonathan Whitfield

200 South Tryon Street, Suite 2800 Charlotte, North Carolina 28202

Prepared by:

Calderwood & Harkness LLP

Attn: James Prentice / Tiffany Rosenthal

555 South Hope Street, Suite 4400 Los Angeles, California 90071 Matter No. 1013-00006&A-4471

CONFIDENTIAL — This Certificate and its contents are confidential and proprietary and are subject to the confidentiality provisions of the Agreement. Any unauthorized use, disclosure, distribution, or reproduction of this Certificate or the information contained herein, in whole or in part, is strictly prohibited.

Item	Amount
Total Closing Cash Consideration	$126,000,000
Less: Escrow Deposit to Ashgrove Equity Partners Escrow Services, Inc. (Account No. 8841-7023-5500)	($14,000,000)
Net Cash Proceeds to Seller	$112,000,000

OFFICER'S CERTIFICATE OF GENOME DX THERAPEUTICS INC.
Delivered Pursuant to Section 8.2(d) of the Asset Purchase Agreement
August 8, 2023
This Officer's Certificate (this "Certificate") is delivered pursuant to Section 8.2(d) of that certain Asset Purchase Agreement, dated as of May 11, 2023 (as the same may be amended, supplemented, or otherwise modified from time to time, the "Agreement"), by and between Genome Dx Therapeutics Inc., a corporation organized and existing under the laws of the State of Delaware ("Seller"), and Meridian Precision Diagnostics, Inc., a corporation organized and existing under the laws of the State of Delaware ("Buyer").
RECITALS
The undersigned, Martin Kowalski, is the Chief Financial Officer of Genome Dx Therapeutics Inc., a corporation duly organized and validly existing under the laws of the State of Delaware, with its principal place of business at 10250 Science Center Drive, Suite 600, San Diego, California 92121 (Employer Identification Number: 47-3892061). This Certificate is being delivered to Buyer as a condition precedent to Buyer's obligation to consummate the closing (the "Closing") of the transactions contemplated by the Agreement, as required by Section 8.2(d) thereof.
Capitalized terms used but not otherwise defined in this Certificate shall have the meanings ascribed to such terms in the Agreement.
The Agreement governs the sale, conveyance, transfer, assignment, and delivery by Seller to Buyer of all assets, intellectual property, contracts, inventory, equipment, regulatory filings, and goodwill exclusively related to Seller's OncuPath™ companion diagnostics assay line (collectively, the "OncuPath Business") for aggregate consideration of One Hundred Forty Million Dollars ($140,000,000), comprising One Hundred Twenty-Six Million Dollars ($126,000,000) in closing cash consideration (subject to the Net Working Capital adjustment described herein and in the Agreement) and up to Fourteen Million Dollars ($14,000,000) in contingent earnout payments, as more fully described in the Agreement and the Earnout Agreement.
The undersigned, Martin Kowalski, is duly authorized to execute and deliver this Certificate on behalf of Seller, and such authority has been duly conferred by the Board of Directors of Seller in connection with the approval of the transactions contemplated by the Agreement. The certifications set forth herein are made to the best of the undersigned's knowledge and belief, after due inquiry, in his capacity as Chief Financial Officer of Seller and not in his individual or personal capacity, and the undersigned shall have no personal liability in connection with the statements made herein except to the extent expressly provided in the Agreement.
NOW, THEREFORE, the undersigned hereby certifies to Buyer as follows:
Section 1. Representations and Warranties — Bring-Down Certification
1.1. The undersigned hereby certifies to Buyer that each of the representations and warranties of Seller contained in Article IV of the Agreement is true and correct in all material respects as of the date hereof, August 8, 2023 (the "Closing Date"), with the same force and effect as though such representations and warranties had been made on and as of the Closing Date; provided, however, that any representation or warranty that is qualified or limited by reference to "materiality," "Material Adverse Effect," or words of similar import shall be true and correct in all respects (without giving effect to any such qualification or limitation) as of the Closing Date; and provided, further, that to the extent any such representation or warranty expressly relates to a specific date or period of time, such representation or warranty shall be true and correct in all material respects (or, if so qualified, in all respects) as of such specified date or with respect to such specified period, as applicable.
