0001047469-16-009535.txt : 20160104 0001047469-16-009535.hdr.sgml : 20160104 20160104171033 ACCESSION NUMBER: 0001047469-16-009535 CONFORMED SUBMISSION TYPE: S-1 PUBLIC DOCUMENT COUNT: 41 FILED AS OF DATE: 20160104 DATE AS OF CHANGE: 20160104 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Tabula Rasa HealthCare, Inc. CENTRAL INDEX KEY: 0001651561 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 465726437 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1 SEC ACT: 1933 Act SEC FILE NUMBER: 333-208857 FILM NUMBER: 161319050 BUSINESS ADDRESS: STREET 1: 110 MARTER AVENUE STREET 2: SUITE 309 CITY: MOORESTOWN STATE: NJ ZIP: 08057 BUSINESS PHONE: 866-648-2767 MAIL ADDRESS: STREET 1: 110 MARTER AVENUE STREET 2: SUITE 309 CITY: MOORESTOWN STATE: NJ ZIP: 08057 S-1 1 a2226891zs-1.htm S-1

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As filed with the Securities and Exchange Commission on January 4, 2016.

Registration No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Tabula Rasa HealthCare, Inc.
(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		8099 (Primary Standard Industrial Classification Code Number)		46-5726437 (I.R.S. Employer Identification Number)

110 Marter Avenue, Suite 309
Moorestown, NJ 08057
(866) 648 - 2767
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Dr. Calvin H. Knowlton, Ph.D.
Chief Executive Officer
Tabula Rasa HealthCare, Inc.
110 Marter Avenue, Suite 309
Moorestown, NJ 08057
(866) 648 - 2767
(Name, address, including zip code, and telephone number, including area code, of agent for service)


Copies to:
James W. McKenzie, Jr. Jeffrey P. Bodle Kevin S. Shmelzer Morgan, Lewis & Bockius LLP 1701 Market Street Philadelphia, PA 19103 (215) 963 - 5000	Brian W. Adams Chief Financial Officer Tabula Rasa HealthCare, Inc. 110 Marter Avenue, Suite 309 Moorestown, NJ 08057 (866) 648 - 2767	Charles S. Kim Brent B. Siler Divakar Gupta Cooley LLP 1114 Avenue of the Americas New York, NY 10036 (212) 479 - 6000

Approximate date of commencement of proposed sale to public:
As soon as practicable after this registration statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer o		Accelerated filer o		Non-accelerated filer ý (Do not check if a smaller reporting company)		Smaller reporting company o

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities To Be Registered	Proposed Maximum Aggregate Offering Price(1)	Amount of Registration Fee(2)




Common stock, $0.0001 par value per share	$115,000,000	$11,580.50

(1): Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended, and includes shares of common stock that the underwriters have an option to purchase to cover over allotments, if any.
(2): Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JANUARY 4, 2016

PRELIMINARY PROSPECTUS

Shares

Common Stock
$ per share

This is the initial public offering of our common stock. We are offering shares of common stock. Prior to this offering, there has been no public market for our common stock. We intend to list our common stock on the NASDAQ Global Market under the symbol "TRHC." We currently estimate that the initial public offering price will be between $ and $ per share of common stock.

We are an "emerging growth company" under applicable Securities and Exchange Commission rules and will be eligible for reduced public company disclosure requirements.

	Per Share	Total

Initial public offering price	$	$
Underwriting discounts and commissions(1)	$	$
Proceeds, before expenses, to Tabula Rasa	$	$

(1): See "Underwriting" for a description of the compensation payable to the underwriters.

We have granted the underwriters an option for a period of 30 days to purchase up to an additional shares of common stock from us.

Investing in our common stock involves risks. See "Risk Factors" beginning on page 14.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares to purchasers on or about , 2016.


Wells Fargo Securities				UBS Investment Bank


		Piper Jaffray


Baird				Stifel

Prospectus dated , 2016.

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Summary		1
The Offering		9
Summary Consolidated Financial Data		11
Risk Factors		14
Special Note Regarding Forward-Looking Statements		42
Market and Industry Data		44
Use of Proceeds		45
Dividend Policy		47
Capitalization		48
Dilution		51
Selected Consolidated Financial Data		54
Management's Discussion and Analysis of Financial Condition and Results of Operations		59
Business		84
Management		109
Executive Compensation		117
Transactions with Related Persons		139
Principal Stockholders		146
Description of Capital Stock		150
Shares Eligible for Future Sale		157
Material U.S. Tax Considerations for Non-U.S. Holders of Common Stock		160
Underwriting		164
Legal Matters		170
Experts		170
Where You Can Find More Information		170
Index to Financial Statements		F-1

We are responsible for the information contained in this prospectus. Neither we nor any of the underwriters have authorized anyone to provide you with information different from that contained in this prospectus, and we take no responsibility for any other information others may give you. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.

Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required other than in the United States. Persons who come into possession of this prospectus and any applicable free writing prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus and any such free writing prospectus applicable to that jurisdiction.

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SUMMARY

This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. This summary does not contain all of the information that may be important to you. You should read and carefully consider the entire prospectus, including our consolidated financial statements and the notes thereto appearing elsewhere in this prospectus and the matters discussed in the sections "Risk Factors," "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," before deciding to invest in our common stock.

Except as otherwise indicated herein or as the context otherwise requires, references in this prospectus to "Tabula Rasa," "the company," "we," "us" and "our" refer, prior to the Reorganization Transaction discussed below, to CareKinesis, Inc., or CareKinesis, and, after the Reorganization Transaction, to Tabula Rasa HealthCare, Inc., in each case together with its consolidated subsidiaries.

Overview

We are a leader in providing patient-specific, data-driven technology and solutions that enable healthcare organizations to optimize medication regimens to improve patient outcomes, reduce hospitalizations, lower healthcare costs and manage risk. We deliver our solutions through a comprehensive suite of technology-enabled products and services for medication risk management, which includes bundled prescription fulfillment and adherence packaging services for client populations with complex prescription needs. We also provide risk adjustment services, which help our clients to properly characterize a patient's acuity, or severity of health condition, and optimize the associated payments for care. With 4.3 billion prescriptions filled in the United States in 2014, medication treatment is the most common medical intervention, and its imprecise use represents the fourth leading cause of death and contributes to an estimated 45 to 50 million adverse drug events, or ADEs, annually with 2.5 to 4.0 million of those ADEs considered serious, disabling or fatal. ADEs result in more than 100,000 deaths annually in the United States and approximately 125,000 hospitalizations, one million emergency room visits, two million affected hospital stays and 3.5 million physician office visits every year. The incidence of ADEs is highly correlated to the number of medications an individual is taking and non-adherence to prescribed regimens, and thus is particularly relevant to populations with complex healthcare needs. Our technology-driven approach to medication risk management represents an evolution from prevailing non-personalized approaches that primarily rely on single drug-to-drug interaction analysis. We currently serve approximately 100 healthcare organizations that focus on populations with complex healthcare needs and extensive medication requirements.

Our suite of cloud-based software solutions provides prescribers, pharmacists and healthcare organizations with sophisticated and innovative tools to better manage the medication-related needs of patients. We believe we offer the first prospective clinical approach to medication risk management, which is designed to increase patient safety and promote adherence to a patient's personalized medication regimen. Furthermore, our medication risk management technology helps healthcare organizations lower costs by reducing ADEs, enhancing quality of care and avoiding preventable hospital admissions. Our products and services are built around our novel and proprietary Medication Risk Mitigation Matrix, or MRM Matrix, which enables optimization of a patient's medication regimen, involving personalizing medication selection, dosage levels, time-of-day administration and reducing the total medication burden by eliminating unnecessary prescriptions. The MRM Matrix analyzes a combination of clinical and pharmacology data, population-based algorithms and extensive patient-specific data, including medical history, lab results, medication lists and individual medication-related genomic information, to deliver "precision medicine." We provide software-enabled solutions that can be bundled with prescription fulfillment and adherence packaging services, which are informed by a patient's personalized MRM Matrix to increase adherence to a patient's optimized regimen, through our three prescription fulfillment pharmacies serving clients across the United States. Our team of clinical pharmacists is available to support prescribers at the point of care through our proprietary technology platform, including real-time secure messaging, with more than 100,000 messages exchanged per month.

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Recently, we began offering software solutions on a standalone software-as-a-service basis, although to date, all of our medication risk management clients have contracted for a bundled offering of our software-enabled solutions, prescription fulfillment and adherence packaging services. While prescription medication revenue has comprised substantially all of our revenue to date, we do not offer prescription fulfillment and adherence packaging services on a standalone basis.

As the U.S. healthcare market continues to evolve from fee-for-service to value-based models of care, healthcare organizations require new and emerging technologies to optimize treatment and manage risk on a patient-specific, customized basis. Our solutions are targeted currently to "at-risk" healthcare organizations that are clinically and financially responsible for the populations they serve, receiving a fixed payment for the care provided to each patient for an entire episode of care or enrollment period. According to the Congressional Budget Office, or CBO, there were approximately 121 million people in the United States covered under government-sponsored programs in 2014, and this number is expected to reach 160 million by 2020. Government-sponsored programs are leading the shift to value-based care. Our solutions support our clients in achieving the Institute for Healthcare Improvement, or IHI, "Triple Aim" of improving a patient's experience, while managing the health of a client's population and controlling costs.

We are led by highly experienced and entrepreneurial executive officers with more than 70 years of cumulative experience in the healthcare industry. Our co-founder, Dr. Calvin H. Knowlton, founded excelleRx, Inc. and, along with Dr. Orsula Knowlton and other members of our management team, built it into the largest national hospice medication management pharmacy in the United States, servicing approximately 400 hospice agencies with approximately 48,000 patients in 46 states, at the time it was sold to Omnicare, Inc. in 2005.

Since our first year of active operations in 2011, our revenue has grown to $48.4 million for the year ended December 31, 2014, and $50.3 million for the nine months ended September 30, 2015 with net losses of $1.1 million and $3.9 million, respectively, and adjusted EBITDA of $3.0 million and $6.2 million, respectively for those periods. See "Selected Consolidated Financial Data — Adjusted EBITDA" for our definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net losses. We had an annual revenue retention rate of 95% and client retention rate of 97% in 2014. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Business Metrics" for our definitions of revenue retention rate and client retention rate.

Market Opportunity

We believe the following market trends drive a growing need for our medication risk management and risk adjustment products and services.

Pervasive Use of Medication is Driving Increased Complexity in Healthcare

Medication treatment is the most common medical intervention. In any given month, 48% of Americans take a prescription drug and 11% take five or more prescription drugs. The number of prescription drugs individuals are using in the United States is increasing as the number of medication therapies rises, the population ages and chronic diseases become more prevalent. We believe the pervasive and rising use of prescription and non-prescription drugs is increasing the complexity of medication management for healthcare organizations and making adherence to medication regimens more difficult for patients.

Imprecise Use of Medication Harms Patients and Increases Healthcare Costs

Given the extensive and increasing use of medication in the United States, the potential for harm from ADEs and patient medication non-adherence constitutes a critical patient safety and public health challenge. According to the Alliance for Human Research Protection, 2.5 to 4 million serious, disabling or fatal ADEs occur on an annual basis in the United States. In 2012, the IMS Institute of Healthcare

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Informatics estimated that medication non-adherence and unnecessary use of medicines are responsible for more than $200 billion in otherwise avoidable medical spending annually in the United States alone, and ADEs contribute $3.5 billion to U.S. healthcare costs on a yearly basis, according to the Institute of Medicine.

Healthcare Organizations Have a Significant Unmet Need for Comprehensive, Personalized Medication Risk Management

The current tools for medication safety produce inconsistent results and are widely viewed as ineffective. Personalized and precision-based methods are typically absent in prevailing trial-and-error approaches to medication selection, rendering providers ineffective and ultimately limited in their ability to deliver optimal patient care due to insufficient data at the point of prescribing. Research suggests that a majority of ADEs are preventable. According to the American Academy of Pediatrics, ADEs account for up to 25% of all hospital admissions and 12% of emergency room visits in adults, of which up to 70% are preventable.

Industry Dynamics Favor a Personalized Approach to Medication Safety

The shift to value-based healthcare has increasingly placed healthcare organizations at financial risk related to imprecise medication usage, providing new incentives to reduce costs and improve quality. Rising healthcare costs and strained government budgets have driven both federal and state government agencies to expand the role of value-based, capitated payment models, which shift the incentives of healthcare organizations away from volume and toward quality and value. In these at-risk models, the provider is incentivized to deliver efficient care, increasing pressure on providers to simultaneously lower costs and improve care quality, safety and the patient experience. As a result of this transition, data on patient-specific disease states and co-morbidities, clinical and quality outcomes, resource utilization and individualized patient information have become increasingly relevant to healthcare delivery.

Accurate Coding is Critical for Optimizing Reimbursement

Accurate coding of medical procedures and diagnoses is increasingly complex and is required throughout the healthcare landscape for proper reimbursement and regulatory compliance. Coding is particularly important in at-risk, value-based care models as healthcare organizations bear financial risk for their patients' medical expenses. Risk scoring based on accurate coding is a significant factor in determining premium reimbursement rates and payments in many government-sponsored healthcare programs. In addition, government agencies, including the Centers for Medicare & Medicaid Services, or CMS, regularly perform audits of healthcare organizations to validate coding practices.

Our Solutions

Medication risk management is our leading offering, and our cloud-based software applications, including EireneRx and MedWise Advisor, together with our bundled prescription fulfillment and adherence packaging services, provide solutions for a range of payors, providers and other healthcare organizations. Our products and services are built around our proprietary MRM Matrix, which combines clinical and pharmacology data, population-based algorithms and extensive patient-specific data, including medical history, lab results, medication lists and personal genomic information, to deliver what the U.S. Food and Drug Administration, or FDA, refers to as "precision medicine." Our suite of technology products is built on a powerful rules engine that houses comprehensive pharmacotherapy profiles, provides risk alerts and includes a combination of proprietary decision-support tools, real-time secure messaging, e-prescribing and advanced precision-dosing functionality, among other functions. Our software applications help reduce ADEs, enhance medication adherence and quality of care, improve medication safety at the individual patient level and reduce the total medication burden by eliminating unnecessary prescriptions. We also provide risk adjustment services and pharmacy cost management

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services to help our clients achieve correct reimbursement, maintain regulatory compliance and optimize pharmacy spend.

Precision-Based Approach to Deliver Patient-Specific Solutions

We believe we are at the forefront of precision medicine with solutions that help our clients tailor medical treatment to the individual characteristics of each patient. Our cloud-based software solutions are designed to identify high-risk individuals, detect susceptibility to ADEs and embed proper dosing guidelines. Our optional medication-adherence technology promotes adherence to a patient's personalized regimen and dosing schedule. By providing patient-specific, data-driven analytical insights and medication safety solutions, we help clients reduce trial-and-error-based medication selection, unintentional medication overdoses and other causes of ADEs.

Demonstrated Ability to Produce Higher Quality Outcomes, Reduce the Cost of Care and Improve the Patient Experience

By offering solutions that improve outcomes in a cost-effective manner, we are aligned with healthcare organizations that are transitioning to value-based healthcare. Our clients have reported that our medication risk management services have resulted in significant reductions in hospital admissions, length of hospital stays and emergency room visits for their patients, thereby reducing their medical expenditures. Our pharmacy cost management services saved our clients more than $44 million in recovered or prevented overpayments in 2014, and our risk adjustment clients realized revenue increases of approximately $350 per patient per month on average in 2014.

Our Strengths

Innovative Technology Solutions for Medication Risk Management Aligned with Transformative Shifts in Healthcare

We believe our innovative technology platform is uniquely equipped to provide comprehensive medication risk management solutions to a variety of healthcare organizations. The shift from a fee-for-service to a value-based model of care, which focuses on outcomes and quality, is driving the rapid adoption of risk-based arrangements across many healthcare organizations.

First-Mover Advantage with Track Record of Improved Outcomes

We believe the six years we have devoted to developing and optimizing our solutions, and our intellectual property portfolio, provide a significant competitive advantage over potential competitors. Leveraging our industry experience, we believe we offer the first prospective clinical approach to medication risk management, utilizing advanced patient safety tools and medication-adherence technology that enable depth and breadth of data-driven analytical insights and actionable interventions. In addition, we integrate directly with many industry-leading electronic health record systems, or EHRs, that are used by many of our clients.

Expertise in Serving At-Risk Healthcare Organizations with Complex Patient Populations

Since our founding, we have leveraged our knowledge of medication risk management and risk adjustment to develop expertise in serving the growing at-risk segment of the healthcare system. Our focus on medication risk management is highly relevant to populations with complex care requirements, and we have developed solutions to address the needs of these patients and their providers and payors.

Highly Scalable Platform

We believe the scalability of our technology platform allows us to rapidly and cost-effectively pursue new opportunities and meet rising market demand. Our clients access our products and services

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through an efficient and scalable cloud-based technology platform that allows for on-demand capacity expansion, rapid deployment capabilities and accelerated speed of execution.

Recurring Revenue Model with Significant Operating Leverage

We believe we have an attractive business model due to the recurring and predictable nature of our revenue, embedded growth opportunities within our existing client base and significant operating leverage. Our client contracts are typically exclusive and multi-year and, while they do not include minimum member or prescription volume or mix requirements, based on our experience, patient populations at our clients do not generally decline over time, the number of medications per patient have been consistent following an initial onboarding period and the overall mix of medications dispensed is generally predictable. As such, our contracts provide significant visibility into our future cash flows. The revenue models under these contracts typically include charges and dispensing fees for medication fulfillment for our clients' patients, which are often high-acuity patients with long-term prescription needs, payments on a per-member per-month basis and payments on a subscription basis. Our annual revenue retention rate was 100% and 95% for 2013 and 2014, respectively, and our client retention rate was 100% and 97%, respectively. As we grow our revenue base, we expect our operating expenses to decrease as a percentage of revenue, providing for substantial operating leverage.

Experienced Management Team

Our Strategy

Further Penetrate and Grow with the Expansion of Our Current At-Risk Markets

By leveraging our industry expertise and thought leadership and expanding our sales and marketing efforts, we believe that we can increasingly penetrate the market for existing and new at-risk clients. We are the market leader in providing medication risk management to Program of All-Inclusive Care for the Elderly, or PACE, a CMS sponsored program through which participating healthcare organizations provide fully integrated healthcare delivery on an at-risk basis for elderly adults, most of whom are dually eligible for Medicare and Medicaid, where we believe we have a significant opportunity to continue to grow. The number of participants enrolled in PACE organizations, who have a typical length of stay exceeding four years, has doubled over the last five years, yet, according to a study we commissioned from AEC Consulting, LLC, an independent healthcare consulting firm, represents only 4% of the total eligible individuals within current PACE service areas. We expect our clients to continue to grow to cover more eligible lives. We are also the market leader in risk adjustment and front-end coding for PACE organizations and we plan to continue to expand these services to other Medicare Advantage programs.

Continue Expansion into Emerging At-Risk Provider and Payor Markets

We intend to leverage our expertise and experience from our existing clients to expand to other at-risk providers and payors through increased investment in our sales force and marketing efforts. We believe that the growth in government healthcare programs and the shift to value-based care models are creating opportunities for many organizations to capture growing portions of the expanding healthcare market. Accordingly, we are actively targeting at-risk, value-based markets, including managed care organizations, physician provider groups and Accountable Care Organizations, or ACOs, which are

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healthcare organizations characterized by a payment and care delivery model that ties provider reimbursement to quality metrics and the total cost of care for an assigned population. We also target post-acute healthcare organizations, which provide a range of medical services to support an individual's recovery or manage chronic illness after a period of in-patient care. As the market leader in pharmacy cost management solutions in the post-acute market, we believe we are also well positioned to further serve these organizations with medication risk management solutions as they migrate to an at-risk reimbursement structure.

Expand Offerings to a Large and Growing Behavioral Health Market

We believe our solutions have the potential to offer substantial value to the behavioral health market. Behavioral health medications are powerful, are subject to trial-and-error prescribing methods and are prone to side effects and ADEs. The behavioral health market is growing, in part as a result of the Patient Protection and Affordable Care Act, or ACA, which significantly expanded coverage for mental health and substance use disorder services. Accordingly, we are currently pursuing intervention studies or pilot programs to evaluate the benefits of our medication risk management solutions in the behavioral health population.

Continue to Innovate and Expand Platform Offerings to Meet Evolving Market Needs

Selectively Pursue Strategic Acquisitions, Joint Ventures and Partnerships

Since our founding in 2009, we have completed and integrated four acquisitions. We plan to continue to acquire assets and businesses and may enter into joint ventures and partnerships that strengthen or expand our service offerings, capabilities and geographic reach and facilitate our entry into new markets.

Develop International Market Opportunities

Risks Associated with Our Business

Our business is subject to a number of risks of which you should be aware before making an investment decision. These risks are discussed more fully in the section titled "Risk Factors." If any of these risks actually occurs, our business, results of operations, financial condition or prospects could be materially and adversely affected. Below is a summary of some of the principal risks we face:

•: the market for technology-enabled healthcare products and services is in its early stages, which makes it difficult to forecast demand for our technology-enabled products and services;
•: consolidation in the healthcare industry could lead to the elimination of some of our clients and make others larger, which could decrease demand for our solutions or create pricing pressure;
•: if we are unable to offer new and innovative products and services or our products and services fail to keep pace with our clients' needs, our clients may terminate or fail to renew their relationships with us;

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•: we have incurred significant net losses since inception and we may not be able to generate net income in the future;
•: we may not grow at the rates we historically have achieved or at all, even if our key metrics may indicate growth;
•: we derive a significant portion of our revenue from PACE organizations, and any changes in laws or regulations or any other factors that cause a decline in the use of PACE organizations to provide healthcare, could hurt our ability to generate revenue and grow our business;
•: a few clients account for a significant portion of our revenue and the loss of one or more of these clients could cause us to lose significant revenue;
•: our sales and implementation cycle can be long and unpredictable and can require considerable time and expense, which may cause our operating results to fluctuate;
•: we may face competition and aggressive business tactics in our markets by potential competitors and may lack sufficient financial or other resources to compete successfully;
•: data loss or corruption due to failures or errors in our systems may expose us to liability, hurt our reputation and relationships with existing clients and force us to incur significant costs;
•: upon the completion of this offering, our executive officers, directors and principal stockholders will, in the aggregate, beneficially own shares representing approximately % of our capital stock and, if these stockholders were to choose to act together, they would be able to control all matters submitted to our stockholders for approval, as well as our management and affairs;
•: complying with, and changes to, significant state and federal regulations could restrict our ability to conduct our business or cause us to incur significant costs; and
•: we may require additional capital to support business growth, and this capital might not be available to us on acceptable terms or at all.

Our Corporate Information

We were incorporated under the laws of the state of Delaware on May 21, 2014 under the name Tabula Rasa HealthCare, Inc. Our principal executive offices are located at 110 Marter Avenue, Suite 309, Moorestown, NJ 08057 and our telephone number is (866) 648-2767. Our website address is www.tabularasahealthcare.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.

Reorganization Transaction

Effective June 30, 2014, in order to facilitate the administration, management and development of our business and the proposed initial public offering, we implemented a holding company reorganization pursuant to which we became the new parent company and CareKinesis became our direct, wholly owned subsidiary. To implement the reorganization, we formed CK Merger Sub, Inc. The holding company structure was implemented by the merger of CK Merger Sub, Inc. with and into CareKinesis, with CareKinesis surviving the merger as our direct, wholly owned subsidiary. As a result of the reorganization, each share of CareKinesis issued and outstanding immediately prior to the merger automatically converted into the same share, with the same rights and preferences, in our company. The business conducted by CareKinesis immediately prior to the corporate reorganization continues to be conducted by CareKinesis following the reorganization. In addition, in connection with the reorganization, CareKinesis distributed all of the equity interests in two of its wholly owned subsidiaries, Capstone Performance Systems, LLC, or Capstone, and CareVentions, Inc., to us.

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Implications of Being an Emerging Growth Company

As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from specified disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:

•: being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure;
•: not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;
•: not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements;
•: reduced disclosure obligations regarding executive compensation; and
•: exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

We may take advantage of these provisions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.0 billion in annual revenue, have more than $700 million in market value of our capital stock held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some, but not all, of the available exemptions. We have taken advantage of some reduced reporting burdens in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

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THE OFFERING


Common stock offered		shares
Common stock to be outstanding immediately after this offering		shares
Option to purchase additional shares		We have granted the underwriters a 30-day option to purchase a maximum of additional shares of our common stock.
Use of proceeds		We estimate that the net proceeds from the sale of shares of our common stock in this offering will be approximately $ million (or approximately $ million if the underwriters exercise their option to purchase additional shares in full), based upon an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
		We currently expect that we will use the net proceeds from this offering to repay approximately $ of our outstanding indebtedness, to continue to develop new product offerings, to enter into new market segments with our existing solutions, to expand our sales and marketing infrastructure, to fund acquisitions of businesses and technologies and for working capital and general corporate purposes. See "Use of Proceeds" for a more complete description of the expected use of proceeds from this offering.
Risk factors		See "Risk Factors" for a discussion of factors to consider carefully before deciding to invest in our common stock.
Proposed NASDAQ Global Market symbol		"TRHC"

The number of shares of our common stock to be outstanding after this offering is based on shares of our common stock outstanding as of September 30, 2015, which includes:

•: 9,873,511 shares of common stock issuable upon the automatic conversion of all outstanding shares of preferred stock into 9,873,511 shares of our common stock immediately prior to the completion of this offering;
•: shares of our common stock issuable upon the net exercise of outstanding warrants that would otherwise expire upon the completion of this offering, assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus; and
•: shares of restricted common stock issuable under our 2014 Equity Compensation Plan to certain members of management immediately prior to the effective date of the registration statement of which this prospectus forms a part.

The number of shares of common stock to be outstanding after this offering excludes:

•: 312,500 shares of our common stock issuable upon the exercise of outstanding warrants as of September 30, 2015, at a weighted-average exercise price of $0.80 per share, which warrants are exercisable to purchase shares of our Series A-1 preferred stock prior to the completion of this offering;

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•: 586,868 shares of our common stock issuable upon the exercise of outstanding warrants as of September 30, 2015, at a weighted-average exercise price of $2.96 per share, which warrants are exercisable to purchase shares of our Series B preferred stock prior to the completion of this offering;
•: 5,412,858 shares of our common stock issuable upon the exercise of stock options outstanding as of September 30, 2015, under our 2014 Equity Compensation Plan, as amended, or the 2014 Equity Compensation Plan, at a weighted-average exercise price of $1.67 per share;
•: an additional shares of our common stock reserved for future issuance under our 2016 Equity Compensation Plan, or the 2016 Equity Compensation Plan, upon the completion of this offering;
•: shares of our common stock that may be issuable at the completion of this offering, at the election of the holder, upon the conversion of all principal outstanding under subordinated convertible promissory notes that we issued in December 2014, or the Medliance Notes, in connection with the acquisition of Medliance LLC, or Medliance, assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus; and
•: 21,000 shares of our common stock that will be issuable in the future as consideration in connection with our acquisition of St. Mary Prescription Pharmacy, or SMPP.

Unless otherwise indicated, all information in this prospectus assumes or gives effect to:

•: the redesignation of all of our Class A Non-Voting common stock and Class B Voting common stock into shares of our common stock;
•: no exercise of the other outstanding warrants or options described above;
•: no exercise by the underwriters of their option to purchase up to shares of our common stock;
•: no election by the holders of the Medliance Notes to convert such notes into shares of our common stock;
•: no issuance of any shares of our common stock issuable in the future as consideration in connection with our acquisition of SMPP;
•: a -for- reverse stock split of our common stock effected on , 2015; and
•: the amendment and restatement of our certificate of incorporation and bylaws immediately prior to the completion of this offering.

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Summary Consolidated Financial Data

The following tables summarize our consolidated financial data and other data for the periods and at the dates indicated. We have derived the consolidated statements of operations data for the years ended December 31, 2013 and 2014 from our audited consolidated financial statements appearing elsewhere in this prospectus. The consolidated statements of operations data for the nine months ended September 30, 2014 and September 30, 2015 and the consolidated balance sheet data as of September 30, 2015 are derived from our unaudited consolidated financial statements included elsewhere in this prospectus. Our unaudited consolidated financial statements were prepared on the same basis as our audited consolidated financial statements and include, in our opinion, all normal recurring adjustments necessary for the fair presentation of the financial information set forth in those statements.

Our historical results for any prior period are not necessarily indicative of the results that should be expected in any future period, and our interim results are not necessarily indicative of the results to be expected for a full year. The following summary of consolidated financial data should be read in conjunction with the sections entitled "Capitalization", "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus.

See notes 3 and 14 to our audited consolidated financial statements and note 11 to our unaudited consolidated financial statements appearing elsewhere in this prospectus for information regarding computation of basic and diluted net loss per share attributable to common stockholders, unaudited pro forma basic and diluted net loss per share attributable to common stockholders, and the unaudited pro forma weighted average basic and diluted common shares outstanding used in computing the pro forma basic and diluted net loss per share attributable to common stockholders.

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	Year Ended December 31,						Nine Months Ended September 30,

	2013			2014			2014			2015
	(In thousands, except share and per share amounts)
Consolidated Statement of Operations Data:
Revenue:
Product revenue	$	25,143		$	46,878		$	33,710		$	42,684
Service revenue		—			1,550			965			7,594

Total revenue		25,143			48,428			34,675			50,278

Cost of revenue, exclusive of depreciation and amortization shown below:
Product cost		20,921			37,073			26,940			32,811
Service cost		—			739			464			2,398

Total cost of revenue		20,921			37,812			27,404			35,209

Gross profit		4,222			10,616			7,271			15,069

Operating (income) expenses:
Research and development		1,338			1,660			1,148			1,879
Sales and marketing		1,775			2,272			1,573			2,071
General and administrative		2,482			3,970			2,672			5,374
Change in fair value of acquisition-related contingent consideration (income) expense		—			790			284			(1,348	)
Depreciation and amortization		1,118			1,817			1,309			2,935

Total operating (income) expenses		6,713			10,509			6,986			10,911

(Loss) income from operations		(2,491	)		107			285			4,158
Other (income) expense:
Change in fair value of warrant liability		547			269			(18	)		3,477
Interest expense		833			1,354			988			4,418

Total other (income) expense		1,380			1,623			970			7,895

Loss before income taxes		(3,871	)		(1,516	)		(685	)		(3,737	)
Income tax (benefit) expense		—			(409	)		(426	)		212

Net loss		(3,871	)		(1,107	)		(259	)		(3,949	)
Accretion of redeemable convertible preferred stock		(5,346	)		(3,884	)		(531	)		(12,058	)

Net loss attributable to common stockholders	$	(9,217	)	$	(4,991	)	$	(790	)	$	(16,007	)



Net loss per share attributable to common stockholders, basic and diluted	$	(1.22	)	$	(0.63	)	$	(0.10	)	$	(1.95	)



Weighted average common shares outstanding, basic and diluted		7,525,931			7,862,025			7,824,537			8,210,760



Pro forma net loss per share attributable to common stockholders, basic and diluted (unaudited)(1)				$						$



Pro forma weighted average common shares outstanding, basic and diluted (unaudited)(1)



Other Financial Data:
Adjusted EBITDA(2)	$	(1,284	)	$	2,968		$	2,068		$	6,216

(1): We intend to use a portion of the proceeds from this offering to repay outstanding debt. The pro forma net loss per share information is calculated based upon an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and gives effect to the automatic conversion of all outstanding shares of preferred stock into 9,873,511 shares of our common stock immediately prior to the completion of this offering, the add back of accretion of redeemable convertible preferred stock, the sale of shares of our common stock, which is the number of shares whose proceeds would be necessary to repay $ of outstanding debt, and the repayment of such debt, all as of the beginning of the reporting period, before deducting estimated underwriting discounts and expenses payable by us. The net loss attributable to common stockholders has been adjusted to exclude interest expense associated with the interest expense incurred on the portion of the debt expected to be repaid with net proceeds from this offering. See "Selected Consolidated Financial Statements" for more information regarding the calculation of pro forma net loss per share.

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(2): Adjusted EBITDA is a non-GAAP financial measure. See "Selected Consolidated Financial Data—Adjusted EBITDA" for our definition of Adjusted EBITDA, why we present Adjusted EBITDA, limitations on the usefulness of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net loss, the most nearly comparable GAAP measurement.

The following sets forth our summary balance sheet data as of September 30, 2015 on:

•: an actual basis;
•: a pro forma basis to give effect to (1) the automatic conversion of all outstanding shares of our preferred stock into an aggregate of 9,873,511 shares of our common stock immediately prior to the completion of this offering and the reclassification to additional paid-in capital of the warrant liability related to warrants to purchase preferred stock, (2) the issuance of shares of our common stock upon the net exercise of outstanding warrants that would otherwise expire upon the completion of this offering, assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and (3) the issuance of shares of restricted common stock under our 2014 Equity Compensation Plan to members of management immediately prior to the effective date of the registration statement of which this prospectus forms a part; and
•: a pro forma as adjusted basis to give further effect to (1) our issuance and sale of shares of our common stock in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, (2) our receipt of the net proceeds of this offering, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, and (3) our application of a portion of such net proceeds to repay indebtedness as set forth under "Use of Proceeds."

	As of September 30, 2015

	Actual			Pro Forma			Pro Forma as Adjusted
	(In thousands)
Consolidated Balance Sheet Data:
Cash	$	2,558		$	2,558
Working capital		(30,675	)		(30,675	)
Total assets		58,341			58,341
Line of credit		10,000			10,000
Long-term debt, including current portion		14,341			14,341
Notes payable to related parties		660			660
Notes payable related to acquisition		15,256			15,256
Warrant liability		6,260			—
Total liabilities		62,187			55,927
Total redeemable convertible preferred stock		31,065			—
Total stockholders' equity (deficit)		(34,911	)		2,414

Each $1.00 increase or decrease in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease the pro forma as adjusted working capital, total assets and total stockholders' equity by $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million shares offered by us would increase or decrease the pro forma as adjusted working capital, total assets and total stockholders' equity by $ million, assuming no change in the assumed initial public offering price per share and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. This pro forma as adjusted information is illustrative only and will depend on the actual initial public offering price and other terms of this offering determined at pricing.

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below together with all of the other information contained in this prospectus, including our consolidated financial statements and the related notes appearing at the end of this prospectus, before deciding to invest in our common stock. The risks below are not the only ones we face. Additional risks and uncertainties that we are unaware of may also become important factors that adversely affect our business. If any of the following risks actually occur, our business, prospects, operating results and financial condition could be harmed. In such event, the trading price of our common stock could decline and you might lose all or part of your investment.

Risks Relating to Our Business and Industry

The healthcare industry in the United States is undergoing significant structural change and is rapidly evolving, and the market for technology-enabled healthcare products and services is in its early stages, which makes it difficult to forecast demand for our technology-enabled products and services. If we are not successful in promoting the benefits of our products and services, our growth may be limited.

The healthcare industry in the United States is undergoing significant structural change and is rapidly evolving. We believe demand for our products and services has been driven in large part by price pressure in traditional fee-for-service healthcare, a regulatory environment that is incentivizing value-based care models, the movement toward patient-centricity and personalized healthcare and advances in technology. Widespread acceptance of the value-based care model is critical to our future growth and success. A reduction in the growth of value-based care or patient-centric models could reduce the demand for our products and services and result in a lower revenue growth rate or decreased revenue.

The market for technology-enabled healthcare products and services is in the early stages and it is uncertain whether it will achieve and sustain high levels of demand and market adoption. Our future financial performance will depend in part on growth in this market and on our ability to adapt to emerging demands of our clients. It is difficult to predict the future growth rate and size of our target market.

Our success will depend to a substantial extent on the willingness of healthcare organizations to increase their use of our technology and our ability to demonstrate the value of our technology to our existing clients and potential clients. If healthcare organizations do not recognize or acknowledge the benefits of our products and services or if we are unable to reduce healthcare costs or drive positive health outcomes, then the market for our products and services might not develop at all, or it might develop more slowly than we expect.

If we are unable to offer innovative products and services or our products and services fail to keep pace with our clients' needs, our clients may terminate or fail to renew their agreements with us and our revenue and results of operations may suffer.

Our success depends on providing innovative, high-quality products and services that healthcare providers and payors use to improve clinical, financial and operational performance. If we cannot adapt to rapidly evolving industry standards, technology and increasingly sophisticated and varied client needs, our existing technology could become undesirable, obsolete or harm our reputation. In order to remain competitive, we must continue to invest significant resources in our personnel and technology in a timely and cost-effective manner in order to enhance our existing products and services and introduce new high-quality products and services that existing clients and potential new clients will want. We are continually involved in a number of projects to develop new products and services, including the further refinement of our proprietary MRM Matrix. If our innovations are not responsive to the needs of our existing clients or potential new clients, are not appropriately timed with market opportunity, are not

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effectively brought to market or significantly increase our operating costs, we may lose existing clients or be unable to obtain new clients and our results of operations may suffer.

Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

We commenced active operations in 2011 and our operations to date have included organizing and staffing our company, business planning, raising capital and developing and marketing our product and services. As an early stage business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors.

We have incurred significant net losses since inception and we may not be able to generate net income in the future.

We have incurred significant losses in each period since our inception. For the years ended December 31, 2013 and 2014 and for the nine months ended September 30, 2015, we reported a net loss of $3.9 million, $1.1 million and $3.9 million, respectively. As of September 30, 2015, we had an accumulated deficit of $34.9 million. Substantially all of our operating losses resulted from costs incurred in connection with our research and development program, acquisitions and from general and administrative costs associated with our operations. Our ability to generate net income is dependent upon, among other things, the acceptance of our products and services by, and the strength of, our existing and potential clients.

Our recurring operating losses have raised substantial doubt regarding our ability to continue as a going concern.

We have incurred net losses since inception and do not currently have the wherewithal to repay a note payable related to an acquisition that is due on June 30, 2016, which raises substantial doubt about our ability to continue as a going concern. As a result, our independent registered public accounting firm included an explanatory paragraph in its report on our financial statements as of and for the year ended December 31, 2014 with respect to this uncertainty. We have limited sources of liquidity to sustain our present activities and satisfy our outstanding indebtedness. Accordingly, our ability to continue as a going concern will require us to obtain additional financing to fund our operations and indebtedness. The perception of our ability to continue as a going concern may make it more difficult for us to obtain financing for the continuation of our operations and could result in the loss of confidence by investors, suppliers and employees.

If we fail to effectively manage our growth, our business and results of operations could be harmed.

We have expanded our operations significantly since our inception. For example, we grew from 29 employees on January 1, 2011, the beginning of our first year of active operations, to 182 employees as of November 30, 2015, and our revenue increased from $34.7 million for the nine months ended September 30, 2014 to $50.3 million for the nine months ended September 30, 2015, and from $25.1 million for the year ended December 31, 2013 to $48.4 million for the year ended December 31, 2014. If we do not effectively manage our growth as we continue to expand, the quality of our products and services could suffer and our revenue could decline. Our growth to date has increased the significant demands on our management, our operational and financial systems, IT infrastructure, security mechanisms and other resources. In order to successfully expand our business, we must effectively recruit, integrate and motivate new employees, while maintaining the beneficial aspects of our corporate culture. We may not be able to hire new employees, including software engineers, quickly enough to meet our needs. If we fail to effectively manage our hiring needs and successfully integrate our new hires, our efficiency and ability to meet our forecasts and our employee morale, productivity and retention could suffer, and our business and results of operations could be harmed. We must also

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continue to improve our existing systems for operational and financial management, including our reporting systems, procedures and controls. These improvements could require significant capital expenditures and place increasing demands on our management. We may not be successful in managing or expanding our operations or in maintaining adequate financial and operating systems and controls. If we do not successfully manage these processes, our business and results of operations could be harmed.

We may not grow at the rates we historically have achieved or at all, even if our key metrics may indicate growth, which could cause the market price of our common stock to decline.

We have experienced significant growth since 2011, our first year of active operations, with total revenue growing from $5.8 million for the year ended December 31, 2011, to $48.4 million for the year ended December 31, 2014, and from $34.7 million for the nine months ended September 30, 2014, to $50.3 million for the nine months ended September 30, 2015. Future revenue may not grow at these same rates or may decline. Our future growth will depend, in part, on our ability to grow our revenue from existing clients, to complete sales to new clients and to expand our client base in the healthcare industry and with provider and payor organizations. We may not be successful in executing on our growth strategies and may not continue to grow our revenue at similar rates as we have in the past. Our ability to execute on our existing sales pipeline, create additional sales pipelines and expand our client base depends on, among other things, the attractiveness of our products and services relative to those offered by our competitors, our ability to demonstrate the value of our existing and future products and services and our ability to attract and retain a sufficient number of qualified sales and marketing personnel. In addition, clients in some market segments in which we have a more limited presence may be slower to adopt our products and services than we currently anticipate.

To date, we have derived substantially all of our product revenue from sales of prescription medications, and revenue from sales of prescription medications is dependent upon factors outside of our control.

To date, substantially all of our product revenue has been derived from sales of prescription medications, and we expect to continue to derive the substantial majority of our product revenue from sales of prescription medications for the foreseeable future. Revenue from prescription medication fulfillment is dependent upon a number of factors, many of which are outside of our control, such as growth or contraction in patient populations at our clients and the number and mix of medications each patient is prescribed. Any change in these factors could harm our financial results.

We derive a significant portion of our revenue from PACE organizations, and any changes in laws or regulations, or any other factors that cause a decline in the use of PACE organizations to provide healthcare could hurt our ability to generate revenue and grow our business.

We derive a significant portion of our revenue from PACE organizations, which are our largest clients, accounting for 94.0% and 86.9% of our revenue for the year ended December 31, 2014 and the nine months ended September 30, 2015, respectively. PACE organizations reflect a relatively new, value-based model for providing healthcare to the elderly and are funded by both Medicare and Medicaid. If the laws and regulations that currently promote PACE organizations were to change in a way that makes operating a PACE organization less attractive, if other Medicare or Medicaid reimbursement models are developed that are more attractive to the healthcare providers that operate PACE organizations or if the prevalence of PACE organizations were to decline for any other reason, our ability to generate revenue and grow our business may be compromised.

Consolidation in the healthcare industry could lead to the elimination of some of our clients and make others larger, which could decrease demand for our solutions or create pricing pressure.

Many healthcare industry participants are consolidating to create larger and more integrated healthcare delivery systems. If regulatory and economic conditions continue to facilitate additional

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consolidation in the healthcare industry, some of our current clients, and possibly our future clients, may be eliminated. Such market fluctuations may result in decreased need for some or all of our products and services as some of our clients disappear, and others acquire larger market power, which may be used to develop various solutions in-house, rather than purchasing them from us, or negotiate fee reductions for our products and services.

Failure by PACE organization clients to meet applicable penetration benchmarks could result in loss of their service area, which could lead to our loss of that business and a corresponding decline in our revenue.

PACE organizations in many states are subject to penetration benchmarks regarding the number of eligible lives in their service areas that have been captured by the program. If the number of members covered by any of our PACE organization clients were to be reduced by a material amount, such decrease may lead to a loss of their service area, which could result in our loss of the client and a corresponding decline in our revenue.

The growth of our business relies, in part, on the growth of our clients, which is difficult to predict and is affected by factors outside of our control.

We enter into agreements with our clients under which a portion of our fees are dependent upon the number of members that are covered by our clients' programs each month. The number of members covered by a client's program is often affected by factors outside of our control, such as the client's pricing, overall quality of service and member retention initiatives. If the number of members covered by one or more of our client's programs were to be reduced, such decrease would lead to a decrease in our revenue. In addition, the growth forecasts of our clients are subject to significant uncertainty and are based on assumptions and estimates that may prove to be inaccurate. Even if the markets in which our clients compete meet the size estimates and growth forecasted, their program membership could fail to grow at similar rates, if at all.

A few clients account for a significant portion of our revenue and, as a result, the loss of one or more of these clients could hurt our revenue.

Our largest ten clients accounted for 62% and 54% of our revenue for the year ended December 31, 2014 and the nine months ended September 30, 2015, respectively. No single client accounted for more than 10% of our revenue during the nine months ended September 30, 2015. For the year ended December 31, 2014, our two largest clients, Viecare Beaver and Viecare Butler, together under common control, and On Lok Senior Health Services, accounted for 11% and 10% of our revenue, respectively, and 21% of our revenue in the aggregate. For the year ended December 31, 2013, our largest client, Viecare Beaver and Viecare Butler, together under common control, accounted for 16% of our revenue. Our engagement with these clients is generally covered through contracts that are multi-year in their duration. One or more of these clients may decline to renew their existing contracts with us upon expiration and any such failure to renew could have a negative impact on our revenue and compromise our growth strategy. Further, if one or more of these clients significantly decreases its use of our solutions, we would lose revenue and our growth would be compromised.

Because we generally bill our clients and recognize revenue over the term of the contract, near-term declines in new or renewed agreements may not be reflected immediately in our operating results.

Most of our revenue in each quarter is derived from agreements entered into with our clients during previous quarters. Consequently, a decline in new or renewed agreements in any one quarter may not be fully reflected in our revenue for that quarter because, although we enter into multi-year arrangements with our clients and recognize revenue over the term of the contract, such revenue is not recognized ratably. Such declines, however, would negatively affect our revenue in future periods. The effect of any significant downturns in sales of, and market demand for, our products and services, as

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well as any potential changes in our rate of renewals or renewal terms, may not be fully reflected in our results of operations until future periods. In addition, we may be unable to adjust our cost structure rapidly or at all, to take account of reduced revenue.