1.2. The Disclosure Schedules delivered by Seller to Buyer on May 11, 2023, in connection with the execution and delivery of the Agreement, remain true, correct, and complete in all material respects as of the Closing Date. No event, occurrence, development, condition, or circumstance has arisen or come to the attention of Seller since the date of the Agreement that would require any update, amendment, modification, or supplement to the Disclosure Schedules in order to make the representations and warranties of Seller contained in Article IV of the Agreement true and correct in all material respects as of the Closing Date, and accordingly no such update has been delivered or is required to be delivered.
1.3. The undersigned further certifies that no Material Adverse Effect has occurred with respect to the OncuPath Business since the date of the Agreement. Without limiting the generality of the foregoing, there has been no event, change, development, circumstance, condition, fact, or occurrence that, individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect on the assets, liabilities, business, financial condition, results of operations, or prospects of the OncuPath Business, as such term is defined in Section 1.1(a)(65) of the Agreement.
Section 2. Covenants — Compliance Certification
2.1. The undersigned hereby certifies to Buyer that Seller has duly performed and complied in all material respects with all covenants, obligations, and agreements required by the Agreement to be performed or complied with by Seller at or prior to the Closing Date, including, without limitation, the covenants and agreements set forth in Article VI of the Agreement. Without limiting the foregoing, the undersigned specifically certifies as follows:
(a) Ordinary Course of Business. During the period between the date of the Agreement (May 11, 2023) and the Closing Date (August 8, 2023) (the "Interim Period"), Seller has operated the OncuPath Business in the ordinary course of business consistent with past practice in all material respects, including with respect to the maintenance of inventory levels, the management of accounts receivable and accounts payable, the conduct of research and development activities, the management of personnel, and the pursuit of commercial and regulatory objectives in a manner consistent with prudent industry practices and Seller's historical conduct of the OncuPath Business.
(b) Preservation of Business Relationships, Assets, and Employees. During the Interim Period, Seller has used commercially reasonable efforts to preserve intact the business organization, operations, and relationships of the OncuPath Business, to retain and maintain the goodwill of the OncuPath Business with its customers, suppliers, distributors, licensors, licensees, and other third parties with which the OncuPath Business has business relationships, and to retain the services of the key employees and other personnel of the OncuPath Business. Seller has maintained all assets included in the Acquired Assets in their current condition, ordinary wear and tear excepted, and has maintained all insurance policies relating to the OncuPath Business in full force and effect through the Closing Date.
(c) Cooperation in Obtaining Required Consents and Approvals. Seller has cooperated with Buyer, and has used commercially reasonable efforts, to obtain all consents, approvals, authorizations, waivers, orders, and filings required in connection with the consummation of the transactions contemplated by the Agreement, including the following:
(i) Hart-Scott-Rodino Antitrust Improvements Act. Seller duly filed its Premerger Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the rules and regulations promulgated thereunder, with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice on May 18, 2023. The applicable waiting period under the HSR Act was terminated by way of early termination granted on June 22, 2023. No request for additional information or documentary material ("Second Request") was issued in connection with such filing. Seller cooperated fully with Buyer in connection with the preparation and filing of such notification and in responding to all inquiries from the applicable governmental authorities.
(ii) Consent to Assignment of the Vantage Molecular Sciences License Agreement. Seller obtained the written consent of Vantage Molecular Sciences, Inc. ("Vantage") to the assignment by Seller to Buyer of the License Agreement dated September 12, 2019, by and between Seller and Vantage (the "Vantage License Agreement"), which governs the license of certain probe-labeling technology utilized in connection with the OncuPath Business. Such consent was duly executed and delivered by Vantage on July 14, 2023, and is unconditional and remains in full force and effect as of the Closing Date. A true, correct, and complete copy of such consent has been delivered to Buyer.
(iii) Landlord Consent — Towne Centre Properties LLC. Seller obtained the written consent of Towne Centre Properties LLC ("Towne Centre"), as landlord, to the assignment by Seller to Buyer of that certain Office Lease Agreement dated March 1, 2018, as amended, between Seller, as tenant, and Towne Centre, as landlord, for premises located at 4820 Towne Centre Drive, Suite 200, San Diego, California 92121 (the "Towne Centre Lease"). Such landlord consent was duly executed and delivered by Towne Centre on July 28, 2023, and is unconditional and remains in full force and effect as of the Closing Date. A true, correct, and complete copy of such consent has been delivered to Buyer.
(iv) Assignment of Sublease — 925 Industrial Court, Carlsbad. Seller has duly arranged for the assignment to Buyer of that certain Sublease Agreement for premises located at 925 Industrial Court, Carlsbad, California 92010, where certain manufacturing, packaging, and quality control operations of the OncuPath Business are conducted. The executed assignment of such sublease is included among the Closing deliverables referenced herein.
(d) Compliance with Interim Operating Covenants. During the Interim Period, Seller has not taken any action, or failed to take any action, that would have required the prior written consent of Buyer under Section 6.1 of the Agreement (Interim Operating Covenants), including, without limitation, any action that would have resulted in (i) the sale, transfer, lease, license, or other disposition of any Acquired Asset outside the ordinary course of business, (ii) the amendment, modification, termination, or waiver of any material provision of any Assumed Contract, (iii) the incurrence of any indebtedness or liens on any Acquired Asset, (iv) any material change in accounting methods, principles, or practices relating to the OncuPath Business, (v) any material increase in compensation, benefits, or severance arrangements applicable to employees of the OncuPath Business, or (vi) any settlement or compromise of any material litigation, claim, or proceeding relating to the OncuPath Business.
(e) Timely Delivery of Closing Deliverables. Seller has delivered, or is delivering concurrently with the Closing, all documents, instruments, agreements, certificates, and other items required to be delivered by Seller at or prior to the Closing pursuant to Section 3.2 and Section 8.2 of the Agreement, as more fully described in Section 5 of this Certificate.
Section 3. Closing Conditions — Satisfaction Certification
3.1. The undersigned hereby certifies to Buyer that all conditions to the obligations of Buyer and Seller to consummate the Closing set forth in Sections 8.1 and 8.2 of the Agreement that are required to be satisfied by or on behalf of Seller have been duly satisfied (or, where applicable, have been waived in writing by Buyer) as of the Closing Date. Without limiting the foregoing, the undersigned specifically certifies as follows:
(a) HSR Clearance. The applicable waiting period under the HSR Act with respect to the transactions contemplated by the Agreement has been terminated. Early termination of the waiting period was granted by the Federal Trade Commission on June 22, 2023, as reflected in the notice of early termination delivered to the parties on such date. No governmental authority has issued, enacted, promulgated, enforced, or entered any order, injunction, judgment, decree, ruling, assessment, or writ (whether temporary, preliminary, or permanent) that is in effect and that restrains, enjoins, prevents, prohibits, or otherwise makes illegal the consummation of the transactions contemplated by the Agreement.
(b) No Litigation. As of the Closing Date, no action, suit, claim, investigation, arbitration, or proceeding (each, a "Proceeding") is pending or, to Seller's knowledge after due inquiry, threatened by or before any court, tribunal, governmental authority, or arbitral body that seeks to (i) restrain, enjoin, prevent, prohibit, or otherwise challenge the consummation of any of the transactions contemplated by the Agreement, (ii) impose any material conditions on or in connection with the consummation of the transactions, or (iii) obtain damages or other relief that would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect on the OncuPath Business or materially impair Buyer's ability to operate the OncuPath Business following the Closing. Seller has not received any written or oral communication from any governmental authority indicating an intention to commence, or the commencement of, any such Proceeding.
(c) Third-Party Consents. All material consents, waivers, approvals, authorizations, and notices from third parties that are required for the lawful consummation of the transactions contemplated by the Agreement and the assignment to Buyer of the Assumed Contracts, Acquired Assets, and other rights and obligations related to the OncuPath Business have been obtained or given, as applicable. Without limitation, the following material consents have been obtained:
(i) Consent to assignment of the Vantage License Agreement, executed by Vantage Molecular Sciences, Inc. on July 14, 2023;