If we do not continue to attract new clients, we may not be able to grow our business.

In order to grow our business, we must continually attract new clients. Our ability to do so depends in large part on the success of our sales and marketing efforts. Potential clients may seek out other options. Therefore, we must demonstrate that our products and services provide a viable solution for potential clients. If we fail to provide high-quality solutions and convince individual clients of our value proposition, we may not be able to attract new clients. If the market for our products and services declines or grows more slowly than we expect, or if the number of individual clients that use our solutions declines or fails to increase as we expect, our financial results could be harmed.

If we are not able to maintain and enhance our reputation and brand recognition, our business will be harmed.

Maintaining and enhancing our reputation and brand recognition is critical to our relationships with existing clients and to our ability to attract new clients. The promotion of our brand may require us to make substantial investments and we anticipate that, as our market becomes increasingly competitive, these marketing initiatives may become more difficult and expensive. Our marketing activities may not be successful or yield increased revenue, and to the extent that these activities yield increased revenue, the increased revenue may not offset the expenses we incur. In addition, any factor that diminishes our reputation or that of our management, including failing to meet the expectations of our clients, could make it substantially more difficult for us to attract new clients. If we do not successfully maintain and enhance our reputation and brand recognition, our business may not grow and we could lose our relationships with clients.

Initial positive outcomes and cost reductions for our clients have not been statistically analyzed, are not necessarily attributable to our services, and are not necessarily predictive of future outcomes or costs.

Although several of our clients have reported improved outcomes for their patients and cost reductions on a per member per month basis, these initial outcomes have not been statistically analyzed and are not necessarily predictive of future outcomes. Other factors, including changes in healthcare regulations or other business practices or our clients' implementation of other cost saving measures may have contributed to positive outcomes or reduced costs. Moreover, outcome and cost reduction data are often susceptible to varying interpretations and analyses, and many companies that believed their technologies and services were effective initially were unable to maintain positive results over time. If we fail to produce positive outcomes and reduce costs for our clients, they may not continue to use our services and we may be unable to attract new clients, each of which could harm our business.

Our marketing efforts depend significantly on our ability to receive positive references from our existing clients.

Our marketing efforts depend significantly on our ability to call on our current clients to provide positive references to new, potential clients. Given our limited number of long-term clients, the loss or dissatisfaction of any client could substantially harm our brand and reputation, inhibit the market adoption of our products and services, impair our ability to attract new clients and maintain existing clients and, ultimately, harm our financial results.

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Our sales and implementation cycle can be long and unpredictable and can require considerable time and expense, which may cause our operating results to fluctuate.

The sales cycle for our products and services from initial sales activity with a potential client to contract execution and implementation can be long and varies widely by client, typically ranging from three to 12 months. Some of our clients undertake pilot programs for our products and services which range from six to 18 months in length. These pilot programs may result in extended sales cycles and upfront sales costs as the potential client evaluates our products and services. Our sales efforts involve educating our clients about the use, technical capabilities and benefits of our products and services. It is possible that in the future we may experience even longer sales cycles, more complex client requirements, higher upfront sales costs and less predictability in completing some of our sales as we continue to expand into new territories and add additional products and services. If our sales cycle lengthens or our substantial upfront sales and implementation investments do not result in sufficient sales to justify our investments, our operating results may be harmed.

Any failure to offer high-quality client support services may adversely affect our relationships with our clients and harm our financial results.

Our clients depend on our technical support to resolve any issues relating to our offering and technology solutions and to provide initial and ongoing training and education, when necessary. In addition, our sales process is highly dependent on the quality of our offering, our business reputation and on strong recommendations from our existing clients. Any failure to maintain high-quality and highly-responsive technical support, or a market perception that we do not maintain high-quality and highly-responsive support, could harm our reputation and compromise our ability to sell our solutions to existing and prospective clients.

We offer client support services with our offering and may be unable to respond quickly enough to accommodate short-term increases in client demand for support services, particularly as we increase the size of our client base. We also may be unable to modify the format of our support services to compete with changes in support services provided by competitors. It is difficult to predict client demand for our support services and if client demand increases significantly, we may be unable to provide satisfactory support services to our clients. Additionally, increased client demand for these services, without corresponding revenue, could increase costs and hurt our ability to achieve profitability.

Our proprietary products and services may not operate properly, which could damage our reputation, give rise to a variety of claims against us or divert our resources from other purposes, any of which could harm our business and operating results.

Technology-enabled product and service development is time-consuming, expensive and complex and may involve unforeseen difficulties. We may encounter technical obstacles, and we may discover additional problems that prevent our proprietary products and services from operating properly. If our products and services do not function reliably or fail to achieve client expectations in terms of performance, clients could assert liability claims against us and attempt to cancel their contracts with us. Moreover, material performance problems, defects or errors in our existing or new products and services may arise in the future and may result from, among other things, the lack of interoperability of our software with systems and data that we did not develop and the function of which are outside of our control or undetected in our testing. Defects or errors in our products or services might discourage existing or potential clients from purchasing services from us. Correction of defects or errors could prove to be time consuming, costly, impossible or impracticable. The existence of errors or defects in our products and services and the correction of such errors could divert our resources from other matters relating to our business, damage our reputation and increase our costs.

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Adverse drug events resulting from optimizing a patient's medication regimen through recommendations made by our technology or our pharmacists could give rise to claims against us and could damage our reputation.

We provide medication risk management services which includes answering prescriber questions and making recommendations to prescribers at the point-of-prescribing, during pharmacist consultation and at periodic patient review. In the event that optimizing a patient's medication regimen through recommendations made by our technology or our pharmacists contribute to an ADE, clients and patients could assert liability claims against us, which may not be subject to a contractually agreed upon liability cap, and clients could attempt to cancel their contracts with us. Such instances may also generate significant negative publicity that could harm our reputation, increase our costs and materially affect our results of operations.

Future sales to clients outside the United States or clients with international operations might expose us to risks inherent in international markets, which could hurt our business.

An element of our growth strategy is to expand internationally. Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic and political risks that are different from those in the United States. We currently do not have any international operations. Because of our lack of experience with international operations, any international expansion efforts might not be successful in creating demand for our products and services outside of the United States or in effectively selling our products and services in the international markets we enter. In addition, we will face risks in doing business internationally that could hurt our business, including:

•: the need to localize and adapt our products and services for specific countries, including translation into foreign languages and associated expenses;
•: difficulties in staffing and managing foreign operations;
•: different pricing environments, longer sales cycles and longer accounts receivable payment cycles and collections issues;
•: new and different sources of competition;
•: weaker protection for intellectual property and other legal rights than in the United States and practical difficulties in enforcing intellectual property and other rights outside of the United States;
•: laws and business practices favoring local competitors;
•: compliance challenges related to the complexity of multiple, conflicting and changing governmental laws and regulations, including employment, anti-bribery, foreign investment, tax, privacy and data protection laws and regulations;
•: increased financial accounting and reporting burdens and complexities;
•: adverse tax consequences; and
•: if we denominate our international contracts in local currencies, fluctuations in the value of the U.S. dollar and foreign currencies might negatively affect our operating results when translated into U.S. dollars.

We purchase a significant portion of our pharmaceutical products through a buying group which receives discounts from our primary supplier.

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purchasing organization, there can be no assurance that our operations would not be disrupted or that we could obtain the necessary pharmaceutical products at similar cost or at all. In this event, failure to satisfy our clients' requirements would result in defaults under client contracts subjecting us to damages and the potential termination of those contracts.

Any restrictions on our ability to license or share data and integrate third-party technologies could harm our business.

We depend upon licenses from third parties for some of the technology and data used in our products and services, and for some of the technology platforms upon which these products and services are built and operate. Most of our third-party licenses are non-exclusive and our competitors may obtain the right to use any of the technology covered by these licenses to compete directly with us. We also license some of our technology and share data we collect with our clients, including under agreements with health systems and providers of electronic health records. We expect that we will need to obtain additional licenses from third parties in the future in connection with the development of our products and services. In addition, we obtain a portion of the data that we use from public records and from our clients for specific client engagements. Our licenses for information may not be sufficient to allow us to use the data that is incorporated into our products and services for all potential or contemplated applications and products.

In the future, data providers could withdraw their data from us or restrict our usage for any reason, including if there is a competitive reason to do so, if legislation is passed restricting the use of the data or if judicial interpretations are issued restricting use of the data that we currently use in our products and services. In addition, data providers could fail to adhere to our quality control standards in the future, causing us to incur additional expense to appropriately utilize the data. If a substantial number of data providers were to withdraw or restrict their data, or if they fail to adhere to our quality control standards, and if we are unable to identify and contract with suitable alternative data suppliers and integrate these data sources into our service offerings, our ability to provide products and services to our clients would be compromised and our future growth and success could be delayed or limited.

We also integrate into our proprietary applications and use third-party software to maintain and enhance, among other things, content generation and delivery, and to support our technology infrastructure. Some of this software is proprietary and some is open source software. Our use of third-party technologies exposes us to increased risks, including, but not limited to, risks associated with the integration of new technology into our solutions, the diversion of our resources from development of our own proprietary technology and our inability to generate revenue from licensed technology sufficient to offset associated acquisition and maintenance costs. These technologies may not be available to us in the future on commercially reasonable terms or at all and could be difficult to replace once integrated into our own proprietary applications. Most of these licenses can be renewed only by mutual consent and may be terminated if we breach the terms of the license and fail to cure the breach within a specified period of time. Our inability to obtain, maintain or comply with any of these licenses could delay development until equivalent technology can be identified, licensed and integrated, which could delay or limit our future growth.

Data loss or corruption due to failures or errors in our systems may expose us to liability, hurt our reputation and relationships with existing clients and force us to incur significant costs.

Hardware failures or errors in our systems could result in data loss or corruption or cause the information that we collect to be incomplete or contain inaccuracies that our clients regard as significant. Complex software such as ours may contain errors or failures that are not detected until after the software is introduced or updates and new versions are released. We continually introduce new software and updates and enhancements to our existing software. Despite testing by us, we may discover defects or errors in our software. Any defects or errors could expose us to risk of liability to clients and the government, and could cause delays in the introduction of new products and services, result in

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increased costs and diversion of development resources, require design modifications, decrease market acceptance or client satisfaction with our products and services or cause harm to our reputation. Data losses related to personal health records could result in additional risks, see "— We are subject to data privacy and security laws and regulations and contractual obligations governing the transmission, security and privacy of health and other sensitive or proprietary information, which may impose restrictions on the manner in which we access, store, transmit, use and disclose such information and subject us to penalties if we are unable to fully comply with such laws or contractual provisions."

Furthermore, our clients might use our software together with products from other companies. As a result, when problems occur, it might be difficult to identify the source of the problem. Even when our software does not cause these problems, the existence of these errors might cause us to incur significant costs, divert the attention of our technical personnel from our product development efforts, hurt our reputation and lead to significant client relations problems.

Our business is subject to online security risks, and if we are unable to safeguard the security and privacy of confidential data, our reputation and business will be harmed.

Our products and services involve the collection, storage and analysis of confidential or proprietary information. If a cyber incident, such as a phishing attack, virus, malware installation, server malfunction, software or hardware failure, impairment of data integrity, loss of data or other computer assets, adware or other similar issue, impairs or shuts down one or more of our computing systems or our IT network, we may be subject to negative treatment and lawsuits by our clients. In addition, attention to remediating cyber incidents may distract our technical or management personnel from their normal responsibilities. Public announcements of such cyber incidents could occur and negative perception of such cyber incidents could adversely affect the price of our common stock, and we could lose sales and clients.

In certain cases, confidential or proprietary information is provided to third parties, such as the service providers that host our technology platform, and we may be unable to control the use of our information or the security protections used by third parties. Cyber incidents and malicious internet-based activity continue to increase generally, and providers of hosting and cloud-based services are often targeted. If the third parties with whom we work violate applicable laws, contracts or our security policies, these violations could also put our confidential or proprietary information at risk and otherwise hurt our business. In addition, if the security measures of our clients are compromised, even without any actual compromise of our own systems, we may face negative publicity or reputational harm if our clients or anyone else incorrectly attributes the blame for such security breaches to us or our systems.

We may be required to expend significant capital and other resources to protect against security incidents caused by known cyber vulnerabilities or to alleviate problems caused by security breaches. Despite our implementation of security measures, techniques used to obtain unauthorized access to information or to sabotage information technology systems change frequently and unknown cyber vulnerabilities caused by third-party software or services may exist within our system. As a result, we may be unable to anticipate such techniques or vulnerabilities or to implement adequate preventative measures. Any compromise or perceived compromise of our security could damage our reputation and our relationship with our clients, could reduce demand for our products and services and could subject us to significant liability or regulatory actions. In addition, in the event that new privacy or data security laws are implemented, we may not be able to timely comply with such requirements, or such requirements may not be compatible with our current processes. Changing our processes could be time consuming and expensive, and failure to timely implement required changes could subject us to liability for non-compliance.

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We rely on internet infrastructure, bandwidth providers, other third parties and our own systems to provide services to our clients, and any failure or interruption in the services provided by these third parties or our own systems could expose us to litigation and hurt our reputation and relationships with clients.

Our ability to deliver our products and services, particularly our cloud-based solutions, is dependent on the development and maintenance of the infrastructure of the internet and other telecommunications services by third parties. This includes maintenance of a reliable network connection with the necessary speed, data capacity and security for providing reliable internet access and services and reliable telephone and facsimile services. Our services are designed to operate without perceptible interruption in accordance with our service level commitments.

We have, however, experienced limited interruptions in these systems in the past, including server failures that temporarily slow down the performance of our services, and we may experience similar or more significant interruptions in the future. We rely on internal systems as well as third-party suppliers, including bandwidth and telecommunications equipment providers, to provide our services. We do not currently maintain redundant systems or facilities for some of these services. Interruptions in these systems or services, whether due to system failures, cyber incidents, physical or electronic break-ins or other events, could affect the security or availability of our services and prevent or inhibit the ability of our clients and their patients to access our services. In the event of a catastrophic event with respect to one or more of these systems or facilities, we may experience an extended period of system unavailability, which could result in substantial costs to remedy those problems or harm our relationship with our clients and our business.

Additionally, any disruption in the network access, telecommunications or co-location services provided by third-party providers or any failure of or by third-party providers' systems or our own systems to handle current or higher volume of use could significantly harm our business. We exercise limited control over our third-party suppliers, which increases our vulnerability to problems with services they provide. Any errors, failures, interruptions or delays experienced in connection with these third-party technologies and information services or our own systems could hurt our relationships with clients and expose us to third-party liabilities. Although we maintain insurance for our business, the coverage under our policies may not be adequate to compensate us for all losses that may occur. In addition, we might not continue to be able to obtain adequate insurance coverage at an acceptable cost.

The reliability and performance of our internet connection may be harmed by increased usage or by denial-of-service attacks or related cyber incidents. The services of other companies delivered through the internet have experienced a variety of outages and other delays as a result of damages to portions of the internet's infrastructure, and such outages and delays could affect our systems and services in the future. These outages and delays could reduce the level of internet usage as well as the availability of the internet to us for delivery of our internet-based services.

We rely on third-party vendors to host and maintain our technology platform.

We rely on third-party vendors to host and maintain our technology platform, including our EireneRx and MedWise Advisor software. Our ability to offer our products and services and operate our business is dependent on maintaining our relationships with third-party vendors, particularly Amazon Web Services, and entering into new relationships to meet the changing needs of our business. Any deterioration in our relationships with such vendors or our failure to enter into agreements with vendors in the future could harm our business and our ability to pursue our growth strategy. Because of the large amount of data that we collect and manage, it is possible that, despite precautions taken at our vendors' facilities, the occurrence of a natural disaster, cyber incident, decision to close the facilities without adequate notice or other unanticipated problems could result in lengthy interruptions in our service. These service interruptions could cause our platform to be unavailable to our clients and impair our ability to deliver products and services and to manage our relationships with new and existing clients.

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If our vendors are unable or unwilling to provide the services necessary to support our business, or if our agreements with such vendors are terminated, our operations could be significantly disrupted. Some of our vendor agreements may be unilaterally terminated by the licensor for convenience, and if such agreements are terminated, we may not be able to enter into similar relationships in the future on reasonable terms or at all. We may also incur substantial costs, delays and disruptions to our business in transitioning such services to ourselves or other third-party vendors. In addition, third-party vendors may not be able to provide the services required in order to meet the changing needs of our business.

We depend on our senior management team, and the loss of one or more of our executive officers or key employees or an inability to attract and retain highly skilled employees could compromise our ability to pursue our growth strategy and grow our business.

Our success depends largely upon the continued services of our executive officers and other key employees. We do not maintain "key person" insurance for our executive officers, other than for our Chief Executive Officer, Dr. Calvin H. Knowlton, or any of our other key employees. From time to time, there may be changes in our senior management team resulting from the hiring or departure of executives, which could disrupt our business. The replacement of one or more of our executive officers or other key employees would likely involve significant time and costs and may significantly delay or prevent the achievement of our business objectives.

In addition, competition for qualified management in our industry is intense. Many of the companies with which we compete for management personnel have greater financial and other resources than we do. As a result, we may experience difficulty hiring and retaining qualified personnel. The departure of key personnel could also hurt our business. In such event, we would be required to hire other personnel to manage and operate our business, and we might not be able to employ a suitable replacement for the departing individual, or a replacement might not be willing to work for us on terms that are favorable to us.

In addition, in making employment decisions, particularly in the technology industry, job candidates often consider the value of the stock options or other equity instruments they are to receive in connection with their employment. Volatility in the price of our common stock might, therefore, compromise our ability to attract or retain highly skilled personnel. Furthermore, the requirement to expense stock options and other equity instruments might discourage us from granting the size or type of stock option or equity awards that job candidates require to join our company. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could be severely harmed.

We may make future acquisitions and investments that may be difficult to integrate, divert management resources, result in unanticipated costs or dilute our stockholders.

Part of our business strategy is to acquire or invest in companies, products or technologies that complement our current products and services, enhance our market coverage or technical capabilities or offer growth opportunities. Future acquisitions and investments could pose numerous risks to our operations, including:

•: difficulty integrating the purchased operations, products or technologies;
•: substantial unanticipated integration costs;
•: assimilation of the acquired businesses, which may divert significant management attention and financial resources from our other operations and could disrupt our ongoing business;
•: the loss of key employees, particularly those of the acquired businesses;
•: difficulty retaining or developing the acquired business' clients;
•: adverse effects on our existing business relationships;

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•: failure to realize the potential cost savings or other financial or strategic benefits of the acquisitions, including failure to consummate any proposed or contemplated transaction; and
•: liabilities from the acquired businesses for infringement of intellectual property rights, loss of intellectual property or goodwill through inadequate data security measures, unknown cyber vulnerabilities or network intrusions, or other claims and failure to obtain indemnification for such liabilities or claims.

In connection with these acquisitions or investments, we could incur debt, amortization expenses related to intangible assets or large and immediate write-offs, assume liabilities or issue stock that would dilute our current stockholders' ownership. We may be unable to complete acquisitions or integrate the operations, products or personnel gained through any such acquisition successfully or without adversely affecting our business, financial condition and results of operations.

Substantially all of our assets are pledged as collateral under our existing line of credit.

As of September 30, 2015, our total indebtedness, net of debt discounts of $2.4 million, was $40.3 million, and after giving effect to this offering and the application of a portion of the net proceeds to repay indebtedness, our total indebtedness as of September 30, 2015 would have been $0 on a pro forma as adjusted basis. Although we expect to repay all outstanding amounts due under our April 29, 2015 revolving line of credit, or the 2015 Line of Credit, with Bridge Bank, National Association with the proceeds received from this offering, the 2015 Line of Credit will remain in place following the completion of this offering even though there will be no borrowings outstanding. The 2015 Line of Credit provides for borrowings, on a revolving basis, in an aggregate amount up to $15.0 million to be used for general corporate purposes. The 2015 Line of Credit is secured by all of our personal property, whether presently existing or created or acquired in the future, as well as our intellectual property. If we are unable to repay any secured borrowings that remain outstanding or that we make following this offering when due, whether at maturity or if declared due and payable following a default, the lenders would have the right to proceed against the collateral pledged to the indebtedness and may sell the assets pledged as collateral in order to repay those borrowings.

We may require additional capital to support business growth, and this capital might not be available to us on acceptable terms or at all.

Our operations have required a significant investment of cash since inception and we intend to continue to make significant investments to support our business growth, respond to business challenges or opportunities, develop new applications and services, enhance our existing platform and services, hire additional sales and marketing personnel, enhance our operating infrastructure and potentially acquire complementary businesses and technologies. As of September 30, 2015, we had $2.6 million of cash, which was held for working capital purposes.

Our future capital requirements may be significantly different from our current estimates and will depend on many factors, including our growth rate, renewal activity, the timing and extent of spending to support product development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced products and services and the continuing market acceptance of our products and services. Accordingly, we might need to engage in equity or debt financings or collaborative arrangements to secure additional funds. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which might make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We might have to obtain funds through arrangements with collaborators or others that may require us to relinquish rights to our technologies or offering that we otherwise would not

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consider. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be limited.

Our pro forma financial information may not be representative of our future performance.

In preparing the unaudited pro forma consolidated financial information included in this prospectus, we have made adjustments to our historical financial information based upon currently available information and upon assumptions that our management believes are reasonable in order to reflect, on a pro forma basis, the impact of acquisitions and as further adjusted for this offering and the contemplated use of the estimated net proceeds from this offering. The unaudited pro forma consolidated financial information also reflects the application of purchase accounting. The estimates and assumptions used in the calculation of the unaudited pro forma consolidated financial information in this prospectus may be materially different from our actual experience. Accordingly, the unaudited pro forma consolidated financial information included in this prospectus does not purport to indicate the results that would have actually been achieved had the acquisitions been completed on the assumed date or for the periods presented, or which may be realized in the future, nor does it give effect to any events other than those described in our unaudited pro forma consolidated financial statements and notes thereto.

We may become subject to litigation, which could be costly and result in significant liability.

We may become subject to litigation in the future. Any future claims may result in significant defense costs and potentially significant judgments against us, some of which we are not insured against. We generally intend to defend ourselves vigorously; however, we cannot be certain of the ultimate outcomes of any claims that may arise in the future. Resolution of these types of matters against us may result in our having to pay significant fines, judgments or settlements, which, if uninsured, or if the fines, judgments and settlements exceed insured levels, could diminish our financial resources. Litigation or the resolution of litigation may also affect the availability or cost of some of our insurance coverage, which could increase our costs, expose us to increased risks that would be uninsured and compromise our ability to attract directors and officers.

Risks Related to Our Intellectual Property

If we are unable to obtain, maintain and enforce intellectual property protection for our technology and products or if the scope of our intellectual property protection is not sufficiently broad, others may be able to develop and commercialize technology and products substantially similar to ours, and our ability to successfully commercialize our technology and products may be compromised.

Our business depends on proprietary technology and content, including software, databases, confidential information and know-how, the protection of which is crucial to the success of our business. We rely on a combination of patent, trademark, trade-secret and copyright laws, confidentiality procedures, cyber security practices and contractual provisions to protect the intellectual property rights of our proprietary technology and content. We are pursuing the registration of additional trademarks and service marks in the United States, as well as patent protection related to certain business methods employed by us. We may, over time, increase our investment in protecting our intellectual property through additional trademark, patent and other intellectual property filings, which could be expensive and time-consuming. We may not be able to obtain protection for our technology and even if we are successful in attaining effective patent, trademark, trade-secret and copyright protection, it is expensive to maintain these rights and the costs of defending our rights could be substantial. Furthermore, recent changes to U.S. intellectual property laws may jeopardize the enforceability and validity of our intellectual property portfolio and harm our ability to obtain patent protection of some of our unique business methods.

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In addition, these measures may not be sufficient to offer us meaningful protection or provide us with any competitive advantages. If we are unable to adequately protect our intellectual property and other proprietary rights, our competitive position and our business could be harmed, as third parties may be able to commercialize and use technologies and software products that are substantially the same as ours without incurring the development and licensing costs that we have incurred. Any of our owned or licensed intellectual property rights could be challenged, invalidated, circumvented, infringed or misappropriated, our trade secrets and other confidential information could be disclosed in an unauthorized manner to third parties, or our intellectual property rights may not be sufficient to permit us to take advantage of current market trends or to otherwise to provide us with competitive advantages, which could result in costly redesign efforts, discontinuance of some of our offerings or other competitive harm.

Monitoring unauthorized use of our intellectual property is difficult and costly. From time to time, we seek to analyze our competitors' products and services, and may in the future seek to enforce our rights against potential infringement. However, the steps we have taken to protect our proprietary rights may not be adequate to enforce our rights as against infringement or misappropriation of our intellectual property. We may not be able to detect unauthorized use of, or take appropriate steps to enforce, our intellectual property rights. Any inability to meaningfully protect our intellectual property rights could harm our ability to compete and reduce demand for our products and services. Moreover, our failure to develop and properly manage new intellectual property could hurt our market position and business opportunities. Also, some of our products and services rely on technologies, data and software developed by or licensed from third parties, and we may not be able to maintain our relationships with such third parties or enter into similar relationships in the future on reasonable terms or at all. Any loss of the right to use any third-party technologies, data or software could result in delays in implementing or provisioning our products and services until equivalent technology is either developed by us or, if available, is identified, obtained and integrated, which could harm our business.

We may also be required to protect our proprietary technology and content in an increasing number of jurisdictions, a process that is expensive and may not be successful, or which we may not pursue in every location. In addition, effective intellectual property protection may not be available to us in every country, and the laws of some foreign countries may not be as protective of intellectual property rights as those in the United States. Additional uncertainty may result from changes to intellectual property legislation enacted in the United States and elsewhere, and from interpretations of intellectual property laws by applicable courts and agencies. Accordingly, we may be unable to obtain, maintain and enforce the intellectual property rights necessary to provide us with a competitive advantage. Our failure to obtain, maintain and enforce our intellectual property rights could therefore adversely affect our business, financial condition and results of operations.

If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest and our competitive position may be harmed.

The registered or unregistered trademarks or trade names that we own may be challenged, infringed, circumvented, declared generic, lapsed or determined to be infringing on or dilutive of other marks. We may not be able to protect our rights in these trademarks and trade names, which we need in order to build name recognition with potential clients. In addition, third parties may in the future file for registration of trademarks similar or identical to our trademarks. If they succeed in registering or developing common law rights in such trademarks, and if we are not successful in challenging such third-party rights, we may not be able to use these trademarks to develop brand recognition of our technologies, products or services. If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively.

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If we cannot protect our domain names, our ability to successfully promote our brand will be impaired.

We currently own the web domain names www.tabularasahealthcare.com, www.carekinesis.com, www.careventions.com, www.medliance.com, www.capstoneperformancesystems.com, www.eirenerx.com, www.medwiseadvisor.com and www.niarx.com, which are critical to the operation of our business. The acquisition and maintenance of domain names is generally regulated by governmental agencies and their designees. The regulation of domain names in the United States and in foreign countries is subject to change. Governing bodies may establish additional top-level domains, appoint additional domain name registrars or modify the requirements for holding domain names. As a result, we may be unable to acquire or maintain relevant domain names in all countries in which we conduct business. Furthermore, it is unclear whether laws protecting trademarks and similar proprietary rights will be extended to protect domain names. Therefore, we may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights. We may not be able to successfully implement our business strategy of establishing a strong brand if we cannot prevent others from using similar domain names or trademarks. This failure could impair our ability to increase our market share and revenue.

We could incur substantial costs as a result of any claim of infringement of another party's intellectual property rights.

Our commercial success depends in part on our ability to develop and commercialize our products and services without infringing or being claimed to have infringed the intellectual property or proprietary rights of third parties. Intellectual property disputes can be costly to defend and may cause our business, operating results and financial condition to suffer. As the market for technology-enabled healthcare solutions in the United States expands and intellectual property protections asserted by others increase, the risk increases that there may be intellectual property asserted by others and patents issued to third parties that relate to our products and technology of which we are not aware or that we must challenge to continue our operations as currently contemplated. Whether merited or not, we may face allegations that we, our clients, our licensees or parties indemnified by us have infringed or otherwise violated the patents, trademarks, copyrights or other intellectual property rights of third parties. In addition, we have received letters from third parties in the past claiming that our software, technologies and methodologies are covered by their patents, and future claims may require us to expend time and money to address and resolve these claims. Such claims may be made by competitors seeking to obtain a competitive advantage or by other parties. Additionally, in recent years, individuals and groups have begun purchasing intellectual property assets for the purpose of making claims of infringement and attempting to extract settlements from other technology-reliant companies. We may also face allegations that our employees or consultants have misappropriated the intellectual property or proprietary rights of their former employers or other third parties, as the case may be. It may be necessary for us to initiate litigation to defend ourselves in order to determine the scope, enforceability and validity of third-party intellectual property or proprietary rights, or to establish our respective rights. Regardless of whether claims that we are infringing patents or other intellectual property rights have merit, such claims can be time-consuming, divert management's attention and financial resources and can be costly to evaluate and defend. Results of any such litigation are difficult to predict and may require us to stop commercializing or using our products or technology, obtain licenses, modify our products and technology while we develop non-infringing substitutes, incur substantial damages or settlement costs, or face a temporary or permanent injunction prohibiting us from marketing or providing the affected products and services. If we require a third-party license, it may not be available on reasonable terms or at all, and we may have to pay substantial royalties, upfront fees or grant cross-licenses to intellectual property rights for our products and services. We may also have to redesign our products or services so they do not infringe third-party intellectual property rights, which may not be possible or may require substantial monetary expenditures and time, during which our technology and products may not be available for commercialization or use. Even if we have an agreement to indemnify

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us against such costs, the indemnifying party may be unable to uphold its contractual obligations. If we cannot or do not obtain a third-party license to the infringed technology at all, license the technology on reasonable terms or obtain similar technology from another source, our ability to operate our business could be compromised.

Our use of open source software could compromise our ability to offer our services and subject us to possible litigation.

We use open source software in connection with our products and services. Companies that incorporate open source software into their products have, from time to time, faced claims challenging the use of open source software and compliance with open source license terms. As a result, we could be subject to suits by parties claiming ownership of what we believe to be open source software or claiming noncompliance with open source licensing terms. Some open source software licenses require users who distribute software containing open source software to publicly disclose all or part of the source code to the licensee's software that incorporates, links or uses such open source software, and make available to third parties for no cost, any derivative works of the open source code created by the licensee, which could include the licensee's own valuable proprietary code. While we monitor our use of open source software and try to ensure that none is used in a manner that would require us to disclose our proprietary source code or that would otherwise breach the terms of an open source agreement, such use could inadvertently occur, or could be claimed to have occurred, in part because open source license terms are often ambiguous. Any actual or claimed requirement to disclose our proprietary source code or pay damages for breach of contract could harm our business and could help our competitors develop products and services that are similar to or better than ours.

We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful.

Competitors may infringe our issued patents or other intellectual property. To counter infringement or unauthorized use, we may be required to monitor for such infringement and file infringement claims, both of which can be expensive and time consuming. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents. In addition, in a patent infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, in whole or in part, or may construe the patent's claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in a proceeding could put one or more of our patents at risk of being invalidated.

We may be subject to claims by third parties asserting that our employees, our consultants or we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.

Many of our employees were previously employed at universities or other technology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees and our consultants do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that our employees, our consultants, or we have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such employee's former employer. Costly litigation may be necessary to defend against these claims.

In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own. Our and their assignment agreements may not be self-executing or may be breached, and we may be forced to bring claims against third parties, or defend

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claims they may bring against us, to determine the ownership of what we regard as our intellectual property.

If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to management.

Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities.

Even if resolved in our favor, litigation or other legal proceedings against us relating to intellectual property claims may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace.

If we are unable to protect the confidentiality of our trade secrets, know-how and other proprietary information, the value of our technology, products and services could be hurt.

We may not be able to protect our trade secrets, know-how and other proprietary information adequately. Although we use reasonable efforts to protect this proprietary information and technology, our employees, consultants and other parties may unintentionally or willfully disclose our information or technology to competitors. In addition, our trade secrets, know-how and other proprietary information may be accessed or disclosed during a cyber incident, which could have a significant negative impact on us. Further, such cyber incidents, if disclosed publicly, could adversely affect the price of our common stock.

Enforcing a claim that a third party illegally obtained and is using any of our proprietary information or technology is expensive and time-consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets, know-how and other proprietary information. We rely, in part, on non-disclosure, confidentiality and invention assignment agreements with our employees, consultants and other parties to protect our trade secrets, know-how and other intellectual property and proprietary information. These agreements may not be self-executing, or they may be breached and we may not have adequate remedies for such breach. Moreover, third parties may independently develop similar or equivalent proprietary information or otherwise gain access to our trade secrets, know-how and other proprietary information.

Risks Related to Industry Regulation and Other Legal Compliance Matters

The healthcare regulatory and political framework is uncertain and evolving.

Healthcare laws and regulations are rapidly evolving and may change significantly in the future. For example, in March 2010, the ACA was adopted, which is a healthcare reform measure that seeks to contain healthcare costs while improving quality and access to coverage. The ACA includes a variety of healthcare reform provisions and requirements that have already become effective or will become effective at varying times through 2018 and substantially changes the way healthcare is financed by both governmental and private insurers, which may significantly affect our industry and our business. Many

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of the provisions of the ACA will phase in over the course of the next several years, and we may be unable to predict accurately what effect the ACA or other healthcare reform measures that may be adopted in the future, including amendments to the ACA, will have on our business. In addition, provisions of the ACA may be challenged in the courts. For example, in 2015 the U.S. Supreme Court determined that the IRS can extend tax credits to individuals enrolled in a plan offered by the federal health insurance exchanges established by the U.S. Department of Health & Human Services, or HHS, despite language in the ACA that was alleged to authorize tax credits only for individuals enrolled in a plan offered by exchanges established by states.

In addition, we are subject to various other healthcare laws and regulations, including, among others, the Stark Law relating to self-referrals, anti-kickback laws, including the federal Anti-Kickback Statute, antitrust laws and the data privacy and security laws and regulations described below. See "Business — Healthcare Regulatory Environment". If we were to become subject to litigation or liabilities or found to be out of compliance with these or other laws, our business could be hurt. See "— We may become subject to litigation, which could be costly and result in significant liability."

We are subject to data privacy and security laws, regulations and contractual obligations governing the transmission, security and privacy of health and other sensitive or proprietary information, which may impose restrictions on the manner in which we access, store, transmit, use and disclose such information and subject us to penalties if we are unable to fully comply with such laws or contractual provisions.

As described below, we are required to comply with numerous federal and state laws and regulations governing the collection, use, disclosure, storage and transmission of individually identifiable health information that we may obtain or have access to in connection with the provision of our services. These laws and regulations, including their interpretation by governmental agencies, are subject to frequent change. These laws and regulations include the following.

•: The Health Insurance Portability and Accountability Act, or HIPAA, and its implementing regulations, required expanded protection of the privacy and security of protected health information, the execution of certain contracts to safeguard protected health information and the adoption of standards for the exchange of electronic health information, for health plans, healthcare clearinghouses and certain healthcare providers, which we refer to as Covered Entities, and their business associates. Among the standards that HHS has adopted pursuant to HIPAA are standards for electronic transactions and code sets, unique identifiers for providers, employers, health plans and individuals, security, electronic signatures, privacy and enforcement. Actual failure to comply with HIPAA could result in fines and civil and criminal penalties, as well as contractual damages, which could harm our business, finances and reputation.
•: The Health Information Technology for Economic and Clinical Health Act, or the HITECH Act, enacted as part of the American Recovery and Reinvestment Act of 2009, also known as the "Stimulus Bill", effective February 22, 2010, modified HIPAA by setting forth health information security breach notification requirements and increasing penalties for violations of HIPAA, among other things. The HITECH Act requires individual notification for all breaches as defined by HIPAA, media notification of breaches affecting over 500 individuals located in the same region and either prompt or annual reporting of breaches to HHS, depending on the number of affected individuals. The HITECH Act also replaced the prior monetary penalty system of $100 per violation and an annual maximum of $25,000 per violation with a four-tier system of sanctions for breaches. Penalties now range from a minimum of $100 per violation and an annual maximum of $25,000 per violation for the first tier to a minimum of $50,000 per violation and an annual maximum of $1.5 million per violation for the fourth tier. Failure to comply with HIPAA as modified by the HITECH Act could result in fines and penalties, criminal sanctions and reputational damage that could harm our business.

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•: Numerous other federal and state laws may apply that restrict the use and disclosure and mandate the protection of the privacy and security of individually identifiable information, as well as employee personal information, and that require notifications and mitigation in the event of a breach. These include state medical information privacy laws, state social security number protection laws and federal and state consumer protection laws, among others. These various laws in many cases are not preempted by HIPAA and may be subject to varying interpretations by the courts and government agencies, creating complex compliance issues for us and our clients and potentially exposing us to additional expense, adverse publicity and liability.
•: Federal and state consumer protection laws are increasingly being applied by the United States Federal Trade Commission, or FTC, and states' attorneys general to regulate the collection, use, storage and disclosure of personal or individually identifiable information, through websites or otherwise, and to regulate the presentation of website content.

There is ongoing concern from privacy advocates, regulators and others regarding data protection and privacy issues, and the number of jurisdictions with data protection and privacy laws has been increasing. In addition, the scope of protection afforded to data subjects by many of these data protection and privacy laws has been increasing. Also, there are ongoing public policy discussions regarding whether the standards for deidentified, anonymous or pseudonomized health information are sufficient, and the risk of re-identification sufficiently small, to adequately protect patient privacy. These discussions may lead to further restrictions on the use of such information. These initiatives or future initiatives could compromise our ability to access and use data or to develop or market current or future services.

The security measures that we and our third-party vendors and subcontractors have in place to ensure compliance with privacy and data protection laws and contractual commitments may not protect our facilities and systems from security breaches, acts of vandalism or theft, cyber incidents, misplaced or lost data, programming and human errors or other similar events. The occurrence of a cyber incident that affects either individually identifiable health information or other confidential or proprietary information with which we have been entrusted may result in liability and hurt our reputation.

Additionally, as a business associate under HIPAA, we may also be liable for privacy and security breaches of protected health information and certain similar failures of our subcontractors. Even though we contractually require our subcontractors to safeguard protected health information as required by law, we still have limited control over their actions and practices. An actual or perceived breach of privacy or security of individually identifiable health information held by us or by our subcontractor may result in an enforcement action, including criminal and civil liability, against us, as well as negative publicity, reputational harm and contractual ramifications with our clients.

We are not able to predict the full extent of the impact such incidents may have on our business. Our failure to comply with HIPAA may result in criminal or civil liability, and due to the heightened enforcement climate and recent changes to the law, the potential for enforcement action against business associates under HIPAA is now greater than in prior years. Enforcement actions against us could be costly and could interrupt regular operations, which may harm our business. While we have not received any notices of violation of the applicable privacy and data protection laws and believe we adequately protect our information, including in compliance with such laws, there can be no assurance that we will not receive such notices in the future. Further, costly breaches can occur regardless of our compliance infrastructure.

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We operate in a highly regulated industry and must comply with a significant number of complex and evolving requirements. Achieving and sustaining compliance with state and federal statutes and regulation related to the healthcare industry may prove costly. Changes in these laws could restrict our ability to conduct our business. Further, if we fail to comply with these requirements, we could incur significant penalties and our reputation could suffer.

In addition to HIPAA, additional federal and state statutes, regulations, guidance and contractual provisions regarding healthcare that may apply to our business activities, including:

•: The federal Anti-Kickback Statute, or AKS, prohibits individuals and entities from knowingly and willfully paying, offering, receiving or soliciting anything of value in order to induce the referral of patients or in return for purchasing, leasing, ordering, arranging for, or recommending services or goods covered in whole or in part by Medicare, Medicaid, or other government healthcare programs. The AKS is an intent-based statute and the failure of an arrangement to satisfy all elements of a safe harbor will not necessarily make it illegal, but it may subject that arrangement to scrutiny by enforcement authorities. Any violation of the AKS can lead to significant penalties, including criminal penalties, civil fines and exclusion from participation in a federal healthcare program, among other penalties.
•: Various state anti-kickback laws that sometimes track federal AKS prohibitions, although some apply to all-payors as opposed to only government healthcare programs.
•: The federal physician self-referral law, often referred to as the Stark Law, prohibits, with limited exceptions, physicians from referring Medicare or Medicaid patients to an entity for the provision of specified Designated Health Services, or DHS, among them outpatient prescription drugs, if the physician or a member of such physician's immediate family has a direct or indirect financial relationship (including an ownership interest or a compensation arrangement) with the entity. The Stark Law also prohibits the entity from billing Medicare or Medicaid programs for such DHS. A referral that may implicate the Stark Law does not fall within a statutory exception is strictly prohibited by the Stark Law. A violation of the Stark Law is punishable by civil sanctions, including significant fines and exclusion from participation in Medicare and Medicaid programs.
•: State data privacy and security laws that track federal requirements or impose more stringent or different requirements than HIPAA regarding storage, transmission, use and disclosure of protected health information, general individually identifiable information or other sensitive information.
•: Consumer protection laws require us to publish statements to users of our services that describe how we handle personal information. If such information that we publish is considered untrue, we may be subject to claims of deceptive practices, which could lead to significant liabilities and consequences, including, costs of defending against litigation, settling claims and loss of willingness of current and potential future clients to work with us.
•: Federal and state false claims laws, including the civil False Claims Act, impose civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment to the government or knowingly make, or cause to be made, a false statement in order to have a false claim paid. The civil False Claims Act provides for treble damages and mandatory minimum penalties per false claim or statement. In this context, it is particularly notable that a significant portion of our revenue is derived from services provided to PACE organizations. PACE organizations are funded by both Medicare and Medicaid, and the Medicare risk-adjustment methodology applies to the Medicare component of PACE organization reimbursement. PACE submissions may also be comparable to state Medicaid risk-adjustment submissions, and vary by state. Because risk adjustment submissions to Medicare and state Medicaid programs have a direct impact on the amounts that Medicare and Medicaid Programs

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pay to PACE organizations, these activities may be the subject of scrutiny and litigation under the federal civil False Claims Act.

•: HHS Office of Inspector General, or OIG, and many state Medicaid agencies maintain lists of individuals and organizations that have been excluded from participation in a federal healthcare program. A significant part of our revenue is derived from our services as federal healthcare program providers, specialty pharmacies, or contractors to federal healthcare program providers or plans and as such, we need to comply with restrictions on employing or contracting with personnel and vendors who have been excluded from participation in federal healthcare programs. Adhering to the best practice of conducting monthly screenings against the federal and state exclusion lists for employees and contractors may be costly and resource-consuming, but failure to do so may give rise to significant administrative liability and sanctions.
•: As contractors to PACE organizations and Medicare Advantage organizations, or MAOs, we are subject to contractual provisions, which impose on us various obligations related to healthcare compliance and healthcare fraud, waste and abuse reduction and elimination efforts. These obligations stem from the provisions contained in prime contracts between PACE organizations and MAOs, and the federal government. Examples of such flow down provisions include subcontractor's compliance with all applicable state and federal laws, subcontractor's obligation to screen state and federal exclusion lists and its obligation to conduct periodic audits, among many others. Breaches of these requirements would not necessarily be a regulatory risk per se, but they could create contract compliance issues, which may yield contractual damages, be costly to resolve and may hurt our reputation and restrict our ability to service such organizations in the future.
•: Various state licensure, registration and certification laws are applicable to pharmacies, pharmacists, pharmacy technicians and other pharmacy personnel. If we are unable to maintain our licenses or if states place burdensome restrictions or limitations on non-resident pharmacies, this could limit or affect our ability to operate in some states. Additionally, if we or any of our personnel violate conditions of their pharmacy or pharmacist licensure, we could face penalties and lose valuable personnel.
•: A number of federal and state laws and registration requirements are applicable to dispensing controlled substances. If we are unable to maintain our registrations this could limit or affect our ability to dispense controlled substances.
•: Federal and state laws and policies require pharmacies to maintain, enroll and participate in federal healthcare programs or to report specified changes in their operations to the agencies that administer these programs. If we do not comply with these laws, we may not be able to participate in some federal healthcare programs, which could compromise our ability to sell our solutions.
•: A number of FDA regulations are applicable to our business. Some technologies and software applications used in healthcare analytics, genomic testing and analysis are considered medical devices and are subject to regulation by the FDA. If any of our current or future services or applications become regulated by the FDA as medical devices, we would be subject to various laws, regulations and policies enforced by the FDA or other governmental authorities, such as the U.S. Federal Trade Commission, including both premarket and post-market requirements. FDA and state regulators, such as state boards of pharmacy, also regulate drug packaging and repackaging. Our drug packaging activities must comply with the relevant FDA and state statutes, regulations and policies. Noncompliance with applicable FDA requirements, including those related to pharmaceutical and medical device promotional practices and the pre-market and post-market approval requirements for medical devices can result in an enforcement action that could substantially harm our business. Changes in existing regulatory requirements, our failure to comply with current or future requirements or adoption of new requirements could negatively affect our business.