(ii) Landlord consent to assignment of the Towne Centre Lease, executed by Towne Centre Properties LLC on July 28, 2023; and
(iii) Such other consents and approvals as are identified on Schedule 3.2(c) of the Agreement.
(d) Board Approval. The Board of Directors of Seller duly authorized and approved the execution, delivery, and performance by Seller of the Agreement and each of the Ancillary Agreements to which Seller is a party, and the consummation of all transactions contemplated thereby, by resolutions duly adopted at a meeting of the Board of Directors held on May 8, 2023, at which a quorum was present throughout and acted throughout. Such resolutions have not been rescinded, modified, supplemented, or amended in any respect and remain in full force and effect as of the Closing Date.
(e) Closing Deliverables. Seller has delivered to Buyer (or, in the case of documents to be executed and delivered simultaneously at the Closing, stands ready to deliver) at or prior to the Closing all of the following documents, instruments, and agreements required pursuant to Section 3.2 and Section 8.2 of the Agreement:
(i) This Officer's Certificate, duly executed by the undersigned;
(ii) Secretary's Certificate of Genome Dx Therapeutics Inc., duly executed by Rachel Han, Secretary of Seller, certifying as to the charter documents, bylaws, and board resolutions of Seller;
(iii) Bill of Sale in the form attached to the Agreement as Exhibit A, duly executed by Seller, conveying to Buyer all right, title, and interest of Seller in and to the tangible personal property included in the Acquired Assets;
(iv) Assignment and Assumption Agreement in the form attached to the Agreement as Exhibit B, duly executed by Seller, assigning to Buyer all of Seller's right, title, and interest in and to the Assumed Contracts and Buyer's assumption of the Assumed Liabilities;
(v) intellectual Property Assignment Agreement in the form attached to the Agreement as Exhibit C, duly executed by Seller, assigning to Buyer all of Seller's right, title, and interest in and to the Transferred intellectual Property, including without limitation (A) fourteen (14) issued United States patents, (B) seven (7) pending United States patent applications, (C) the following registered trademarks: OncuPath™ (U.S. Trademark Registration No. 5,847,321), OncuPath-HER3™ (U.S. Trademark Registration No. 6,412,088), and OncuPath-GENOMARK™ (U.S. Trademark Registration No. 6,118,754), (D) all trade secrets, proprietary data, and know-how exclusively related to the OncuPath Business, and (E) all associated goodwill;
(vi) Escrow Agreement in the form attached to the Agreement as Exhibit D, duly executed by Seller, Buyer, and Ashgrove Equity Partners Escrow Services, Inc., as escrow agent, pursuant to which Fourteen Million Dollars ($14,000,000) of the closing cash consideration shall be deposited into escrow (Ashgrove Equity Partners Escrow Account No. 8841-7023-5500) to secure Seller's indemnification obligations under the Agreement;
(vii) Transition Services Agreement in the form attached to the Agreement as Exhibit E, duly executed by Seller, pursuant to which Seller will provide to Buyer certain transitional services with respect to information technology, facilities management, and human resources/payroll administration for a period of up to nine (9) months following the Closing Date, at a rate of cost-plus-five-percent (cost + 5%);
(viii) Non-Competition and Non-Solicitation Agreement in the form attached to the Agreement as Exhibit F, duly executed by Seller, pursuant to which Seller has agreed to (A) a three (3)-year covenant not to compete in the companion diagnostics field within the United States, commencing on the Closing Date, and (B) a two (2)-year covenant not to solicit for employment any Transferred Employee, commencing on the Closing Date;
(ix) Earnout Agreement in the form attached to the Agreement as Exhibit G, duly executed by Seller, providing for contingent earnout payments to Seller based on the achievement of the following milestones: (A) Milestone 1 — Eight Million Dollars ($8,000,000), payable upon the receipt of clearance or approval from the U.S. Food and Drug Administration for OncuPath-HER3™ on or before August 8, 2025, and (B) Milestone 2 — Six Million Dollars ($6,000,000), payable upon the assignment of a CMS Healthcare Common Procedure Coding System (HCPCS) code and the receipt of first Medicare reimbursement for OncuPath-HER3™ on or before August 8, 2026;
(x) FIRPTA Certificate of Seller, executed by Seller under penalties of perjury and in compliance with the requirements of Section 1445 of the Internal Revenue Code of 1986, as amended, and Treasury Regulations Section 1.1445-2(b)(2), certifying that Seller is not a foreign person within the meaning of Section 1445 of the Code;