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Further modifications to the Medicare Part D program and changes in pricing benchmarks may reduce revenue and impose additional costs to the industry.

The Medicare Prescription Drug Improvement and Modernization Act of 2003 included a major expansion of the Medicare program with the addition of a prescription drug benefit under the new Medicare Part D program. The continued impact of these regulations depends upon a variety of factors, including our ongoing relationships with the Part D Plans and the patient mix of our clients. Future modifications to the Medicare Part D program may reduce revenue and impose additional costs to the industry. In addition, contracts and fee schedules in the prescription drug industry, including our contracts with certain of our clients use certain published benchmarks, including average wholesale price, or AWP, to establish pricing for prescription drugs. Most of our contracts utilize the AWP standard. However, there can be no assurance that our clients will continue to utilize AWP, as previously calculated, or that other pricing benchmarks will not be adopted to establish prices for prescription drugs within the industry.

Risks Related to Our Common Stock and This Offering

After this offering, our executive officers, directors and principal stockholders, if they choose to act together, will continue to have the ability to control all matters submitted to stockholders for approval.

Upon the completion of this offering, our executive officers and directors, combined with our stockholders who own more than five percent of our outstanding capital stock before this offering will, in the aggregate, beneficially own shares representing approximately % of our capital stock. As a result, if these stockholders were to choose to act together, they would be able to control all matters submitted to our stockholders for approval, as well as our management and affairs. For example, these persons, if they choose to act together, would control the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of ownership control may:

•: delay, defer or prevent a change in control;
•: entrench our management and the board of directors; or
•: impede a merger, consolidation, takeover or other business combination involving us that other stockholders may desire.

As a result, these executive officers, directors and current five percent or greater stockholders could pursue transactions that may not be in our best interests and which could harm our business.

Some provisions of Delaware law, our amended and restated certificate of incorporation and our amended and restated bylaws may deter third parties from acquiring us.

We expect that our amended and restated certificate of incorporation and amended and restated bylaws will, among other things:

•: divide our board of directors into three staggered classes of directors that are each elected to three-year terms;
•: provide that the authorized number of directors may be changed only by resolution of our board of directors;
•: provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;
•: prohibit stockholder action by written consent;

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•: authorize the issuance of "blank check" preferred stock that could be issued by our board of directors to increase the number of outstanding shares of capital stock, making a takeover more difficult and expensive;
•: prohibit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates;
•: provide that special meetings of the stockholders may be called only by or at the direction of the board of directors, the chairman of our board or the chief executive officer; and
•: require advance notice to be given by stockholders for any stockholder proposals or director nominees.

In addition, Section 203 of the General Corporation Law of the State of Delaware, or the DGCL, may affect the ability of an "interested stockholder" to engage in specified business combinations, for a period of three years following the time that the stockholder becomes an "interested stockholder". We intend to elect in our amended and restated certificate of incorporation not to be subject to Section 203 of the DGCL. Nevertheless, our amended and restated certificate of incorporation will contain provisions that have the same effect as Section 203 of the DGCL.

These and other provisions could have the effect of discouraging, delaying or preventing a transaction involving a change in control of our company or could make it more difficult for you and other stockholders to elect directors of your choosing or to cause us to take other corporate actions that you desire. See "Description of Capital Stock".

Our amended and restated certificate of incorporation will designate courts in the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation will provide that, subject to limited exceptions, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (c) any action asserting a claim against us arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws, (d) any action to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or amended and restated bylaws or (e) any other action asserting a claim against us that is governed by the internal affairs doctrine. We refer to each of these proceedings as a covered proceeding. In addition, our amended and restated certificate of incorporation will provide that if any action the subject matter of which is a covered proceeding is filed in a court other than the specified Delaware courts without the approval of our board of directors, which we refer to as a foreign action, the claiming party will be deemed to have consented to (1) the personal jurisdiction of the specified Delaware courts in connection with any action brought in any such courts to enforce the exclusive forum provision described above and (2) having service of process made upon such claiming party in any such enforcement action by service upon such claiming party's counsel in the foreign action as agent for such claiming party. Our amended and restated certificate of incorporation will also provide that, except to the extent prohibited by the DGCL, in the event that a claiming party initiates, asserts, joins, offers substantial assistance to or has a direct financial interest in any foreign action without the prior approval of our board of directors, each such claiming party will be obligated jointly and severally to reimburse us and any officer, director or other employee made a party to such proceeding for all fees, costs and expenses of every kind and description (including, but not limited to, all attorneys' fees and other litigation expenses) that the parties may incur in connection with such foreign action. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and to have consented to these provisions. These provisions may limit a stockholder's ability

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to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions.

Our amended and restated bylaws will provide that if a claiming party brings certain actions against us and is not successful on the merits then it will be obligated to pay our litigation costs, which could have the effect of discouraging litigation, including claims brought by our stockholders.

Our amended and restated bylaws will provide that, except to the extent prohibited by the DGCL, and unless our board of directors otherwise approves, in the event that any claiming party (a) initiates, asserts, joins, offers substantial assistance to or has a direct financial interest in a covered proceeding and (b) such claiming party does not obtain a judgment on the merits that substantially achieves, in substance and amount, the full remedy sought by such claiming party, then each such claiming party will be obligated to reimburse us and any applicable director, officer or other employee for all fees, costs and expenses of every kind and description (including, but not limited to, all attorneys' fees and other litigation expenses) that we or any such director, officer or other employee actually incurs in connection with the covered proceeding. While application of this standard will necessarily need to take into account the particular facts, circumstances and equities of any particular claim, we would expect a claiming party to be required to prevail on the merits on substantially all of the claims asserted in the complaint and, as a result, receive substantially the full remedy that it was seeking (including, if applicable, any equitable remedy) in order to avoid responsibility for reimbursing such fees, costs and expenses. Any person or entity purchasing or otherwise acquiring any interest in the shares of our capital stock will be deemed to have notice of and consented to this provision. This provision could have the effect of discouraging litigation against us, including claims brought by our stockholders and including claims that are partially (but not wholly) successful on the merits. However, it is currently unclear whether the Delaware legislature will take action to eliminate or limit the ability of stock corporations to implement provisions such as this, or whether Delaware courts will enforce in full a provision such as this for a Delaware stock corporation. If the Delaware legislature takes action to limit or eliminate our ability to include this provision in our amended and restated bylaws or a court were to find this provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions.

If you purchase shares of common stock in this offering, you will suffer immediate dilution of your investment.

The initial public offering price of our common stock will be substantially higher than the net tangible book value per share of our common stock. Therefore, if you purchase shares of our common stock in this offering, you will pay a price per share that substantially exceeds our net tangible book value per share after this offering. This dilution is due in large part to the fact that our earlier investors paid substantially less than the initial public offering price when they purchased their shares of capital stock. To the extent shares subsequently are issued pursuant to the exercise of options to purchase common stock under our equity incentive plans, you will incur further dilution. For a further description of the dilution that you will experience immediately after this offering, see the section of this prospectus titled "Dilution".

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An active trading market for our common stock may not develop.

Prior to this offering, there has been no public market for our common stock. The initial public offering price for our common stock will be determined through negotiations with the underwriters. Although we have applied to have our common stock approved for listing on the NASDAQ Global Market, an active trading market for our shares may never develop or be sustained following this offering. If an active market for our common stock does not develop, it may be difficult for you to sell shares you purchase in this offering without depressing the market price for the shares or at all. An inactive market may also impair our ability to raise capital by selling our common stock and may impair our ability to acquire other companies, products or technologies by using our common stock as consideration.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If few securities analysts commence coverage of us, or if industry analysts cease coverage of us, the trading price for our common stock could be negatively affected. If one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, our common stock price will likely decline. If one or more of these analysts fails to publish reports on us regularly, demand for our common stock could decrease, which might cause our common stock price and trading volume to decline.

The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock in this offering.

Our stock price is likely to be volatile. The stock market in general and the market for smaller healthcare technology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, you may not be able to sell your common stock at or above the initial public offering price. The market price for our common stock may be influenced by many factors, including:

•: the success of competitive products, services or technologies;
•: regulatory or legal developments in the United States and other countries;
•: developments or disputes concerning patent applications, issued patents or other proprietary rights;
•: the recruitment or departure of key personnel;
•: the level of expenses related to developing any of our products or services;
•: the results of our efforts to discover, develop, acquire or in-license additional products;
•: actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;
•: variations in our financial results or those of companies that are perceived to be similar to us;
•: changes in the structure of healthcare payment systems;
•: market conditions in the healthcare technology sector;
•: global and general economic, industry and market conditions; and
•: the other factors described in this "Risk Factors" section.

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We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our common stock. The failure by our management to apply these funds effectively could result in financial losses that could harm our business, cause the price of our common stock to decline and delay further development of our products. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

A significant portion of our total outstanding shares are eligible to be sold into the market in the near future, which could cause the market price of our common stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of our common stock in the public market, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. After this offering, we will have outstanding shares of common stock based on the number of shares outstanding as of . This includes the shares that we are selling in this offering, which may be resold in the public market immediately without restriction, unless purchased by our affiliates or existing stockholders. Of the remaining shares, shares are currently restricted as a result of securities laws or lock-up agreements but will become eligible to be sold at various times after the offering. Moreover, after this offering, holders of an aggregate of shares of our common stock will have rights, subject to specified conditions, to require us to file registration statements covering their shares or, along with holders of additional shares of our common stock, to include their shares in registration statements that we may file for ourselves or other stockholders. We also intend to register all shares of common stock that we may issue under our equity compensation plans. Once we register these shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates and the lock-up agreements described in the "Underwriting" section of this prospectus.

We are an "emerging growth company," and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may remain an emerging growth company for up to five years. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from some disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:

•: being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure;
•: not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;
•: not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements;
•: reduced disclosure obligations regarding executive compensation; and
•: exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

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We have taken advantage of reduced reporting burdens in this prospectus. In particular, in this prospectus, we have provided only two years of audited financial statements and have not included all of the executive compensation related information that would be required if we were not an emerging growth company. We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of these accounting standards until they would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this exemption and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.

As a public company, we will be required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, requires that we evaluate and determine the effectiveness of our internal control over financial reporting and, beginning with our annual report for the year ending December 31, 2016, provide a management report on the internal control over financial reporting. Our independent registered public accounting firm is not required to audit the effectiveness of our internal control over financial reporting until after we are no longer an "emerging growth company," as defined in the JOBS Act. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating.

If we have a material weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. In connection with the audit for the year ended December 31, 2013, we identified certain deficiencies in our internal controls over financial reporting, including a material weakness in our internal control over financial reporting during 2013 related to the accretion of the redemption value of our Series B redeemable convertible preferred stock as a result of not having a process in place to obtain and review valuations on a timely basis as a privately held company. We have remediated the material weakness and have remediated or are addressing the other internal control deficiencies identified. If we are unable to comply with the requirements of Section 404 in a timely manner, if we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be negatively affected and we could become subject to investigations by the NASDAQ Global Market, on which our securities will be listed, the SEC or other regulatory authorities, which could require us to obtain additional financial and management resources.

The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, particularly after we are no longer an "emerging growth company".

Following the completion of this offering, we will be required to comply with various regulatory and reporting requirements, including those required by the SEC and the NASDAQ Stock Market. Complying with these reporting and other regulatory requirements will be time-consuming and will result in increased costs to us. As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, or the Exchange Act, and the Sarbanes-Oxley Act. These

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requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we may need to commit significant resources, hire additional staff and provide additional management oversight. We will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. Sustaining our growth as a public company will also require us to commit additional management, operational and financial resources to identify new professionals to join our company and to maintain appropriate operational and financial systems to adequately support expansion. These activities may also divert management's attention from other business concerns.

As an "emerging growth company" as defined in the JOBS Act, we may take advantage of temporary exemptions from various reporting requirements, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

When these exemptions cease to apply, we expect to incur additional expenses and devote increased management effort toward ensuring compliance with them. We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs.

Our business and stock price may suffer as a result of our lack of public company operating experience.

We have been a privately held company since we began operations in 2009. Our lack of public company operating experience may make it difficult to forecast and evaluate our future prospects. If we are unable to execute our business strategy, either as a result of our inability to effectively manage our business in a public company environment or for any other reason, our stock price may be harmed.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

Under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an "ownership change," generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation's ability to use its pre-change federal net operating loss carryforwards, or NOLs, and other pre-change federal tax attributes (such as research tax credits) to offset its post-change income may be limited. We have experienced ownership changes in the past, but have not determined if such changes could limit the use of our NOLs. In addition, we may experience ownership changes in the future as a result of the completion of this offering and subsequent shifts in our stock ownership. State NOL carryforwards may be similarly or more stringently limited. As a result, if we earn net taxable income, our ability to use our pre-change NOLs to offset United States federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this prospectus, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words "anticipate," "believe," "estimate," "expect," "intend," "may," "might," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

The forward-looking statements in this prospectus include, among other things, statements about:

•: our expectations regarding industry and market trends, including the expected growth and continued structural change and consolidation in the market for healthcare in the United States;
•: our expectations about the growth of PACE organizations;
•: our expectations about private payors establishing their own at-risk programs;
•: the advantages of our solutions as compared to those of competitors;
•: our estimates about our financial performance, including our expectation that some of our expenses will decline as a percentage of total revenue;
•: the visibility into future cash flows from our business model;
•: our growth strategy, including our ability to grow our client base;
•: our plans to further penetrate existing markets and enter new markets;
•: our plans to pursue strategic acquisitions and partnerships and international expansion;
•: our plans to expand and enhance our solutions; and
•: our estimates regarding capital requirements and needs for additional financing.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. We operate in a very competitive and rapidly changing environment. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make, and accordingly you should not place undue reliance on our forward-looking statements. We have included important factors in the cautionary statements included in this prospectus, particularly in the "Risk Factors" section that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus is a part completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in this prospectus by these cautionary statements. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

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TRADEMARKS AND TRADE NAMES

Our material trademarks, service marks and other marks include EireneRx®, Medication Risk Mitigation by CareKinesis®, MedWise Advisor®, NiaRx®, Capstone Performance Systems™, CareVentions™, Medication Risk Mitigation™, Medication Risk Mitigation Matrix™, Medliance™ and Tabula Rasa HealthCare™. We also have trademark applications pending to register marks in the United States. We have proprietary and licensed rights to trademarks used in this prospectus which are important to our business, many of which are registered under applicable intellectual property laws. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the "®" or "™" symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent possible under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies' trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. Each trademark, trade name or service mark of any other company appearing in this prospectus is the property of its respective holder.

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MARKET AND INDUSTRY DATA

This prospectus contains estimates and other statistical data, including those relating to our industry and the market in which we operate, that we have obtained or derived from industry publications and reports, including reports from the Centers for Medicare & Medicaid Services, the Centers for Disease Control and Prevention, the Alliance for Human Research Protection and the Kaiser Family Foundation. These industry publications and reports generally indicate that they have obtained their information from sources believed to be reliable, but do not guarantee the accuracy and completeness of their information. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. Based on our industry experience, we believe that the publications and reports are reliable and that the conclusions contained in the publications and reports are reasonable. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled "Risk Factors." These and other factors could cause our actual results to differ materially from those expressed in the industry publications and reports.

Information referenced in this prospectus regarding the total eligible individuals within current PACE service areas is based upon estimates of the eligible individuals as of July 2015, prepared by AEC Consulting, LLC, an Altitude Edge company, an independent healthcare consulting firm. We have included these estimates in reliance on the authority of such firm as an expert in such matters.

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USE OF PROCEEDS

We estimate that the net proceeds from our issuance and sale of shares of our common stock in this offering will be approximately $ million, assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise their option to purchase additional shares in full, we estimate that the net proceeds from this offering will be approximately $ million, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

A $1.00 increase or decrease in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease the net proceeds from this offering by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million shares of common stock offered by us would increase or decrease the net proceeds from this offering by approximately $ million, assuming the assumed initial public offering price remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

We currently estimate that we will use the net proceeds from this offering as follows:

•

to repay our outstanding indebtedness, including approximately:

•: $ to Eastward Fund Management, LLC, or Eastward, under our December 2014 $12.0 million loan, or the December 2014 Eastward Loan;
•: $ to Eastward under our April 2014 $3.0 million loan or the April 2014 Eastward Loan;
•: $250,000 to Dr. John Durham and Mrs. Joanne Durham under our $250,000 demand promissory note bearing interest at 6% per annum;
•: $ to the holders of the Medliance Notes, bearing interest at 8% per annum and maturing in June 2016, assuming the holders of such notes do not elect to convert the notes into shares of our common stock upon the completion of this offering; and
•: $ for all remaining amounts due under all equipment financing arrangements outstanding as of the completion of the offering;

•

to fully repay Bridge Bank, National Association for borrowings under the 2015 Line of Credit to the extent of any borrowings outstanding as of the completion of this offering;

•

to continue to develop new product offerings;

•

to enter into new market segments with our existing solutions;

•

to expand our sales and marketing infrastructure;

•

to fund acquisitions of businesses and technologies; and

•

the remainder for working capital and general corporate purposes.

In April 2015, we entered into the 2015 Line of Credit with Bridge Bank, National Association, or Bridge Bank, pursuant to which we can request up to an aggregate amount of $15.0 million in revolving advances. The proceeds of the 2015 Line of Credit were used to repay all outstanding amounts owed under the December 2013 Revolving Credit Facility with Silicon Valley Bank and to fund our general business requirements. Amounts outstanding under the 2015 Line of Credit bear interest at 1% above the greater of 3.25% per year or the variable rate of interest, per annum, most recently announced by Bridge

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Bank, as its "prime rate," with interest payable monthly. Upon completion of this offering, such rate shall be equal to 0.5% above the greater of 3.25% per year or Bridge Bank's prime rate. The 2015 Line of Credit has a maturity date of April 2017, and is secured by all of our personal property, whether presently existing or created or acquired in the future, as well as our intellectual property.

The first payment of interest under the December 2014 Eastward Loan was due January 1, 2015 in an amount of $120,000. The payments due are $120,000 per month for the first 12 months, which payments then increase to $460,374 per month for the following 30 months. The term of the December 2014 Eastward Loan ends on June 30, 2018.

The first payment of interest under the April 2014 Eastward Loan was due May 1, 2014 in an amount of $28,750. The payments due are $28,750 per month for the first 12 months, which payments then increase to $114,441 per month for the following 30 months. The term of the April 2014 Eastward Loan ends on October 31, 2017.

The expected use of net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors including the factors described in the section titled "Risk Factors." As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering. In addition, our anticipated use of proceeds does not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make. We have no current understandings, agreements or commitments for any material acquisitions or licenses of any products, businesses or technologies. Pending our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities.

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DIVIDEND POLICY

We have never declared or paid cash dividends on our capital stock. We intend to retain all of our future earnings, if any, to finance the growth and development of our business. We do not intend to pay cash dividends to our stockholders in the foreseeable future. In addition, under the terms of our loan and security agreement with Bridge Bank, we may not declare or pay any cash dividends or distributions without the consent of Bridge Bank.

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CAPITALIZATION

The following table sets forth our cash and capitalization as of September 30, 2015 on:

•: an actual basis;
•: a pro forma basis to give effect to (1) the automatic conversion of all outstanding shares of our preferred stock into an aggregate of 9,873,511 shares of our common stock immediately prior to the completion of this offering and the reclassification to additional paid-in capital of the warrant liability related to warrants to purchase preferred stock, (2) the issuance of shares of our common stock upon the net exercise of outstanding warrants that would otherwise expire upon the completion of this offering, assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, (3) the issuance of shares of restricted common stock under our 2014 Equity Compensation Plan to members of management immediately prior to the effective date of the registration statement of which this prospectus forms a part and (4) the amendment and restatement of our certificate of incorporation immediately prior to the completion of this offering; and
•: a pro forma as adjusted basis to give further effect to (1) our issuance and sale of shares of our common stock in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, (2) our receipt of the net proceeds of this offering, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us and (3) our application of a portion of such net proceeds to repay indebtedness, as set forth under "Use of Proceeds."

The information in this table is illustrative only and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table in conjunction with the information contained in the sections titled "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," along with our consolidated financial statements and the related notes thereto included elsewhere in this prospectus.

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	September 30, 2015

	Actual			Pro Forma	Pro Forma As Adjusted
	(In thousands)
Cash	$	2,558		$	$



Line of credit	$	10,000		$	$
Notes payable to related parties		660
Notes payable related to acquisition		15,256
Long-term debt, including current portion		14,341
Warrant liability		6,260

Redeemable convertible preferred stock:
Series A and A-1 preferred stock, $0.0001 par value per share; 7,224,266 shares authorized, 6,911,766 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted		6,453
Series B preferred stock, $0.0001 par value per share; 3,548,614 shares authorized, 2,961,745 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted		24,612

Total redeemable convertible preferred stock		31,065

Stockholders' equity (deficit):
Preferred stock, $0.0001 par value per share; no shares authorized, issued or outstanding, actual; shares authorized, no shares issued or outstanding, pro forma and pro forma as adjusted		—
Common stock, $0.0001 par value per share; 27,836,869 shares authorized, 8,871,248 shares issued and outstanding, actual; shares authorized, shares issued and outstanding, pro forma; shares authorized, shares issued and outstanding, pro forma as adjusted		1
Additional paid-in capital		—
Accumulated deficit		(34,912	)

Total stockholders' equity (deficit)		(34,911	)

Total capitalization	$	42,671		$	$

A $1.00 increase or decrease in the assumed initial public offering price of $ per share would increase or decrease each of the pro forma as adjusted cash, additional paid-in capital, total stockholders' equity (deficit) and total capitalization by $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. Each increase or decrease of 1.0 million shares offered by us would increase or decrease each of pro forma as adjusted cash, additional paid-in capital, total stockholders' equity (deficit) and total capitalization by $ million, assuming that the assumed initial public offering price, which is the midpoint of the price range set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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The table above does not include:

•: 312,500 shares of our common stock issuable upon the exercise of outstanding warrants as of September 30, 2015 at a weighted-average exercise price of $0.80 per share, which warrants are exercisable to purchase shares of our Series A-1 preferred stock prior to the completion of this offering;
•: 586,868 shares of our common stock issuable upon the exercise of outstanding warrants as of September 30, 2015 at a weighted-average exercise price of $2.96 per share, which warrants are exercisable to purchase shares of our Series B preferred stock prior to the completion of this offering;
•: 5,412,858 shares of our common stock issuable upon the exercise of stock options outstanding as of September 30, 2015 under our 2014 Equity Compensation Plan at a weighted-average exercise price of $1.67 per share;
•: an additional shares of our common stock reserved for future issuance under our 2016 Equity Compensation Plan, upon the completion of this offering;
•: shares of our common stock that may be issuable at the completion of this offering, at the election of the holder, upon the conversion of all principal outstanding under the Medliance Notes, assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus; and
•: 21,000 shares of our common stock that will be issuable in the future as consideration in connection with our acquisition of SMPP.

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DILUTION

If you invest in our common stock in this offering, your ownership interest will be diluted immediately to the extent of the difference between the initial public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering. Net tangible book value per share of our common stock is determined at any date by subtracting our total liabilities and redeemable convertible preferred stock from the amount of our total tangible assets and dividing the difference by the number of shares of our common stock deemed outstanding at that date.

The historical net tangible book value of our common stock as of September 30, 2015 was a deficit of $(74.8) million, or $(8.43) per share, based on 8,871,248 shares of our common stock outstanding as of September 30, 2015.

The pro forma net tangible book value of our common stock as of September 30, 2015 was a deficit of $ million, or $ per share, after giving effect to (1) the automatic conversion of all outstanding shares of our preferred stock into an aggregate of 9,873,511 shares of our common stock immediately prior to the completion of this offering and the reclassification to additional paid-in capital of the warrant liability related to warrants to purchase preferred stock, (2) the issuance of shares of our common stock upon the net exercise of outstanding warrants that would otherwise expire upon the completion of this offering, assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and (3) the issuance of shares of restricted common stock under our 2014 Equity Compensation Plan to members of management immediately prior to the effective date of the registration statement of which this prospectus forms a part.

After giving further effect to (1) our issuance and sale of shares of our common stock in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, (2) our receipt of the net proceeds of this offering, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us and (3) our application of a portion of such net proceeds to repay indebtedness, as set forth under "Use of Proceeds," our pro forma as adjusted net tangible book value as of September 30, 2015 would have been $ million, or $ per share. This represents an immediate increase in pro forma as adjusted net tangible book value of $ per share to existing stockholders, and an immediate dilution of $ per share to investors purchasing common stock in this offering. The following table illustrates this per share dilution:


Assumed initial public offering price per share				$
Historical net tangible book value (deficit) per share as of September 30, 2015	$	(8.43	)
Pro forma increase in net tangible book value per share attributable to the pro forma effects described above

Pro forma net tangible book value (deficit) per share as of September 30, 2015
Pro forma increase in net tangible book value per share attributable to new investors

Pro forma as adjusted net tangible book value per share after this offering

Dilution per share to new investors purchasing common stock in this offering				$

A $1.00 increase or decrease in the assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease our pro forma as adjusted net tangible book value by $ million, or $ per share, and the dilution to new investors in this offering by $ per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We

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may also increase or decrease the number of shares we are offering. An increase or decrease of 1.0 million shares offered by us would increase or decrease our pro forma as adjusted net tangible book value, by $ million, or $ per share, and the dilution per share to new investors purchasing common stock in this offering by $ , assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters partially or fully exercise their option to purchase additional shares from us, the pro forma as adjusted net tangible book value per share after giving effect to this offering would be $ per share, which amount represents an immediate increase in pro forma net tangible book value of $ per share of our common stock to existing stockholders and an immediate dilution in net tangible book value of $ per share of our common stock to new investors purchasing shares of common stock in this offering.

The following table summarizes, as of September 30, 2015, on the pro forma basis described above, the differences between the number of shares purchased from us, the total consideration paid to us, and the average price per share paid to us by existing stockholders and by new investors purchasing common stock in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

	Shares Purchased			Total Consideration

	Shares Purchased			Total Consideration			Average Price Per Share
	Number	Percentage		Amount	Percentage		Average Price Per Share
	(Dollars in thousands)
Existing stockholders			%	$		%	$
New investors

Total			%	$		%

The number of shares of our common stock to be outstanding after this offering is based on shares of our common stock outstanding as of September 30, 2015, which includes:

•: 9,873,511 shares of common stock issuable upon the automatic conversion of all outstanding shares of preferred stock into 9,873,511 shares of our common stock immediately prior to the completion of this offering;
•: shares of our common stock issuable upon the net exercise of outstanding warrants that would otherwise expire upon the completion of this offering, assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus; and
•: shares of restricted common stock issuable under our 2014 Equity Compensation Plan to certain members of management immediately prior to the effective date of the registration statement of which this prospectus forms a part.

The number of shares of common stock to be outstanding after this offering excludes:

•: 312,500 shares of our common stock issuable upon the exercise of outstanding warrants as of September 30, 2015 at a weighted-average exercise price of $0.80 per share, which warrants are exercisable to purchase shares of our Series A-1 preferred stock prior to the completion of this offering;
•: 586,868 shares of our common stock issuable upon the exercise of outstanding warrants as of September 30, 2015 at a weighted-average exercise price of $2.96 per share, which warrants are exercisable to purchase shares of our Series B preferred stock prior to the completion of this offering;

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•: 5,412,858 shares of our common stock issuable upon the exercise of stock options outstanding as of September 30, 2015 under the 2014 Equity Compensation Plan at a weighted-average exercise price of $1.67 per share;
•: shares of our common stock that may be issuable upon the completion of this offering, at the election of the holder, upon the conversion of all principal outstanding under the Medliance Notes, assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus; and
•: 21,000 shares of our common stock that will be issuable in the future as consideration in connection with our acquisition of SMPP.

To the extent that outstanding stock options or warrants are subsequently exercised, there will be further dilution to new investors.

Effective upon the completion of this offering, an aggregate of shares of our common stock will be reserved for future issuance under our 2016 Equity Compensation Plan, and the number of reserved shares will also be subject to automatic annual increases in accordance with the terms of such plan. New options that we may grant under our 2016 Equity Compensation Plan will further dilute investors purchasing common stock in this offering.

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SELECTED CONSOLIDATED FINANCIAL DATA

The following tables set forth selected consolidated financial data and other data for the periods and at the dates indicated. We have derived the consolidated statements of operations data for the years ended December 31, 2013 and 2014 and the consolidated balance sheet data as of December 31, 2013 and 2014 from our audited consolidated financial statements appearing elsewhere in this prospectus. The consolidated statements of operations data for the nine months ended September 30, 2014 and September 30, 2015 and the consolidated balance sheet data as of September 30, 2015 are derived from our unaudited consolidated financial statements included elsewhere in this prospectus. Our unaudited consolidated financial statements were prepared on the same basis as our audited consolidated financial statements and include, in our opinion, all normal recurring adjustments necessary for the fair presentation of the financial information set forth in those statements.

Our historical results for any prior period are not necessarily indicative of the results that should be expected in any future period, and our interim results are not necessarily indicative of the results to be expected for a full year. The following selected consolidated financial data should be read in conjunction with the sections entitled "Capitalization" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus.

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	Year Ended December 31,						Nine Months Ended September 30,

	2013			2014			2014			2015
	(In thousands, except share and per share amounts)
Consolidated Statement of Operations Data:
Revenue:
Product revenue	$	25,143		$	46,878		$	33,710		$	42,684
Service revenue		—			1,550			965			7,594

Total revenue		25,143			48,428			34,675			50,278

Cost of revenue, exclusive of depreciation and amortization shown below:
Product cost		20,921			37,073			26,940			32,811
Service cost		—			739			464			2,398

Total cost of revenue		20,921			37,812			27,404			35,209

Gross profit		4,222			10,616			7,271			15,069

Operating (income) expenses:
Research and development		1,338			1,660			1,148			1,879
Sales and marketing		1,775			2,272			1,573			2,071
General and administrative		2,482			3,970			2,672			5,374
Change in fair value of acquisition-related contingent consideration (income) expense		—			790			284			(1,348	)
Depreciation and amortization		1,118			1,817			1,309			2,935

Total operating (income) expenses		6,713			10,509			6,986			10,911

(Loss) income from operations		(2,491	)		107			285			4,158
Other (income) expense:
Change in fair value of warrant liability		547			269			(18	)		3,477
Interest expense		833			1,354			988			4,418

Total other (income) expense		1,380			1,623			970			7,895

Loss before income taxes		(3,871	)		(1,516	)		(685	)		(3,737	)
Income tax (benefit) expense		—			(409	)		(426	)		212

Net loss		(3,871	)		(1,107	)		(259	)		(3,949	)
Accretion of redeemable convertible preferred stock		(5,346	)		(3,884	)		(531	)		(12,058	)

Net loss attributable to common stockholders	$	(9,217	)	$	(4,991	)	$	(790	)	$	(16,007	)



Net loss per share attributable to common stockholders, basic and diluted	$	(1.22	)	$	(0.63	)	$	(0.10	)	$	(1.95	)



Weighted average common shares outstanding, basic and diluted		7,525,931			7,862,025			7,824,537			8,210,760



Pro forma net loss per share attributable to common stockholders, basic and diluted (unaudited)(1)				$						$



Pro forma weighted average common shares outstanding, basic and diluted (unaudited)(1)



Other Financial Data:
Adjusted EBITDA(2)	$	(1,284	)	$	2,968		$	2,068		$	6,216

(1): We intend to use a portion of the proceeds from this offering to repay outstanding debt. The pro forma net loss per share information is calculated based upon an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and gives effect to

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the automatic conversion of all outstanding shares of preferred stock into 9,873,511 shares of our common stock immediately prior to the completion of this offering, the add back of accretion of redeemable convertible preferred stock, the sale of shares, which is the number of shares whose proceeds would be necessary to repay $ of outstanding debt, and the repayment of such debt, all as of the beginning of the reporting period, before deducting estimated underwriting discounts and expenses payable by us. The net loss attributable to common stockholders has been adjusted to exclude interest expense associated with the interest expense incurred on the portion of the debt expected to be repaid with net proceeds from this offering.

The table below provides a summary of net loss attributable to common stockholders used in the calculation of pro forma net loss per share:

	Year Ended December 31, 2014			Nine Months Ended September 30, 2015

Net loss attributable to common stockholders	$	(4,991	)	$	(16,007	)
Accretion of redeemable convertible preferred stock		3,884			12,058
Reduction of interest expense

Pro forma net loss attributable to common stockholders	$			$

The table below provides a summary of the pro forma weighted average common shares outstanding, basic and diluted:



Weighted average common shares outstanding, basic and diluted	7,862,025	8,210,760
Conversion of redeemable convertible preferred stock	9,873,511	9,873,511
Common shares sold in offering related to repayment of debt

(2): Adjusted EBITDA is a non-GAAP financial measure. See "Adjusted EBITDA" below for our definition of Adjusted EBITDA, why we present Adjusted EBITDA, limitations on the usefulness of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net loss, the most nearly comparable GAAP measurement.

	December 31,						September 30,

	2013			2014			2015
	(In thousands)
Consolidated Balance Sheet Data:
Cash	$	6,027		$	4,122		$	2,558
Working capital		3,119			(9,822	)		(30,675	)
Total assets		14,533			58,823			58,341
Line of credit		6,860			6,860			10,000
Long-term debt, including current portion		3,235			15,110			14,341
Notes payable to related parties		1,089			1,014			660
Notes payable related to acquisition		—			14,350			15,256
Warrant liability		679			2,783			6,260
Total liabilities		15,430			59,818			62,187
Total redeemable convertible preferred stock		15,123			19,007			31,065
Total stockholders' deficit		(16,020	)		(20,002	)		(34,911	)

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Adjusted EBITDA

The following is a reconciliation of Adjusted EBITDA to our net loss for the years ended December 31, 2013 and 2014 and the nine months ended September 30, 2014 and 2015:

	Year Ended December 31,						Nine Months Ended September 30,

	2013			2014			2014			2015
	(In thousands)
Reconciliation of Adjusted EBITDA to net loss:
Net loss	$	(3,871	)	$	(1,107	)	$	(259	)	$	(3,949	)
Add:
Change in fair value of warrant liability		547			269			(18	)		3,477
Interest expense		833			1,354			988			4,418
Income tax (benefit) expense		—			(409	)		(426	)		212
Depreciation and amortization		1,118			1,817			1,309			2,935
Change in fair value of acquisition-related contingent consideration expense (income)		—			790			284			(1,348	)
Stock-based compensation expense		89			254			190			471

Adjusted EBITDA	$	(1,284	)	$	2,968		$	2,068		$	6,216

To provide investors with additional information about our financial results, we disclose within this prospectus Adjusted EBITDA, a non-GAAP financial measure. Adjusted EBITDA consists of net loss plus total other expenses, which includes change in fair value of warrant liability and interest expense; provision (benefit) for income tax, depreciation and amortization, change in fair value of acquisition-related contingent consideration (income) expense and stock-based compensation expense. We present Adjusted EBITDA because it is one of the measures used by our management and board of directors to understand and evaluate our core operating performance, and we consider it an important supplemental measure of performance. We believe this metric is commonly used by the financial community, and we present it to enhance investors' understanding of our operating performance and cash flows. We believe Adjusted EBITDA provides investors and other users of our financial information consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations.

Our management uses Adjusted EBITDA:

•: as a measure of operating performance to assist in comparing performance from period to period on a consistent basis;
•: to prepare and approve our annual budget; and
•: to develop short- and long-term operational plans

Adjusted EBITDA is not in accordance with, or an alternative to, measures prepared in accordance with GAAP. In addition, this non-GAAP measure is not based on any comprehensive set of accounting rules or principles. As a non-GAAP measure, Adjusted EBITDA has limitations in that it does not reflect

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all of the amounts associated with our results of operations as determined in accordance with GAAP. In particular:

•: although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
•: Adjusted EBITDA does not reflect cash interest income or expense;
•: Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
•: Adjusted EBITDA does not reflect the potentially dilutive impact of stock-based compensation;
•: Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and
•: other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure.

Because of these and other limitations, you should consider Adjusted EBITDA alongside other GAAP-based financial performance measures, including various cash flow metrics, net income and our other GAAP financial results and not in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. You should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in the presentation, and we do not intend to imply that our future results will be unaffected by unusual or non-recurring items.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the "Risk Factors" section of this prospectus, our actual results could differ materially from the results we describe or imply in the forward-looking statements contained in the following discussion and analysis.

Overview

Our suite of cloud-based software solutions provides prescribers, pharmacists and healthcare organizations with sophisticated and innovative tools to better manage the medication-related needs of their patients. We believe we offer the first prospective clinical approach to medication risk management, which is designed to increase patient safety and promote adherence to a patient's personalized medication regimen. Furthermore, our medication risk management technology helps healthcare organizations lower costs by reducing ADEs, enhancing quality of care and avoiding preventable hospital admissions. Our products and services are built around our novel and proprietary MRM Matrix, which enables optimization of a patient's medication regimen, involving personalizing medication selection, dosage levels, time-of-day administration and reducing the total medication burden by eliminating unnecessary prescriptions. The MRM Matrix analyzes a combination of clinical and pharmacology data, population-based algorithms and extensive patient-specific data, including medical history, lab results, medication lists and individual genomic data, to deliver "precision medicine." We provide software-enabled solutions that can be bundled with prescription fulfillment and adherence packaging services, which are informed by a patient's personalized MRM Matrix to increase adherence to a patient's optimized regimen, through our three prescription fulfillment pharmacies. Our prescription fulfillment pharmacies are strategically located to efficiently distribute medications nationwide for our clients and medications are packaged to promote adherence to their patients' personalized regimens and dosing schedules. Our team of clinical pharmacists is available to support prescribers at the point of care through our proprietary technology platform, including real-time secure messaging, with more than 100,000 messages exchanged per month. Recently, we began offering software solutions on a standalone software-as-a-service basis, although to date, all of our medication risk management clients have contracted for a bundled offering of our software-enabled solutions, prescription fulfillment and adherence packaging services. While prescription medication revenue has comprised substantially all of our revenue to date, we do not offer prescription fulfillment and adherence packaging services on a standalone basis.

Our technology-driven approach to medication risk management represents an evolution from prevailing non-personalized approaches that primarily rely on single drug-to-drug interaction analysis. At the end of 2011, 2012, 2013 and 2014, we were serving 8, 13, 20 and 51 healthcare organizations, respectively, and as of September 30, 2015, this number had grown to 101 healthcare organizations that focus on populations with complex healthcare needs and extensive medication requirements.

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Our total revenue and Adjusted EBITDA for the nine months ended September 30, 2015 were $50.3 million and $6.2 million, respectively, compared to $34.7 million and $2.1 million, respectively, for the nine months ended September 30, 2014. Our total revenue and Adjusted EBITDA for the year ended December 31, 2014 were $48.4 million and $3.0 million, respectively, compared to $25.1 million and $(1.3) million, respectively, for the year ended December 31, 2013. We incurred net losses of $259 thousand and $3.9 million for the nine months ended September 30, 2014 and 2015, respectively, and $3.9 million and $1.1 million for the years ended December 31, 2013 and 2014, respectively. See "Selected Consolidated Financial Data — Adjusted EBITDA" for our definition of Adjusted EBITDA, why we present Adjusted EBITDA and a reconciliation of net losses to Adjusted EBITDA.

We face a variety of challenges and risks, which we will need to address and manage as we pursue our growth strategy. In particular, we will need to continue to innovate in the face of a rapidly changing healthcare landscape if we are to remain competitive. We will also need to effectively manage our growth, especially related to our expansion beyond the PACE and post-acute markets to other at-risk providers and payors. Our senior management continuously focuses on these and other challenges, and we believe that our culture of innovation and our history of growth and expansion will contribute to the success of our business. We are engaged in a number of pilot programs of our technology and services and we intend to use these pilot programs to evaluate the viability and impact of our offerings in certain markets. We cannot, however, assure you that we will be successful in addressing and managing the many challenges and risks that we face.

We manage our operations and allocate resources as a single reportable segment. All of our revenue is recognized in the United States and all of our assets are located in the United States.

Key Business Metrics

We regularly review a number of metrics, including the following key metrics, to evaluate and manage our business and that are useful in evaluating our operating performance compared to that of other companies in our industry.

	Nine Months Ended September 30,						Change

	2014			2015			$			%
	(Dollars in thousands)
Total revenue	$	34,675		$	50,278		$	15,603			45	%
Net loss		(259	)		(3,949	)		(3,690	)		(1,425	)
Adjusted EBITDA		2,068			6,216			4,148			201

	Year Ended December 31,						Change

	2013			2014			$		%
	(Dollars in thousands)
Total revenue	$	25,143		$	48,428		$	23,285		93	%
Net loss		(3,871	)		(1,107	)		2,764		71
Adjusted EBITDA		(1,284	)		2,968			4,252		331

We monitor the key metrics set forth in the preceding table to help us evaluate trends, establish budgets, measure the effectiveness and efficiency of our operations and gauge our cash generation. We discuss Adjusted EBITDA in "Selected Consolidated Financial Data — Adjusted EBITDA."

We also monitor revenue retention rate and client retention rate. Our revenue retention rate and client retention rate were 95% and 97%, respectively for 2014 and 100% and 100%, respectively, for 2013.

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Revenue retention rate

We believe that our ability to retain revenue associated with new or existing client relationships is an indicator of the stability of our revenue base and the long-term value we provide to our clients. We assess our performance in this area using a metric we refer to as our revenue retention rate. We calculate our revenue retention rate at the end of each calendar year by dividing total revenue in the year from client contracts that have not renewed or have been terminated during the year by our total revenue for that year, and subtracting this quotient from 100%.

Client retention rate

We monitor our client retention rate as a measure for our overall business performance. We believe that our ability to retain clients is an indicator of the stability of our revenue base and the long-term value of our client relationships. We assess our performance in this area using a metric we refer to as our client retention rate. We calculate this rate by dividing the number of client terminations and client non-renewals during a calendar year by the total number of clients serviced during that year, and subtracting this quotient from 100%.

Factors Affecting our Future Performance

We believe that our future success will be dependent on many factors, including our ability to maintain and grow our relationships with existing clients, expand our client base, continue to enter new markets and expand our offerings to meet evolving market needs. While these areas present significant opportunity, they also present risks that we must manage to ensure successful results. See the section entitled "Risk Factors" for a discussion of certain risks and uncertainties that may impact our future success.

Recent Developments

Reorganization

Effective June 30, 2014, in order to facilitate the administration, management and development of our business and the proposed initial public offering, we implemented a holding company reorganization pursuant to which we became the new parent company and CareKinesis became our direct, wholly owned subsidiary. To implement the reorganization, we formed CK Merger Sub, Inc. The holding company structure was implemented by the merger of CK Merger Sub, Inc. with and into CareKinesis, with CareKinesis surviving the merger as our direct, wholly owned subsidiary. As a result of the reorganization, each share of CareKinesis issued and outstanding immediately prior to the merger automatically converted into the same share, with the same rights and preferences, of stock in our company. The business conducted by CareKinesis immediately prior to the corporate reorganization continues to be conducted by CareKinesis following the reorganization. In addition, in connection with the reorganization, CareKinesis distributed all of the equity interests in two of its wholly owned subsidiaries, Capstone Performance Systems, LLC, or Capstone, and CareVentions, Inc., to us.

Acquisitions

In January 2014, we acquired all of the authorized, issued and outstanding shares of capital stock of J. A. Robertson, Inc., doing business as St. Mary Prescription Pharmacy, or SMPP, a pharmacy based in San Francisco, California that has been servicing the needs of PACE participants for over 30 years. The acquisition consideration consisted of cash consideration of up to $2.0 million, consisting of $1.0 million payable upon closing, up to $500 thousand payable following the six-month anniversary of the closing date, up to $300 thousand payable following the 12-month anniversary of the closing date and a fixed amount of $200 thousand payable following the 24-month anniversary of the closing date. The first two cash payments made subsequent to the closing date were contingent upon the achievement of specified revenue targets, as set forth in the underlying purchase agreement. As of September 30, 2015, each of the first two contingent cash payments have been made in full. The final

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payment on the 24-month anniversary of the closing date will be paid if we have not made any claims for indemnification pursuant to the purchase agreement. In addition to the cash consideration, the purchase price included up to 210,000 shares of our common stock, consisting of 105,000 shares due upon the closing of the acquisition, up to 52,500 shares due following the six-month anniversary of the closing date, up to 31,500 shares due following the 12-month anniversary of the closing date and a fixed amount of 21,000 shares due following the 24-month anniversary of the closing date. The first two issuances made subsequent to the closing date were contingent upon the achievement of specified revenue targets. As of September 30, 2015, the first two contingent stock payments have been made in full. The final issuance following the 24-month anniversary of the closing date will be issued if we have not made any claims for indemnification pursuant to the purchase agreement. No claims for indemnification have been made as of September 30, 2015.