(xi) Executed Consent to Assignment of the Vantage Molecular Sciences License Agreement, duly executed by Vantage Molecular Sciences, Inc. on July 14, 2023;
(xii) Executed Consent to Assignment of Lease from Towne Centre Properties LLC, duly executed by Towne Centre Properties LLC on July 28, 2023; and
(xiii) Executed Assignment of Sublease for the premises located at 925 Industrial Court, Carlsbad, California 92010, duly executed by Seller and the applicable sublandlord.
(f) No Material Adverse Effect. No Material Adverse Effect has occurred with respect to the OncuPath Business since the date of the Agreement. The undersigned is not aware of any event, change, development, circumstance, condition, or occurrence that, individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect on the OncuPath Business.
(g) Regulatory Matters. All required regulatory filings, notifications, and submissions in connection with the transfer of the OncuPath Business from Seller to Buyer have been duly made or are in the process of being made as of the Closing Date, including without limitation:
(i) the filing of an application for transfer of the Clinical Laboratory Improvement Amendments of 1988 ("CLIA") certificate associated with the OncuPath Business (CLIA ID: 05D2178493) from Seller to Buyer with the Centers for Medicare and Medicaid Services;
(ii) the updating of the FDA establishment registration information to reflect the change in ownership of the OncuPath Business;
(iii) notification to the FDA regarding the pending OncuPath-HER3™ Premarket Approval ("PMA") supplement (PMA Supplement No. P230014, initially submitted by Seller on January 30, 2023) and the change of ownership of the sponsor and applicant with respect thereto; and
(iv) such other regulatory notifications and filings as are described in Schedule 8.2(g) of the Agreement.
Section 4. Employee Transfer Confirmation
4.1. The undersigned hereby certifies that Seller has complied in all material respects with its obligations under Section 7.4 of the Agreement with respect to the identification, notification, and transfer of OncuPath Business employees to Buyer as of the Closing Date.
4.2. In accordance with Section 7.4 of the Agreement, Seller extended (or caused to be extended) offers of employment on behalf of Buyer to eighty-three (83) employees of the OncuPath Business (the "Designated Employees"), which represents all of the employees exclusively dedicated to the OncuPath Business as identified on Schedule 7.4(a) of the Agreement. Of such Designated Employees, seventy-eight (78) individuals have accepted offers of employment with Buyer and will transfer to Buyer's employment effective as of the Closing Date (the "Transferred Employees"). The remaining five (5) Designated Employees declined the offers of employment extended to them, and Seller has provided Buyer with a schedule identifying such individuals and their respective positions, as required by Section 7.4(c) of the Agreement.
4.3. Among the key personnel transferring to Buyer as Transferred Employees are:
(a) Dr. Lara Okonkwo, Vice President, OncuPath Research and Development;
(b) Samuel Briggs, Director, OncuPath Commercial Operations; and
(c) Yuki Tanabe, Head of Regulatory Affairs, OncuPath.
4.4. Seller has determined that no notification was required to be given under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the "WARN Act"), or any comparable state or local "mini-WARN" statute, in connection with the transactions contemplated by the Agreement, as the number of employees affected at any single site of employment did not meet or exceed the threshold of one hundred (100) employees established under the WARN Act. Seller has not effectuated a "plant closing" or "mass layoff" (each as defined under the WARN Act) within the ninety (90)-day period preceding the Closing Date.
Section 5. Working Capital Confirmation
5.1. The undersigned hereby certifies that the estimated Net Working Capital of the OncuPath Business as of the Closing Date (the "Estimated Closing NWC") has been calculated by Seller in good faith and in accordance with the methodology, principles, procedures, and definitions set forth in Section 2.4 and Schedule 2.4 of the Agreement, applied on a basis consistent with the preparation of the Reference Balance Sheet.
5.2. As set forth in the Agreement, the target Net Working Capital for the OncuPath Business (the "Target NWC") is Six Million Eight Hundred Thousand Dollars ($6,800,000). The Estimated Closing NWC, as delivered by Seller to Buyer in the Estimated Closing Statement on August 4, 2023, falls within the collar of plus or minus Three Hundred Fifty Thousand Dollars (±$350,000) of the Target NWC, and accordingly no adjustment to the closing cash consideration at Closing is required under Section 2.4(b) of the Agreement.