In April 2014, we acquired substantially all of the assets, and assumed certain liabilities, of Capstone, a consulting business providing expert Medicare risk adjustment services for at-risk healthcare organizations. The acquisition consideration consisted of cash consideration consisting of $3.0 million payable upon closing, $500 thousand payable following the six-month anniversary of the closing date, and the greater of (i) $2.0 million or (ii) an amount equal to a multiple of EBITDA, as defined in the purchase agreement, payable following the 12-month anniversary of the closing date. As of September 30, 2015, all contingent cash payments had been made, totaling $577 thousand, and no additional contingent cash consideration is payable. In addition to the cash consideration, the purchase price included up to 677,862 shares of our common stock, which was issuable following the 12-month anniversary of the closing date if specified net income targets, as defined in the purchase agreement, were achieved. As of September 30, 2015, 239,088 shares of our common stock have been issued and no additional stock consideration is payable.

In December 2014, we acquired all of the authorized, issued and outstanding equity interests of Medliance LLC, or Medliance, which provides pharmacy cost management services through data analytics. The acquisition consideration consisted of $16.4 million in the form of promissory notes with an aggregate fair value of $14.3 million as of the acquisition date, or the Medliance Notes, and cash consideration consisting of $12.0 million payable upon closing and contingent purchase price consideration with an estimated acquisition date fair value of $7.3 million due upon achieving specified revenue targets as of the 12-, 24- and 36-month anniversaries of the acquisition. The Medliance Notes accrue interest at 8% per annum, compounding annually and are due on June 30, 2016 unless an initial public offering occurs prior to the maturity date, at which time all principal and interest shall become due and payable or, at the option of the holder, the holder may receive a number of shares of our common stock equal to the quotient obtained by dividing (i) the outstanding principal amount under such Medliance Note by (ii) 92% of the public offering price per share of our common stock in the initial public offering.

We account for acquisitions using the purchase method of accounting. In each case, we allocated the purchase price to the assets acquired, including intangible assets and liabilities assumed, based on estimated fair values at the date of the acquisition. The results of operations from each acquisition are included in our consolidated financial statements from the acquisition date.

Financing

On April 29, 2015 we entered into a revolving line of credit, or the 2015 Line of Credit, with a lender pursuant to the terms of a loan and security agreement, which provides for borrowings in an aggregate amount up to $15.0 million to be used for general corporate purposes, including repayment of a prior line of credit. We borrowed $10.0 million under the 2015 Line of Credit at that time. See "—Liquidity and Capital Resources—Revolving Credit Facility" for additional information with respect to the 2015 Line of Credit.

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Components of Our Results of Operations

Revenue

Our revenue is derived from our product sales and service activities. For the nine months ended September 30, 2014 and 2015, product sales represented 97% and 85%, respectively, of our total revenue, and service revenue represented 3% and 15%, respectively, of our total revenue.

For the years ended December 31, 2013 and 2014, product sales represented 100% and 97%, respectively, of our total revenue and service revenue represented 0% and 3%, respectively, of our total revenue. We did not generate service revenue until our acquisition of Capstone in April 2014.

Product Revenue

Our product revenue is primarily generated through our medication risk management contracts with healthcare organizations. Our MRM Matrix technology enables our pharmacists to prospectively optimize personalized medication regimens for each patient. Recently, we began offering software solutions on a standalone software-as-a-service basis, although to date, all of our medication risk management clients have contracted for a bundled offering of our software-enabled solutions, prescription fulfillment and adherence packaging services. We do not offer, and have not generated any revenue from, standalone prescription fulfillment and adherence packaging services.

Under our medication risk management contracts, revenue is generated through the following components:

Prescription medication revenue. We sell prescription medications directly to healthcare organizations through our prescription fulfillment pharmacies. Prescription medication fees are based upon the prices stated in client contracts for the prescription and include a dispensing fee. For the periods presented, substantially all of our product revenue has consisted of prescription medication revenue.

Per member per month, or PMPM, fees. We also receive a fixed monthly administrative fee for each member in the program contracted for medication risk management services.

Our revenue from prescription medication sales varies based on the number and mix of medications dispensed; however, based on our historical experience, patient populations at our clients do not generally decline over time, the number of medications per patient have been consistent following an initial onboarding period and the overall mix of medications dispensed is generally predictable. In addition, our dispensing fees vary directly with the volume of prescription medication sales each period. Our PMPM fees vary directly with the number of members serviced by our clients each month. Although revenue is generated from various sources, pricing and other key contractual terms are negotiated on a bundled basis.

Service Revenue

Our service revenue is generated by the risk adjustment and pharmacy cost management services that we provide to healthcare organizations. Our client contracts for these services include a PMPM fee for selected services, monthly subscription fees, initial set up fees and hourly consulting charges. PMPM fees vary directly with the number of members serviced by our clients each month under our risk adjustment contracts. Additionally, service revenue includes data and statistics fees we receive from medication manufacturers for the sale of medication utilization data we collect through our pharmacy cost management engagements, which is recognized when we receive such amounts due to the unpredictable nature of the payments.

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Cost of Revenue

Product Cost

Cost of product revenue includes all costs directly related to the medication risk management offering, including costs relating to our pharmacists' collaboration on a patient's medication management, medication risk analysis and offering guidance to the prescriber based upon the assessment of the MRM Matrix and the individual patient's medical history, as well as the fulfillment and distribution of prescription medications. Costs consist primarily of the purchase price of the prescription medications we dispense. For the nine months ended September 30, 2014 and 2015, prescription medication costs represented 75% and 76%, respectively, of our total product costs. For the years ended December 31, 2013 and 2014, prescription medication costs represented 71% and 75%, respectively, of our total product costs. In addition to costs incurred for the prescription medications we dispense, other costs include expenses to package, dispense and distribute prescription medications, expenses associated with our clinical pharmacist support centers and prescription fulfillment centers, including employment costs and stock-based compensation, and expenses related to the hosting of our technology platform. Such costs also include direct overhead expenses, as well as allocated miscellaneous overhead costs. We allocate miscellaneous overhead costs among functions based on employee headcount.

Service Cost

Cost of service revenue includes all labor costs, including stock-based compensation expense, directly related to the risk adjustment and pharmacy cost management services and expenses for claims processing, technology services and overhead costs.

Research and Development Expenses

Our research and development expenses consist primarily of salaries and related costs, including stock-based compensation expense, for personnel in our research and development functions, costs for design and development of new software and technology and enhancement of existing software and technology, including fees paid to third-party consultants, costs related to quality assurance and testing, and depreciation and other allocated facility-related overhead and expenses.

We continue to focus our research and development efforts on adding new features and applications, increasing the functionality and enhancing the ease of use of our existing suite of software solutions.

We capitalize certain costs incurred in connection with obtaining or developing internal-use software, including external direct costs of material and services and payroll costs for employees directly involved with the software development. Capitalized software costs are amortized beginning when the software project is substantially complete and the asset is ready for its intended use. Costs incurred during the preliminary project stage and post-implementation stage, as well as maintenance and training costs, are expensed as incurred as part of research and development expense.

We expect our research and development expenses will increase in absolute dollars as we increase our research and development headcount to further strengthen and enhance our software solutions, but will decrease as a percentage of revenue in the long term as we expect our revenue to increase at a greater rate than such expenses.

Sales and Marketing Expenses

Sales and marketing expenses consist principally of salaries, commissions, bonuses, stock-based compensation and employee benefits for sales and marketing personnel, as well as travel costs related to sales, marketing and client service activities. Marketing costs also include costs of communication and branding materials, trade shows and public relations, as well as allocated overhead.

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We expect our sales and marketing expenses to increase in absolute dollars as we strategically invest to grow our marketing operations and expand into new products and markets, but decrease as a percentage of revenue in the long term. We expect to hire additional sales personnel and related account management and sales support personnel as we continue to grow.

General and Administrative Expenses

General and administrative expenses consist principally of salaries and related costs for executives, administrative personnel and consultants, including stock-based compensation and travel expenses. Other general and administrative expenses include professional fees for legal, consulting and accounting services. General and administrative expenses are expensed when incurred.

We expect that our general and administrative expenses will increase as we expand our infrastructure and transition to a public company. These increases will likely include increased costs for director and officer liability insurance, costs related to the hiring of additional personnel and increased fees for directors, outside consultants, lawyers and accountants. We also expect to incur significant costs to comply with corporate governance, internal controls and similar requirements applicable to public companies.

Remeasurement of Acquisition-related Contingent Consideration

We classify our acquisition-related contingent consideration as a liability. Acquisition-related contingent consideration is subject to remeasurement at each balance sheet date. Any change in the fair value of such acquisition-related contingent consideration is reflected in our consolidated statements of operations as a change in fair value of the liability. We will continue to adjust the carrying value of the acquisition-related contingent consideration until the contingency is finally determined.

Depreciation and Amortization Expenses

Depreciation and amortization expenses are primarily attributable to our capital investment in equipment and our capitalized software and acquisition-related intangibles.

Change in Fair Value of Warrant Liability

Warrants to purchase shares of our preferred stock are classified as warrant liabilities and recorded at fair value. This warrant liability is subject to remeasurement at each balance sheet date and we recognize any change in fair value in our consolidated statements of operations as a change in fair value of the warrant liability. Upon the completion of this offering, these warrants will automatically convert into warrants to purchase shares of our common stock. At that time, the liabilities will be reclassified to additional paid-in capital, a component of stockholders' equity (deficit).

Interest Expense

Interest expense is primarily attributable to interest expense associated with our revolving credit facility, term loans, related party notes, capital lease obligations and acquisition-related notes. It also includes the amortization of discounts on debt and amortization of deferred financing costs related to these various debt arrangements.

Accretion of Redeemable Convertible Preferred Stock

The carrying values of Series A and Series A-1 redeemable convertible preferred stock are being accreted to their respective redemption values at each reporting period, from the date of issuance to the earliest date the holders can demand redemption. The carrying value of Series B redeemable convertible preferred stock is being accreted to redemption value at each reporting period at the greater of (i) the original issuance price plus unpaid accrued dividends or (ii) the fair value of the redeemable convertible preferred stock. Upon the completion of this offering, our preferred stock will automatically convert into shares of our common stock. At that time, we will discontinue accreting our preferred stock to its redemption value.

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Results of Operations

The following table summarizes our results of operations for the years ended December 31, 2013 and 2014 and for the nine months ended September 30, 2014 and 2015:

	Year Ended December 31,						Change						Nine Months Ended September 30,						Change

	2013			2014			$			%			2014			2015			$			%
	(Dollars in thousands)
Revenue:
Product revenue	$	25,143		$	46,878		$	21,735			86	%	$	33,710		$	42,684		$	8,974			27	%
Service revenue		—			1,550			1,550			nm			965			7,594			6,629			687

Total revenue		25,143			48,428			23,285			93			34,675			50,278			15,603			45

Cost of revenue, exclusive of depreciation and amortization shown below:
Product cost		20,921			37,073			16,152			77			26,940			32,811			5,871			22
Service cost		—			739			739			nm			464			2,398			1,934			417

Total cost of revenue		20,921			37,812			16,891			81			27,404			35,209			7,805			28

Gross profit		4,222			10,616			6,394			151			7,271			15,069			7,798			107

Operating (income) expenses:
Research and development		1,338			1,660			322			24			1,148			1,879			731			64
Sales and marketing		1,775			2,272			497			28			1,573			2,071			498			32
General and administrative		2,482			3,970			1,488			60			2,672			5,374			2,702			101
Change in fair value of acquisition-related contingent consideration (income) expense		—			790			790			nm			284			(1,348	)		(1,632	)		nm
Depreciation and amortization		1,118			1,817			699			63			1,309			2,935			1,626			124

Total operating (income) expenses		6,713			10,509			3,796			57			6,986			10,911			3,925			56

(Loss) income from operations		(2,491	)		107			2,598			nm			285			4,158			3,873			nm
Other (income) expense:
Change in fair value of warrant liability		547			269			(278	)		(51	)		(18	)		3,477			3,495			nm
Interest expense		833			1,354			521			63			988			4,418			3,430			347

Total other (income) expense		1,380			1,623			243			18			970			7,895			6,925			714

Loss before income taxes		(3,871	)		(1,516	)		2,355			61			(685	)		(3,737	)		(3,052	)		(446	)
Income tax (benefit) expense		—			(409	)		(409	)		nm			(426	)		212			638			nm

Net loss		(3,871	)		(1,107	)		2,764			71			(259	)		(3,949	)		(3,690	)		(1,425	)
Accretion of redeemable convertible preferred stock		(5,346	)		(3,884	)		1,462			27			(531	)		(12,058	)		(11,527	)		2,171

Net loss attributable to common stockholders	$	(9,217	)	$	(4,991	)	$	4,226			46	%	$	(790	)	$	(16,007	)	$	(15,217	)		1,926	%

nm = not meaningful

Comparison of the Nine Months Ended September 30, 2014 and 2015

Product Revenue

Product revenue increased $9.0 million, or 27%, from $33.7 million for the nine months ended September 30, 2014 to $42.7 million for the comparable period in 2015. The increase was primarily driven

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by organic growth in our core business, medication risk management, which represented approximately $5.6 million of the increase. Of that $5.6 million increase, $2.1 million was attributable to new customers acquired period over period, while the remaining $3.5 million was attributable to increased prescription fulfillment volume from existing customers. Manufacturer price increases, medication mix we fulfilled for our clients' patients and payor mix contributed to an additional $3.4 million of the overall increase in product revenue.

Service Revenue

Service revenue increased $6.6 million from $1.0 million for the nine months ended September 30, 2014 to $7.6 million for the nine months ended September 30, 2015, which was primarily the result of a $5.5 million increase related to our pharmacy cost management services related to Medliance, which we acquired in December 2014, and an additional $1.1 million increase related to nine months of revenue from risk adjustment services related to Capstone for the period ended September 30, 2015 as compared to only five months for the period ended September 30, 2014.

For the nine months ended September 30, 2014, revenue generated from our PMPM fees and subscription revenue was $858 thousand while the remainder of the service revenue primarily related to hourly consulting charges and setup fees. For the nine months ended September 30, 2015, $3.1 million related to PMPM fees and subscription revenue and $4.5 million represented hourly consulting charges and data and statistics revenue.

Cost of Product Revenue

Cost of product revenue increased $5.9 million, or 22%, from $26.9 million for the nine months ended September 30, 2014 to $32.8 million for the comparable period in 2015. This increase was largely driven by increased volume of revenue which contributed approximately $3.6 million to the period over period change, while manufacturer price increases and medication mix we fulfilled for our clients' patients contributed $2.1 million to the overall increase in the cost of product revenue. In addition, labor costs increased $527 thousand, which was primarily due to added pharmacy headcount, including additional pharmacists, technicians and support staff, to support our growth, as well as a $313 thousand increase in distribution charges related to increased shipping volume for the medications we fulfilled for our clients' patients. These increases were offset by more favorable rebates on wholesale product purchases of prescription medications. Specifically, we joined a purchasing group in the first quarter of 2014 and, as a result, were able to gain access to more favorable pricing, which decreased the cost of the prescription medications we purchased by $727 thousand.

Cost of Service Revenue

Cost of service revenue increased $1.9 million from $464 thousand for the nine months ended September 30, 2014 to $2.4 million for the nine months ended September 30, 2015. Of the $1.9 million increase, $1.3 million was attributable to pharmacy cost management services related to Medliance, which we acquired in December 2014, and $533 thousand was the result of risk adjustment services related to Capstone for the period ended September 30, 2015 as compared to five months for the period ended September 30, 2014.

Research and Development Expenses

Research and development expenses increased $731 thousand, or 64%, from $1.1 million for the nine months ended September 30, 2014 to $1.9 million for the comparable period in 2015. The overall increase was primarily attributable to a $476 thousand increase in payroll and payroll-related costs. Additionally, $236 thousand of the increase was from expenses related to new Medliance product offerings.

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Sales and Marketing Expenses

Sales and marketing expenses increased $498 thousand, or 32%, from $1.6 million for the nine months ended September 30, 2014 to $2.1 million for the comparable period in 2015. The increase was primarily attributable to a $202 thousand increase in personnel costs, including salaries and benefits, related to market adjustments as well as performance-based increases. The remaining portion of the increase was principally related to increased marketing efforts, in particular marketing events and conferences, which contributed approximately $134 thousand to the overall increase in such expenses. The increase in the period also included $162 thousand in sales and marketing expenses related to the ongoing operations of Capstone and Medliance.

General and Administrative Expenses

General and administrative expenses increased $2.7 million, or 101%, from $2.7 million for the nine months ended September 30, 2014 to $5.4 million for the nine months ended September 30, 2015. The increase was primarily attributable to a $894 thousand increase in personnel costs, including salaries and benefits, related to an increase in headcount to support the overall growth of our operations. Finance and accounting fees increased by $805 thousand as a result of higher costs related to preparation for this offering that did not qualify for deferral. Additionally, the increase in the period included $555 thousand of general and administrative expenses related to the ongoing operations of Medliance and $232 thousand for nine months of operations of Capstone for the period ended September 30, 2015 as compared to $90 thousand for the five months for the period ended September 30, 2014.

Acquisition-related Contingent Consideration Expense

During the nine months ended September 30, 2014, we recognized a $284 thousand remeasurement charge, as compared to a $1.3 million remeasurement gain during the nine months ended September 30, 2015, related to the contingent consideration associated with our acquisitions of SMPP, Capstone and Medliance. The remeasurement gain recorded during the nine months ended September 30, 2015 was due to a decrease in expected revenue for Medliance due to a lost customer in 2015, which reduced the amount of contingent consideration we expect to pay.

Depreciation and Amortization Expenses

Depreciation and amortization expenses increased $1.6 million, or 124%, from $1.3 million for the nine months ended September 30, 2014 to $2.9 million for the comparable period in 2015. This increase was due to an increase in depreciation expense of $112 thousand related to the continued capital investment in pharmacy and other equipment to support our medication adherence and fulfillment technology, an increase in amortization expense of $102 thousand due to capitalized internal-use software and an increase of $1.4 million due to acquisition-related intangibles.

Change in Fair Value of Warrant Liability

During the nine months ended September 30, 2014, we recognized $18 thousand of income for the change in fair value of warrant liability as compared to expense of $3.5 million during the nine months ended September 30, 2015. The change in fair value of warrant liability for the nine months ended September 30, 2015 was due to the increase in the fair value of our Series A-1 and Series B redeemable convertible preferred stock.

Interest Expense

Interest expense increased $3.4 million from $1.0 million for the nine months ended September 30, 2014 to $4.4 million for the nine months ended September 30, 2015. The increase was primarily attributable to interest payable and the amortization of debt discounts recorded in connection with

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various acquisition debt financing, including the Medliance Notes, in an aggregate amount of $3.4 million.

Income Taxes

During the nine months ended September 30, 2015, we recognized expense of $212 thousand related to state income taxes and deferred income tax expense related to goodwill that is attributable to the nine months ended September 30, 2015. For the nine months ended September 30, 2014, we recognized a $426 thousand income tax benefit. The income tax benefit was primarily the result of deferred tax liabilities that were recorded in connection with the acquisition of SMPP, which created a source of recoverability of a portion of previously reserved deferred tax assets.

Comparison of the Years Ended December 31, 2013 and 2014

Product Revenue

Product revenue increased $21.8 million, or 86%, from $25.1 million for the year ended December 31, 2013 to $46.9 million for the year ended December 31, 2014. The increase was primarily driven by organic growth in our core business, medication risk management, which represented $11.8 million of the increase. Of that $11.8 million increase, $1.8 million was attributable to new customers acquired period over period, while the remaining $10.0 million was attributable to increased prescription fulfillment volume from existing customers. Medication manufacturer price increases, medication mix we fulfilled for our clients' patients and payor mix contributed to an additional $3.7 million of the overall increase in product revenue. An additional $6.2 million of the increase was attributable to the acquisition of SMPP, which resulted in higher medication fulfillment revenue.

Service Revenue

Service revenue was $1.6 million for the year ended December 31, 2014, which was attributable to revenue derived from risk adjustment services related to Capstone, which we acquired in April 2014. Nearly all of this service revenue related to PMPM fees.

Cost of Product Revenue

Cost of product revenue increased $16.2 million, or 77%, from $20.9 million for the year ended December 31, 2013 to $37.1 million for the year ended December 31, 2014. This increase was largely driven by increased volume of revenue, which contributed $7.2 million to the year over year change, while medication manufacturer price increases and medication mix we fulfilled for our clients' patients contributed $3.6 million to the overall increase in the cost of product revenue. In addition, labor costs increased $939 thousand, primarily due to added pharmacy headcount, including additional pharmacists, technicians and support staff, to support our sales growth. We also experienced a $450 thousand increase in distribution charges related to increased shipping volume for the medications we fulfilled for our clients' patients. These increases were offset in part by more favorable rebates on wholesale product purchases of prescription medications. Specifically, we joined a purchasing group in the first quarter of 2014 and, as a result, were able to gain access to more favorable pricing which decreased the cost of the prescription medications we purchased by $1.7 million. The increase in the period also included $5.2 million for cost of product revenue related to the ongoing operations of SMPP, which we acquired in January 2014.

Cost of Service Revenue

Cost of service revenue was $739 thousand for the year ended December 31, 2014. The cost of service revenue in the period primarily related to risk adjustment services related to Capstone, which we acquired in April 2014.

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Research and Development Expenses

Research and development expenses increased $322 thousand, or 24%, from $1.3 million for the year ended December 31, 2013 to $1.7 million for the year ended December 31, 2014. The overall increase was primarily attributable to a $183 thousand increase in personnel costs due to an increase in headcount, an increase in professional fees of $42 thousand and an increase in technology cost of $63 thousand attributable to the continued development of our software applications.

Sales and Marketing Expenses

Sales and marketing expenses increased $497 thousand, or 28%, from $1.8 million for the year ended December 31, 2013 to $2.3 million for the year ended December 31, 2014. The increase was primarily attributable to a $211 thousand increase in personnel costs, including salaries and benefits, related to market adjustments as well as performance based increases. The increase in the period also included $105 thousand sales and marketing expenses related to the ongoing operations of SMPP and Capstone. The remaining portion of the increase was principally related to increased marketing efforts, in particular marketing events and conferences.

General and Administrative Expenses

General and administrative expenses increased $1.5 million, or 60%, from $2.5 million for the year ended December 31, 2013 to $4.0 million for the year ended December 31, 2014. The increase was primarily attributable to a $796 thousand increase in personnel costs, including salaries and benefits, related to an increase in headcount to support the overall growth of our operations. Additionally, professional fees increased $218 thousand primarily due to the three acquisitions we completed in 2014 as well as the corporate reorganization that we completed during 2014. The increase also included an increase of $198 thousand in general and administrative expenses related to the ongoing operations of SMPP and Capstone.

Acquisition-related Contingent Consideration Expense

During the year ended December 31, 2014, we recognized a $790 thousand remeasurement charge related to the contingent consideration associated with our acquisitions of SMPP and Capstone, each of which were acquired in 2014. The change was primarily due to Capstone's actual results exceeding the amounts estimated as of the acquisition date, which we determined made the related contingent consideration we expect to pay higher.

Depreciation and Amortization Expenses

Depreciation and amortization expenses increased $699 thousand, or 63%, from $1.1 million for the year ended December 31, 2013 to $1.8 million for the year ended December 31, 2014. This increase was primarily due to an increase in depreciation expense of $99 thousand related to the continued capital investment in pharmacy and other equipment to support our medication adherence and fulfillment technology, an increase in amortization expense of $138 thousand due to capitalized internal-use software and $463 thousand due to acquisition-related intangibles.

Change in Fair Value of Warrant Liability

We recorded expense related to the change in fair value of our warrant liability of $547 thousand and $269 thousand for the years ended December 31, 2013 and 2014, respectively. The change in the fair value of the warrant liability in 2013 and 2014 was due to the increase in the fair value of our preferred stock.

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Interest Expense

Interest expense increased $521 thousand, or 63%, from $833 thousand for the year ended December 31, 2013 to $1.4 million for the year ended December 31, 2014. Of the increase, $428 thousand was due to borrowings under a revolving line of credit we entered into in December 2013 to fund working capital needs to support our growth. In addition, $314 thousand of the increase was attributable to borrowings under a debt facility we entered into to finance the acquisition of Capstone. These increases were offset by $63 thousand related to the write-off of the debt discount associated with the NJEDA Loan. The remaining offset was attributable to higher principal payments due on outstanding debt compared with the year ended December 31, 2013.

Income Taxes

During the year ended December 31, 2014, we recognized a $409 thousand income tax benefit. We recorded a valuation allowance against deferred income tax assets as a result of our history of losses. The income tax benefit recorded in 2014 was primarily the result of deferred tax liabilities that were recorded in connection with the acquisition of SMPP, which created a source of recoverability of a portion of previously reserved deferred tax assets. We do not expect to record an income tax benefit until such time that it generates income before income taxes on a recurring basis or unless there are other sources of recoverability, such as future acquisitions that create taxable temporary differences.

Liquidity and Capital Resources

Since inception, we have incurred net losses from our operations. We incurred net losses of $3.9 million and $1.1 million for the years ended December 31, 2013 and 2014, respectively, and $259 thousand and $3.9 million for the nine months ended September 30, 2014 and 2015, respectively. Our primary liquidity and capital requirements are for research and development, sales and marketing, general and administrative expenses, debt service obligations and strategic business acquisitions. We have funded our operations, working capital needs and investments with cash generated through operations, issuance of preferred stock and borrowings under our credit facilities. At September 30, 2015, we had cash of $2.6 million. Through September 30, 2015, we have received net proceeds of $13.3 million from the issuance of our preferred and common stock, including pursuant to the exercise of stock options.

Summary of Cash Flows

The following table shows a summary of our cash flows for the years ended December 31, 2013 and 2014 and the nine months ended September 30, 2014 and 2015.

	Year Ended December 31,						Nine Months Ended September 30,

	2013			2014			2014			2015
	(In thousands)
Net cash (used in) provided by operating activities	$	(2,155	)	$	870		$	310		$	2,783
Net cash used in investing activities		(845	)		(14,916	)		(5,326	)		(2,907	)
Net cash provided by (used in) financing activities		8,868			12,141			1,209			(1,440	)

Net increase (decrease) in cash and cash equivalents	$	5,868		$	(1,905	)	$	(3,807	)	$	(1,564	)

Operating Activities

Net cash provided by operating activities was $310 thousand for the nine months ended September 30, 2014 and consisted primarily of our net loss of $259 thousand and changes in our operating assets and liabilities totaling $1.0 million, offset by noncash items of $1.4 million. The

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significant factors that contributed to the change in operating assets and liabilities included an increase in accounts receivable of $869 thousand, an increase in inventories of $677 thousand and an increase in rebates receivable of $375 thousand, each of which were directly related to the increase in product sales, partially offset by increases in accounts payable of $375 thousand and accrued expenses and other liabilities of $777 thousand, each of which was primarily due to the timing of our vendor payments and the purchase of prescription medications to build inventory to support our increase in sales. The noncash increases were primarily attributable to depreciation and amortization expenses related to leasehold improvements, capital equipment and capitalized internal-use software development costs of $1.3 million, amortization of deferred financing fees of $177 thousand, stock-based compensation expenses of $190 thousand and an expense of $284 thousand for the revaluation of acquisition contingent consideration partially offset by deferred income tax benefit of $426 thousand. The income tax benefit was primarily the result of deferred tax liabilities that were recorded in connection with the acquisition of SMPP, which created a source of recoverability of a portion of previously reserved deferred tax assets.

Net cash provided by operating activities was $2.8 million for the nine months ended September 30, 2015 and consisted primarily of our net loss of $3.9 million and decreases in cash from changes in our operating assets and liabilities totaling $488 thousand, which were more than offset by non-cash charges of $7.2 million, which were primarily attributable to depreciation and amortization expenses related to leasehold improvements, capital equipment and capitalized internal-use software development costs of $2.9 million, amortization of deferred financing fees and debt discount of $1.6 million, stock-based compensation expense of $471 thousand, the non-cash expense related to the revaluation of the warrant liability of $3.5 million partially offset by a gain of $1.3 million for the revaluation of acquisition-related contingent consideration. The significant factors that contributed to the decrease in cash from changes in operating assets and liabilities included an increase in accounts receivable of $951 thousand, an increase in inventories of $353 thousand, and an increase of $191 thousand in prepaid expenses and other assets. The increase in accounts receivable is directly related to the increase in product sales. The increase in prepaid expenses and other assets was primarily due to a prepayment of rent for a new office space and prepayment in connection with a conference we attended in October 2015. These operating asset increases were partially offset by a decrease of $308 thousand in rebates receivable, primarily related to timing of payments, and increases in accounts payable of $322 thousand and accrued expenses and other liabilities of $912 thousand primarily due to the timing of our vendor payments and the purchase of prescription medications to build inventory that supports our increase in sales, offset by a $610 thousand decrease primarily attributable to contingent considerations payments made to the previous owners of Capstone.

Net cash used in operating activities was $2.2 million for the year ended December 31, 2013 and consisted primarily of our net loss of $3.9 million, partially offset by noncash charges of $1.9 million and a $219 thousand decrease in cash related to changes in operating assets and liabilities. The non-cash charges were primarily attributable to depreciation and amortization expense related to leasehold improvements, capital equipment and capitalized internal-use software development costs of $1.1 million, amortization of deferred financing fees and debt discount of $166 thousand, stock-based compensation expense of $89 thousand and the non-cash expense related to the revaluation of the warrant liability of $547 thousand. The significant factors that contributed to the decrease in cash from changes in operating assets and liabilities included an increase in accounts receivables of $884 thousand and increase in inventories of $337 thousand, each of which were directly related to the increase in product sales, partially offset by increases in accounts payable of $801 thousand and accrued expenses and other liabilities of $403 thousand primarily due to the timing of our vendor payments and the purchase of prescription medications to build inventory to support our increase in sales.

Net cash provided by operating activities was $870 thousand for the year ended December 31, 2014 and consisted primarily of our net loss of $1.1 million and decreases in cash from changes in our operating assets and liabilities totaling $1.0 million, which were more than offset by non-cash charges of

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$3.0 million, which were primarily attributable to depreciation and amortization expenses related to leasehold improvements, capital equipment and capitalized internal-use software development costs of $1.8 million, amortization of deferred financing fees and debt discount of $259 thousand, stock-based compensation expense $254 thousand, non-cash expense related to the revaluation of the warrant liability of $269 thousand and a charge of $730 thousand for the revaluation of acquisition-related contingent consideration, offset by $422 thousand of deferred tax benefit. The significant factors that contributed to the decrease in cash from changes in operating assets and liabilities included an increase in accounts receivable of $1.4 million, an increase in inventories of $792 thousand and an increase in rebates receivable of $715 thousand directly related to the increase in product sales and more favorable rebates due to joining a buying group in the first quarter of 2014, partially offset by increases in accounts payable of $1.4 million and accrued expenses and other liabilities of $604 thousand primarily due to the timing of our vendor payments and the purchase of prescription medications to build inventory that supports our increase in sales.

Investing Activities

Net cash used in investing activities was $5.3 million for the nine months ended September 30, 2014 and $2.9 million for the nine months ended September 30, 2015. Investing activities for the nine months ended September 30, 2014 reflects $4.0 million paid in connection with the acquisitions of SMPP and Capstone, net of cash acquired, along with $300 thousand in purchases of property and equipment, a $500 thousand increase in restricted cash due to funds placed in escrow for the SMPP acquisition and $535 thousand in software development costs. Investing activities for the nine months ended September 30, 2015 reflects $2.4 million paid in connection with the acquisition of Medliance, along with $135 thousand in purchases of property and equipment and $669 thousand in software development costs, offset by a decrease of $300 thousand in restricted cash from the release of funds related to a contingent purchase price payment for the SMPP acquisition that was paid.

Net cash used in investing activities was $845 thousand for the year ended December 31, 2013 and $14.9 million for the year ended December 31, 2014. Investing activities for the 2013 fiscal year reflect purchases of property and equipment of $366 thousand and software development costs of $479 thousand. Investing activities for the 2014 fiscal year reflects $13.4 million paid in connection with the acquisitions of SMPP, Capstone and Medliance, net of cash acquired, $230 thousand in purchases of property and equipment, a $500 thousand increase in restricted cash due to funds placed in escrow for the SMPP acquisition and $738 thousand in software development costs.

Financing Activities

Net cash provided by financing activities was $1.2 million for the nine months ended September 30, 2014 as compared to net cash used in financing activities of $1.4 million for the nine months ended September 30, 2015. Financing activities for the nine months ended September 30, 2014 primarily reflect net borrowings under our various financing arrangements of $1.7 million offset by $62 thousand in deferred financing costs relating to our acquisitions and $440 thousand in payments of contingent purchase price consideration related to our SMPP acquisition. Financing activities for the nine months ended September 30, 2015 are primarily attributable to net borrowings of $1.2 million under our various financing arrangements offset by $69 thousand in deferred financing costs, $2.2 million in payments of deferred and contingent purchase price consideration related to our SMPP and Capstone acquisitions, and $390 thousand in payments of deferred costs associated with this offering.

Net cash provided by financing activities was $8.9 million and $12.1 million for the years ended December 31, 2013 and 2014, respectively. Financing activities in 2013 primarily reflected net borrowings under our various financing arrangements of $5.3 million, including $1.4 million from related parties, and $3.8 million in net proceeds from the sale of our preferred stock, partially offset by $300 thousand for the cancellation of warrants. Financing activities in 2014 primarily related to net borrowings under our various financing arrangements of $13.2 million offset in part by $212 thousand in financing costs and a $1.0 million payment of deferred and contingent purchase price consideration relating to our SMPP and Capstone acquisitions.

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Funding Requirements

We have not achieved profitability and have incurred net losses since our inception, and we expect to continue to incur net losses for the foreseeable future. We had an accumulated deficit of $20.0 million as of December 31, 2014. Following this offering, we will be a publicly traded company and will incur significant legal, accounting and other expenses that we were not required to incur as a private company. In addition, the Sarbanes-Oxley Act, as well as rules adopted by the SEC and NASDAQ Stock Market, require public companies to implement specified corporate governance practices that are currently inapplicable to us as a private company. We expect these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We estimate that we will incur approximately $1.0 million to $2.0 million in incremental costs per year as a result of being a publicly traded company, although it is possible that our actual incremental costs will be higher than we currently estimate. Additionally, as disclosed in note 7 to our unaudited consolidated financial statements, we are required to pay $16.4 million on June 30, 2016 or upon the completion of this offering related to the Medliance Notes. We plan to repay the Medliance Notes with the proceeds from this offering if the holders of the notes do not elect to convert such notes into shares of our common stock.

We believe that the net proceeds of this offering, together with our cash of $2.6 million as of September 30, 2015, borrowing capacity under our 2015 Line of Credit and cash flows from continuing operations, will be sufficient to fund our planned operations through at least January 31, 2017. Our ability to maintain successful operations will depend on, among other things, new business, the retention of clients and the effectiveness of sales and marketing initiatives.

We may seek additional funding through public or private debt or equity financings. We may not be able to obtain financing on acceptable terms, or at all. The terms of any financing may adversely affect our stockholders. If we are unable to obtain funding, we could be forced to delay, reduce or eliminate our research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect our business prospects. There is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, if at all.

Contractual Obligations and Commitments

The following summarizes our significant contractual obligations as of December 31, 2014:

	Payments due by period

	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(In thousands)
Revolver(1)	$	6,860	$	6,860	$	—	$	—	$	—
Long-term debt(2)		19,686		3,303		16,383		—		—
Related party notes(3)		1,014		1,014		—		—		—
Contingent consideration payments(4)		8,379		1,079		7,300		—		—
Non-contingent consideration payments(5)		20,979		4,594		16,385		—		—
Capital leases(6)		1,237		733		504		—		—
Operating leases(7)		1,186		630		494		62		—

Total	$	59,341	$	18,213	$	41,066	$	62	$	—

(1): Revolver represents the principal balance outstanding as of December 31, 2014 under the 2013 Credit Facility. In April 2015, we satisfied all amounts due under the 2013 Credit Facility and replaced such facility with the 2015 Line of Credit with Bridge Bank. The principal amount

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outstanding under the 2015 Line of Credit as of September 30, 2015 was $10.0 million, which is not included in the table above.

(2): Long-term debt represents obligations outstanding as of December 31, 2014 under our senior secured term loans, including both principal and interest.
(3): Related party notes represents the principal balances outstanding as of December 31, 2014 on outstanding indebtedness due to related parties. On December 8, 2015, we repaid $408,407 under two demand promissory notes with the satisfaction of the loan we made to certain executive officers on August 14, 2015.
(4): Contingent consideration represents the fair value of future cash payments and stock consideration as of December 31, 2014 related to acquisitions completed in 2014.
(5): Non-contingent consideration includes outstanding obligations associated with acquisition-related notes and deferred payments, including accrued interest.
(6): Capital lease obligations represent future lease payments for equipment including interest.
(7): The operating lease obligations represent future lease payments for office space. On August 21, 2015, we entered into three operating lease agreements to occupy office space in Moorestown, New Jersey. The leases commence upon the substantial completion of tenant improvement work completed by the landlord, estimated to be February 2016, and will continue for 11 years and eight months from the commencement date. We have an option to extend the leases for one additional period of ten years. The aggregate base rental payments over the term of the leases, excluding any extension period, are $17.6 million. In addition to the base rent payments, we will be obligated to pay a pro rata share of operating expenses and taxes.

Except as discussed in (1), (3) and (7) above, our contractual obligations as of December 8, 2015 have not materially changed from December 31, 2014.

Revolving Credit Facility

In December 2013, we entered into a Revolving Credit Facility, or the 2013 Credit Facility, with Silicon Valley Bank pursuant to which we had the ability to request up to $7.0 million in revolving advances. The proceeds of the 2013 Facility were used to repay existing indebtedness, fund a portion of the acquisition of SMPP and fund our general business requirements. As of April 2015, we had $6.9 million of debt outstanding under the 2013 Facility.

In April 2015, we entered into the 2015 Line of Credit with Bridge Bank pursuant to which we can request up to $15.0 million in revolving advances and we borrowed $10.0 million at that time. We used $6.9 million of the proceeds from borrowings under the 2015 Line of Credit to repay all outstanding amounts owed under the 2013 Credit Facility. Amounts outstanding under the 2015 Line of Credit bear interest at 1% above the greater of 3.25% per year or the variable rate of interest, per annum, most recently announced by Bridge Bank, as its "prime rate," with interest payable monthly. Following the completion of this offering, such rate will be equal to 0.5% above the greater of 3.25% per year or Bridge Bank's prime rate. The 2015 Line of Credit has a maturity date of April 2017, and is secured by all of our personal property, whether presently existing or created or acquired in the future, as well as our intellectual property.

The 2015 Line of Credit contains financial covenants, including covenants requiring us to maintain a minimum unrestricted cash balance, a minimum monthly recurring revenue retention rate, measured monthly, and a minimum EBITDA, measured each quarter. The 2015 Line of Credit also contains operating covenants, including covenants restricting our ability to effect a sale of any part of our business, merge with or acquire another company, incur additional indebtedness, encumber or assign any right to or interest in our property, pay dividends or other distributions, make certain investments, transact with affiliates outside of the ordinary course of business and incur annual capital expenditures in excess of $1.0 million. The 2015 Line of Credit contains customary events of default, including upon

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the occurrence of a payment default, a covenant default, a material adverse change, our insolvency and judgments against us in excess of $250 thousand that remain unsatisfied for 30 days or longer. The 2015 Line of Credit provides for a ten day cure period for a covenant breach, which may be extended to up to 30 days in certain circumstances. As of September 30, 2015, we were in compliance with all of the financial covenants related to the 2015 Line of Credit.

Cumulative Preferred Stock Dividends

As of December 31, 2014, accrued dividends in the amount of $813 thousand, $403 thousand and $417 thousand were payable on our Series A preferred stock, Series A-1 preferred stock and Series B preferred stock, respectively, if declared by our board of directors or upon the occurrence of certain other events, including a liquidation event, as set forth in our certificate of incorporation. All accumulated dividends are forfeited upon conversion of our preferred stock into shares of our common stock, which will occur immediately prior to the consummation of this offering.

Off-Balance Sheet Arrangements

During the periods presented, we did not have any off-balance sheet arrangements, as defined by applicable SEC rules and regulations.

Critical Accounting Policies and Significant Judgments and Estimates

We base this management's discussion and analysis of our financial condition and results of operations on our financial statements, which we have prepared in accordance with generally accepted accounting practices in the United States, or GAAP. The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in our financial statements. We evaluate our estimates and judgments, including those related to: (i) the fair value of assets acquired and liabilities assumed for business combinations, (ii) the valuation of our common stock and preferred stock, (iii) the recognition and disclosure of contingent liabilities, (iv) the useful lives of long-lived assets (including definite-lived intangible assets), (v) the evaluation of revenue recognition criteria, (vi) assumptions used in the Black-Scholes option-pricing model to determine the fair value of equity and liability classified warrants and stock-based compensation instruments and (vii) the realizability of long-lived assets including goodwill and intangible assets. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. You should consider your evaluation of our financial condition and results of operations with these policies, judgments and estimates in mind.

While we describe our significant accounting policies in the notes to our financial statements appearing elsewhere in this prospectus, we believe the following accounting policies are the most critical to the judgments and estimates we use in the preparation of our financial statements.

Revenue Recognition

We recognize revenue from product sales or services rendered when (i) persuasive evidence of an arrangement exists, (ii) services have been rendered, (iii) the price to our client is fixed or determinable and (iv) collectability is reasonably assured.

When we enter into arrangements with multiple deliverables, we apply the accounting guidance for revenue arrangements with multiple deliverables and evaluate each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (i) whether the delivered item has value to the client on a standalone basis, and (ii) if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in our control. Revenue is allocated to each element in an arrangement based on a

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selling price hierarchy. The selling price for a deliverable is based on estimated selling prices, or ESP, as vendor specific objective evidence or third party evidence is not available. We establish ESP for the elements of our arrangements based upon our pricing practices and class of client. The stated prices for the various deliverables of our contracts are consistent across classes of clients.

Product Revenue

We enter into multiple-element arrangements with healthcare organizations to provide software-enabled medication risk management solutions. Under these contracts, revenue is generated through the following components:

Prescription drug revenue

We sell prescription medications directly to healthcare organizations through our prescription fulfillment pharmacies. Prescription medication fees are based upon the prices stated in client contracts for the prescription and include a dispensing fee. Prescription medications are considered a separate unit of accounting. Prescription medication revenue, including dispensing fees, is recognized when the product is shipped to the client. For the periods presented, substantially all of our product revenue has been in the form of prescription medication revenue.

Per member per month fees—medication risk management services

We receive a fixed monthly administrative fee for each member in the program contracted for medication risk management services. This fee, which is included in product revenue in our income statement, is recognized on a monthly basis as medication risk management services are provided. The services associated with the per member per month fees are considered a separate unit of accounting.

Service Revenue

We enter into contracts with healthcare organizations to provide (i) risk adjustment services and (ii) pharmacy cost management services, which include training client staff and providers about documentation and diagnosis coding, analyzing clients' data collection and submission processes and delivering meaningful analytics for understanding reimbursement complexities.

Under the risk adjustment contracts, there are three revenue generating components:

Set up fees:

Our contracts with our risk adjustment service clients often require clients to pay non-refundable set up fees, which are deferred and recognized over the estimated term of the contract. These fees are charged at the beginning of the client relationship as compensation for our efforts to prepare the client and configure its system for the data collection process. The set up activities do not represent a separate unit of accounting as they do not have value apart from the broader risk adjustment service contracts.

Per member per month fees—risk adjustment services

We receive a fixed monthly fee for each member in the program contracted for risk adjustment services. These services represent a separate unit of accounting and are offered independently from any other services. Revenue for these services is recognized each month as the related risk adjustment services are performed.

Hourly consulting fees

We contract with clients to perform various risk adjustment services. Such services are billed on a time and materials basis, at agreed hourly rates. Consulting services represent a separate unit of

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accounting and are offered independently from any other services. Revenue for these services is recognized as time is incurred on the project.

Our pharmacy cost management services include subscription revenue from clients and revenues from drug manufacturers for data and statistics we collect from our pharmacy cost management engagements. Subscription revenue is recognized monthly as either a flat fee or as a percentage of monthly transactions incurred. Data and statistics revenue from drug manufacturers is recognized when received due to the unpredictable nature of the payments and because fees are not fixed and determinable until received.

Business Combinations and Contingent Consideration

Acquired businesses are accounted for using the purchase method of accounting, which requires that the purchase price be allocated to the net assets acquired at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Amounts allocated to contingent consideration are recorded to the balance sheet at the date of acquisition based on their relative fair values. The purchase price allocation requires us to make significant estimates and assumptions, especially at the acquisition date, with respect to intangible assets. Although we believe the assumptions and estimates we have made are reasonable, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain.

We account for contingent consideration in accordance with applicable guidance provided within the business combination accounting rules. As part of our consideration for the SMPP, Capstone and Medliance acquisitions, we are contractually obligated to pay certain consideration resulting from the outcome of future events. Therefore, we are required to update our underlying assumptions each reporting period, based on new developments, and record such contingent consideration liabilities at fair value until the contingency is resolved. Changes in the fair value of the contingent consideration liabilities are recognized each reporting period and included in our consolidated statements of operations.

Examples of critical estimates used in valuing certain of the intangible assets and contingent consideration include:

•: future expected cash flows from sales, and acquired developed technologies;
•: the acquired company's trade name and customer relationships as well as assumptions about the period of time the acquired trade name and customer relationships will continue to be used in the combined company's portfolio;
•: the probability of meeting the future events; and
•: discount rates used to determine the present value of estimated future cash flows.