5.3. The undersigned acknowledges that the final closing balance sheet of the OncuPath Business will be prepared by Haverford & Lane LLP, the independent accounting firm designated pursuant to Section 2.4(c) of the Agreement, and that the post-closing Net Working Capital true-up process will be completed within ninety (90) days of the Closing Date (i.e., on or before November 6, 2023). Any adjustment resulting from such true-up shall be made in accordance with the procedures set forth in Section 2.4(d) of the Agreement.
Section 6. Funds Flow Confirmation
6.1. The undersigned hereby certifies that Seller has delivered to Buyer wire transfer instructions for the receipt of the closing cash consideration, as required by Section 3.2(k) of the Agreement, and that Seller is prepared to execute the funds flow in accordance with the Closing Funds Flow Memorandum, dated August 7, 2023, as agreed upon by Seller, Buyer, and their respective counsel (the "Funds Flow Memorandum").
6.2. A summary of the anticipated closing funds flow, consistent with the Funds Flow Memorandum, is as follows:
6.3. Seller further confirms that it will pay its pro rata share of the premium for the representation and warranty insurance policy procured in connection with the transactions contemplated by the Agreement, in the amount of Four Hundred Twenty Thousand Dollars ($420,000), to Apex Mutual Insurance Company (Policy No. RWI-2023-07182), in accordance with the terms and conditions set forth in Section 7.9 of the Agreement and the Funds Flow Memorandum. Such payment will be made by wire transfer on the Closing Date concurrently with the consummation of the Closing.
Section 7. No Other Agreements or Understandings
7.1. The undersigned hereby certifies that, as of the date hereof, neither Seller nor any of its Affiliates, directors, officers, employees, agents, or representatives has entered into any agreement, arrangement, understanding, commitment, or undertaking (whether written or oral, express or implied, formal or informal) with any third party that would, or would reasonably be expected to, (a) conflict with, be inconsistent with, or contravene the terms and conditions of the Agreement or any Ancillary Agreement, (b) adversely affect Buyer's rights, interests, or remedies under the Agreement or any Ancillary Agreement, (c) adversely affect Buyer's ability to own, hold, or operate the OncuPath Business or any of the Acquired Assets following the Closing, or (d) impose any obligation, liability, restriction, or encumbrance on the OncuPath Business or any of the Acquired Assets that is not reflected in the Agreement, the Disclosure Schedules, or the Ancillary Agreements.
Section 8. Governing Law
8.1. This Certificate shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware, consistent with Section 11.8 of the Agreement.
8.2. This Certificate is delivered pursuant to, and forms a part of the Closing deliverables required under, the Agreement. Nothing in this Certificate is intended to, and nothing herein shall be construed to, create any rights, remedies, claims, or causes of action in favor of any Person other than Buyer, except to the extent expressly provided in the Agreement. The remedies of Buyer with respect to the certifications set forth herein shall be exclusively governed by Article X of the Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has executed and delivered this Officer's Certificate as of the date first written above, in his capacity as Chief Financial Officer of Genome Dx Therapeutics Inc. and not in his individual capacity.
GENOME DX THERAPEUTICS INC.
By: ________
Name: Martin Kowalski
Title: Chief Financial Officer
Date: August 8, 2023
Address:
10250 Science Center Drive, Suite 600 San Diego, California 92121
NOTICE AND DELIVERY
This Certificate has been delivered to:
Buyer:
Meridian Precision Diagnostics, Inc.
Attn: David Pruitt, General Counsel
2400 Meridian Parkway, Suite 300 Durham, North Carolina 27713
With a copy to Buyer's counsel:
Whitfield Sayer & Gregg LLP
Attn: Jonathan Whitfield
200 South Tryon Street, Suite 2800 Charlotte, North Carolina 28202
Prepared by:
Calderwood & Harkness LLP
Attn: James Prentice / Tiffany Rosenthal
555 South Hope Street, Suite 4400 Los Angeles, California 90071 Matter No. 1013-00006&A-4471
CONFIDENTIAL — This Certificate and its contents are confidential and proprietary and are subject to the confidentiality provisions of the Agreement. Any unauthorized use, disclosure, distribution, or reproduction of this Certificate or the information contained herein, in whole or in part, is strictly prohibited.
Item | Amount
Total Closing Cash Consideration | $126,000,000
Less: Escrow Deposit to Ashgrove Equity Partners Escrow Services, Inc. (Account No. 8841-7023-5500) | ($14,000,000)
Net Cash Proceeds to Seller | $112,000,000

OFFICER'S CERTIFICATE OF GENOME DX THERAPEUTICS INC.

RECITALS

GENOME DX THERAPEUTICS INC.

NOTICE AND DELIVERY

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