These estimates are inherently uncertain and unpredictable, and if different estimates were used the purchase price for the acquisition could be allocated to the acquired assets and liabilities differently from the allocation that we have made. In addition, unanticipated events and circumstances may occur, which may affect the accuracy or validity of such estimates, and if such events occur we may be required to record a charge against the value ascribed to an acquired asset or an increase in the amounts recorded for assumed liabilities.

Warrant Liability

We classified our warrants to purchase shares of our preferred stock as a warrant liability, which we record at fair value. We estimate the warrant fair values using the option pricing method as discussed in the American Institute of Certified Public Accountants, Audit and Accounting Practice Aid Series: Valuation of Privately Held Company Equity Securities Issued as Compensation, or the AICPA Practice Guide. The option pricing method treats securities as options based on the enterprise's value,

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with exercise prices based on the liquidation preferences set forth in the terms of the underlying stock, option or warrant agreements. Preferred stock, common stock, options and warrants are treated as call options that give the holder the right to buy the underlying net assets at a predetermined or "strike" price at a liquidity event. The option pricing method considers the various terms of the stockholder agreements and implicitly considers the effect of the liquidation preference as of the appropriate date in the future and uses the Black-Scholes model to price the call option.

The significant inputs, which we estimate as part of this method, include the expected term of the warrants, expected volatility and the estimated fair value of the underlying share of preferred stock. Because we do not have sufficient history to estimate the expected volatility of our stock price, expected volatility is based on the average volatility of peer public entities that are similar in size and industry. We estimate the expected term of the warrants based on the timing of anticipated future liquidity events. The risk-free rate is based on the U.S. Treasury yield curve equal to the expected term of the warrant as of the measurement date. These warrant liabilities are subject to remeasurement at each balance sheet date, and we recognize any change in fair value in our statements of operations as a change in fair value of the derivative liability.

Goodwill

Goodwill consists of the excess purchase price over fair value of net tangible and intangible assets acquired. Goodwill is not amortized, but tested for impairment annually. GAAP provides an entity an option to perform a qualitative assessment to determine whether it is more-likely than-not that the fair value of a reporting unit is less than its carrying amount prior to performing the two-step goodwill impairment test. If this is the case, the two-step goodwill impairment test is required. If it is more-likely than-not that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. If the two -step goodwill impairment test is required, first, the fair value of the reporting unit is compared with its carrying amount (including goodwill). If the fair value of the reporting unit is less than its carrying amount, an indication of goodwill impairment exists for the reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting units' goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill.

Factors we generally consider important in our qualitative assessment that could trigger a step-two impairment test include significant underperformance relative to expected operating trends, significant changes in the way assets are used, underutilization of our tangible assets, discontinuance of certain products by us or by our clients, changes in the competitive environment and significant negative industry or economic trends.

Impairment of Long-Lived Assets Including Other Intangible Assets

Long-lived assets consist of property and equipment, software development costs and definite-lived intangible assets. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that we consider in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, we compare forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows.

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Although we believe the carrying values of our long-lived assets are currently realizable, future events could cause us to conclude otherwise.

Stock-Based Compensation

We recognize compensation expense related to the fair value of stock-based awards in our consolidated statements of operations. For stock options we issued to employees and members of our board of directors for their services on our board of directors, we estimate the grant-date fair value of options using the Black-Scholes option pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and the value of the common stock. For awards subject to time-based vesting, we recognize stock-based compensation expense, net of estimated forfeitures, on a straight-line basis over the requisite service period, which is generally the vesting term of the award. We record stock-based awards issued to non-employees and non-directors at their fair values, and periodically revalue them as the equity instruments vest and are recognized as expense over the related service period of the award.

We will continue to use judgment in evaluating the expected volatility, expected terms and forfeiture rates utilized for our stock-based compensation calculations on a prospective basis. As we continue to accumulate additional data related to our common stock, we may have refinements to the estimates of our expected volatility, expected terms and forfeiture rates, which could materially impact our future stock-based compensation expense.

Fair Value of Common and Preferred Stock

We are required to estimate the fair value of the common stock underlying our stock-based awards when performing fair value calculations. We are also required to estimate the fair value of our preferred stock as it relates to determining the fair value of our Series B redeemable convertible preferred stock and our warrant liability. We engaged an independent third-party valuation firm to assist our board of directors in estimating the fair value of the common and preferred stock on a retrospective basis. We have granted all options to purchase shares of our common stock with an exercise price per share no less than the fair value per share of our common stock underlying those options on the date of grant, based on the information we knew on the date of grant.

In the absence of a public trading market for our common stock, on each grant date, we develop an estimate of the fair value of our common stock in order to determine an exercise price for the option grants based in part on input from the independent third-party valuation firm. We determined the fair value of our common and preferred stock using methodologies, approaches and assumptions consistent with the AICPA Practice Guide. In addition, our board of directors considered various objective and subjective factors, along with input from management and the independent third-party valuation firm, to estimate the fair value of our common stock, including external market conditions affecting the healthcare market, trends within the healthcare market, the prices at which we sold shares of our different series of preferred stock, the superior rights and preferences of each series of preferred stock relative to our common stock at the time of each grant, our results of operations and financial position, our business strategy, the lack of an active public market for our common and our preferred stock and the likelihood of achieving a liquidity event such as an initial public offering or sale in light of prevailing market conditions.

The per share estimated fair value of common stock in the table below represents the determination by our board of directors of the fair value of our common stock as of the date of grant, taking into consideration the various objective and subjective factors described above, including the conclusions, if applicable, of contemporaneous valuations of our common stock as discussed below. The following table presents the grant dates and related exercise prices of stock options granted to employees and non-employees from January 1, 2014 through the date of this prospectus:

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Month of Issuance		Exercise Price Per Option		Per Share Estimated Fair Value of Common Stock

January 2014	257,938	$	3.00	$	1.85
January 2014	161,082		3.30		1.85
February 2014	4,000		3.00		1.85
March 2014	8,500		3.00		1.85
April 2014	26,900		3.00		1.84
May 2014	750		3.00		1.84
June 2014	5,500		3.00		1.84
July 2014	17,977		3.00		1.84
August 2014	4,500		3.00		1.84
September 2014	4,750		3.00		1.84
October 2014	5,500		3.00		1.84
November 2014	6,000		3.00		1.84
January 2015	372,900		3.00		3.00
January 2015	140,000		3.30		3.00
February 2015	65,432		3.00		3.00
February 2015	6,835		3.30		3.00
March 2015	6,500		3.00		3.00
April 2015	13,250		3.00		3.00
June 2015	61,650		3.00		3.27
July 2015	2,000		IPO price		7.36
August 2015	9,500		IPO price		7.36
September 2015	14,000		IPO price		7.36

In determining the fair value of our common stock for purposes of granting stock options and in determining the fair value of our preferred stock for purposes of valuing our Series B redeemable convertible preferred stock and warrant liability, our board of directors considered the most recent valuations of our common and preferred stock, which an independent third party prepared as of June 28, 2013, January 7, 2014, June 30, 2014, January 1, 2015 and September 30, 2015. The board of directors based its determination in part on the analyses summarized below in determining the exercise price of options to be issued after those dates.

In valuing our common and preferred stock, the board of directors determined the equity value of our business by taking a combination of the income and market approaches.

The income approach estimates the fair value of a company based on the present value of the company's future estimated cash flows and the residual value of the company beyond the forecast period. These future values are discounted to their present values using a discount rate which is derived from an analysis of the cost of capital of comparable publicly-traded companies in the same industry or similar lines of business as of each valuation date and is adjusted to reflect the risks inherent in the company achieving these estimated cash flows.

For the market approach, we utilized the guideline company method by analyzing a population of comparable companies and selected those technology companies that we considered to be the most comparable to us in terms of product offerings, revenue, margins and growth. Under the market approach, we then used these guideline companies to develop relevant market multiples and ratios, which are then applied to our corresponding financial metrics to estimate our equity value.

Prior to 2015, the enterprise values determined by the income and market approaches were then allocated to the common stock using the Option Pricing Method, or OPM.

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The OPM treats common stock and preferred stock as call options on a company's enterprise value, with exercise prices based on the liquidation preferences of the preferred stock. Therefore, the common stock has value only if the funds available for distribution to the stockholders exceed the value of the liquidation preference at the time of an assumed liquidity event such as a merger, sale or IPO. The common stock is modeled as a call option with a claim on the enterprise at an exercise price equal to the remaining value immediately after the preferred stock is liquidated. The OPM uses the Black-Scholes option-pricing model to determine the price of the call option. The OPM is appropriate to use when the range of possible future outcomes is so difficult to predict that forecasts would be highly speculative.

Beginning in 2015, we used the probability-weighted expected return method to determine the value of our common stock. Under the probability-weighted expected return method, the value of an enterprise's common stock is estimated based upon an analysis of future values assuming various possible future liquidity events, such as an initial public offering, a strategic sale or merger and remaining a private enterprise without a liquidity event. The fair market value of the stock is based upon the probability-weighted present value of expected future net cash flows as a result of distributions to stockholders considering each of the possible future events, as well as the rights and preferences of each class of stock.

Once our common stock commences publicly trading following the completion of this offering it will not be necessary to use estimates to determine the fair value of new stock-based awards. Additionally, we will no longer need to estimate the fair value of our preferred stock as it converts to common stock.

The aggregate intrinsic value of vested and unvested stock options as of September 30, 2015, based on an assumed public offering price per share of $ , the midpoint of the price range set forth on the front cover of this prospectus, was $ and $ , respectively.

Quantitative and Qualitative Disclosure about Market Risk

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risks are principally limited to interest rate fluctuations.

We had cash of $4.1 million and $2.6 million as of December 31, 2014 and September 30, 2015, respectively. The primary objective of our investment activities is to preserve principal and liquidity while maximizing income without significantly increasing risk. We do not enter into investments for trading or speculative purposes. Due to the short-term nature of our investment portfolio, we do not believe an immediate one percentage point increase in interest rates would have a material effect on the fair market value of our portfolio, and accordingly we do not expect a sudden change in market interest rates to affect materially our operating results or cash flows.

We have $10.0 million outstanding under our 2015 Line of Credit, which we entered into to fund working capital needs to support our growth. Interest on the loan is based on the lender's prime rate plus 1.0%, with the lender's prime rate having a floor of 3.25%, which exposes us to market risk due to changes in interest rates. This means that a change in the prevailing interest rates may cause our periodic interest payment obligations to fluctuate. We believe that a one percentage point increase in interest rates would result in an approximate $100 thousand increase to our interest expense for the nine months ended September 30, 2015.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board, or FASB. issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers, or ASU 2014-09. ASU 2014-09 represents a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the company expects to be entitled to receive in exchange for those goods or

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services. ASU 2014-09 sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed. For public companies, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017 and interim reporting periods within that reporting period. Early adoption is not permitted. Accordingly, we will adopt ASU 2014-09 on January 1, 2018. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. We are currently evaluating the impact of ASU 2014-09 on our consolidated financial statements and have not yet selected a transition method.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, or ASU 2014-15. ASU 2014-15 will explicitly require management to assess a company's ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The new standard will be effective in the first annual period ending after December 15, 2016. Early application is permitted. We are currently evaluating the impact of the adoption of ASU 2014-15 on our consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, or ASU 2015-03. ASU 2015-03 requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. For public companies, ASU 2015-03 is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. We will apply ASU 2015-03 on a retrospective basis.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, or ASU 2015-11, which simplifies the subsequent measurement of inventories by replacing the current lower of cost or market test with a lower of cost and net realizable value test. ASU 2015-11 is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of ASU 2015-11 on our consolidated financial statements.

JOBS Act

In April 2012, the Jumpstart Our Business Startups Act, or JOBS Act, was enacted. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other companies.

We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an "emerging growth company," we intend to rely on certain of these exemptions, including without limitation, (i) providing an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (ii) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.0 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

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BUSINESS

Overview

We are a leader in providing patient-specific, data-driven technology and solutions that enable healthcare organizations to optimize medication regimens to improve patient outcomes, reduce hospitalizations, lower healthcare costs and manage risk. We deliver our solutions through a comprehensive suite of technology-enabled products and services for medication risk management, which includes bundled prescription fulfillment and adherence packaging services for client populations with complex prescription needs. We also provide risk adjustment services, which help our clients to properly characterize a patient's acuity, or severity of health condition, and optimize the associated payments for care. With 4.3 billion prescriptions filled in the United States in 2014, medication treatment is the most common medical intervention, and its imprecise use represents the fourth leading cause of death and contributes to an estimated 45 to 50 million adverse drug events, or ADEs, annually with 2.5 to 4.0 million of those ADEs considered serious, disabling or fatal. The incidence of ADEs is highly correlated to the number of medications an individual is taking and non-adherence to prescribed regimens, and thus is particularly relevant to populations with complex healthcare needs. Our technology-driven approach to medication risk management represents an evolution from prevailing non-personalized approaches that primarily rely on single drug-to-drug interaction analysis. We currently serve approximately 100 healthcare organizations that focus on populations with complex healthcare needs and extensive medication requirements.

Total spending in the United States on prescription medicines was $374 billion in 2014, according to a report issued by the IMS Institute for Healthcare Informatics. According to the Centers for Disease Control and Prevention, in any given month, 48% of Americans take a prescription medication, and 11% take five or more prescription medications. According to the Alliance for Human Research Protection, ADEs result in more than 100,000 deaths annually in the United States, and a study by the U.S. Department of Health and Human Services, or HHS, notes that ADEs cause approximately 125,000 hospitalizations, one million emergency room visits, two million affected hospital stays and 3.5 million

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physician office visits every year. These statistics indicate that medication treatment is complex, and current tools available to healthcare organizations have been largely unsuccessful in mitigating ADEs.

To enhance healthcare outcomes and better control costs, employers, health insurers and government agencies are restructuring health coverage and care models to make healthcare providers more accountable for healthcare utilization and quality of care. As the U.S. healthcare market continues to evolve from a fee-for-service to a value-based model of care, healthcare organizations require new and emerging technologies to optimize treatment and manage risk on a patient-specific, customized basis. Our solutions are targeted currently to "at-risk" healthcare organizations that are clinically and financially responsible for the populations they serve, receiving a fixed payment for the care provided to each patient for an entire episode of care or enrollment period. According to the Congressional Budget Office, or CBO, there were approximately 121 million people in the United States covered under government-sponsored programs in 2014, and this number is expected to reach 160 million by 2020. Government-sponsored programs are leading the shift to value-based healthcare. Our solutions support our clients in achieving the Institute for Healthcare Improvement, or IHI, "Triple Aim" of improving a patient's experience, while managing the health of a client's population and controlling costs.

We are led by highly experienced and entrepreneurial executive officers with more than 70 years of cumulative experience in the healthcare industry. Our co-founder, Dr. Calvin H. Knowlton, founded excelleRx, Inc., and along with Dr. Orsula Knowlton and other members of our management team, built it into the largest national hospice medication management pharmacy in the United States servicing approximately 400 hospice agencies with approximately 48,000 patients in 46 states, at the time it was sold to Omnicare, Inc. in 2005.

Market Opportunity

The pervasive use of medications, including the prevalent use of multiple medications for each patient, causes increased treatment complexity that healthcare organizations have been unable to effectively manage. This results in imprecise medication usage, which is a leading cause of ADEs that harm patients and increase healthcare costs. Accordingly, while a majority of ADEs are preventable, the prevailing tools that attempt to address these avoidable harms and costs have been largely ineffective. The shift to value-based healthcare and pressures to control healthcare costs have increasingly placed healthcare organizations at financial risk related to imprecise medication usage. As a result, healthcare organizations are now strongly incentivized to adopt new, data-driven and personalized technologies and solutions that address the substantial unmet need for comprehensive medication risk management.

Pervasive Use of Medication is Driving Increased Complexity in Healthcare

Medication treatment is the most common medical intervention. In any given month, 48% of Americans take a prescription medication and 11% take five or more prescription medications. According to HHS, among adults 65 years of age or older in the United States, 57% to 59% reported taking five to nine medications in 2006, and 17% to 19% reported taking ten or more medications over the course of that year. According to a 2012 study published in the Journal of the American Geriatrics Society, the risk of an ADE in persons taking seven or more medications is as high as 82%. The number of prescription medications individuals are using in the United States is increasing as the number of

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medication therapies rises, the population ages and chronic diseases become more prevalent. According to the CDC, the percentage of individuals aged 65 years or older taking three or more prescriptions increased from 51.8%, in the period from 1999 and 2002, to 64.8%, in the period from 2009 to 2012.

According to the National Institute of Mental Health, in 2014 there were 13.6 million people in the United States with a chronic severe mental illness like schizophrenia, major depression or bipolar disorder. Prescription medications were the most significant medical expense for mental health treatment in 2014, estimated to be 30% of total healthcare expenditures by payors, more than total hospital costs, physician expenses and insurance administration, according to the Substance Abuse and Mental Health Services Administration, or SAMHSA. We believe the pervasive and rising use of prescription and non-prescription drugs is increasing the complexity of medication management for healthcare organizations and making adherence to medication regimens more difficult for patients.

Imprecise Use of Medication Harms Patients and Increases Healthcare Costs

Given the extensive and increasing use of medication in the United States, the potential for harm from ADEs and patient medication non-adherence constitutes a critical patient safety and public health challenge. In 2012, the IMS Institute of Healthcare Informatics estimated that medication non-adherence and unnecessary use of medicines are responsible for more than $200 billion in otherwise avoidable medical spending annually in the United States alone, and ADEs contribute $3.5 billion to U.S. healthcare costs on a yearly basis, according to the Institute of Medicine.

According to the Alliance for Human Research Protection and HHS, ADEs in the United States annually result in approximately:

The majority of individuals in the United States who are prescribed a medication are non-adherent in one or more ways, including taking a dose other than the prescribed dose or not taking the prescription. A study published by the National Community Pharmacists Association in 2013 reported that approximately 75% of adults 40 and older with a chronic condition report at least one non-adherent behavior in the past 12 months, and more than half report multiple forms of non-adherence. Furthermore, the inability to read medication labels due to poor eyesight or the inability to read English has been associated with medication non-adherence.

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Healthcare Organizations Have a Significant Unmet Need for Comprehensive, Personalized Medication Risk Management

The current tools for medication safety produce inconsistent results and are widely viewed as ineffective. Most prevailing approaches rely upon slowly increasing dosage levels, prescribers' individual clinical experience, single drug-to-drug interaction tables, black box warnings and the Beers' Criteria of drugs to avoid in the elderly. Personalized and precision-based methods are typically absent in prevailing trial-and-error approaches to medication selection, rendering providers ineffective and ultimately limited in their ability to deliver optimal patient care due to insufficient data at the point of prescribing.

Research suggests that a majority of ADEs are preventable. A 2007 study published by the Institute of Medicine's Committee on Identifying and Preventing Medication Errors estimated that at least 1.5 million preventable ADEs occur each year in the United States. According to the American Academy of Pediatrics, ADEs account for up to 25% of all hospital admissions and 12% of emergency room visits in adults, of which up to 70% are preventable. According to a 2011 study published by the New England Journal of Medicine, nearly half of hospitalizations for ADEs involve patients 80 years of age or older and two-thirds of those hospitalizations were due to unintentional overdoses. In addition, an April 2015 article published in the journal Nature suggested that 75% or more of people are unresponsive or mis-responsive to the ten highest grossing medications in the United States.

In 2010, one in five adults in the United States was on at least one medication to treat a psychological or behavioral disorder, according to the American Psychological Association. Behavioral health medications are powerful, are subject to trial-and-error prescribing methods and are prone to side effects and ADEs. Mental illness is also associated with increased occurrence of chronic diseases as well as with reduced adherence to medication therapies. According to a report from SAMHSA, the treatment of mental health in the United States resulted in healthcare expenditures of $147.4 billion in 2009.

Industry Dynamics Favor a Personalized Approach to Medication Safety

The shift to value-based healthcare has increasingly placed healthcare organizations at financial risk related to imprecise medication usage, providing new incentives to reduce costs and improve quality. Rising healthcare costs and strained government budgets have driven both federal and state government agencies to expand the role of value-based, capitated payment models, under which a fixed payment is made to deliver all or multiple facets of patient care. In January 2015, HHS set a goal of tying 90% of all traditional Medicare payments to quality or value by 2018. Both federal and state governments are actively promoting value-based payment models through government-sponsored programs such as Medicare Advantage, Medicare Shared Savings Program, managed Medicaid plans and bundled payment models. These models shift the incentives of healthcare organizations away from volume and toward quality and value and have encouraged the creation of Accountable Care Organizations, or ACOs, including Programs of All-inclusive Care for the Elderly, or PACE. The private sector is acting in parallel, with private payors establishing their own accountable care, capitated and bundled-payment structures with physician practice groups.

With the emergence of these new payment models, healthcare organizations are increasingly becoming "at risk" by taking on greater clinical and financial responsibility for the populations they serve. In these at-risk models, the provider is incentivized to deliver efficient care because the provider receives a fixed payment for the care provided to any given patient for an entire episode of care or enrollment period. The focus on profitability rather than revenue has placed increasing pressure on providers to lower costs and improve care quality, safety and the patient experience. As a result of this transition, data on patient-specific disease states and co-morbidities, clinical and quality outcomes, resource utilization and individualized patient information have become increasingly relevant to healthcare delivery.

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Accurate Coding is Critical for Optimizing Reimbursement

Accurate coding of medical procedures and diagnoses is required throughout the healthcare landscape for proper reimbursement and regulatory compliance. Payments to healthcare organizations are determined and adjusted by the acuity and relative risk scores of patients, which in turn are derived from the coding of medical services by their providers. Coding is particularly important in at-risk, value-based care models as healthcare organizations bear financial risk for their patients' medical expenses. If a healthcare organization submits coding that is inaccurate, the organization may receive inadequate reimbursement for the services it provides. Risk scoring based on accurate coding is a significant factor in determining premium reimbursement rates and payments in many government-sponsored healthcare programs including Medicare Advantage, managed Medicaid and Medicare Part D plans and ACOs, including PACE organizations. According to the Kaiser Family Foundation, the number of individuals covered through Medicare Advantage and Medicare Part D programs was more than 15 million and 37 million, respectively, in 2014, up from 11 million and 27 million, respectively, in 2010, with more than 2,000 Medicare Advantage plans and more than 1,100 Medicare Part D plans in 2014.

Accurate coding is increasingly complex, with more than 140,000 procedures in the ICD-10, which will become the primary coding benchmark for most U.S. healthcare programs in October 2015. Government agencies, including the Centers for Medicare & Medicaid Services, or CMS, regularly perform audits of healthcare organizations to validate coding practices. Inaccurate coding results in incorrect reimbursement as well as the potential for sanctions such as exclusion from program participation, civil or criminal penalties and fines. Healthcare organizations that are able to efficiently and accurately code under the value-based framework will be better positioned financially and more likely to avoid potential legal and regulatory penalties associated with improper coding.

Our Solutions

Medication risk management is our leading offering, and our cloud-based software applications, including EireneRx and MedWise Advisor, together with our bundled prescription fulfillment and adherence packaging services, provide solutions for a range of payors, providers and other healthcare organizations. Our products and services are built around our proprietary MRM Matrix, which combines clinical and pharmacology data, population-based algorithms and extensive patient-specific data, including medical history, lab results, medication lists and personal genomic information, to deliver what the U.S. Food and Drug Administration, or FDA, refers to as "precision medicine." Precision medicine combines traditional evidence-based medication selection with new patient-specific medication selection to better optimize a patient's medication therapy. Our suite of technology products is built on a powerful rules engine that houses comprehensive pharmacotherapy profiles, provides risk alerts and includes a combination of proprietary decision-support tools, real-time secure messaging, e-prescribing and advanced precision-dosing functionality, among other functions. Our software applications help reduce ADEs, enhance medication adherence and quality of care, improve medication safety at the individual patient level and reduce the total medication burden by eliminating unnecessary prescriptions.

We also provide risk adjustment services and pharmacy cost management services to help our clients achieve correct reimbursement, maintain regulatory compliance and optimize pharmacy spend.

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The following chart sets forth the environment within which our solutions, enabled by our personalized MRM Matrix, apply precision medicine practices to collect, analyze and process patient information to accurately inform each patient's medication regimen.

Precision-Based Approach to Deliver Patient-Specific Solutions

We believe we are at the forefront of precision medicine with solutions that help our clients tailor medical treatment to the individual characteristics of each patient. Our technology platform enables healthcare providers to design a safer medication regimen for each patient by supplementing clinician insight with population-based algorithms and extensive patient-specific data, including medical history, lab results, medication lists and individual medication-related genomic data. Our cloud-based software solutions are designed to identify high-risk individuals, detect susceptibility to ADEs and embed proper dosing guidelines. By providing patient-specific, data-driven analytical insights and medication safety solutions, we help clients reduce trial-and-error-based medication selection, unintentional medication overdoses and other causes of ADEs.

Our team of clinical pharmacists is available to collaborate with prescribers through our proprietary technology platform to promote medication safety. Our platform provides real-time secure messaging capability between prescribers at the point-of-care and our pharmacists. Once a patient's medication schedule and regimen is optimized, our prescription fulfillment and adherence packaging services ensure that each patient's medications are packaged to promote adherence to their personalized regimen and dosing schedule. Our software includes multilingual resources and health literacy aids, which are designed to explain, in simple and easy-to-read language, the patient's dosing schedule and medication risks, and provide other patient-specific instructions to help optimize medication adherence.

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Demonstrated Ability to Produce Higher Quality Outcomes, Reduce the Cost of Care and Improve the Patient Experience

By offering solutions that improve outcomes in a cost-effective manner, we are aligned with healthcare organizations that are transitioning to value-based healthcare. We believe we offer significant value to our clients, measured by patient outcomes, monetary savings and payor and provider satisfaction. According to the National PACE Association, the average PACE organization spends 10% of its revenue on hospitalization costs. According to the Agency for Healthcare Research and Quality, each hospitalization for adults with multiple chronic conditions, a population similar to that of PACE, is estimated to cost, on average, $14,500 in the United States. Our PACE clients have reported that our medication risk management services have resulted in significant reductions in hospital admissions, length of hospital stays and emergency room visits for their patients, thereby reducing their medical expenditures. Our pharmacy cost management services saved our clients more than $44 million in recovered or prevented overpayments in 2014, and our risk adjustment clients realized revenue increases of approximately $350 per patient per month on average in 2014. We believe our solutions deliver savings throughout the healthcare system, facilitate correct reimbursement and enable patients to live healthier lives.

Our Strengths

Innovative Technology Solutions for Medication Risk Management Aligned with Transformative Shifts in Healthcare

We believe that medication risk management provides a significant opportunity to improve healthcare outcomes and create efficiencies in today's healthcare system, and our innovative technology platform is uniquely equipped to provide comprehensive medication risk management solutions to a variety of healthcare organizations. The shift from a fee-for-service to a value-based model of care, which focuses on outcomes and quality, is driving the rapid adoption of risk-based arrangements across many healthcare organizations. Under these risk-based models, providers often receive capitated payments to deliver all or multiple facets of a patient's care at a fixed price. According to the CBO, in 2014 there were approximately 121 million people in the United States covered under government-sponsored programs, and this number is expected to reach 160 million by 2020. Government-sponsored programs are leading the shift to value-based care. Given this shift, there is a corresponding increase in focus on high-acuity populations with complex healthcare needs to curtail the rapid rise in healthcare costs. Medication treatment is the most frequent intervention in healthcare, and chronically ill patients, elderly patients and patients who suffer from multiple conditions typically have extensive medication requirements and utilize multiple prescription medications, often prescribed by multiple providers. These complex medication regimens often result in negative outcomes. Our solutions are designed to provide comprehensive medication risk management for these populations to help our clients improve health outcomes and manage rising healthcare costs.

First-Mover Advantage with Track Record of Improved Outcomes

We believe the six years we have devoted to developing and optimizing our solutions, and our intellectual property portfolio, provide a significant competitive advantage over potential competitors. Leveraging our industry experience, we believe we offer the first prospective clinical approach to medication risk management, utilizing advanced patient safety tools and medication-adherence technology that enable depth and breadth of data-driven analytical insights and actionable interventions. We intend to continue developing and patenting technologies that are designed to increase medication safety, reduce ADEs and healthcare utilization and improve the prescribing process. In addition, we integrate directly with many industry-leading electronic health record systems, or EHRs, that are used by many of our clients.

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Expertise in Serving At-Risk Healthcare Organizations with Complex Patient Populations

Since our founding, we have leveraged our knowledge of medication risk management and risk adjustment to develop expertise in serving the growing at-risk segment of the healthcare system. Our clients currently include more than 45 PACE organizations, the first fully at-risk provider system, as well as more than 1,300 post-acute care facilities. In general, post-acute care facilities are migrating to an at-risk bundled-reimbursement model. Our focus on medication risk management is highly relevant to populations with complex care requirements, such as chronically ill patients, elderly patients and patients who suffer from multiple conditions and the healthcare organizations that care for them. According to the CDC, chronic diseases account for 86% of healthcare spending in the United States. We have developed solutions to address the needs of these patients and their providers and payors.

Highly Scalable Platform

We believe the scalability of our technology platform allows us to rapidly and cost-effectively pursue new opportunities and meet rising market demand. Our clients access our products and services through an efficient and scalable cloud-based technology platform. We have developed this platform using open-source technologies, internet distribution methodologies, horizontal scaling and search and sorting algorithms, enabling seamless integration of our software solutions with the existing systems of new clients. Our cloud-based technology platform allows for on-demand capacity expansion, rapid deployment capabilities and accelerated speed of execution.

Recurring Revenue Model with Significant Operating Leverage

We believe we have an attractive business model due to the recurring and predictable nature of our revenue, embedded growth opportunities within our existing client base and significant operating leverage. Our client contracts are typically exclusive and multi-year and, while they do not include minimum member or prescription volume or mix requirements, based on our experience, patient populations at our clients do not generally decline over time, the number of medications per patient have been consistent following an initial onboarding period and the overall mix of medications dispensed is generally predictable. As such, our contracts provide significant visibility into our future cash flows. The revenue models under these contracts typically include charges and dispensing fees for medication fulfillment for our clients' patients, which are often high-acuity patients with long-term prescription needs, payments on a per-member per-month basis and payments on a subscription basis. Our annual revenue retention rate was 100% and 95% for 2013 and 2014, respectively, and our client retention rate was 100% and 97%, respectively. We believe this reflects strong client satisfaction with our solutions. Since our first year of active operations in 2011, our revenue has grown to $48 million and $50 million for the year ended December 31, 2014 and the nine months ended September 30, 2015, respectively, and our cash flows from operating activities were positive for the same periods. As we grow our revenue base, we expect our operating expenses to decrease as a percentage of revenue, providing for substantial operating leverage. We believe this operating leverage inherent in our business, coupled with extensive cross-sell opportunities and low client acquisition costs, will help drive future cash flow.

Experienced Management Team

We are led by highly experienced and entrepreneurial executive officers with more than 70 years of cumulative experience in the healthcare industry. Prior to our founding in April 2009, our co-founder, Dr. Calvin H. Knowlton, founded excelleRx, Inc. and, along with Dr. Orsula Knowlton and other members of our management team, built it into the largest national hospice medication management pharmacy in the United States, servicing approximately 400 hospice agencies providing care to approximately 48,000 patients in 46 states, at the time it was sold to Omnicare, Inc. in 2005. Our management team brings deep experience to their relevant areas including pharmacotherapy, technology, pharmacy, operations, supply chain, marketing, finance and legal. Since 2009, we have acquired and integrated four businesses to enhance our comprehensive suite of solutions and solidify our market leadership position. Our culture

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of service, innovation, product excellence, collaboration, accountability and integrity underlies our interactions with each other as well as with our clients. We believe that our experienced management team and a strong commitment to our culture are key drivers of our success and position us well for long-term growth.

Our Strategy

Further Penetrate and Grow with the Expansion of Our Current At-Risk Markets

By leveraging our industry expertise and thought leadership and expanding our sales and marketing efforts, we believe that we can increasingly penetrate the market for existing and new at-risk clients. We are the market leader in providing medication risk management to PACE, a CMS sponsored program through which participating healthcare organizations provide fully integrated healthcare delivery on an at-risk basis for elderly adults, most of whom are dually eligible for Medicare and Medicaid. Our PACE clients cover approximately 15% of the total PACE enrollees nationwide. We believe that we have a significant opportunity to continue to grow within this market. Since 2010, the number of PACE organizations has increased 53%, from 75 in 2010 to 115 PACE organizations operating in 32 states as of January 2015. The number of participants enrolled in PACE organizations, who have a typical length of stay exceeding four years, has doubled over the last five years, yet, according to a study we commissioned from AEC Consulting, LLC, represents only 4% of the total eligible individuals within current PACE service areas.

We expect our PACE clients to continue to grow to cover more eligible lives. This growth may be facilitated by existing state and federal initiatives that present expansion opportunities for PACE, including recently allowing the formation of PACE organizations by for-profit providers, and the creation of other PACE-like, at-risk organizations, many of which would be targets for our solutions. For example, the PACE Innovation Act of 2015 allows CMS to develop pilot programs using the PACE model of care to serve individuals under age 55 and at risk of needing nursing home care as well as other patients with chronic diseases. Working with our scalable solutions can help PACE organizations facilitate their growth.

Furthermore, in Medicare Advantage and similar value-based care models, patients are assigned relative risk scores based on diagnosis, which need to be documented accurately each year for proper reimbursement. We are also the market leader in risk adjustment and front-end coding for PACE organizations, and we plan to continue to expand these services to other Medicare Advantage programs.

Continue Expansion into Emerging At-Risk Provider and Payor Markets

We intend to leverage our expertise and experience from our existing clients to expand to other at-risk providers and payors through increased investment in our sales force and marketing efforts. We also currently have pilot programs with Genesis HealthCare, EmblemHealth, Oak Street Health and other at-risk providers for use of our medication risk management solutions, which we expect will lead to additional at-risk provider clients.

We believe that the growth in government healthcare programs and the shift to value-based care models are creating opportunities for many organizations to capture growing portions of the expanding healthcare market. Accordingly, we are actively targeting at-risk, value-based markets, including managed care organizations, physician provider groups and ACOs, which are healthcare organizations characterized by a payment and care delivery model that ties provider reimbursement to quality metrics and the total cost of care for an assigned population. We also target post-acute healthcare organizations, which provide a range of medical services to support an individual's recovery or manage chronic illness after a period of in-patient care. We are currently working with EmblemHealth, a comprehensive managed care organization, through a pilot program covering approximately 500 Medicare lives, to provide software-as-a-service, or SaaS, based medication therapy management and risk stratification services. We believe non-PACE ACOs offer another large market for our solutions, as they operate under

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a similar at-risk reimbursement model. The number of ACOs in the United States has increased from 64 in 2011 to 744 in January 2015, collectively covering approximately 23.5 million individuals. Many physician provider groups are moving to at-risk, capitated payment models in response to incentives from managed care organizations and government programs. We are currently working with Oak Street Health, an at-risk, Medicare focused, primary care physician group, to provide medication risk management products and solutions.

Many post-acute healthcare services are also transitioning to value-based care models. On April 1, 2015, the CMS Innovation Center's Bundled Payments for Care Improvement, or BPCI, initiative began, which comprises four broadly defined models of care designed to improve the coordination and quality of care at a lower cost to Medicare. In the BPCI initiative, post-acute care facilities and home health agencies receive bundled payments for episodes of care. According to a recent report by the Advisory Board Company, more than 4,000 post-acute facilities and a number of home health agencies have already signed up to participate in the BPCI program. As the market leader in pharmacy cost management solutions in the post-acute market, we believe we are also well positioned to further serve these organizations with medication risk management solutions as they continue migrating to an at-risk reimbursement structure. We are currently working with Genesis HealthCare's short-stay post-acute rehabilitation division to provide several of its facilities with medication risk management for in-patients and, upon discharge, prescription fulfillment and adherence packaging services. Genesis HealthCare is utilizing our technology to reduce readmissions and avoid the costly effects of uncoordinated medication management. Genesis HealthCare has requested that we service additional locations and work with other referral hospitals.

Expand Offerings to a Large and Growing Behavioral Health Market

We believe our solutions have the potential to offer substantial value to the behavioral health market. Behavioral health medications are powerful, are subject to trial-and-error prescribing methods and are prone to side effects and ADEs. The behavioral health market is growing in part as a result of the Patient Protection and Affordable Care Act, or ACA, which significantly expanded coverage for mental health and substance use disorder services. These new protections build on the Mental Health Parity and Addiction Equity Act of 2008 provisions to expand mental health and substance use disorder benefits and federal parity protections to an estimated 62 million Americans.

Accordingly, we are pursuing intervention studies or pilot programs to evaluate the benefits of our medication risk management solutions in the behavioral health population. We continue to explore additional expansion opportunities with behavioral health providers as this market evolves.

Continue to Innovate and Expand Platform Offerings to Meet Evolving Market Needs

We believe our investments in human capital, technology and services capabilities position us to continue to pursue rapid innovation and expand our medication risk management solutions and other platform offerings to the broader healthcare marketplace. For example, we are developing high-throughput medication risk stratification technology for identification of high-risk patients in need of clinical intervention, and we are developing a direct-to-consumer version of our MRM Matrix solution. We are also piloting a monthly, subscription-based SaaS program utilizing our MRM Matrix for use by pharmacists. We also believe there is a substantial opportunity in our existing client base to cross-sell our full set of solutions.

Selectively Pursue Strategic Acquisitions and Partnerships

Since our founding in 2009, we have successfully completed and integrated four acquisitions, which have significantly expanded our market footprint and broadened our medication risk management and risk adjustment offerings. We plan to continue to acquire assets and businesses and may enter into strategic partnerships that strengthen or expand our service offerings, capabilities and geographic reach

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and facilitate our entry into new markets. Our acquisition strategy is driven by our commitment to serving client needs, and we are continuously assessing the market for potential opportunities.

Develop International Market Opportunities

We believe we are well positioned to provide our products and services to international healthcare organizations that face challenges similar to those that our clients face domestically. Our solutions are readily scalable and can be utilized by healthcare organizations abroad seeking to achieve the IHI Triple Aim. We believe our solutions would provide significant value to the international healthcare landscape, which is frequently characterized by single-payor government-administered healthcare.

Our Core Technology

ADEs often result from unintended drug overdoses due to factors, such as multi-drug interactions, impaired renal function, medication-related genomic variants and the cumulative impact of drug-related sensitivities, such as excess sedation and increased risk of falls and injury. Other adverse effects associated with anticholinergic drugs, or drugs that block the action of the neurotransmitter acetylcholine to the nervous system, may include delirium, dizziness, cognitive impairment, impulsive behavior, constipation, dry eyes and mouth and oral health issues. Our goal is to enable prescribers to optimize the use of medications using a prospective approach to medication risk management in order to avoid ADEs and improve patient outcomes. Our technology suite enables a novel approach to optimize the medication regimen of individual patients and address the issues with prevailing prescribing methodologies.

Utilizing our technology, prescribers obtain real-time information about the factors impacting a medication's effectiveness and safety for a particular patient grounded in evidence-based clinical data and extensive patient-specific data. Our technologies deliver prospective intervention and are designed to reduce ADEs, increase medication adherence and quality of care and improve medication safety at the individual patient level. Our cloud-based applications are scalable, easily accessible to healthcare organizations, seamlessly integrated with client applications and databases and customized for use across the healthcare continuum of care. Our software systems provide secure communication between prescribers and our pharmacists, and our sophisticated medication decision-support tools are interoperable with many industry-leading EHRs. We believe our innovative technology platform offers a means of improving patient outcomes while mitigating medication-related and financial risk for healthcare organizations.

Our suite of cloud-based software solutions incorporates comprehensive pharmacotherapy profiles, a combination of proprietary decision-support tools, risk alerts, e-prescribing, advanced precision-dosing functionality, real-time secure messaging and health literacy aids, among other functions. At the core of our technology platform is our proprietary MRM Matrix. Through a sophisticated rules engine, the MRM Matrix combines patient-specific data with the science of pharmacokinetics, the effects of what the body does to drugs, and pharmacodynamics, the effects of what the drug does to the body, to enable our clients to personalize the medication regimen of each patient. The MRM Matrix also draws upon pharmacoevidence, which considers published guidelines that denote potentially inappropriate medications for older adults such as the Beers Criteria and potentially unsafe medications in various age groups such as the FDA's Black Box warnings, as well as pharmacoeconomics, which compares the cost, expressed in monetary terms, and effects, expressed in terms of monetary value, efficacy or enhanced quality of life, of one pharmaceutical drug or drug therapy to another.

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The following charts contrast the prevailing approach to prescribing medications, which is often uncoordinated and non-personalized and results in inconsistent and ineffective medication regimens for the same patient, with our personalized approach utilizing our proprietary MRM Matrix.

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Our software offerings are developed by our in-house team of software engineers who continuously enhance our solutions and their functionality. By maintaining in-house development and support, we can efficiently leverage our institutional knowledge to augment our solutions while protecting our intellectual property. Our solutions are further protected by patent, copyright, trademark and trade secret laws as well as confidentiality agreements, licenses and other agreements with employees, consultants, vendors and clients. Our software offerings are scalable, fault-tolerant and compliant with the Health Insurance Portability and Accountability Act of 1996, or HIPAA, and Health Information Technology for Economic and Clinical Health Act, or HITECH, regulations and are Meaningful-Use certified, which means they qualify in determining eligibility for EHR incentive payments from CMS under the American Recovery and Reinvestment Act of 2009.

Our Software and Services

Our Software

Our cloud-based software applications include EireneRx, which is used by at-risk healthcare organizations to access their patients' medication-related information through our dashboard that shows the results of the MRM Matrix and medication recommendations, MedWise Advisor, which allows for components of EireneRx to be used independently and by a broader healthcare audience, and NiaRx, which is our educational software platform designed to facilitate brand awareness of our solutions in the pharmacy educational community. These software-enabled solutions are offered on a standalone basis or bundled with prescription fulfillment and adherence packaging services for client populations with complex prescription needs.

Our personalized medication risk management services are based on our MRM Matrix technology. For each patient, our software creates a personalized MRM Matrix, which incorporates personal medical history data inputs, summarizes the medications the patient is taking and provides clinical alerts, including for the risk of falls and injury, sedation risk and medication scheduling risk. This MRM Matrix is utilized by prescribers independently and, in some cases, in conjunction with our pharmacists, to optimize each patient's medication regimen utilizing one of our proprietary software solutions below:



	*EireneRx*	*MedWise Advisor*

Revenue Model	• Per-member per-month • Fee-for-service model (for prescription fulfillment and adherence packaging services)	• Recurring monthly subscription • SaaS model

Current Target Clients	• Healthcare organizations with all-inclusive, or closed, care models with an emphasis on coordination of care, such as PACE, ACOs, Integrated Delivery Networks and Patient Centered-Medical Homes • Risk-bearing provider groups	• Healthcare organizations able to leverage the MRM Matrix • Health plans • Risk-bearing provider groups • Hospitals and health systems • Pharmacies and pharmacists • Potential direct-to-consumer

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	*EireneRx*	*MedWise Advisor*

Key Technology Features	• Cloud-based electronic portal • MRM Matrix • e-prescribing • Decision support at the point of care • Computerized physician order entry • Modular certified for Meaningful Use • Real-time secure messaging capabilities with our pharmacists • Storage of personalized actionable pharmacogenomic data, which is data on how genes affect a person's response to drugs	• Cloud-based electronic portal • MRM Matrix • Decision support at the point of care • Real-time secure messaging capabilities with our pharmacists • Storage of personalized actionable pharmacogenomic data

Service Features	• Fully interoperable with many industry-leading EHRs and dispensing software • Sophisticated medication decision-support tools • Precision dosing systems • May be combined with prescription fulfillment and adherence packaging, patient-focused health literacy and adherence tools and pharmacist consultation	• Used independently or readily integrated with other pharmacy management systems, long-term care clinical systems, case management platforms, industry-leading EHRs or dispensing software • Sophisticated medication decision-support tools • Precision dosing systems

Differentiated Attributes	• Enables physicians and pharmacists to collaborate on a patient's medication management in real time • Offers clinical analysis and aggregates reports that optimize outcomes and show risk mitigation results • Compatible with third-party dispensing-systems	• Sophisticated alert functionalities and patient risk evaluation • Built-in module with capabilities to remove repetitive components of a comprehensive medication review

EireneRx

EireneRx is our cloud-based medication decision-support and e-prescribing platform, which includes a computerized order entry module used by healthcare organizations to access patient medication-related information and utilize our personalized proprietary MRM Matrix. EireneRx provides a single version of a patient's medication profile, enabling prescribers and our pharmacists to collaborate on a patient's medication management in real time. The EireneRx platform provides a dashboard report that shows the results of the MRM Matrix. We have a team of pharmacists available to perform clinical analysis of the results and, when necessary, offer guidance to the prescriber based upon their assessment of the MRM Matrix and the individual patient's medical history. EireneRx provides several communication workflows through which our pharmacists can answer questions and make recommendations to prescribers.

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Medication decision-support tools and precision-dosing aides are presented to prescribers at the point-of-prescribing, during pharmacist consultation and at periodic patient reviews, providing detailed patient-specific information. These tools are Meaningful Use Stage I and II certified, meaning they qualify in determining eligibility for EHR incentive payments from CMS under the American Recovery and Reinvestment Act of 2009. EireneRx is integrated with our prescription fulfillment pharmacies, which can deliver medications to our clients' patients nationally. The platform is also capable of sending prescriptions to substantially all pharmacies in the United States.

MedWise Advisor

MedWise Advisor software provides the medication decision support components of EireneRx, primarily our MRM Matrix, to support clients seeking to manage their medication risk and improve medication outcomes and patient relationships by enhancing their existing systems. MedWise Advisor can be integrated with a variety of e-prescribing modules, EHRs, pharmacy management systems, clinical systems, case management platforms and other clinical databases. The software enables a prescribing environment where the physician prescribes medication with real-time pharmacist consultation. We have a team of pharmacists available to perform clinical analysis of the results and, when necessary, offer guidance to the prescriber based upon their review of the MRM Matrix and the individual patient's medical history. We believe MedWise Advisor is broadly applicable to all healthcare organizations that employ clinicians who prescribe medications and those with pharmacists or other clinicians that provide support to prescribers. We are currently working with managed care and behavioral health organizations that are utilizing MedWise Advisor to improve medication therapy outcomes, and we are targeting a broad range of healthcare systems, hospitals, post-acute providers and pharmacies and intend to target consumers with this solution. To date, the only clients using MedWise Advisor are doing so through pilot programs, and we have not yet generated any revenue from MedWise Advisor clients.

NiaRx

NiaRx is a cloud-based software platform designed to facilitate the cognitive practice of pharmacy through case-based learning utilizing the MRM Matrix. NiaRx is in use by six schools of pharmacy, with over 2,000 registered academic users, and is intended to build literacy and brand awareness of our suite of technology solutions with thought-leaders and students in the pharmacy educational community, and drive adoption in the professional pharmacy community.

Our Services

Our clinical pharmacist collaboration service, prescription fulfillment and adherence packaging service and pharmacy cost management service are designed to improve patient experiences and outcomes and contain costs while our risk adjustment services help optimize revenue. The revenue models under these service contracts typically include payments on a per-member per-month basis, payments on a subscription basis and charges and dispensing fees for medication fulfillment for our clients' patients.

Clinical Pharmacist Collaboration

We have a team of pharmacists available to perform medication risk analysis and offer guidance, including the clinical application of pharmacogenomic test results and data application, to the prescriber based upon their assessment of the MRM Matrix and the individual patient's medical history. Our clinical pharmacists provide these personalized medication recommendations predominantly through secure real-time messaging. Available 24/7, 365 days per year, this service supports the medication risk management clinical decision making process with medication safety recommendations, including to eliminate unnecessary prescriptions, and execution of the optimized medication regimen. We exchanged over 100,000 secure real-time messages per month as of September 2015.

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Prescription Fulfillment and Adherence Packaging

We operate three prescription fulfillment pharmacies strategically located to efficiently distribute medications nationwide for our clients. Informed by each patient's personalized MRM Matrix, we package, synchronize and aggregate medications by day, time-of-day and dosage to increase the ease of adherence by patients to their optimized medication regimens. Using automated, robotic dispensing machines, our scalable, high-performance systems allow for an array of medication packaging options, including multi-dose deep well cards and multi-dose pouches.

We purchase a substantial amount of our pharmaceutical products through a group purchasing organization, pursuant to a membership agreement. The group purchasing organization receives discounts on pharmaceutical product purchases from AmerisourceBergen Drug Corporation, our primary supplier. As part of the arrangement with the group purchasing organization and AmerisourceBergen Drug Corporation, we are obligated to purchase at least 90% of our medication product requirements from AmerisourceBergen Drug Corporation. The arrangement also provides for negotiated rebates that differ by drug classification. We may terminate our membership in the group purchasing organization at any time, which would immediately terminate our minimum purchase obligations. Upon termination of our membership in the group purchasing organization, we are required to pay a withdrawal fee that will be determined by the board of directors of the group purchasing organization.

Risk Adjustment

We take a prospective approach to risk adjustment, going beyond the typical strategy of providing retrospective reviews and claims data analysis. We identify opportunities for efficiency and performance improvement in coding patterns, data integrity and diagnosis volumes and trends. Our consultants help clients to refine processes and systems to capture timely, complete and accurate claims data. Our team of expert physicians and nurse consultants trains client staff and providers about documentation and diagnosis coding, analyzes client data collection and submission processes and delivers meaningful analytics for understanding reimbursement complexities.

Long-term optimization of risk adjustment outcomes is complex and, for many organizations, significantly affects financial performance. We specialize in helping clients optimize processes and systems to capture timely, complete and accurate data. Through these services, we currently help PACE and other healthcare organizations remain compliant with regulations, make reliable comparisons to internal and external benchmarks and identify high-volume/high-cost issues for quality program initiatives.

Pharmacy Cost Management

We design, implement and manage pharmacy cost-containment strategies for our post-acute care clients. Pharmacy cost management services help our clients reduce risk, increase compliance and optimize spending. For many of our clients, excessive pharmacy costs are a common driver of shrinking profit margins. Complex contract language, atypical dispensing practices and a lack of recourse for pricing errors contribute to inaccurate pharmacy budgets, improper reimbursement and waste. Our analytics provide real-time reporting, simplify drug-spend data and are designed to create contract transparency for our clients. By simplifying and adding oversight to the adjudication process, we help clients avoid risks associated with managing pharmacy costs by preventing overpayments and ensuring appropriate reimbursements.

Our Clients

Our clients are at-risk healthcare organizations, primarily PACE organizations, managed-care organizations, including government and commercial plans, post-acute care facilities, behavioral health organizations and other provider groups. We have strong and long-standing relationships with our clients, providing services under multi-year contracts. At the end of 2011, 2012, 2013 and 2014, we were

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serving 8, 13, 20 and 51 healthcare organizations, respectively, and this number had grown to 101 as of September 30, 2015. Our annual revenue retention rate was 100% and 95% for 2013 and 2014, respectively, and our client retention rate was 100% and 97%, respectively, which we believe reflects strong client satisfaction with our solutions. No single client accounted for more than 10% of our revenue during the nine months ended September 30, 2015. For the year ended December 31, 2014, our two largest clients, Viecare Beaver and Viecare Butler, together under common control, and On Lok Senior Health Services, accounted for 11% and 10% of our revenue, respectively. For the year ended December 31, 2013, our largest client, Viecare Beaver and Viecare Butler, together under common control, accounted for 15.9% of our revenue. We believe our clients view us as a trusted partner that shares their commitment to improving medication-related health outcomes and reducing overall healthcare costs.

Providers Serving Dual-eligible Patients

The majority of our clients serve dual-eligible patients as of September 30, 2015. Dual-eligible patients, who are eligible for coverage under both Medicare and Medicaid, are typically among the most vulnerable and highest-acuity beneficiaries covered by the healthcare system, with some of the most complex medication requirements. They represent 21% of the Medicare population and 15% of the Medicaid population, but account for 36% of total Medicare costs and 39% of total Medicaid costs. Because of the high costs associated with care for these patients, the federal government and many states are implementing systems and service models to integrate care and align reimbursement under at-risk structures.

PACE Organizations

PACE, a federal and state collaboration, is one growing model serving the dual-eligible patient population that focuses on averting institutional-based placement. PACE embodies many of the characteristics and trends affecting the healthcare industry as a whole. Our proof of concept was to provide medication risk management technology and services to PACE organizations, which are responsible for elderly patients, typically with complex medication regimens. Over the past four years, we have become the market-leader in providing PACE with medication risk management. Our PACE clients cover approximately 15% of the total PACE enrollees nationwide. However, the existing 40,000 PACE enrollees represent only 4% of the 900,000 total eligible individuals within current PACE service areas, according to a study we commissioned from AEC Consulting, LLC. In addition to personalized medication management, we also provide risk adjustment services and intend to provide pharmacy cost management services to PACE organizations.

Managed Care Organizations

Since 2004, the number of beneficiaries enrolled in Medicare Advantage, or MA, plans has almost tripled from 5.3 million to 16.8 million in 2015 and is expected to grow to 22 million by 2020. MA is a capitated program with payment rates that are calculated based on the acuity of the patients served. Accordingly, patients are assigned relative risk scores based on diagnosis, which need to be documented accurately each year for appropriate reimbursement. We have become the market leader in risk adjustment and front-end coding for PACE organizations and we plan to continue to expand these services to other MA programs. We are also working with EmblemHealth, a comprehensive managed care organization, on a medication therapy management, or MTM, pilot program utilizing MedWise Advisor. The program provides EmblemHealth MTM pharmacists with the MRM Matrix to reference when making recommendations to the program's beneficiaries and prescribers. Furthermore, we believe our solutions are broadly applicable throughout the managed care landscape. According to the CBO, in 2014 there were approximately 54 million people in the United States covered under Medicare, 61 million people covered under Medicaid and 186 million people covered under commercial managed care. These numbers are expected to reach 64 million, 71 million and 216 million, respectively, by 2020.

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Post-Acute Care Providers

Post-acute care providers are increasingly operating in value-based care models. Under the BPCI, post-acute care providers, such as skilled nursing facilities, in-patient rehabilitation facilities and home health agencies, began to receive bundled payments for episodes of care. According to a recent report, more than 4,000 facilities and agencies have already signed up to participate in the BPCI program.

We are currently working with Genesis HealthCare's short-stay post-acute rehabilitation division to provide several of its facilities with medication risk management for in-patients and upon discharge, prescription fulfillment and adherence packaging services. Genesis HealthCare is utilizing our technology to reduce readmissions and avoid the costly effects of uncoordinated medication management. Genesis HealthCare has requested that we service additional locations and work with other referral hospitals. Genesis HealthCare is currently evaluating the installation of the EireneRx platform for e-prescribing as part of this new model.

We are also working with Bayada Home Health Care for medication risk management services for patients discharged from the acute care hospital to home care setting. This collaboration is designed to reduce readmissions and improve star-ratings and quality-based compliance. We began providing our services in July 2015 and Bayada Home Health Care reported a 31% reduction in hospital readmissions, a 20% reduction in falls and a 38% reduction in forfeited managed care payments in the initial population between July 1, 2015 and September 30, 2015, which they attribute in part to our services.

We are also the market leader in pharmacy cost management solutions in the post-acute arena, helping facilities manage their pharmacy spend for their capitated patients. Our clients include more than 1,300 of the more than 15,400 post-acute facilities in the United States. We believe there are significant opportunities to cross-sell our medication risk management solutions within this client base.

Physician Provider Groups

We currently serve physician provider groups through our risk adjustment services. We are also currently piloting programs providing our medication risk management solutions directly to physician provider groups that are under at-risk care models. We are working with Oak Street Health, a network of primary care clinics in the greater Chicago area whose physicians manage the dual-eligible population in a PACE-like model.

Behavioral Health Organizations

According to the National Institute of Mental Health, in 2014 there were 13.6 million people in the United States with a chronic severe mental illness like schizophrenia, major depression or bipolar disorder. According to SAMHSA, total spending on mental health treatment is projected to increase from $147 billion in 2009 to $239 billion in 2020. For these individuals, in 2014, prescription medications were the most significant mental health spend, accounting for 30% of total expenditures by provider, more than total hospital costs, physician expenses and insurance administration, according to a 2014 study by HHS. Behavioral health organizations are increasingly operating under value-based care models, and according to the National Council for Behavioral Health, there are over 2,200 behavioral health organizations in the United States. We are currently pursuing intervention studies or pilot programs to evaluate the benefits of clinical interventions in the behavioral health setting.

Client Case Studies

The following examples illustrate how we partner with healthcare organizations to help them reduce cost and improve quality, safety and patient experience through our medication risk management solutions. Although our clients reported that our solutions contributed to positive outcomes and reduced costs, these changes have not been statistically analyzed and other factors, including changes in

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healthcare regulations or other business practices, or our clients' implementation of other cost saving measures may have contributed to these changes.

Client Case Study 1

Client 1 is a PACE organization that opened in 2008 and changed pharmacy service providers three times in three years. At the start of our engagement, the program had 189 participants and was struggling with lack of clinical medication decision support, ineffective processes to foster medication adherence, medication-related workflow inefficiencies and insufficient access to medications.

We began working with Client 1 in November 2011, implementing EireneRx for e-prescribing, which had immediate uptake among prescribers and the clinic nursing staff. By the first quarter of 2012, Client 1 reported that it began to see results, including substantial reductions in emergency room visits, hospitalizations, length-of-stay and pharmacy errors that they attribute in part to our services. The PMPM medication costs, despite annual drug price increases by manufacturers, had an initial reduction and have remained stable, which they attribute in part to our services. The organization's number of participants has increased nearly 50% since we began working with them.

Client Case Study 2

Client 2 is a PACE organization that opened in 1998 providing clinical care primarily through nurse practitioners. As enrollment grew, the program struggled with a lack of clinical pharmacist support, limited on-site medication access and a disorganized medication delivery, packaging and refill request system.

We began providing services to Client 2 in November 2013. As part of the implementation, a comprehensive medication reconciliation was conducted by a team of their nurse practitioners and our pharmacists, which reviewed each medication profile for baseline assessment of risk and medication regimens were optimized to enhance medication safety. Client 2 reported that 565 prescription medications were discontinued as a result of this process, which represented approximately 8% of the total prescription burden, thereby reducing waste and polypharmacy, which is the use of four or more medications by a patient. The ongoing collaboration with Client 2 focuses on their high-risk areas, including the creation of accurate medication profiles upon hospital admission. In the first quarter of 2014, Client 2 reported that it began to realize a reduction in hospitalization and emergency room visits compared to the same time in previous years, a reduction that they attribute in part to our services.

Client Case Study 3

Client 3 is a PACE organization that opened in 2008 and initially utilized our risk adjustment services. At the start of our engagement, the program was struggling with lack of clinical medication decision support, ineffective manual processes for medication-related workflow and a high volume of medication refill requests resulting in excess supply of medications for participants.

We began working with Client 3 in August 2014, implementing EireneRx for e-prescribing, which integrated with the electronic medical record system already in place. Client 3 reported that it began to see results, including reductions in polypharmacy, increased accuracy and a deficiency free audit by CMS that they attribute in part to our services. The PMPM medication costs have been reduced since our engagement by Client 3, which they attribute in part to our services.

Client Case Study 4

Client 4 is a PACE organization that started in March 2009. Prior to our involvement, Client 4 lacked a prospective approach to medication management, prescriber support and patient adherence tools. As of December 1, 2015, the program had the highest percent of patients with end stage renal disease in the United States.

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We began working with Client 4 in January 2011. The medication use process improved, and system efficiencies were created, which they attribute in part to our collaboration. Client 4 reported reduced hospitalizations and improved outcomes for patients over time, which they attribute in part to the introduction in 2013 of the MRM Matrix and interaction with our clinical pharmacists, in collaboration with the prescribers.

Intellectual Property

We create, own and maintain a wide array of intellectual property assets which, in the aggregate, are of material importance to our business. Our intellectual property assets include: one patent and two patent applications related to our innovations, products and services; trademarks and trademark applications related to our brands, products and services; copyrights in software, documentation, content and databases; trade secrets relating to data processing, statistical methodologies, data security and other aspects of our business; and other intellectual property rights and licenses of various kinds. We are licensed to use certain technology and other intellectual property rights owned and controlled by others, and, similarly, other companies are licensed on a non-exclusive basis to use certain technology and other intellectual property rights owned and controlled by us.

We rely on patent, copyright, trademark and trade secret laws as well as confidentiality agreements, licenses and other agreements with employees, consultants, vendors and clients. We also seek to control access to and distribution of our proprietary software, confidential information and know-how, technology and other intellectual property. We have one issued patent for our medication management system and method (U.S. Pat. No. 8,392,220, issued March 2013) and two patent applications pending in the United States, the first, filed in December 2014, relates to our Medication Risk Mitigation system and method and the second, filed in February 2015, relates to our MRM Matrix. Our issued patent expires on August 21, 2021. We own one registered copyright protecting the code and documentation related to EireneRx, initially filed in 2012 and updated in 2015.

We own and use trademarks in connection with products and services, including both unregistered common law marks and issued trademark registrations in the United States. Our material trademarks, service marks and other marks include: EireneRx®, Medication Risk Mitigation by CareKinesis®, MedWise Advisor®, NiaRx®, CareVentions™, Tabula Rasa HealthCare™, Medliance™, Capstone Performance Systems™, Medication Risk Mitigation™ and Medication Risk Mitigation Matrix™. We also have trademark applications pending to register marks in the United States.

Our Competitive Landscape

We compete with a broad and diverse set of businesses. We believe the competitive landscape is highly fragmented with no single competitor offering similarly expansive capabilities and solution offerings in medication risk management. Our competitive advantage is largely based on our analytical capabilities, healthcare industry expertise, breadth and depth of services, intellectual property, the size and quality of our underlying datasets and benchmarks, ease of use, reputation, innovation, security, price, reliability and client service. Our primary competitive challenge is to demonstrate to our existing and potential clients the value of utilizing our platforms rather than developing or assembling their own alternative capabilities or utilizing providers offering a subset of our services. However, we believe that the combination of our competitive strengths and successful culture of innovation, including our industry-leading analytics, the real-world-tested nature of our platforms and subject matter expertise of our associates, make it time and cost prohibitive for our clients or competitors to replace or replicate all that we offer without facing material risk.

Current industry players providing medication risk management and related service offerings include large and small healthcare data analytics and consulting companies, community or long-term care pharmacies, national pharmacy providers, health plans, genomic testing labs and healthcare information technology companies, among others. Many of our competitors' solutions are regulatory-

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driven, retrospective in nature and offer no intervention at the point of care. The services offered by these organizations may include e-prescribing and EHRs utilizing single drug-to-drug interaction analysis, lab-based genomic evaluation, basic risk stratification solutions and other prevailing approaches to medication therapy management. Many health plans attempt to address non-adherence through outreach efforts, which often require the intervention of in-house or third-party consultants and have low success rates. Some healthcare information technology providers offer risk adjustment and pharmacy cost management services, but lack the comprehensive solutions we provide. Many genomic testing labs lack the ability to apply patient test results in a useful way at the point of care. Post-acute providers typically employ pharmacist consultants to review prescription regimens every 30 days, which is retrospective in nature and generally ineffective in improving patient outcomes. Furthermore, typical prescription fulfillment models are reimbursed on a fee-for-service basis and are incentivized based on prescription dispensing volumes. Our clients partner with us in order to prospectively address ADEs, lower healthcare costs and improve overall health outcomes, which often involves utilizing our software to reduce the number of prescriptions per patient to optimize prescription regimens.

While we believe that no competitor provides the breadth of our suite of solutions, we nevertheless compete with other companies with regards to specific products or solutions and markets or care settings. We expect that competition will continue to increase as a result of consolidation in both the information technology and healthcare industries. The anticipated growth in healthcare spending, the shift to a value-based payment model, the rise of consumerism and changes in government regulation may draw increasing attention to healthcare data and analytics, and new competitors, such as management consultants, technology companies and start-ups may enter the market, and we may face increased competition from these sources.

Healthcare Regulatory Environment

We operate in a highly regulated industry and our business operations must comply with a number of complex and evolving federal and state agency requirements. While we believe we comply in all material respects with applicable healthcare laws and regulations, these laws can vary significantly from jurisdiction to jurisdiction, and the state and federal interpretation of existing laws and regulations, and their enforcement, may change from time to time. Additionally, a state or federal government enforcement body may disagree that we are in material compliance with applicable healthcare laws and regulations. Federal and state legislatures also may enact various legislative proposals that could materially impact certain aspects of our business.

A non-exhaustive list of federal and state statutes, regulations, sub-regulatory guidance and contractual provisions that may apply to our business activities include:

Healthcare Reform

In 2010, Congress passed major health reform legislation, mostly through the ACA. Generally, the ACA was designed to expand coverage for the uninsured while at the same time containing overall healthcare costs. While not all of these reforms affect our business directly, many affect the coverage and plan designs that are or will be provided by many of our clients. Consequently, these reforms could impact some or many of our business arrangements directly or indirectly.

Given that certain regulations implementing ACA are still being formulated and finalized, and given that sub-regulatory guidance is still being promulgated by federal agencies, such as HHS and the Internal Revenue Service, and state agencies, we cannot predict with any certainty the outcome of any future legislation, regulation or litigation related to healthcare reform.

PACE Organizations

Our partnership with PACE organizations is a significant source of our current revenue stream. The PACE program is a unique, comprehensive managed care benefit for certain frail elderly individuals,

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most of whom are dually eligible for Medicare and Medicaid benefits, provided by a not-for-profit or public entity. The PACE program features a comprehensive medical and social service delivery system using an interdisciplinary team approach in an adult day health center that is supplemented by in-home and referral services in accordance with participants' needs. Financing for the program is capped, which allows providers to deliver all services participants need rather than only those reimbursable under Medicare and Medicaid fee-for-service plans. PACE is a program under Medicare, and states can elect to provide PACE services to Medicaid program beneficiaries as an optional Medicaid benefit. The PACE program becomes the sole source of Medicaid and Medicare benefits for PACE participants.

As PACE organization contractors, we are subject to numerous contractual obligations imposed by our partner organizations, as well as to various audit and certification requirements.

HIPAA Healthcare Fraud Provisions

HIPAA also created additional federal criminal statutes regarding fraud. Specifically, the HIPAA healthcare fraud statute prohibits, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program, knowingly and willfully embezzling or stealing from a healthcare benefit program, and willfully obstructing a criminal investigation of a healthcare offense. The HIPAA false statements statute prohibits, among other things, concealing a material fact or making a materially false statement in connection with the payment for healthcare benefits, items or services. Like the federal Anti-Kickback Statute, the ACA amended the intent standard for certain healthcare fraud statutes under HIPAA such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. Those found to have aided in a violation of these prohibitions are deemed by statute to have committed the offense and are punishable as a principal offender.

State and Federal Data Privacy and Security Laws

We process, collect, use and disclose individual patient data for patients directly or for our clients and therefore, are subject to various laws protecting privacy and security of the patient information. Certain segments of our company qualify as a "Covered Entity" under HIPAA, and others qualify as a "Business Associate" to our partners who are Covered Entities and as such we are required to comply with HIPAA and HITECH, as implemented through regulations promulgated thereunder by HHS, including the HIPAA Omnibus Final Rule, the HIPAA Privacy Rule and the HIPAA Security Rule. HIPAA generally requires Covered Entities and their Business Associates to adopt certain safeguards to ensure the privacy and security of protected health information, or PHI, and to limit uses and disclosures of such PHI to those permissible under the law. When Covered Entities utilize Business Associates to provide services, pursuant to which the Business Associate may access the Covered Entity's PHI, the parties must enter into a Business Associate agreement through which the Business Associate must contractually agree to safeguard PHI in certain ways and to notify the Covered Entity of improper uses or disclosures of PHI.

Covered Entities and Business Associates are required to have written policies and procedures addressing HIPAA compliance and must designate a Security Officer to oversee the development and implementation of the policies and procedures related to the safeguards to protect privacy of electronic PHI. Covered Entities must also designate a Privacy Officer, although the Privacy Officer and the Security Officer may be the same person. As part of their security policies and procedures, Covered Entities and Business Associates are required to conduct periodic risk assessments to identify vulnerabilities to electronic PHI. Additionally, Covered Entities and Business Associates are required to train all employees on their HIPAA policies and procedures. Further, in the event of a breach of PHI as defined by HIPAA, Covered Entities must notify affected individuals, HHS and sometimes the media, as well as take steps to mitigate damage, and they may be subject to fines and penalties. HIPAA violations can result in significant civil monetary penalties and/or imprisonment for up to ten years depending on the facts surrounding the violation.

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Many states also have similar data privacy and security laws that track federal requirements or impose different and/or more stringent conditions for use and disclosure of protected health information. Failure to comply with these laws may also result in the imposition of significant civil and/or criminal penalties.

Food, Drug and Cosmetic Act and Implementing Regulations

Some technologies and software applications used in connection with healthcare analytics and genomic testing and analysis are considered medical devices and are subject to regulation by the FDA. FDA and state regulators, such as state boards of pharmacy, also regulate drug packaging and repackaging. If any of our current or future services, technologies or software applications are regulated by the FDA as medical devices, we would be subject to various statutes, regulations and policies enforced by the FDA and other governmental authorities, such as the Federal Trade Commission, including both premarket and post-market requirements. Similarly, our drug packaging activities must comply with the applicable FDA and state statutes, regulations and policies. Noncompliance with applicable FDA or state requirements, including those related to the pre-market and post-market approval requirements for medical devices or repackaged drug products, can result in an enforcement action that could substantially harm our business.

Anti-Kickback Laws

The federal Anti-Kickback Statute, or AKS, makes it unlawful for individuals or entities, among other things, to knowingly and willfully solicit, offer, receive or pay any kickback, bribe or other remuneration, directly or indirectly, in cash or in kind, in exchange for or to induce or reward the referral of an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a federal healthcare program, or the purchase, lease or order, or arranging for or recommending purchasing, leasing or ordering, any good, facility, service or item for which payment may be made in whole or in part under a federal healthcare program. Penalties for violations include criminal penalties and civil sanctions such as fines, imprisonment and possible exclusion from federal healthcare programs. The federal AKS is an intent-based statute, but following amendment from the ACA, a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. Further, the failure of an arrangement to satisfy all elements of an AKS safe harbor will not necessarily make it illegal, but it may subject that arrangement to increased scrutiny by enforcement authorities. The federal AKS is applicable to us as operators of specialty pharmacies, contractors to health plans and providers, as well as contractors to various federal healthcare program payors. When our compensation arrangements implicate the AKS and/or state anti-kickback laws we evaluate whether we believe they fall within one of the safe harbors. If not, we consider the factors to identify the intent behind such arrangements and the relative risk of fraud and abuse. We also design business models that seek to reduce the risk that any such arrangements might be viewed as abusive and trigger AKS scrutiny or claims.

In addition to the federal AKS, many states have anti-kickback prohibitions that may apply to arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors.

Federal and State Self-Referral Laws

The federal physician self-referral law, often referred to as the Stark Law, with limited exceptions, prohibits physicians from referring Medicare Program or Medicaid patients to an entity for the provision of certain designated health services, among them outpatient prescription medications, if the physician or a member of such physician's immediate family has a direct or indirect financial relationship (including an ownership or investment interest or a compensation arrangement) with the entity. The Stark Law also prohibits the entity from billing Medicare or Medicaid for such designated health

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services. A referral that does not fall within a statutory exception is strictly prohibited by the Stark Law. A violation of the Stark Law is punishable by civil sanctions, including significant fines and exclusion from participation in Medicare and Medicaid Programs.

We evaluate when these physician (or immediate family member) financial arrangements are created to strive to ensure we do not enter into a prohibited financial relationship and design structures that satisfy exceptions under the Stark Law.

Our business may implicate federal and state physician self-referral laws to the extent our pharmacy, a designated health services entity, has financial arrangements in the form of ownership, investment or compensation with referring physicians or a referring physician's immediate family member. No physician has an ownership or investment interest in our business, but our pharmacy may have compensation arrangements with physicians who serve on its Clinical Advisory Panel and who order designated health services for patients enrolled in a PACE program. If any such compensation arrangements exist, we believe such compensation arrangements fall within an exception to the physician self-referral prohibition.

A number of states have statutes and regulations that prohibit the same general types of conduct as those prohibited by the Stark Law, but some have even broader application, extending beyond Medicare and Medicaid Programs and including commercial and self payors.

Federal and State False Claims Acts

The federal false claims and civil monetary penalties laws, including the civil False Claims Act, impose criminal and civil liability on individuals and entities that, among other things, knowingly submit, or cause to be submitted, false or fraudulent claims for payment to the federal government or knowingly make, or cause to be made, a false statement in order to have a false claim paid. The civil False Claims Act provides for treble damages and mandatory and significant minimum penalties per false claim or statement ($5,500 to $11,000 per false claim). The qui tam or whistleblower provisions of the civil False Claims Act permit a private individual to bring actions on behalf of the federal government alleging that the defendant has submitted a false claim to the federal government, and to share in any monetary recovery. Our future activities relating to the manner in which we sell and market our services may be subject to scrutiny under these laws. False Claims Act qui tam lawsuits in healthcare are common, although the government often declines to pursue such actions following investigation. Analogous state false claims laws also may apply to our sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors.

Other State Laws

The vast majority, if not all states have laws regulating licensure, registration and certification of pharmacies, pharmacists, pharmacy technicians and other pharmacy personnel. We are licensed in all states that require such licensure in which we do business and believe that we substantially comply with all state licensing laws applicable to our business. Where required by law, we also have pharmacists licensed in all states in which we dispense. If we violate state pharmacy licensure laws or engage in conduct prohibited under our license, we could be subject to enforcement action, including but not limited to suspension or loss of such pharmacy license

The U.S. Drug Enforcement Administration, as well as some similar state agencies, requires our pharmacy locations to individually register in order to handle controlled substances, including prescription pharmaceuticals. Federal and various state laws also regulate specific labeling, reporting and record-keeping aspects related to controlled substances. We maintain U.S. Drug Enforcement Administration registrations for each of our facilities that require such registration and follow procedures intended to comply with all applicable federal and state requirements regarding dispensing controlled substances.

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Employees

As of November 30, 2015, we had 182 employees. Of those employees, 119 provide direct client service, including 40 who are clinical pharmacists who perform medication risk analysis and offer guidance, seven are involved in sales, marketing and client support, 29 are involved in software development and 27 are devoted to information technology, administrative and financial activities. None of our employees are represented by labor unions or subject to collective bargaining agreements and all of our employees currently work in the United States. We consider our employee relations to be good.

Facilities

Our corporate headquarters is located in Moorestown, New Jersey, where we occupy 15,045 square feet of space. At our corporate headquarters, 6,160 square feet is utilized for pharmacy dispensing under a lease agreement that was extended on a month-to-month basis in October 2015, and 8,885 square feet is utilized for office space under a lease agreement that expires in March 2016. We have entered into three lease agreements for approximately 75,000 additional square feet in Moorestown, New Jersey, which are expected to expire in September 2027, to be used as our corporate headquarters and for pharmacy dispensing upon the expiration of the existing lease. In addition, we lease an aggregate of 16,584 square feet at the following locations: Boulder, Colorado; Charleston, South Carolina; San Francisco, California; St. Louis, Missouri; and Phoenix, Arizona. This includes 9,599 square feet dedicated to pharmacy dispensing in Boulder, Colorado and San Francisco, California.

We believe that our properties are adequate for our business as presently conducted.

Legal Proceedings

We are not currently party to any material legal proceedings. From time to time, however, we may be a party to litigation and subject to claims in the ordinary course of business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

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MANAGEMENT

The following table sets forth the name, age and position of each of our executive officers, directors and key employees as of November 30, 2015.

Name		Position

Executive Officers and Directors
Dr. Calvin H. Knowlton	66	Chief Executive Officer, Chairman of the Board of Directors
Dr. Orsula V. Knowlton	47	President, Director
Brian Adams	34	Chief Financial Officer
Glen Bressner	55	Director
Daniel Lubin	55	Director
Bruce Luehrs	62	Director
A Gordon Tunstall	71	Director
Key Employees
Dr. Robert L. Alesiani	58	Chief Pharmacotherapy Officer
Joseph J. Filippoli	50	Chief Information Officer
Michael Greenhalgh	53	Chief Pharmacy Officer
Philip W. Heath	50	Chief Operating Officer
Brian J. Litten, Esq.	51	Chief Strategy Officer, General Counsel and Chief Compliance Officer
Jacques Turgeon	56	Chief Scientific Officer

(1): Member of the Audit Committee.
(2): Member of the Compensation Committee.
(3): Member of the Nominating and Corporate Governance Committee.

Executive Officers and Directors

Dr. Calvin H. Knowlton, BScPharm, MDiv, PhD. Dr. Calvin Knowlton is our co-founder and has served as our Chairman and Chief Executive Officer since June 2014. He has served as Chairman and Chief Executive Officer of CareKinesis since May 2009. Dr. Calvin Knowlton founded excelleRx Inc., a national hospice medication management pharmacy serving the elderly, where he acted as President and Chief Executive Officer from April 1995 through July 2007. Dr. Calvin Knowlton has served on the Board and Executive Committee of the Coriell Institute for Medical Research since 2009, and the Evergreens Continuing Care Retirement Community Board of Trustees since 2011. He has chaired the Board of Coriell Life Sciences, Inc. since 2011 and has served as a founding member of the Board of the Cooper Medical School of Rowan University since 2011. Dr. Calvin Knowlton served on the Board of St. Christopher's Hospital for Children in Philadelphia from 2005 to 2011. Dr. Calvin Knowlton has been a member of the APhA Pharmacogenomics Task Force, as well as the national Pharmacogenomics Advisory Group since 2010 and 2011, respectively. Dr. Calvin Knowlton served as President of the American Pharmacists Association from 1994 to 1996, and President of the American Pharmacist Association Foundation from 2008 to 2009. Dr. Calvin Knowlton was awarded the highest national honor in pharmacy, the Remington Honor Medal, in 2015. Dr. Calvin Knowlton received his pharmacy degree from Temple University, his Divinity degree from Princeton Theological Seminary and his Ph.D. in Pharmacoeconomics from the University of Maryland. Dr. Calvin Knowlton is married to Dr. Orsula Knowlton. The board of directors believes that Dr. Calvin Knowlton's extensive healthcare services and technology experience, coupled with previous experience founding companies, brings valuable observations to the board of directors on a broad range of matters relating to healthcare services and technology company operations and regulatory interactions.

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Dr. Orsula V. Knowlton, BScPharm, PharmD, MBA. Dr. Orsula Knowlton is our co-founder and has served as our President since June 2014. She has served as President and a director of CareKinesis since May 2009. She served in numerous positions, including Vice President and Chief Marketing, New Business Development and Strategy Officer, of excelleRx, Inc. from April 1995 through July 2007. Dr. Orsula Knowlton currently serves on the Board of Trustees, a position she has held since 2009, and has chaired the Quality Committee for Samaritan Hospice, Marlton, NJ since 2012. She has been a member of the Board of Trustees for the West Jersey Chamber Music Society from 2009. Dr. Orsula Knowlton served on the Dean's Advisory Board, School of Public Health, Drexel University, Philadelphia from 2008 through 2011; the founding Dean's Advisory Board of Jefferson School of Pharmacy, Philadelphia, PA from 2009 through 2012; the Board of Advisors for the George Washington Institute on Spirituality and Health, Washington, DC from 2009 through 2012; and the Board of Trustees for Family Services, Mt. Holly, NJ (Oaks Integrated Care) from 2009 through 2012. Dr. Orsula Knowlton graduated from the University of the Sciences School of Pharmacy and Temple University's executive Masters in Business Administration program. Dr. Orsula Knowlton is married to Dr. Calvin Knowlton. The board of directors believes that Dr. Orsula Knowlton is qualified as a director based on her extensive marketing and strategy experience in the healthcare services and technology industry, coupled with her previous experience founding companies.

Brian W. Adams. Mr. Adams has served as our Chief Financial Officer since June 2014, and prior to that served as Vice President of Finance and Director of Finance for CareKinesis since October 2011. From September 2007 through October 2011, Mr. Adams served as Senior Financial Analyst, Manager of Finance and Associate Director of Finance and Accounting at KPMG LLP. Mr. Adams served as the Manager of Financial Planning and Analysis of excelleRx, Inc. from July 2005 through September 2007. Mr. Adams graduated from The University of Richmond, Robins School of Business with a Bachelor of Science in Business Administration with a concentration in finance.

Glen Bressner. Mr. Bressner has served as a member of our board of directors since June 2014, and as a director of CareKinesis since August 2010. Since September 2008, Mr. Bressner has served as a Managing Partner for Originate Ventures, a venture capital investment firm targeting early stage companies in the Mid-Atlantic region with a focus on medical devices, healthcare, consumer, information technology, web-based and commercial products. Mr. Bressner has been a Managing Partner with Mid-Atlantic Venture Funds since October 1985 and combined its fifth fund to help establish Originate Ventures. Mr. Bressner is Vice Chairman of NASDAQ-listed Innovative Solutions and Support Inc., a provider of flat panel display systems to the aerospace industry, and currently serves as the Chairman of its Audit Committee. Over his career, Mr. Bressner has served on the board of various health-related companies, including Access Health, Inc., UltraCision, Inc., CareGain, Inc. and FSAstore.com, Inc. Mr. Bressner has been a Partner and board member of Alum-a-Lift, Inc. since January 1987. He is currently a member of the Board of Governors of St. Christopher's Hospital for Children. The board of directors believes that Mr. Bressner's experience in venture capital makes him a valuable member of our board of directors.

Daniel Lubin. Mr. Lubin has served as a member of our board of directors since June 2014, and as a director of CareKinesis since June 2013. Mr. Lubin has been a Managing Partner and co-founder of Radius Ventures, LLC, which acts as the investment advisor to the Radius Funds, a venture capital firm that invests in leading-edge, growth equity and expansion-stage health and life sciences companies, since 1997. Prior to co-founding Radius, Mr. Lubin was a Director in the Investment Banking Division of Schroder Wertheim & Co., with co-responsibility for managing the firm's Health Care Group from 1994 through 1997. In 1991, Mr. Lubin co-founded and was Managing Director of KBL Healthcare, Inc., a health and life science venture capital and investment banking organization, and served as President and Chief Operating Officer of KBL Healthcare Acquisition Corp. from 1991 through 1994. Mr. Lubin earned a Bachelor of Science in Foreign Service from the Georgetown University School of Foreign Service and a Masters in Business Administration from Harvard Business School. The board of directors

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believes Mr. Lubin is a valuable addition to the board of directors because of his experience in investing in the healthcare services and information technology sectors.

Bruce Luehrs. Mr. Luehrs has served as a member of our board of directors since June 2014, and as a director of CareKinesis since August 2010. Mr. Luehrs has served as the Managing Partner of Rittenhouse Ventures since January 2015, and its predecessor fund Emerald Stage2 Ventures, an early stage venture fund, since its founding in 2007. Prior to joining Rittenhouse Ventures, Mr. Luehrs was a Partner at Penn Valley Capital from July 2006 through June 2007 and a Partner at the Edison Venture Fund from December 1997 through June 2006. Mr. Luehrs previously served as a director of Octagon Research, Cadient and Innaphase. Mr. Luehrs received a Masters in Business Administration from the Kellogg School of Management at Northwestern University following graduation from Duke University with a Bachelor of Arts in Economics. The board of directors believes Mr. Luehrs' prior director experience across the healthcare technology arena and his specific healthcare experience in pharmaceutical information technology makes him a valuable member of the board of directors.

A Gordon Tunstall. Mr. Tunstall has served as a member of our board of directors since June 2014 and as a director of CareKinesis since February 2012. Mr. Tunstall founded Tunstall Consulting, Inc. in 1980, which provides entrepreneurs with advisory services developing growth capital in the institutional capital markets. Mr. Tunstall has served as director on several boards, including excelleRx, Inc., Kforce Inc., Health Insurance Innovations, Inc., Advanced Lighting Technologies, Inc., JLM Industries, Inc., Horizon Medical Products, Inc., Discount Auto Parts, Inc., L.A.T. Sportswear and OrthoSynetics, Inc. (formerly Orthodontic Centers of America, Inc.). Mr. Tunstall is a CPA. Mr. Tunstall attended Widener College and received a Bachelor of Science in accounting. Because of his strong background of service on the boards of directors of numerous companies, his vast industry experience and his background as a successful strategic consultant for over 35 years advising a large number of companies in a variety of industries, the board of directors believes Mr. Tunstall has the qualifications and expertise necessary to serve on our board of directors.

Key Employees

Robert L. Alesiani, Jr., PharmD, CGP. Dr. Alesiani has served as our Chief Pharmacotherapy Officer since June 2014, and prior to that held the same position at CareKinesis since October 2009. From January 2009 through September 2009, Dr. Alesiani was the Senior Vice President of Clinical Pharmacy Operations for RevolutionCare, Inc. From August 2007 through December 2008, Dr. Alesiani was the Pharmacist in Charge at Stoke Compounding Pharmacy. Dr. Alesiani served as the Director of Compounding, then the Pharmacist Leader for excelleRx from June 1996 through July 2007. Dr. Alesiani was responsible for the education and oversight of more than 60 clinical pharmacists and pharmacy technicians and was responsible for formulating unique dosage forms for medication administration for the hospice patients. From December 1994 through May 1996, Dr. Alesiani was the Site Director and Clinical Pharmacist until 1996 when he became the Director of the Clinical Intake and Assessment Center at Hospice Pharmacia. From May 1987 through November 1994, Dr. Alesiani was the Director of Institutional Pharmacy and Clinical Community Pharmacist at Amherst Pharmacy. Dr. Alesiani is a Certified Geriatric Pharmacist who received his bachelor's degree in Marine Sciences from The Richard Stockton University of New Jersey, a bachelor's degree in Pharmacy from the University of the Sciences in Philadelphia and his doctorate in Pharmacy from the University of Florida.

Joseph J. Filippoli. Mr. Filippoli has served as our Chief Information Officer since June 2014, and as the Senior Vice President for CareKinesis since January 2012. From February 2008 through January 2012, Mr. Filippoli served as the Director of Information Management, leading the Enterprise Analytics and Reporting Department in Information Services, at The Children's Hospital of Philadelphia. Mr. Filippoli founded and served as President of JF Technology Advisors consulting firm from August 2007 to February 2008. From February 2000 through August 2007, he served as the Senior Vice President & Chief Technology Officer for excelleRx, Inc. Mr. Filippoli also served in technology

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management at Christiana Care Health System in Delaware from March 1998 through February 2000, and as Director of Management Information Systems and Chief Technology Architect at Delaware Park Casino from 1995 through March 1998. Mr. Filippoli received his Masters in Business Administration from Drexel University. Mr. Filippoli is a son-in-law of Dr. Calvin Knowlton.

Michael Greenhalgh. Mr. Greenhalgh has served as our Chief Pharmacy Officer since June 2014. Mr. Greenhalgh has served as the Chief Operating Officer of CareKinesis since May 2009, where he also served as the chief architect and designer of all pharmacy operations. Prior to CareKinesis, Mr. Greenhalgh was co-founder and President of Myofacial Associates from February 2003 through June 2006, a professional wellness center specializing in a natural alternative medicine approach to patient care with emphasis on well care visits. From March 1988 through March 1998, Mr. Greenhalgh was the President and owner of Red Fern Pharmacy, Norris Hills Pharmacy, Inc. and Red Fern Medical Inc. Red Fern Pharmacy and Norris Hills Pharmacy, Inc. became leaders in health education and pharmaceutical care for various disease states and hospice care. Red Fern Medical specialized in diabetes care, medical supplies and breast prosthesis for breast cancer patients. All three companies were acquired by Rite Aid, a Fortune 500 company. In addition to Mr. Greenhalgh's experience in pharmacy operations and health care management, Mr. Greenhalgh is the founder and managing partner of Blairhart Developing Inc. and MG2 Properties, each a real estate acquisitions and property management company, since 1992. Further, Mr. Greenhalgh was the owner of Exit Realty Pennsylvania, a sub-franchisor of Exit Realty International, a real estate brokerage where Mr. Greenhalgh was a franchisor for the Commonwealth of Pennsylvania, from 2002 through 2009. Mr. Greenhalgh graduated from Temple University with his bachelor's degree in Pharmacy in May 1985.

Phillip W. Heath. Mr. Heath has served as our Chief Operating Officer since February 2015. From January, 2012 through January 2015, Mr. Heath served as Chief Marketing and Sales Officer and Chief Administrative Officer at InnovAge, a provider of long-term care services including PACE, home care, affordable senior housing and care management services. From January 2010 through December 2011, Mr. Heath served as the Vice President of Business Development for The Denver Hospice. Mr. Heath was the Regional Director of PACE Operations for InnovAge Greater Colorado PACE from August 2008 through December 2009. From June 2007 through August 2008, Mr. Heath served as the General Manager and Executive Director of Odyssey Healthcare. Mr. Heath was the Director of Access and Admissions for TRU Community Care from August 2003 through June 2007. Mr. Heath holds a Bachelor of Arts from Morehouse College and a Masters in Health Services Administration from the University of Detroit Mercy. Mr. Health also completed a Healthcare Leadership certification from Cornell University.

Brian J. Litten, Esq. Mr. Litten has served as our Chief Strategy Officer, General Counsel and Chief Compliance Officer since September 2014. Prior to joining the company, Mr. Litten served as Chief Executive Officer of PathForward Oncology, LLC, a healthcare technology company, from November 2010 to July 2013 and as Strategic Advisor to the Chief Executive Officer of eviti, Inc., a healthcare technology company, from November 2010 through August 2014. Mr. Litten served as Vice President of Strategic and External Affairs for AmeriHealth New Jersey, a for-profit subsidiary of Independence Blue Cross (Philadelphia), from October 2008 through October 2010. Mr. Litten served as Director, Government Affairs from August 2003 through September 2008 for Horizon Blue Cross Blue Shield of New Jersey. Mr. Litten was the Managing Director, State and Civic Affairs, for Continental Airlines from July 2000 through July 2003. Mr. Litten was appointed to serve as Chief Legislative Counsel and Assistant Attorney General in New Jersey's Office of the Attorney General, Department of Law and Public Safety, from September 1995 through July 2000. Mr. Litten has served on the Board of the Public Affairs Council since June 2015 and, previously, from August 2003 through August 2012. From January 2011 through December 2012, Mr. Litten served as a Senior Fellow at the Jefferson School of Population Health. Mr. Litten also served on the Board and the Executive Committee of the Coriell Institute for Medical Research, a non-profit biomedical research center, from September 2008 through December 2012. Mr. Litten served on the New Jersey Association of Health plans Board of Directors

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from August 2003 through October 2010 and was elected as its Chairman from January 2005 through October 2010. Mr. Litten earned a Juris Doctor from Rutgers University School of Law and a Bachelor of Arts in Economics from Vassar College. Mr. Litten is a member in good standing of the Bar of the State of New Jersey.

Jacques Turgeon, PhD. Dr. Turgeon has served as our Chief Scientific Officer since September 2015. Dr. Turgeon served as the Chief Executive Officer of the Centre hospitalier de l'Universite de Montreal, the major francophone university hospital in the province of Quebec, from April 2015 to September 2015, and was previously the Executive Director beginning in June 2014. From April 2007 to June 2014, Dr. Turgeon was the Director of the Research Center of the Centre hospitalier de l'Université de Montréal. Dr. Turgeon was Dean of the Faculty of Pharmacy at the Université de Montréal where he is a professor in drug metabolism, pharmacokinetics and pharmacogenomics. Dr. Turgeon received his Bachelor of Science in Pharmacy from l'Université Laval in Quebec City followed by a Master of Science in pharmacokinetics and a Ph.D. in drug metabolism from the same institution. Dr. Turgeon completed post-doctoral studies in the department of Clinical Pharmacology at Vanderbilt University.

Board Composition and Election of Directors

Board Composition

Our board of directors currently consists of six directors, four of whom qualify as independent directors under the rules and regulations of the Securities and Exchange Commission, or SEC, and The NASDAQ Stock Market, LLC, or NASDAQ.

Effective upon the completion of this offering, our board of directors will be divided into three classes, class I, class II and class III, with members of each class serving staggered three-year terms. The members of the classes will be divided as follows:

•: the class I directors will be and , and their term will expire at the annual meeting of stockholders to be held in 2016;
•: the class II directors will be and , and their term will expire at the annual meeting of stockholders to be held in 2017; and
•: the class III directors will be and , and their term will expire at the annual meeting of stockholders to be held in 2018.

Our amended and restated certificate of incorporation and amended and restated bylaws provide that the number of our directors shall be fixed from time to time by a resolution of the majority of our board of directors. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class shall consist of one third of the board of directors. The division of our board of directors into three classes with staggered three-year terms may delay or prevent stockholder efforts to effect a change of our management or a change in control.

We have no formal policy regarding board diversity. Our priority in selection of board members is identification of members who will further the interests of our stockholders through his or her established record of professional accomplishment, the ability to contribute positively to the collaborative culture among board members, knowledge of our business and understanding of the competitive landscape.

Director Independence

Rule 5605 of the NASDAQ Marketplace Rules, or the NASDAQ Listing Rules, requires that a company listing in connection with its initial public offering must meet the following requirements (1) for its audit, compensation and nominating committees, (a) one member satisfying the independence requirements applicable to such committees described below at the time of listing, (b) a majority of

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members satisfying such requirements within 90 days of listing and (c) all members satisfying such requirements within one year of listing; and (2) independent directors compose a majority of the listed company's board of directors within one year of listing. In addition, the NASDAQ Listing Rules require that, subject to specified exceptions, each member of a listed company's audit committee, compensation committee and nominating committee (to the extent that the listed company select or recommend director nominees through a nominating committee instead of independent directors constituting a majority of the board of directors' independent directors), be independent and that audit committee members and compensation committee members also satisfy additional independence criteria. Under NASDAQ Listing Rule 5605(a)(2), a director will only qualify as "independent" if the person meets the independence criteria listed therein and, in the opinion of our board of directors that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Under NASDAQ Listing Rule 5605(c)(2), audit committee members must also meet the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, under which a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors or any other board committee: (1) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries; or (2) be an affiliated person of the listed company or any of its subsidiaries. Under NASDAQ Listing Rule 5605(d)(2), members of the compensation committee must also satisfy additional independence requirements under which the board of directors of the listed company must consider, in affirmatively determining the independence of a director who will serve on the compensation committee, all factors specifically relevant to determining whether a director has a relationship to the listed company that is material to that director's ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to, the source of compensation of such director, including any consulting, advisory or other compensatory fee from the listed company, and whether the compensation committee member is affiliated with the listed company, any of its subsidiaries or an affiliate of a subsidiary of the listed company.

In 2015, our board of directors undertook a review of the composition of our board of directors and its committees and the independence of each director. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family and other relationships, including those relationships described under "Transactions with Related Persons," our board of directors determined that each of our directors, with the exception of Drs. Calvin and Orsula Knowlton, is an "independent director" as that term is defined under Rule 5605(a)(2) of the NASDAQ Listing Rules. Drs. Calvin and Orsula Knowlton are not considered independent because they currently serve as our Chief Executive Officer and President, respectively. Our board of directors also determined that each member of the audit, compensation and nominating and corporate governance committees satisfies the independence standards for such committees established by the SEC and the NASDAQ Listing Rules. In making these determinations regarding the independence of our directors, our board of directors considered the relationships that each such non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining independence, including the beneficial ownership of our capital stock by each non-employee director.

Board Leadership Structure and the Role of the Board in Risk Oversight

Board Leadership Structure

The positions of our chairman of the board and chief executive officer are combined, our board of directors does not have a policy on whether the role of the chairman and the chief executive officer should be separate and believes it should maintain flexibility to select a chairman and board leadership structure from time to time. Currently, the board of directors believes that it is in the best interests of

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the company and its stockholders for Dr. Calvin Knowlton to serve in both roles given his knowledge of the company and industry.

Role of the Board in Risk Oversight

We face a number of risks, including those described in the section titled "Risk Factors". Our board of directors believes that risk management is an important part of establishing, updating and executing the company's business strategy. Our board of directors, as a whole and at the committee level, has oversight responsibility relating to risks that could affect the corporate strategy, business objectives, compliance, operations and the financial condition and performance of the company. Our board of directors focuses its oversight on the most significant risks facing the company and on its processes to identify, prioritize, assess, manage and mitigate those risks. Our board of directors and its committees receive regular reports from members of the company's senior management on areas of material risk to the company, including strategic, operational, financial, legal and regulatory risks. While our board of directors has an oversight role, management is principally tasked with direct responsibility for management and assessment of risks and the implementation of processes and controls to mitigate the effects of risks on the company.

The audit committee, as part of its responsibilities, oversees the management of financial risks, including accounting matters, liquidity and credit risks, corporate tax positions, insurance coverage and cash investment strategy and results. The audit committee is also responsible for overseeing the management of risks relating to the performance of the company's internal audit function, if required, and its independent registered public accounting firm, as well as our systems of internal controls and disclosure controls and procedures. The compensation committee is responsible for overseeing the management of risks relating to our executive compensation and overall compensation and benefit strategies, plans, arrangements, practices and policies. The nominating and corporate governance committee oversees the management of risks associated with our overall compliance and corporate governance practices, and the independence and composition of our board of directors. These committees provide regular reports, on at least a quarterly basis, to the full board of directors.

Committees of the Board

Our board of directors has a standing audit committee, compensation committee and nominating and corporate governance committee. The composition and responsibilities of each committee are described below. Members serve on these committees until their resignation or until otherwise determined by our board.

Audit Committee

The audit committee is responsible for assisting our board of directors in its oversight of the integrity of our financial statements, the qualifications and independence of our independent auditors and our internal financial and accounting controls. The audit committee has direct responsibility for the appointment, compensation, retention (including termination) and oversight of our independent auditors, and our independent auditors report directly to the audit committee. The audit committee also prepares the audit committee report that the SEC requires to be included in our annual proxy statement.

The members of the audit committee are , and serves as chair of the audit committee. Each member of the audit committee qualifies as an independent director under the corporate governance standards of the NASDAQ Listing Rules and the independence requirements of Rule 10A-3 of the Exchange Act. Our board of directors has determined that qualifies as an "audit committee financial expert" as such term is currently defined in Item 407(d)(5) of Regulation S-K. The audit committee has adopted a written charter that satisfies the applicable standards of the SEC and the NASDAQ Listing Rules, which we will post on our website upon completion of this offering.

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Compensation Committee

The compensation committee approves the compensation objectives for the company, approves the compensation of the chief executive officer and approves or recommends to our board of directors for approval the compensation for other executives. The compensation committee reviews all compensation components, including base salary, bonus, benefits and other perquisites.

The members of the compensation committee are , and serves as chair of the compensation committee. Each member of the compensation committee is a non-employee director within the meaning of Rule 16b-3 of the rules promulgated under the Exchange Act, each is an outside director as defined by Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended, or the Code, and each is an independent director as defined by the NASDAQ Listing Rules, including NASDAQ Listing Rule 5605(d)(2). The compensation committee has adopted a written charter that satisfies the applicable standards of the SEC and the NASDAQ Listing Rules, which we will post on our website upon completion of this offering.

Nominating and Corporate Governance Committee

The nominating and corporate governance committee is responsible for making recommendations to our board of directors regarding candidates for directorships and the structure and composition of our board and the board committees. In addition, the nominating and corporate governance committee is responsible for developing and recommending to our board, corporate governance guidelines applicable to the company and advising our board on corporate governance matters.

The members of the nominating and corporate governance committee are and serves as chair of the nominating and corporate governance committee. Each member of the nominating and corporate governance committee is a non-employee director within the meaning of Rule 16b-3 of the rules promulgated under the Exchange Act and an independent director as defined by the NASDAQ Listing Rules. The nominating and corporate governance committee has adopted a written charter that satisfies the applicable standards of the NASDAQ Listing Rules, which we will post on our website upon completion of this offering.

Code of Business Conduct and Ethics

We will adopt a code of business conduct and ethics that applies to all of our employees, officers and directors including those officers responsible for financial reporting. Upon completion of this offering, we will post the code of business conduct and ethics on our website. We intend to disclose future amendments to the code or any waivers of its requirements on our website to the extent permitted by the applicable rules and exchange requirements.

Compensation Committee Interlocks and Insider Participation

None of the members of our compensation committee has ever been an officer or employee of the company. None of our executive officers serves, or has served during the last three year, as a member of the board of directors, compensation committee or other board committee performing equivalent functions of any entity that has one or more executive officers serving as one of our directors or on our compensation committee.

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EXECUTIVE COMPENSATION

This section discusses the material components of the executive compensation program for our executive officers who are named in the "2014 Summary Compensation Table" below. As an emerging growth company, we have opted to comply with the executive compensation disclosure rules applicable to "smaller reporting companies" as such term is defined in the rules promulgated under the Securities Act, which require compensation disclosure for our principal executive officer and our two other most highly compensated executive officers. In 2014, our chief executive officer and our two other highest-paid executive officers, referred to collectively as our "named executive officers", were as follows:

•: Dr. Calvin Knowlton, Chief Executive Officer;
•: Dr. Orsula Knowlton, President; and
•: Brian Adams, Chief Financial Officer.

We review compensation annually for all employees, including our named executive officers. In setting base salaries and bonuses and granting equity incentive awards, we consider compensation for comparable positions in the market, individual performance as compared to our expectations and objectives, our desire to motivate our named executive officers to achieve short- and long-term results that are in the best interests of our stockholders and a long-term commitment to our company.

This discussion may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt following the completion of this offering may differ materially from the currently planned programs summarized in this discussion.

2014 Summary Compensation Table

The following table sets forth information for the year ended December 31, 2014, regarding compensation awarded to or earned by our named executive officers.

Name and Principal Position

Dr. Calvin Knowlton	2014	277,025	61,695	102,000	56,311	497,031
Chief Executive Officer
Dr. Orsula Knowlton	2014	247,539	60,366	95,840	10,634	414,379
President
Brian Adams	2014	188,879	17,179	47,500	8,999	262,557
Chief Financial Officer

(1): Amounts shown include $10,830, $9,675 and $3,640 for Drs. Calvin and Orsula Knowlton and Mr. Adams, respectively, as payment of accrued but unused paid time off in excess of 80 hours in accordance with our paid time off policy applicable to all employees.
(2): Amounts reflect the grant date fair value of option awards granted in accordance with FASB ASC Topic 718. Our named executive officers will only realize compensation to the extent the market price of our common stock is greater than the exercise price of such stock options. For information regarding assumptions underlying the valuation of equity awards, see Note 13 to our financial statements appearing at the end of this prospectus.
(3): Amounts reflect annual performance bonuses paid under our short-term incentive compensation program, as discussed in the "Short-Term Incentive Compensation" section.

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(4): Includes the following additional compensation:

Name and Principal Position

Dr. Calvin Knowlton	2014	5,590	2,873	24,388	8,543	12,903
Chief Executive Officer
Dr. Orsula Knowlton	2014	5,253	2,687	—	680	—
President
Brian Adams	2014	4,165	2,042	—	778	—
Chief Financial Officer

(a): This amount reflects the value of the after-tax retirement payment in the amount of 3% of base salary made to each of the named executive officers under the retirement policy applicable to all employees prior to the second quarter of 2014.
(b): Includes the premiums paid for our medical plan for Dr. Calvin Knowlton, covering both him and Dr. Orsula Knowlton, which are fully paid by us, as discussed below in the "Other Benefits" section.
(c): Includes premiums paid for our executive life insurance program, discussed below in the "Other Benefits" section.
(d): The aggregate amount of perquisites does not exceed $10,000 per annum for each of the named executive officers, except for Dr. Calvin Knowlton. The amount reported here for Dr. Calvin Knowlton reflects the value of country club and social club dues paid by us, discussed below in the "Other Benefits" section.

Narrative to Summary Compensation Table

Employment Agreements

We expect to enter into employment agreements with each of our named executive officers effective on or prior to the effective date of the registration statement of which this prospectus forms a part. Certain key terms of these agreements are described below.

The employment agreement with Dr. Calvin Knowlton entitles him to an annual base salary of $ and an annual target bonus opportunity, which for 2016 equals % of his annual base salary. The employment agreement with Dr. Orsula Knowlton entitles her to an annual base salary of $ and an annual target bonus opportunity, which for 2016 equals % of her annual base salary. The employment agreement with Mr. Adams entitles him to an annual base salary of $ and an annual target bonus opportunity, which for 2016 equals % of his annual base salary. Each employment agreement has an initial 3-year term and will automatically renew each anniversary thereafter unless notice of non-renewal is given 90 days prior to the expiration of the renewal date or they are otherwise terminated pursuant to their terms.

In the event Dr. Calvin Knowlton, Dr. Orsula Knowlton or Mr. Adams is terminated by us without cause or resigns for good reason (each as generally defined below), subject to the applicable executive timely executing a release of claims in our favor, each of Dr. Calvin Knowlton and Dr. Orsula Knowlton is entitled to receive 18 months, and Mr. Adams is entitled to receive 12 months, of continued base salary and each executive is also entitled to receive up to 18 months of continued medical, dental or vision coverage pursuant to COBRA at the active employee rate, if elected. If the termination occurs within 60 days before or 12 months following a change in control, referred to as a change in control termination, subject to the executive timely executing a release of claims in our favor, each of the executives, as applicable, are entitled to receive the following in lieu of the severance benefits described in the previous sentence: (i) 2 times for Dr. Calvin Knowlton and Dr. Orsula Knowlton, and 1.5 times for

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Mr. Adams, such executive's annual base salary plus target bonus opportunity, paid in regular payroll installments over the 24-month period for Dr. Calvin Knowlton and Dr. Orsula Knowlton, and the 18-month period for Mr. Adams, following such executive's employment termination date; (ii) up to 24 months for Dr. Calvin Knowlton and Dr. Orsula Knowlton, and 18 months for Mr. Adams, of continued medical, dental or vision coverage pursuant to COBRA at the active employee rate, or pursuant to an individual policy following the COBRA continuation period, if elected; and (iii) accelerated vesting of the executive's time-based equity awards and continued eligibility to vest in awards subject to performance-based vesting conditions if and to the extent such performance conditions are thereafter satisfied.

The employment agreements each contain restrictive covenants pursuant to which the executives have agreed to refrain from competing with us or soliciting our employees or customers for a period following the executive's termination of employment. For Dr. Calvin Knowlton and Dr. Orsula Knowlton, the period is 18 months, provided that such period shall be increased to 24 months in the case of a change in control termination. For Mr. Adams, the period is 12 months, provided that such period shall be increased to 18 months in the case of a change in control termination.

Payments and benefits under the employment agreements are reduced to the maximum amount that does not trigger the excise tax under Code sections 280G and 4999 unless the executive would be better off, on an after-tax basis, if the executive received all payments and benefits and paid all applicable excise and income taxes.

For purposes of the employment agreements:

•: "cause" generally means, subject to certain notice requirements and cure rights, the executive's: (i) knowing and material dishonesty or fraud committed in connection with the executive's employment; (ii) theft, misappropriation or embezzlement of our funds; (iii) repeatedly negligently performing or failing to perform, or willfully refusing to perform, the executive's duties to us (other than a failure resulting from the executive's incapacity due to physical or mental illness); (iv) conviction of or a plea of guilty or nolo contendere to any felony, a crime involving fraud or misrepresentation, or any other crime (whether or not connected with his employment) the effect of which is likely to adversely affect us or our affiliates; (v) material breach of any of the provisions or covenants set forth in the employment agreement; or (vi) a material breach of our Code of Business Conduct and Ethics.
•: "good reason" generally means, subject to certain notice requirements and cure rights, (i) material diminution of the executive's authority, duties or responsibilities; (ii) a relocation of our offices at which the executive is principally employed to a location more than miles from the location of such offices immediately prior to the relocation; (iii) a material diminution in the executive's base salary; (iv) non-renewal of the employment agreement; or (v) any action or inaction that constitutes a material breach by us of a material provision of the employment agreement.
•: "change in control" has the meaning set forth in our 2014 Equity Compensation Plan.

Incentive Compensation

We award both short-term and long-term incentive compensation to our named executive officers.

Short-Term Incentive Compensation

We pay annual performance bonuses to reward the performance achievements of our named executive officers. We generally pay these bonuses in cash, and an executive must be employed by us on the pay date to receive a bonus. Each named executive officer is assigned a targeted maximum payout, expressed as a percentage of his or her base salary for the year, which varies by his or her compensation tier. Each named executive officer's annual performance bonus is generally determined

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based on our achievement of company objectives. Our company objectives generally relate to the achievement of pre-established performance goals based on company-wide business objectives.

The performance objectives are generally objectively determinable and measurable and their outcomes are uncertain at the time established. When we set the 2014 objectives, we considered them to be ambitious, but attainable and designed to cause annual performance bonus payments to reflect meaningful performance requirements. For 2014, our company objectives were achievement of designated levels of profitable growth, client satisfaction and retention, efficient and quality production and regulatory and departmental compliance. In 2014, the actual bonuses paid reflect that our objectives were achieved at 100% of target. For 2014, the target bonus and actual payout for our named executive officers are set forth in the table below:

Name

Dr. Calvin Knowlton	102,000	102,000
Dr. Orsula Knowlton	95,840	95,840
Brian Adams	47,500	47,500

Long-Term Incentive Compensation

We award long-term incentive awards to our named executive officers under the 2014 Equity Compensation Plan, discussed below in the "Equity Compensation Plan" section. In addition, our named executive officers participate in three long-term incentive programs that were adopted on June 28, 2013. Each of these programs is designed to drive our performance through a change in control transaction or initial public offering.

Special Equity Award Pool

The board of directors established an employee equity award pool of 2,626,188 shares of common stock under the 2014 Equity Compensation Plan for purposes of granting equity-based compensation awards, including stock options, to employees until June 28, 2018. We make annual stock option grants to certain employees, including our named executive officers, under the 2014 Equity Compensation Plan using shares from this pool. The exercise price of stock options is the fair market value of our common stock as determined by our board of directors on the date of grant. Our stock options typically vest over a four-year period, subject to continued employment or association with us, and generally expire five or ten years after the date of grant. Incentive stock options, or ISOs, also include terms necessary to assure compliance with the applicable provision of the Code. In connection with this offering, any remaining shares in the pool will be granted as restricted stock to certain of our executives, including our named executive officers, immediately prior to the effective date of the registration statement of which this prospectus forms a part, as determined by our board of directors based on the recommendation of our Chief Executive Officer, Dr. Calvin Knowlton.

Leadership Exit Bonus Plan

In June 2014, we entered into a Letter Agreement with Radius, pursuant to which we established the Leadership Exit Bonus Plan, whereby certain of our executives, including our named executive officers, participate in a change in control transaction or initial public offering with respect to us based on proceeds received by Radius in connection with such event as described below.

Payments under our Leadership Exit Bonus Plan, if any, will be based on a value of up to $4.0 million, which pursuant to the terms of the plan will be allocated at the discretion of Dr. Calvin Knowlton. All of our named executive officers, Joseph Filippoli and two additional key employees are entitled to participate in the Leadership Exit Bonus Plan.

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In the event of our initial public offering where Radius is permitted to sell in such offering shares of our capital stock, owned by Radius, with an aggregate sales price of at least $8.0 million, then:

•: In the event that the initial public offering value, calculated based on the proceeds received by Radius, exceeds $16.0 million but is equal to or less than $20.0 million, then on the effective date of the initial public offering, Radius shall contribute to us shares of Series B preferred stock and/or common stock issued upon the conversion of such Series B preferred stock, with an aggregate fair market value calculated based upon the initial public offering price, equal to the lesser of (1) $1.0 million and (2) the amount by which the initial public offering value exceeds $16.0 million;
•: In the event that the initial public offering value exceeds $20.0 million but is equal to or less than $24.0 million, then on the effective date of the initial public offering, Radius shall contribute to us shares of Series B preferred stock and/or common stock issued upon the conversion of such Series B preferred stock, with an aggregate fair market value calculated based upon the initial public offering price, equal to the sum of (1) $1.0 million plus (2) the lesser of (A) $1.0 million and (B) the amount by which the initial public offering value exceeds $20.0 million; and
•: In the event that the initial public offering value exceeds $24.0 million, then on the effective date of the initial public offering, Radius shall contribute to us shares of Series B preferred stock and/or common stock issued upon the conversion of such Series B preferred stock, with an aggregate fair market value calculated based upon the initial public offering price, equal to the sum of (1) $2.0 million plus (2) the lesser of (A) $2.0 million and (B) the amount by which the initial public offering value exceeds $24.0 million.

Based on the assumed terms of this offering, we will make payments under the plan using shares we will receive from Radius. To the extent we receive any payments from Radius, we will make aggregate payments in such amount to participants in the plan in the form of shares of our common stock, cash or other consideration, as determined by our board of directors from a pool valued at up to $4.0 million, allocated in our discretion.

Valuation Incentive Award Plan

The Valuation Incentive Award Plan establishes, in the event of an acquisition of our company resulting in proceeds of at least $250.0 million, an award pool of $9.0 million from the proceeds of such acquisition. Certain executives, including our named executive officers, would be eligible for awards from the pool, as allocated in the discretion of our Chief Executive Officer, Dr. Calvin Knowlton. The Valuation Incentive Award Plan will be terminated in connection with this offering.

Other Benefits

401(k) Plan

Prior to the second quarter of 2014, we provided an after-tax retirement payment to our employees, including our named executive officers, in the amount of 3% of base salary, paid on a quarterly basis. In the second quarter of 2014, we put in place a defined contribution employee retirement plan for our employees. Our 401(k) plan is intended to qualify as a tax-qualified plan under Section 401 of the Code so that contributions to our 401(k) plan, and income earned on such contributions, are not taxable to participants until withdrawn or distributed from the 401(k) plan. Our 401(k) plan provides that each participant may contribute up to $18,000 for 2015. Participants who are at least 50 years old can also make "catch-up" contributions, which in 2015 may be up to an additional $5,500 above the statutory limit. Under our 401(k) plan, we make a contribution equal to 3% of compensation on behalf of each eligible employee.

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Executive Life Insurance Program

In 2014, we began providing an executive life insurance program in which our named executive officers participate. This program provides a death benefit to the named executive officer's beneficiary in an amount equal to $1.0 million, $1.0 million and $1.5 million for Drs. Calvin and Orsula Knowlton and Mr. Adams, respectively.

Additional Benefits

Our named executive officers are eligible to participate in all of our employee benefit plans, such as dental insurance, vision insurance, a medical and dental opt-out program, group life insurance and short and long-term disability insurance, in each case on the same basis as other employees, subject to applicable laws. We also provide vacation and other paid holidays to all employees, including our named executive officers. We pay the full cost of medical insurance for Drs. Calvin and Orsula Knowlton. Mr. Adams participates in our medical insurance benefits on the same basis as other employees.

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Outstanding Equity Awards at 2014 Fiscal Year End Table

The following table presents information regarding all outstanding stock options held by each of our named executive officers on December 31, 2014. We have not historically made stock or other equity award grants to our named executive officers.

	Option Awards

Name	Grant Date		Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date
Dr. Calvin Knowlton		8/15/2010		161,593		—		0.28		8/15/2015
		8/15/2010		66,977		—		0.55		8/15/2015
		8/15/2010		169,580		—		0.75		8/15/2015
		1/31/2011		5,893		126		0.75		1/31/2016
		2/10/2011		60,708		1,292		0.75		2/10/2016
		3/10/2011		958		42		0.75		3/10/2016
		10/25/2011		475		125		0.88		10/25/2016
		11/25/2011		5,550		1,650		0.88		11/25/2016
		1/6/2012		50,442		15,500		0.88		1/6/2017
		3/1/2012		1,971		—		0.88		3/1/2017
		12/20/2012		12,185		—		1.21		12/20/2017
		1/2/2013		25,000		25,000		1.76		1/2/2018
		1/22/2013		7,392		—		1.76		1/22/2018
		6/28/2013		213,728		356,213		1.76		6/28/2018
		1/1/2014		8,254		70,000		3.30		1/1/2019
Dr. Orsula Knowlton		8/15/2010		154,611		—		0.28		8/15/2015
		8/15/2010		66,977		—		0.55		8/15/2015
		8/15/2010		163,187		—		0.75		8/15/2015
		1/31/2011		5,893		126		0.75		1/31/2016
		2/10/2011		60,708		1,292		0.75		2/10/2016
		3/10/2011		958		42		0.75		3/10/2016
		10/25/2011		475		125		0.88		10/25/2016
		11/25/2011		5,550		1,650		0.88		11/25/2016
		1/6/2012		50,147		15,500		0.88		1/6/2017
		3/1/2012		1,823		—		0.88		3/1/2017
		12/20/2012		11,271		—		1.21		12/20/2017
		1/2/2013		25,000		25,000		1.76		1/2/2018
		1/22/2013		6,837		—		1.76		1/22/2018
		6/28/2013		213,728		356,213		1.76		6/28/2018
		1/1/2014		6,328		70,000		3.30		1/1/2019
Brian Adams		10/20/2011		15,833		4,167		0.80		10/20/2021
		1/6/2012		14,750		3,250		0.80		1/6/2022
		3/1/2012		2,500		—		0.80		3/1/2022
		12/20/2012		16,379		—		1.10		12/20/2022
		1/2/2013		7,500		7,500		1.60		1/2/2023
		1/22/2013		1,311		—		1.60		1/22/2023
		6/28/2013		64,131		106,886		1.60		6/28/2023
		1/1/2014		512		20,000		3.00		1/1/2024

(1): Option awards vest 25% on the first anniversary of grant, and 1/36th each month thereafter. Option awards to Drs. Calvin and Orsula Knowlton have a term of 5 years because they are considered 10% owners and the tax rules for incentive stock option grants require a 5 year term. Option awards to Mr. Adams have a term of ten years.

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Equity Compensation Plans

The board of directors of CareKinesis and its stockholders previously adopted the 2014 Equity Compensation Plan to provide for the grant of ISOs, nonqualified stock options, or NSOs, stock awards, stock units, stock appreciation rights, or SARs, and other equity-based awards to employees, consultants and advisors and non-employee directors. The 2009 Equity Compensation Plan was originally adopted on May 1, 2009, and was subsequently amended in 2010, 2011, 2012 and 2013. As part of the 2013 amendment and restatement, it was renamed the 2013 Equity Compensation Plan. The 2013 Equity Compensation Plan was amended and restated on June 30, 2014 and renamed as the 2014 Equity Compensation Plan. In connection with the Reorganization Transaction, we assumed the 2014 Equity Compensation Plan on such date. References to the 2014 Equity Compensation Plan include the 2009 Equity Compensation Plan and 2013 Equity Compensation Plan for awards made under those prior restatements of the 2014 Compensation Plan.

In connection with this offering, we expect to adopt a new equity compensation plan that will be effective immediately prior to the effective date of the registration statement of which this prospectus forms a part and will replace the existing 2014 Equity Compensation Plan. As of the effective date of the 2016 Equity Compensation Plan, the 2014 Equity Compensation Plan will be merged with and into the 2016 Equity Compensation Plan and no additional grants will be made thereafter under the 2014 Equity Compensation Plan. Outstanding grants under the 2014 Equity Compensation Plan will continue in effect according to their terms as in effect before the merger with the 2014 Equity Compensation Plan, and the shares with respect to outstanding grants under the 2014 Equity Compensation Plan will be issued or transferred under the 2016 Equity Compensation Plan.

Following this offering, we expect to grant equity awards under the 2016 Equity Compensation Plan from time to time, but, except as set forth under "—Non-Employee Director Compensation," we have not determined the schedule or amount of such grants.

2014 Equity Compensation Plan

Types of Stock Awards

The 2014 Equity Compensation Plan provides for the grant of stock options (ISOs and NSOs), stock awards, stock units, SARs and other stock-based awards, which are collectively referred to as stock awards. Other stock-based awards are awards of common stock and other awards (including cash) that are valued in whole or in part by reference to, or are payable in or otherwise based on, our common stock. Stock awards may be granted to employees, including officers, non-employee directors and consultants of the company or our affiliates, except that ISOs may be granted only to employees. Awards are evidenced by award agreements in such forms as the committee approves from time to time. Each award is subject to such terms and conditions, consistent with the 2014 Equity Compensation Plan, as are determined by the committee and as set forth in the award agreement.

Share Reserve

The aggregate number of shares of our common stock that may be issued pursuant to stock awards under the 2014 Equity Compensation Plan is 7,635,580 shares. This pool consists of 5,044,636 shares of our Class A common stock and 2,590,944 shares of our Class B common stock. If a stock option or SAR granted under the 2014 Equity Compensation Plan expires, terminates, is canceled or is forfeited, exchanged or surrendered without having been exercised, or if any stock award, stock unit or other stock-based award is forfeited, the number of shares subject to the grant will again be available for purposes of stock awards under the 2014 Equity Compensation Plan. As of November 30, 2015, 1,063,218 shares have been issued upon the exercise of options granted under the 2014 Equity Compensation Plan, options to purchase 5,426,358 shares of our common stock were outstanding at a weighted average exercise price of $1.69 per share and 1,146,004 shares remained available for grant under the 2014 Equity Compensation Plan. No shares have been granted outside of the 2014 Equity Compensation Plan.

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Administration

Our board of directors, or a duly authorized committee thereof, has the authority to administer the 2014 Equity Compensation Plan. Subject to the terms of the 2014 Equity Compensation Plan, our board of directors or the authorized committee, referred to herein as the committee, determines recipients, dates of grant, the numbers and types of stock awards to be granted and the terms and conditions of the stock awards, including the period of exercisability and vesting schedule applicable to a stock award. Subject to the limitations set forth below, the committee will also determine the exercise price, strike price or purchase price of awards granted and the types of consideration to be paid for the award. The committee has the authority to adopt and amend administrative rules, regulations, agreements and instruments for implementing the 2014 Equity Compensation Plan. Decisions and interpretations or other actions by the committee are in the discretion of the committee and are final binding and conclusive on the company and all participants in the 2014 Equity Compensation Plan.

Stock Units

Stock units may be granted to non-employee directors, employees and consultants and advisors selected by the committee. A stock unit is a notional account representing one share of common stock or an amount based on the value of one share of common stock. The committee determines the vesting criteria, if any, for stock units, which may be based on the passage of time, achievement of performance conditions or vesting conditions otherwise determined by the committee.

A stock unit granted by the committee will be paid in the form of shares of common stock, cash, or a combination of both, as set forth in the applicable award agreement.

Stock Awards

Stock awards may be granted to non-employee directors, employees and consultants and advisors selected by the committee. Each stock award is subject to terms and conditions determined by the committee and set forth in the applicable award agreement, which may include vesting conditions that lapse based on the passage of time, achievement of performance conditions or vesting conditions otherwise determined by the committee, restrictions on the sale or other disposition of the shares covered by the award and our right to reacquire such shares for no consideration upon termination of the participant's employment within specified periods.

The applicable award agreement will specify whether the participant will have all of the rights of a stockholder with respect to the shares of common stock subject to a stock award, including the right to receive dividends and to vote the shares, subject to any restrictions deemed appropriate by the committee, including, without limitation, the achievement of specific performance goals.

Stock Options

ISOs and NSOs are granted pursuant to stock option agreements adopted by the committee. The committee determines the exercise price for a stock option, within the terms and conditions of the 2014 Equity Compensation Plan, provided that the exercise price of a stock option cannot be less than 100% of the fair market value of our common stock on the date of grant. Options granted under the 2014 Equity Compensation Plan will become exercisable at the rate specified by the committee.

The committee determines the term of stock options granted under the 2014 Equity Compensation Plan, up to a maximum of ten years. Unless the terms of an option holder's stock option agreement provide otherwise, if an option holder's service relationship with us, or any of our affiliates, ceases for any reason other than disability, death or cause, the option holder may generally exercise any vested options for a period of 90 days following the cessation of service. If an option holder's service relationship with us or any of our affiliates ceases due to disability or death, or an option holder dies within a certain period following cessation of service, the option holder or a beneficiary may generally

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exercise any vested options for a period of one year following the option holder's disability or death. Unless otherwise provided by the committee at the time a stock option is granted, in the event of a termination for cause, before the stock option is exercised, then the stock option will terminate.

Acceptable consideration for the purchase of common stock issued upon the exercise of a stock option will be determined by the committee and may include (i) cash, (ii) the tender of shares of our common stock owned by the option holder, (iii) if the company's common stock is publicly traded, a broker assisted cashless exercise, or (iv) such other methods as may be approved by the committee.

Unless the committee provides otherwise, options generally are not transferable except by will, the laws of descent and distribution, or, with respect to grants other than ISOs, if permitted by the committee, pursuant to a domestic relations order. The committee may provide that an NSO may be transferred to a family member, as such term is defined under the applicable securities laws.

The aggregate fair market value, determined at the time of grant, of our common stock with respect to ISOs that are exercisable for the first time by an option holder during any calendar year may not exceed $100,000. Options or portions thereof that exceed such limit will generally be treated as NSOs. No ISO may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or that of any of our affiliates unless (i) the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant, and (ii) the term of the ISO does not exceed five years from the date of grant.

Stock Appreciation Rights

Stock appreciation rights may be granted to non-employee directors, employees and consultants and advisors selected by the committee. A stock appreciation right is a right to receive a payment in cash, shares of common stock or a combination of cash and shares of common stock, in an amount equal to the fair market value of a specified number of shares on the date of exercise over the applicable base price per share, as determined by the committee. The base price per share may not be less than the fair market value of a share of common stock on the date the stock appreciation right is granted. The committee may grant in connection with any stock option one or more tandem SARs relating to a number of shares of common stock less than or equal to the number of shares of common stock subject to the related stock option.

If a SAR holder's service relationship with us, or any of our affiliates, ceases for any reason other than disability, death or cause, the SAR holder may generally exercise any vested SARs for a period of 90 days following the cessation of service. If a SAR holder's service relationship with us or any of our affiliates ceases due to disability or death, or a SAR holder dies within a certain period following cessation of service, the SAR holder or a beneficiary may generally exercise any vested SARs for a period of one year following the SAR holder's disability or death. Unless otherwise provided by the committee at the time a SAR is granted, in the event of a termination for cause, before the SAR is exercised, then the SAR will terminate. Tandem SARs may only be exercisable during the period when the option to which it is related is exercisable.

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Termination of Employment

Unless otherwise specified in an award agreement or any other written agreement between the participant and the company or any of its subsidiaries, and subject to the foregoing vesting restrictions, if a participant's employment is terminated, outstanding vested and unvested awards under the 2014 Equity Compensation Plan will be subject to the following treatment:

Reason for Termination		Effect on Awards under the 2014 Equity Compensation Plan, except as otherwise specified in an award agreement or other written agreement

Death or Disability		• Unvested awards will be forfeited.
		• Vested stock options and stock appreciation rights will be exercisable for a 1-year period unless the award has an earlier expiration date.
For-Cause Termination		• Unvested awards will be forfeited.
		• All stock options and stock appreciation rights, whether or not vested, will be forfeited.
Other Termination Events		• Unvested awards will be forfeited.
		• Vested stock options and stock appreciation rights will be exercisable for a 90-day period unless the award has an earlier expiration date.

Effect of Change in Control

Upon a change in control, all outstanding stock options and SARs shall accelerate and become exercisable and the restrictions and conditions on all stock awards, stock unit awards and other stock-based awards will lapse.

Under the 2014 Equity Compensation Plan, "change in control" means:

•: any person or entity, other than the company, its subsidiaries or an employee benefit plan sponsored by the company or its subsidiaries, becomes the beneficial owner of more than 50% of our voting stock;
•: consummation of a sale of all or substantially all of the company's assets or property;
•: consummation of a merger or consolidation of the company with another corporation following which our stockholders immediately before the transaction do not own more than 50% of the voting stock of the surviving entity;
•: liquidation or dissolution of the company; or
•: the committee may provide a different definition of change in control in an award agreement if it determines a different definition is necessary or appropriate, including to comply with Section 409A of the Code.

Adjustments to Awards Due to Changes in the Company's Capital Structure

If there is any change in the number or kind of shares of our common stock outstanding by reason of (i) a stock dividend, spinoff, recapitalization, stock split, or combination or exchange of shares, (ii) a merger, reorganization or consolidation, (iii) a reclassification or change in par value or (iv) any other extraordinary or unusual event affecting the outstanding common stock as a class without the company's receipt of consideration, or if the value of outstanding shares of common stock is substantially reduced as a result of a spinoff or the company's payment of any extraordinary dividend or distribution, the maximum number of shares of common stock available for issuance under the 2014 Equity Compensation Plan, the maximum number of shares of common stock for which any individual may receive awards in any year, the number and kind of shares covered by outstanding awards and the price per share or applicable market value of such awards will be required to be equitably adjusted by the committee to reflect any increase or decrease in the number of, or change in the kind or value of,

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issued shares of common stock to preclude, to the extent practicable, the enlargement or dilution of rights and benefits under the 2014 Equity Compensation Plan and such outstanding awards. Any fractional shares resulting from such adjustment will be eliminated. Any adjustments to outstanding awards will be consistent with Sections 409A, to the extent applicable. Any adjustment of awards will include adjustment of shares, stock option exercise price, stock appreciation right base price, performance goals or other terms and conditions, as the committee deems appropriate.

Transferability

Unless the committee provides otherwise, awards generally are not transferable except by will, the laws of descent and distribution, or, with respect to grants other than ISOs, if permitted by the committee, pursuant to a domestic relations order. The committee may provide that an NSO may be transferred to a family member, as such term is defined under the applicable securities laws. The committee may require an award holder to enter into a stockholder's agreement with respect to stock issued or distributed pursuant to the 2014 Equity Compensation Plan and shares may be subject to a lock-up period if requested by us. Prior to a public offering, company stock distributed under the 2014 Equity Compensation Plan is subject to our right of first refusal and repurchase rights.

Amendment of the 2014 Equity Compensation Plan and Awards

Our board of directors may amend, suspend, or terminate the 2014 Equity Compensation Plan at any time. The committee may amend any award at any time. However, no amendment may materially impair a participant's award without the participant's consent, unless otherwise permitted by the terms of the 2014 Equity Compensation Plan or the applicable award agreement, or if necessary to comply with applicable law.

2016 Equity Compensation Plan

Purpose and Types of Grants

The purpose of the 2016 Equity Compensation Plan is to attract and retain employees, non-employee directors and consultants, and advisors. The 2016 Equity Compensation Plan provides for the issuance of incentive stock options, non-qualified stock options, stock awards, stock units, stock appreciation rights, other stock-based awards and cash awards. The 2016 Equity Compensation Plan also provides for the issuance of equity and cash awards that are intended to qualify as qualified performance-based compensation for purposes of Section 162(m) of the Code to selected executive employees, or qualified performance grants. The 2016 Equity Compensation Plan is intended to provide an incentive to participants to contribute to our economic success by aligning the economic interests of participants with those of our stockholders.

Administration

The compensation committee of our board of directors, referred to herein as the committee, has the authority to administer the 2016 Equity Compensation Plan. The 2016 Equity Compensation Plan will be administered by the committee, and the committee will determine all of the terms and conditions applicable to grants under the 2016 Equity Compensation Plan. The committee will also determine who will receive grants under the 2016 Equity Compensation Plan and the number of shares of common stock that will be subject to grants, except that grants to members of our board of directors must be authorized by a majority of our board of directors. The committee may delegate authority under the 2016 Equity Compensation Plan to one or more subcommittees as it deems appropriate. Subject to compliance with applicable law and NASDAQ requirements, the committee, or our board of directors or a subcommittee, as applicable, may delegate all or part of its authority to our Chief Executive Officer, as it deems appropriate, with respect to grants to employees or key advisors who are not executive officers under Section 16 of the Exchange Act and provided that such grants are not intended to meet the

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requirements for qualified performance-based compensation under Section 162(m) of the Code. The committee, our board of directors, any subcommittee or the Chief Executive Officer, as applicable, that has authority with respect to a specific grant is referred to as the committee in this description of the 2016 Equity Compensation Plan.

Grants

Subject to adjustment, the 2016 Equity Compensation Plan authorizes the issuance or transfer of up to the sum of the following: (1) new shares, plus (2) the number of shares of our common stock subject to outstanding grants under the 2014 Equity Compensation Plan as of the effective date of the 2016 Equity Compensation Plan; provided, however, that the aggregate number of shares of our common stock that may be issued or transferred under the 2016 Equity Compensation Plan pursuant to incentive stock options may not exceed . During the term of the 2016 Equity Compensation Plan, the share reserve will automatically increase on the first trading day in January of each calendar year, beginning in calendar year 2017, by an amount equal to the lesser of 5% of the total number of outstanding shares of common stock on the last trading day in December of the prior calendar year or such other number set by our board of directors.

If any options or stock appreciation rights, including outstanding options and stock appreciation rights granted under the 2014 Equity Compensation Plan, terminate, expire, or are canceled, forfeited, exchanged, or surrendered without having been exercised, or if any stock awards, stock units or other stock-based awards, including outstanding awards granted under the 2014 Equity Compensation Plan, are forfeited, terminated or otherwise not paid in full, the shares subject to such grants will again be available for purposes of the 2016 Equity Compensation Plan. In addition, if any shares of our common stock are surrendered in payment of the exercise price of an option or stock appreciation right, the number of shares available for issuance under the 2016 Equity Compensation Plan will be reduced only by the net number of shares actually issued upon exercise and not by the total number of shares under which such option or stock appreciation right is exercised. If shares of our common stock are withheld in satisfaction of the withholding taxes incurred in connection with the issuance, vesting or exercise of any grant, or the issuance of our common stock, then the number of shares of our common stock available for issuance under the 2016 Equity Compensation Plan shall be reduced by the net number of shares issued, vested or exercised under such grant. If any grants are paid in cash, and not in shares of our common stock, any shares of our common stock subject to such grants will also be available for future grants. In addition, shares of our common stock issued under grants made pursuant to assumption, substitution or exchange of previously granted awards of a company that we acquire will not reduce the number of shares of our common stock available under the 2016 Equity Compensation Plan. Available shares under a stockholder approved plan of an acquired company may be used for grants under the 2016 Equity Compensation Plan and will not reduce the share reserve, subject to compliance with the applicable stock exchange and the Code.

With respect to grants that are intended to meet the requirements for qualified performance-based compensation under Section 162(m) of the Code, the 2016 Equity Compensation Plan contains the following annual limits, subject to adjustment as described in the 2016 Equity Compensation Plan:

•: the maximum number of shares of our common stock for which grants measured in shares may be awarded to any employee in any calendar year shall not exceed shares;
•: the maximum dollar amount for which grants measured in cash dollars (including cash awards) that may be awarded to any employee in any 12-month period within a performance period shall not exceed $ million; and
•: the maximum aggregate amount of dividends and dividend equivalents that an employee may accrue in any calendar year shall not exceed $ million.

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The individual limits described above are increased to two times the otherwise applicable limits set forth above with respect to grants that are intended to meet the requirements for qualified performance-based compensation under Section 162(m) of the Code that are made on or around the date of hire to a newly hired employee.

The 2016 Equity Compensation Plan also includes limits for compensation paid to non-employee directors during any calendar year. The maximum grant date value of shares of common stock subject to grants made to any non-employee directors, taken together with any cash fees earned by such non-employee director for services rendered during the calendar year, shall not exceed $ in total value, with the value of such grants calculated based on the grant date fair value of such grants for financial reporting purposes.

Adjustments

In connection with stock splits, stock dividends, recapitalizations and certain other events affecting our common stock, the committee will make adjustments as it deems appropriate in the maximum number of shares of common stock reserved for issuance as grants, the maximum number of shares of common stock that any individual participating in the 2016 Equity Compensation Plan may be granted in any year, the number and kind of shares covered by outstanding grants, the kind of shares that may be issued or transferred under the 2016 Equity Compensation Plan, the price per share or market value of any outstanding grants, the exercise price of options, the base amount of stock appreciation rights, the performance goals or other terms and conditions as the committee deems appropriate.

Eligibility

All of our employees are eligible to receive grants under the 2016 Equity Compensation Plan. In addition, our non-employee directors and key advisors who perform services for us may receive grants under the 2016 Equity Compensation Plan.

Vesting

The committee determines the vesting and exercisability terms of awards granted under the 2016 Equity Compensation Plan.

Options

Under the 2016 Equity Compensation Plan, the committee will determine the exercise price of the options granted and may grant options to purchase shares of common stock in such amounts as it determines. The committee may grant options that are intended to qualify as incentive stock options under Section 422 of the Code or non-qualified stock options, which are not intended to so qualify. Incentive stock options may only be granted to our employees. Anyone eligible to participate in the 2016 Equity Compensation Plan may receive a grant of non-qualified stock options. The exercise price of a stock option granted under the 2016 Equity Compensation Plan cannot be less than the fair market value of a share of our common stock on the date the option is granted. If an incentive stock option is granted to a 10% stockholder, the exercise price cannot be less than 110% of the fair market value of a share of our common stock on the date the option is granted.

The exercise price for any option is generally payable in cash. In certain circumstances as permitted by the committee, the exercise price may be paid by the surrender of shares of our common stock with an aggregate fair market value on the date the option is exercised equal to the exercise price, by payment through a broker in accordance with procedures established by the Federal Reserve Board, by withholding shares of common stock subject to the exercisable option which have a fair market value on the date of exercise equal to the aggregate exercise price or by such other method as the committee approves.

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The term of an option cannot exceed ten years from the date of grant, except that if an incentive stock option is granted to a 10% stockholder, the term cannot exceed five years from the date of grant. In the event that on the last day of the term of a non-qualified stock option, the exercise is prohibited by applicable law, including a prohibition on purchases or sales of our common stock under our insider trading policy, the term of the non-qualified option will be extended for a period of 30 days following the end of the legal prohibition, unless the committee determines otherwise.

Except as provided in the grant instrument, an option may only be exercised while a participant is employed by or providing service to us. The committee will determine in the grant instrument under what circumstances and during what time periods a participant may exercise an option after termination of employment.

Stock Appreciation Rights

Under the 2016 Equity Compensation Plan, the committee may grant stock appreciation rights, which may be granted separately or in tandem with any option. Stock appreciation rights granted with a non-qualified stock option may be granted either at the time the non-qualified stock option is granted or any time thereafter while the option remains outstanding. Stock appreciation rights granted with an incentive stock option may be granted only at the time the grant of the incentive stock option is made. The committee will establish the base amount of the stock appreciation right at the time the stock appreciation right is granted, which will be equal to or greater than the fair market value of a share of our common stock as of the date of grant.

If a stock appreciation right is granted in tandem with an option, the number of stock appreciation rights that are exercisable during a specified period will not exceed the number of shares of our common stock that the participant may purchase upon exercising the related option during such period. Upon exercising the related option, the related stock appreciation rights will terminate, and upon the exercise of a stock appreciation right, the related option will terminate to the extent of an equal number of shares of our common stock. Generally, stock appreciation rights may only be exercised while the participant is employed by, or providing services to, us. When a participant exercises a stock appreciation right, the participant will receive the excess of the fair market value of the underlying common stock over the base amount of the stock appreciation right. The appreciation of a stock appreciation right will be paid in shares of our common stock, cash, or both.

The term of a stock appreciation right cannot exceed ten years from the date of grant. In the event that on the last day of the term of a stock appreciation right, the exercise is prohibited by applicable law, including a prohibition on purchases or sales of our common stock under our insider trading policy, the term of the stock appreciation right will be extended for a period of 30 days following the end of the legal prohibition, unless the committee determines otherwise.

Stock Awards

Under the 2016 Equity Compensation Plan, the committee may grant stock awards. A stock award is an award of our common stock that may be subject to restrictions as the committee determines. The restrictions, if any, may lapse over a specified period of employment or based on the satisfaction of pre-established criteria, in installments or otherwise, as the committee may determine. Except to the extent restricted under the grant instrument relating to the stock award, a participant will have all of the rights of a stockholder as to those shares, including the right to vote and the right to receive dividends or distributions on the shares. Dividends with respect to stock awards that vest based on performance shall vest if and to the extent that the underlying stock award vests, as determined by the committee. All unvested stock awards are forfeited if the participant's employment or service is terminated for any reason, unless the committee determines otherwise.

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Stock Units

Under the 2016 Equity Compensation Plan, the committee may grant stock units to anyone eligible to participate in the 2016 Equity Compensation Plan. Stock units are phantom units that represent shares of our common stock. Stock units become payable on terms and conditions determined by the committee and will be payable in cash or shares of our stock as determined by the committee. All unvested stock units are forfeited if the participant's employment or service is terminated for any reason, unless the committee determines otherwise.

Cash Awards

Under the 2016 Equity Compensation Plan, the committee may grant cash awards to our employees who are executives or other key employees. The committee will determine which employees will receive cash awards and the terms and conditions applicable to each cash award, including the criteria for vesting.

Other Stock-Based Awards

Under the 2016 Equity Compensation Plan, the committee may grant other types of awards that are based on, measured by or payable to anyone eligible to participate in the 2016 Equity Compensation Plan in shares of our common stock. The committee will determine the terms and conditions of such awards. Other stock-based awards may be payable in cash, shares of our common stock, or a combination of the two.

Dividend Equivalents

Under the 2016 Equity Compensation Plan, the committee may grant dividend equivalents in connection with grants of stock units or other stock-based awards made under the 2016 Equity Compensation Plan. Dividend equivalents entitle the participant to receive amounts equal to ordinary dividends that are paid on the shares underlying a grant while the grant is outstanding. The committee will determine whether dividend equivalents will be paid currently or accrued as contingent cash obligations. Dividend equivalents may be paid in cash, in shares of our common stock or in a combination of the two. The committee will determine the terms and conditions of the dividend equivalent grants, including whether the grants are payable upon the achievement of specific performance goals. Dividend equivalents with respect to stock units or other stock-based awards that vest based on performance shall vest and be paid only if and to the extent that the underlying stock units or other stock-based awards vest and are paid as determined by the committee.

Qualified Performance-Based Compensation

The 2016 Equity Compensation Plan permits the committee to impose performance goals that must be met with respect to grants of stock awards, stock units, other stock-based awards, cash awards and dividend equivalents that are intended to meet the exception for qualified performance-based compensation under Section 162(m) of the Code, referred to herein as qualified performance grants. Prior to or soon after the beginning of a performance period, the committee will establish the performance goals that must be met, the applicable performance periods, the amounts to be paid if the performance goals are met and any other conditions. The 2016 Equity Compensation Plan is intended to comply with the transition relief for purposes of Section 162(m) of the Code, as more fully described below.

The performance goals, to the extent designed to meet the requirements of qualified performance-based compensation under Section 162(m) of the Code, will be based on one or more of the following criteria: cash flow; earnings, including gross margin, earnings before interest and taxes, earnings before taxes, earnings before interest, taxes, depreciation, amortization and charges for stock-based compensation, earnings before interest, taxes, depreciation and amortization and net earnings; earnings

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per share; growth in earnings or earnings per share; stock price; return on equity or average stockholder equity; total stockholder return or growth in total stockholder return either directly or in relation to a comparative group; return on capital; return on assets or net assets; revenue, growth in revenue or return on sales; income or net income; operating income, net operating income, or net operating income after tax; operating profit or net operating profit; operating margin; return on operating revenue, or return on operating profit; regulatory filings; regulatory approvals, litigation and regulatory resolution goals; other operational, regulatory or departmental objectives; budget comparisons; growth in stockholder value relative to established indexes, or another peer group or peer group index; development and implementation of strategic plans or organizational restructuring goals; development and implementation of risk and crisis management programs; improvement in workforce diversity; compliance requirements and compliance relief; safety goals; productivity goals; workforce management and succession planning goals; economic value added, including typical adjustments consistently applied from generally accepted accounting principles required to determine economic value added performance measures; measures of customer satisfaction, employee satisfaction or staff development; development or marketing collaborations, formations of joint ventures or partnerships or the completion of other similar transactions intended to enhance the company's revenue or profitability or enhance its customer base; mergers and acquisitions; and any other goal that is established at the discretion of the committee other than with respect to grants intended to meet the requirements of Section 162(m) of the Code. The committee shall have sole discretion to determine specific targets within each category of performance goals.

In establishing performance goals, the committee may, no later than the date on which such performance goals are to be established in accordance with Section 162(m) of the Code, provide for the exclusion of the effects of items to the extent identified in our audited financial statements, including footnotes, Management's Discussion and Analysis of Financial Condition and Results of Operations accompanying such financial statements or as otherwise specified by the committee, such as the following: (1) restructurings, discontinued operations and other unusual, infrequent, or non-recurring charges or events, (2) asset write-downs, (3) significant litigation or claim judgments or settlements, (4) acquisitions or divestitures, (5) any reorganization or change in our corporate structure or capital structure, (6) an event either not directly related to our operations, or operations of a subsidiary, division, business segment, or business unit or not within the reasonable control of management, (7) foreign exchange gains and losses, (8) a change in our fiscal year, (9) the cumulative effects of tax or accounting changes in accordance with GAAP or (10) the effect of changes in other laws or regulatory rules affecting reported results.

Change of Control

If we experience a change of control where we are not the surviving corporation, or survive only as a subsidiary of another corporation, unless the committee determines otherwise, all outstanding grants that are not exercised or paid at the time of the change of control will be assumed by, or replaced with grants that have comparable terms by, the surviving corporation, or a parent or subsidiary of the surviving corporation. Unless a grant instrument provides otherwise, if a participant's employment is terminated by the surviving corporation without cause upon or within 12 months following a change of control, the participant's outstanding grants will fully vest as of the date of termination; provided, that if the vesting of any grants is based, in whole or in part, on performance, the applicable grant instrument will specify how the portion of the grant that becomes vested upon a termination following a change of control will be calculated.

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If there is a change of control and all outstanding grants are not assumed by, or replaced with grants that have comparable terms by, the surviving corporation, the committee may take any of the following action without the consent of any participant:

•: determine that outstanding options and stock appreciation rights will accelerate and become fully exercisable and the restrictions and conditions on outstanding stock awards, stock units, cash awards and dividend equivalents immediately lapse;
•: pay participants, in an amount and form determined by the committee, in settlement of outstanding stock units, cash awards or dividend equivalents;
•: require that participants surrender their outstanding stock options, stock appreciation rights or any other exercisable grant, in exchange for a payment by the company, in cash or shares of our common stock, equal to the difference between the exercise price and the fair market value of the underlying shares of common stock; provided, however, if the per share fair market value of the common stock does not exceed the per share stock option exercise price or stock appreciation right base amount, as applicable, we will not be required to make any payment to the participant upon surrender of the stock option or stock appreciation right; or
•: after giving participants an opportunity to exercise all of their outstanding stock options and stock appreciation rights, terminate any unexercised stock options and stock appreciation rights on the date determined by the committee.

In general terms, a change of control under the 2016 Equity Compensation Plan occurs if:

•: a person, entity or affiliated group, with certain exceptions, acquires more than 50% of our then outstanding voting securities;
•: we merge into another entity unless the holders of our voting shares immediately prior to the merger have at least 50% of the combined voting power of the securities in the merged entity or its parent;
•: we merge into another entity and the members of the board of directors prior to the merger would not constitute a majority of the board of the merged entity or its parent;
•: we sell or dispose of all or substantially all of our assets;
•: our stockholders approve a plan of complete liquidation or dissolution; or
•: a majority of the members of our board of directors is replaced during any 12-month period or less by directors whose appointment or election is not endorsed by a majority of the incumbent directors.

Deferrals

The committee may permit or require participants to defer receipt of the payment of cash or the delivery of shares of common stock that would otherwise be due to the participant in connection with a grant under the 2016 Equity Compensation Plan. The committee will establish the rules and procedures applicable to any such deferrals, consistent with the requirements of Section 409A of the Code.

Withholding

All grants under the Plan are subject to applicable U.S. federal (including FICA), state, and local, foreign country or other tax withholding requirements. We may require participants or other persons receiving grants or exercising grants to pay an amount sufficient to satisfy such tax withholding requirements with respect to such grants, or we may deduct from other wages and compensation paid by us to such participants or other persons the amount of any withholding taxes due with respect to such grant.

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The committee may permit or require that our tax withholding obligation with respect to grants paid in our common stock be paid by having shares withheld up to an amount that does not exceed the participant's minimum applicable withholding tax rate for United States federal (including FICA), state and local tax liabilities, or as otherwise determined by the committee. In addition, the committee may, in its discretion, and subject to such rules as the committee may adopt, allow participants to elect to have such share withholding applied to all or a portion of the tax withholding obligation arising in connection with any particular grant.

No Repricing

Except in connection with a corporate transaction involving the company (including, without limitation, any stock dividend, distribution, whether in the form of cash, our common stock, other securities or property, stock split, extraordinary cash dividend, recapitalization, change of control, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of our common stock or other securities or similar transactions), we may not, without obtaining stockholder approval, (1) amend the terms of outstanding options or stock appreciation rights to reduce the exercise price of such outstanding options or base price of such stock appreciation rights, (2) cancel outstanding options or stock appreciation rights in exchange for options or stock appreciation rights with an exercise price or base price, as applicable, that is less than the exercise price or base price of the original options or stock appreciation rights or (3) cancel outstanding options or stock appreciation rights with an exercise price or base price, as applicable, above the current stock price in exchange for cash or other securities.

Transferability

Except as permitted by the committee with respect to non-qualified stock options, only a participant may exercise rights under a grant during the participant's lifetime. Upon death, the personal representative or other person entitled to succeed to the rights of the participant may exercise such rights. A participant cannot transfer those rights except by will or by the laws of descent and distribution or, with respect to grants other than incentive stock options, pursuant to a domestic relations order. The committee may provide in a grant instrument that a participant may transfer non-qualified stock options to family members, or one or more trusts or other entities for the benefit or owned by family members, consistent with applicable securities laws.

Amendment; Termination

Our board of directors may amend or terminate the 2016 Equity Compensation Plan at any time, except that our stockholders must approve an amendment if such approval is required in order to comply with the Code, applicable laws, or applicable stock exchange requirements. Unless terminated sooner by our board or extended with stockholder approval, the 2016 Equity Compensation Plan will terminate on the day immediately preceding the tenth anniversary of the effective date.

Stockholder Approval

The 2016 Equity Compensation Plan is intended to comply with the transition relief set forth in Treasury Regulation §1.162-27(f)(1) for companies that become publicly held in connection with an initial public offering. Following the transition period set forth therein, if grants are made as qualified performance-based compensation, the 2016 Equity Compensation Plan must be approved by our stockholders in accordance with the requirements of Section 162(m) of the Code, and reapproved by our stockholders no later than the first stockholders meeting that occurs in the fifth year following such stockholder approval, if required by Section 162(m) of the Code or the regulations thereunder.

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Establishment of Sub-Plans

Our board of directors may, from time to time, establish one or more sub-plans under the 2016 Equity Compensation Plan to satisfy applicable Blue Sky, securities or tax laws of various jurisdictions. Our board of directors may establish such sub-plans by adopting supplements to the 2016 Equity Compensation Plan setting forth limitations on the committee's discretion and such additional terms and conditions not otherwise inconsistent with the 2016 Equity Compensation Plan, as our board of directors will deem necessary or desirable. All such supplements will be deemed part of the 2016 Equity Compensation Plan, but each supplement will only apply to participants within the affected jurisdiction.

Clawback

Subject to applicable law, the committee may provide in any grant instrument that if a participant breaches any restrictive covenant agreement between the participant and us, or otherwise engages in activities that constitute cause as defined in the 2016 Equity Compensation Plan, either while employed by, or providing services to, us or within a specified period of time thereafter, all grants held by the participant will terminate, and we may rescind any exercise of an option or stock appreciation right and the vesting of any other grant and delivery of shares upon such exercise or vesting, as applicable on such terms as the committee will determine, including the right to require that in the event of any rescission:

•: the participant must return the shares received upon the exercise of any option or stock appreciation right and/or the vesting and payment of any other grants; or
•: if the participant no longer owns the shares, the participant must pay to us the amount of any gain realized or payment received as a result of any sale or other disposition of the shares, if the participant transferred the shares by gift or without consideration, then the fair market value of the share on the date of the breach of the restrictive covenant agreement or activity constituting cause, net of the price originally paid by the participant for the shares.

The committee may also provide for clawbacks pursuant to the applicable clawback policy, which may be amended from time to time, adopted by our board of directors. Payment by the participant will be made in such manner and on such terms and conditions as may be required by the committee. We will be entitled to set off against the amount of any such payment any amounts that we otherwise owe to the participant.

Limitation of Liability and Indemnification

Our amended and restated certificate of incorporation, which will become effective upon the completion of this offering, limits the personal liability of directors for breach of fiduciary duty to the maximum extent permitted by the Delaware General Corporation Law and provides that no director will have personal liability to us or to our stockholders for monetary damages for breach of fiduciary duty or other duty as a director. However, these provisions do not eliminate or limit the liability of any of our directors:

•: for any breach of the director's duty of loyalty to us or our stockholders;
•: for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
•: for voting or assenting to unlawful payments of dividends, stock repurchases or other distributions; or
•: for any transaction from which the director derived an improper personal benefit.

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repeal. If the Delaware General Corporation Law is amended to provide for further limitations on the personal liability of directors of corporations, then the personal liability of our directors will be further limited to the greatest extent permitted by the Delaware General Corporation Law.

In addition, our amended and restated certificate of incorporation, which will become effective upon the completion of this offering, provides that we must indemnify our directors and officers and we must advance expenses, including attorneys' fees, to our directors and officers in connection with legal proceedings, subject to very limited exceptions.

In addition to the indemnification required in our amended and restated certificate of incorporation and amended and restated bylaws, we expect to enter into indemnification agreements with each of our current directors, officers and some employees before the completion of this offering. These agreements provide for the indemnification of our directors, officers and some employees for all reasonable expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were our agents. We believe that these bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors, officers and employees.

We maintain a general liability insurance policy that covers specified liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers. In addition, we have entered into indemnification agreements with all of our directors, and we intend to enter into indemnification agreements with all of our executive officers prior to the completion of this offering. These indemnification agreements may require us, among other things, to indemnify each such director and executive officer for some expenses, including attorneys' fees, judgments, fines and settlement amounts incurred by him in any action or proceeding arising out of his or her service as one of our directors or executive officers.

Some of our non-employee directors may, through their relationships with their employers, be insured or indemnified against specified liabilities incurred in their capacities as members of our board of directors.

Non-Employee Director Compensation

For 2014, members of our board of directors received no cash compensation, equity compensation or other compensation for services rendered as such. From time to time, certain members of our board of directors who are not our employees received options to purchase our common stock under the 2014 Equity Compensation Plan. The table below shows the aggregate number of option awards outstanding for each non-employee director as of December 31, 2014.

Name		Aggregate option awards outstanding as of December 31, 2014(1) (#)

A Gordon Tunstall			200,000

(1): Option awards vest 25% on the first anniversary of grant, and 1/36th each month thereafter. All Option awards have a term of ten years.

After consultation with Pearl Meyer, our compensation consultant, our compensation committee has approved a compensation policy for our non-employee directors that becomes effective upon the completion of this offering. This policy provides for the following compensation to our non-employee directors following this offering:

•: Each non-employee director serving on our board of directors will receive an annual fee from us of $20,000;
•: The chair of our audit committee will receive an annual fee from us of $10,000 and each other member will receive $5,000;

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•: The chair of our compensation committee will receive an annual fee from us of $5,000 and each other member will receive $2,500;
•: The chair of our nominating and corporate governance committee will receive an annual fee from us of $4,000 and each other member will receive $2,000; and
•: Each non-employee director, upon appointment to the board of directors, will be entitled to an initial grant of options equal to 0.050% of fully diluted common stock outstanding to purchase shares of our common stock and an annual grant of options equal to 0.025% of fully diluted common stock outstanding to purchase shares of our common stock under our 2016 Equity Compensation Plan. Each non-employee director may elect to receive restricted stock in lieu of options which will be granted based on a 1:2 exchange ratio, with one share of restricted stock granted for each two shares subject to an option grant. The initial grant will vest in three substantially equal annual installments over three years and the annual grant will vest in full on the earlier of the next annual shareholder meeting or the one year anniversary of the grant date, in each case, subject to continued service from the date of grant until the applicable vesting dates. The initial annual equity grant to Mr. Tunstall shall be made and become effective upon the closing of this offering and Mr. Tunstall has informed us that he has elected to receive restricted stock in lieu of options.

All fees under the director compensation policy will be on a rolling annual basis and no per meeting fees will be paid. All fees payable to our committee members will be in addition to the fees payable to them for serving as a director. Each of Glen Bressner, Bruce Luehrs and Daniel Lubin will only be eligible for cash compensation in connection with serving on any committee and will not receive any stock-based compensation. We will also reimburse non-employee directors for reasonable expenses incurred in connection with attending board of director and committee meetings.

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TRANSACTIONS WITH RELATED PERSONS

The following is a description of transactions since January 1, 2012 to which we have been a party, and in which any of our directors, executive officers or beneficial owners of more than 5% of our voting securities, or affiliates or immediate family members of any of our directors, executive officers or beneficial owners of more than 5% of our voting securities, had or will have a direct or indirect material interest. We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, from unrelated third parties.

Preferred Stock Financings

Series A-1 Preferred Stock Financing

On February 22, 2012, we entered into an amendment to our Series A-1 Preferred Stock Purchase Agreement pursuant to which we issued and sold to the original parties to the purchase agreement an additional 625,000 shares of Series A-1 preferred stock at a purchase price of $0.80 per share for aggregate consideration of $500,000. The following table sets forth the shares of Series A-1 preferred stock issued to holders of more than 5% of our capital stock and their affiliates, and the breakdown of the purchase price paid by such persons:

5% Holder		Purchase Price for Series A-1 Preferred Stock

Emerald Stage2 Ventures, L.P.(1)	208,750	$	167,000
Originate Growth Fund #1 Q, L.P. and its affiliates(2)	416,250		333,000

(1): Our director, Bruce Luehrs, is affiliated with, manages and has a pecuniary interest in Emerald Stage2 Ventures, L.P.
(2): Originate Growth Fund #1 Q, L.P. and its affiliates, or Originate, includes Originate Growth Fund #1 A, L.P. Our director, Glen Bressner, is affiliated with, manages and has a pecuniary interest in, Originate.

Series B Preferred Stock Financing

On June 28, 2013, we entered into a Series B Preferred Stock Purchase Agreement pursuant to which we issued and sold to investors 2,961,745 shares of our Series B preferred stock at a purchase price of $1.52312 per share for aggregate consideration of $4,511,096. The following table sets forth the shares of our Series B preferred stock issued to holders of more than 5% of our capital stock and their affiliates, and the breakdown of the purchase price paid by such persons:

5% Holder		Purchase Price

Originate Growth Fund #1 Q, L.P. and its affiliates(1)	335,557	$	511,096
Radius Venture Partners III QP, L.P. and its affiliates(2)	2,626,188		4,000,000

(1): Our director, Glen Bressner, is affiliated with, manages and has a pecuniary interest in, Originate.

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(2): Radius Venture Partners III QP, L.P. and its affiliates, or Radius, includes Radius Venture Partners III (Ohio), L.P. and Radius Venture Partners III, L.P. Our director, Daniel Lubin, is affiliated with, manages and has a pecuniary interest in Radius.

Employment Agreements and Compensation Arrangements

We currently do not have employment agreements with our named executive officers, but we expect to enter into employment with such officers in connection with this offering. For more information, refer to the section titled "Executive Compensation — Employment Agreements."

Dr. Calvin Knowlton, husband of Dr. Orsula Knowlton, our President, has been employed by us since 2010. Dr. Calvin Knowlton serves as our Chief Executive Officer and Chairman. See the section titled "Executive Compensation" for compensation information for Dr. Calvin Knowlton.

Dr. Orsula Knowlton, wife of Dr. Calvin Knowlton, has been employed by us since 2010. See the section titled "Executive Compensation" for compensation information for Dr. Orsula Knowlton.

Jeffrey Knowlton, a son of Dr. Calvin Knowlton, has been employed by us since 2013. Jeffrey Knowlton serves as our Director of Business Intelligence. During the fiscal years ended December 31, 2013 and 2014, Jeffrey Knowlton had total compensation, including base salary, bonus, option awards and other compensation, of $116,553 and $170,607, respectively.

Dana Filippoli, a daughter of Dr. Calvin Knowlton, has been employed by us since 2011. Dana Filippoli serves as our Director of Marketing and Communications. During the fiscal years ended December 31, 2012, 2013 and 2014, Dana Filippoli had total compensation, including base salary, bonus, option awards and other compensation, of $82,049, $86,902 and $102,306, respectively.

Michael Ristagno, a brother-in-law of Drs. Calvin and Orsula Knowlton, has been employed by us since 2011. Michael Ristagno serves as our Senior Vice President of Client Services. During the fiscal years ended December 31, 2012, 2013 and 2014, Michael Ristagno had total compensation, including base salary, bonus, option awards and other compensation, of $180,516, $206,877 and $214,000, respectively.

Joseph Filippoli, a son-in-law of Dr. Calvin Knowlton, has been employed by us since 2013. Joseph Filippoli serves as our Chief Information Officer. During the fiscal years ended December 31, 2013 and 2014, Joseph Filippoli had total compensation, including base salary, bonus, option awards and other compensation, of $273,506 and $298,829, respectively.

Robert Omlor, a son-in-law of Dr. Calvin Knowlton, has been employed by us since 2010. Robert Omlor serves as our Senior Director of Client Services. During the fiscal years ended December 31, 2012, 2013 and 2014, Robert Omlor had total compensation, including base salary, bonus, option awards and other compensation, of $138,498, $147,202 and $158,415, respectively.

Each of Jeffrey Knowlton, Dana Filippoli, Michael Ristagno, Joseph Filippoli and Robert Omlor's respective compensation levels were determined, in part, by reference to our similarly situated employees who were not related to an executive officer or director. Each of the above named individuals was also eligible for equity awards on the same general terms and conditions as applicable to other similarly situated employees who were not related to an executive officer or director.

In June 2014, we entered into a Letter Agreement with Radius, pursuant to which we established the Leadership Exit Bonus Plan, whereby certain of our executives, including our named executive officers, will receive certain proceeds in connection with an initial public offering based on proceeds received by Radius in connection with such event. For more information, refer to the section titled "Executive Compensation — Long-Term Incentive Compensation — Leadership Exit Bonus Plan."

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Equity Plan Awards

We have granted stock options under our 2014 Equity Compensation Plan to certain of our executive officers and directors, as well as certain of their respective immediate family members. The table below summarizes the stock option grants made to such persons since January 1, 2012:

	Option Awards

Name	Grant Date	Number of Securities Underlying Option Award (#)		Option Exercise Price ($)		Option Expiration Date
Dr. Calvin Knowlton	1/6/2012		65,942		0.88	1/6/2017
	3/1/2012		1,971		0.88	3/1/2017
	12/20/2012		12,185		1.21	12/20/2017
	1/2/2013		50,000		1.76	1/2/2018
	1/22/2013		7,392		1.76	1/22/2018
	6/28/2013		569,941		1.76	6/28/2018
	1/1/2014		78,254		3.30	1/1/2019
	1/1/2015		70,000		3.30	1/1/2020
	2/1/2015		3,610		3.30	2/1/2020
Dr. Orsula Knowlton	1/6/2012		65,647		0.88	1/6/2017
	3/1/2012		1,823		0.88	3/1/2017
	12/20/2012		11,271		1.21	12/20/2017
	1/2/2013		50,000		1.76	1/2/2018
	1/22/2013		6,837		1.76	1/22/2018
	6/28/2013		569,941		1.76	6/28/2018
	1/1/2014		76,328		3.30	1/1/2019
	1/1/2015		70,000		3.30	1/1/2020
	2/1/2015		3,225		3.30	2/1/2020
Brian Adams	1/6/2012		18,000		0.80	1/6/2022
	3/1/2012		2,500		0.80	3/1/2022
	12/20/2012		16,379		1.10	12/20/2022
	1/2/2013		15,000		1.60	1/2/2023
	1/22/2013		1,311		1.60	1/22/2023
	6/28/2013		171,017		1.60	6/28/2023
	1/1/2014		20,512		3.00	1/1/2024
	1/1/2015		20,000		3.00	1/1/2025
	2/1/2015		1,213		3.00	2/1/2025
A. Gordon Tunstall	3/21/2012		50,000		0.80	3/21/2022
	3/21/2012		100,000		0.80	3/21/2022
	11/19/2013		50,000		1.85	11/19/2023
	1/1/2015		15,000		3.00	1/1/2025
	1/1/2015		50,000		3.00	1/1/2025
Jeffrey Knowlton	1/1/2013		350		1.60	1/1/2023
	3/4/2013		16,250		1.76	3/4/2023
	1/1/2014		1,500		3.30	1/1/2024
	1/1/2015		1,500		3.00	1/1/2025
	2/1/2015		1,432		3.00	2/1/2025

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	Option Awards

Name	Grant Date	Number of Securities Underlying Option Award (#)		Option Exercise Price ($)		Option Expiration Date
Dana Filippoli	1/6/2012		3,000		0.88	1/6/2022
	1/2/2013		1,500		1.76	1/2/2023
	1/1/2014		5,000		3.30	1/1/2024
	1/1/2015		5,000		3.00	1/1/2025
Michael Ristagno	1/6/2012		18,413		0.80	1/6/2022
	3/1/2012		4,207		0.80	3/1/2022
	12/20/2012		22,334		1.10	12/20/2022
	1/2/2013		7,500		1.60	1/2/2023
	1/22/2013		2,783		1.60	1/22/2023
	1/1/2014		7,500		3.00	1/1/2024
	4/4/2014		25		3.00	4/4/2024
	1/1/2015		5,000		3.00	1/1/2025
Joseph Filippoli	1/2/2013		30,000		1.20	1/2/2023
	1/2/2013		15,000		1.60	1/2/2023
	6/28/2013		113,777		1.60	6/28/2023
	1/1/2014		20,105		3.00	1/1/2024
	1/1/2015		20,000		3.00	1/1/2025
Robert Omlor	1/6/2012		5,898		0.80	1/6/2022
	3/1/2012		999		0.80	3/1/2022
	12/20/2012		9,502		1.10	12/20/2022
	1/2/2013		1,500		1.60	1/2/2023
	1/22/2013		2,997		1.60	1/22/2023
	1/1/2014		2,029		3.00	1/1/2024
	1/1/2015		1,500		3.00	1/1/2025
	2/1/2015		464		3.00	2/1/2025
Antonia Ristagno	1/2/2013		250		1.60	1/2/2023

For further information regarding stock option grants to our named executive officers and directors, see the section titled "Executive Compensation."

On June 28, 2013, our board of directors approved distributing any remaining shares of our common stock available for issuance under the 2014 Equity Compensation Plan to certain members of management, including each of our named executive officers, as restricted stock, upon the consummation of an initial public offering or a change of control. The allocation of such shares shall be determined by our board of directors based on the recommendation of our Chief Executive Officer, Dr. Calvin Knowlton. Such shares of restricted common stock will be issued immediately prior to the effective date of the registration statement of which this prospectus forms a part.

We adopted a Valuation Incentive Award Plan in June of 2014. Pursuant to the terms of such plan, each named executive officer, Joseph Filippoli and two additional key employees are eligible to participate in an incentive award pool of $9.0 million as determined by Dr. Calvin Knowlton upon an acquisition of the company in excess of $250.0 million. We are terminating the Valuation Incentive Award Plan in connection with this offering.

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Loan Transactions

On August 14, 2015, we made a loan to Drs. Calvin Knowlton and Orsula Knowlton, pursuant to a promissory note, for an aggregate principal amount of $409,541, which they repaid in full on December 8, 2015 by offsetting amounts due to them pursuant to demand promissory notes we previously issued. The note carried interest at a rate of 6% per annum.

On January 16, 2014, we borrowed $100,000 from Drs. Calvin and Orsula Knowlton, pursuant to a demand promissory note, all of which was repaid on December 8, 2015 in connection with the satisfaction of the loan we previously made to Drs. Calvin and Orsula Knowlton. The note carried interest at a rate of 6% per annum.

On May 20, 2013, we borrowed $250,000 from Dr. John Durham and Mrs. Joann Durham, pursuant to a demand promissory note, $250,000 of which remained outstanding as of September 30, 2015. The note carries interest at a rate of 6% per annum. Under the terms of the note, we agreed to grant warrants to purchase shares of our common stock to Dr. and Mrs. Durham. For more information, refer to the section titled "Transactions with Related Persons — Warrants."

On December 28, 2012, we executed a demand promissory note with Drs. Calvin and Orsula Knowlton, which was increased by amendment several times to an aggregate principal amount of $1,099,109 as of September 26, 2013. As of September 30, 2015, $309,759 remained outstanding under the note. On December 8, 2015, we repaid $308,407 under the demand promissory note in connection with the satisfaction of the loan we previously made to Drs. Calvin and Orsula Knowlton and we repaid the remaining balance of $1,352 on January 4, 2016. The note carries interest at a rate of 6% per annum. Under the terms of the note, we agreed to grant warrants to purchase shares of our common stock to Drs. Knowlton. For more information, refer to the section titled "Transactions with Related Persons — Warrants."

On July 14, 2011, we entered into a promissory note with Liberty Bell Bank, pursuant to which we financed the acquisition of certain equipment. This note has a balance as of September 30, 2015 of $39,657. In connection therewith, Dr. Calvin Knowlton entered into a commercial guaranty under which he personally guaranteed the payment and satisfaction of this indebtedness.

On January 28, 2011, we entered into a promissory note with Liberty Bell Bank, pursuant to which we financed the acquisition of certain equipment. This note has a balance as of September 30, 2015 of $123,163. In connection therewith, Dr. Calvin Knowlton entered into a commercial guaranty under which he personally guaranteed the payment and satisfaction of this indebtedness.

Warrants

Under the terms of the Knowlton promissory note originally issued on December 28, 2012, we agreed to grant to Drs. Calvin and Orsula Knowlton warrants with a ten year term to purchase shares of our common stock during the period while the principal amount of the note was outstanding until June 30, 2015. Under this agreement, warrants to purchase an aggregate of 76,655 shares of common stock were issued on a monthly basis from January 2013 through June 2015, at exercise prices ranging from $1.32 to $3.30 per share.

Under the terms of the Durham promissory note originally issued on May 20, 2013, we agreed to grant to Dr. John Durham and Mrs. Joann Durham warrants with a ten year term to purchase shares of our common stock during the period while the principal amount of the note was outstanding until December 31, 2014. Under this agreement, warrants to purchase an aggregate of 17,474 shares of common stock were issued on a monthly basis from May 2013 through December 2014, at exercise prices ranging from $1.60 to $3.00 per share.

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Registration Rights

We are a party to an Investor Rights Agreement with Emerald Stage2 Ventures, L.P., Originate and Radius. This agreement provides these holders the right, subject to the terms of the lock-up agreements entered into in connection with this offering, following the completion of this offering, to demand that we file a registration statement or to request that their shares be covered by a registration statement that we are otherwise filing. See "Description of Capital Stock — Registration Rights" for additional information regarding these registration rights.

Indemnification Agreements

We intend to enter into indemnification agreements with each of our directors and certain of our executive officers. These agreements will require us to indemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

Stockholders Agreements

We are a party to a Stockholders Agreement with substantially all holders of our common and preferred stock, including each beneficial owner of more than 5% of our voting securities and each of our other officers and directors to the extent they own any of our capital stock. This agreement terminates upon the completion of this offering, except for the obligation of certain holders of our common stock who are signatories to the Stockholders Agreement, who are prohibited from selling shares for a period of 180 days following the effective date of the filing of this registration statement.

Policies and Procedures for Related Person Transactions

In connection with this offering, our board of directors plans to adopt a written related person transaction policy to set forth policies and procedures for the review and approval or ratification of related person transactions. Effective upon the closing of this offering, this policy is expected to cover any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, the amount involved exceeds $120,000 and one of our executive officers, directors, director nominees or 5% stockholders, or their immediate family members, each of whom we refer to as a "related person," had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person.

If a related person proposes to enter into such a transaction, arrangement or relationship, which we refer to as a "related person transaction," the related person must report the proposed related person transaction to our audit committee. The policy calls for the proposed related person transaction to be reviewed and, if deemed appropriate, approved by our audit committee. Whenever practicable, the reporting, review and approval will occur prior to entry into the transaction. If advance review and approval is not practicable, the committee will review, and, in its discretion, may ratify the related person transaction. The policy also permits the chairman of the audit committee to review and, if deemed appropriate, approve proposed related person transactions that arise between committee meetings, subject to ratification by the committee at its next meeting. Any related person transactions that are ongoing in nature will be reviewed annually.

A related person transaction reviewed under the policy will be considered approved or ratified if it is authorized by the committee after full disclosure of the related person's interest in the transaction. As appropriate for the circumstances, the audit committee will review and consider:

•: the related person's interest in the related person transaction;

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•: the approximate dollar value of the amount involved in the related person transaction;
•: the approximate dollar value of the amount of the related person's interest in the transaction without regard to the amount of any profit or loss;
•: whether the transaction was undertaken in the ordinary course of our business;
•: whether the terms of the transaction are no less favorable to us than terms that could have been reached with an unrelated third party;
•: the purpose of, and the potential benefits to us of, the transaction; and
•: any other information regarding the related person transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction.

Our audit committee may approve or ratify the transaction only if it determines that, under all of the circumstances, the transaction is in our best interests. Our audit committee may impose any conditions on the related person transaction that it deems appropriate.

In addition to the transactions that are excluded by the instructions to the SEC's related person transaction disclosure rule, our board of directors has determined that the following transactions do not create a material direct or indirect interest on behalf of related persons and, therefore, are not related person transactions for purposes of this policy:

•: interests arising solely from the related person's position as an executive officer of another entity whether or not the person is also a director of the entity that is a participant in the transaction, where the related person and all other related persons own in the aggregate less than a 10% equity interest in such entity, the related person and his or her immediate family members are not involved in the negotiation of the terms of the transaction and do not receive any special benefits as a result of the transaction and the amount involved in the transaction is less than the greater of $200,000 or 5% of the annual gross revenue of the company receiving payment under the transaction; and
•: a transaction that is specifically contemplated by provisions of our certificate of incorporation or bylaws.

The policy provides that transactions involving compensation of executive officers shall be reviewed and approved by our compensation committee in the manner specified in the compensation committee's charter.

We did not have a written policy regarding the review and approval of related person transactions prior to this offering. Nevertheless, with respect to such transactions, it has been the practice of our board of directors to consider the nature of and business reason for such transactions, how the terms of such transactions compared to those which might be obtained from unaffiliated third parties and whether such transactions were otherwise fair to and in the best interests of, or not contrary to, our best interests. In addition, all related person transactions required prior approval, or later ratification, by our board of directors.

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PRINCIPAL STOCKHOLDERS

The following table sets forth information with respect to the beneficial ownership of our common stock, assuming no exercise of the underwriters' option to purchase additional shares, as of November 30, 2015 by:

•: each of our directors;
•: each of our executive officers;
•: all of our directors and executive officers as a group; and
•: each person or group of affiliated persons who is known by us to beneficially own more than 5% of our outstanding common stock.

The column entitled "Percentage of Shares Beneficially Owned — Before Offering" is based on a total of shares of our common stock outstanding as of November 30, 2015, assuming (1) the conversion of all outstanding shares of our preferred stock into common stock, which will occur immediately prior to the completion of this offering, (2) the issuance of shares of our common stock upon the net exercise of outstanding warrants that would otherwise expire upon the completion of this offering and (3) the issuance of shares of restricted common stock under our 2014 Equity Compensation Plan to members of management immediately prior to the effective date of the registration statement of which this prospectus forms a part. The column entitled "Percentage of Shares Beneficially Owned — After Offering" is based on shares of our common stock to be outstanding after this offering, including the shares of our common stock that we are selling in this offering.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to our common stock. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days after November 30, 2015 are considered outstanding and beneficially owned by the person holding the options for the purpose of calculating the percentage ownership of that person but not for the purpose of calculating the percentage ownership of any other person. Except as otherwise noted, to our knowledge, the persons and entities in this table have sole voting and investing power with respect to all of the shares of our common stock beneficially owned by them, subject to community property laws, where applicable.

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Except as otherwise set forth below, the address of each beneficial owner is: c/o 110 Marter Avenue, Suite 309, Moorestown, New Jersey 08057.

			Percentage of Shares Beneficially Owned

Name and Address of Beneficial Owner	Number of Shares Beneficially Owned		Before Offering		After Offering
5% Stockholders (other than directors and executive officers)
Originate Growth Fund #1 Q, L.P. and its affiliates(1)		5,394,885		%		%
c/o Originate Ventures
205 South Webster Street
Bethlehem, PA 18105
Radius Venture Partners III QP, L.P. and its affiliates(2)		3,602,796
c/o Radius Venture Partners III, LLC
400 Madison Avenue, 8th Floor
New York, NY 10017
Emerald Stage2 Ventures L.P.(3)		1,852,394
4801 South Broad Street, Suite 200
Philadelphia, PA 19112
Dr. John Durham and Mrs. Joann Durham(4)		1,616,591
Directors and Executive Officers:
Dr. Calvin H. Knowlton(5)		3,587,057
Dr. Orsula Knowlton(5)		3,587,057
Brian W. Adams(6)		196,613
Glen Bressner(7)		5,394,885
Daniel Lubin(8)		3,602,796
Bruce Luehrs(9)		1,852,394
A Gordon Tunstall(10)		187,083
All executive officers and directors as a group (7 persons)		14,820,828

*: Represents beneficial ownership of less than one percent of our outstanding common stock.
(1): Consists of (a) 916,766 shares of common stock issuable upon the conversion of 916,766 shares of Series A preferred stock held by Originate Growth Fund #1A, L.P., or Originate Growth Fund #1A, (b) 2,024,410 shares of common stock issuable upon the conversion of 2,024,410 shares of Series A preferred stock held by Originate Growth Fund #1Q, L.P., or Originate Growth Fund #1Q, (c) 587,158 shares of common stock issuable upon the conversion of 587,158 shares of Series A-1 preferred stock held by Originate Growth Fund #1A, (d) 1,296,605 shares of common stock issuable upon the conversion of 1,296,605 shares of Series A-1 preferred stock held by Originate Growth Fund #1Q, (e) 104,589 shares of common stock issuable upon the conversion of 104,589 shares of Series B preferred stock held by Originate Growth Fund #1A, (f) 230,968 shares of common stock issuable upon the conversion of 230,968 shares of Series B preferred stock held by Originate Growth Fund #1Q, (g) 73,057 shares of common stock held by Originate Growth Fund #1A and (h) 161,332 shares of common stock held by Originate Growth Fund #1Q. Originate Growth GP, LLC is the general partner of both Originate Growth Fund #1A and Originate Growth Fund #1Q and Originate Ventures LLC is the management company of both Originate Growth Fund #1A and Originate Growth Fund #1Q. The members of Originate Growth GP, LLC and

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Originate Ventures LLC are Glen Bressner, Eric Arnson and Michael Gausling. Each member shares voting and dispositive power with respect to the shares held by each of Originate Growth Fund #1A and Originate Growth Fund #1Q.

(2): Consists of (a) 29,346 shares of common stock issuable upon the conversion of 29,346 shares of Series A-1 preferred stock held by Radius Venture Partners III (Ohio), L.P., or Radius Venture Partners III (Ohio), (b) 233,659 shares of common stock issuable upon the conversion of 233,659 shares of Series A-1 preferred stock held by Radius Venture Partners III QP, L.P., or Radius Venture Partners III QP, (c) 21,428 shares of common stock issuable upon the conversion of 21,428 shares of Series A-1 preferred stock held by Radius Venture Partners III, L.P., or Radius Venture Partners III, (d) 270,952 shares of common stock issuable upon the conversion of 270,952 shares of Series B preferred stock held by Radius Venture Partners III (Ohio), (e) 2,157,390 shares of common stock issuable upon the conversion of 2,157,390 shares of Series B preferred stock held by Radius Venture Partners III QP, (f) 197,846 shares of common stock issuable upon the conversion of 197,846 shares of Series B preferred stock held by Radius Venture Partners III, (g) 71,414 shares of common stock held by Radius Venture Partners III (Ohio), (h) 568,615 shares of common stock held by Radius Venture Partners III QP and (i) 52,146 shares of common stock held by Radius Venture Partners III. Radius Venture Partners III, LLC is the general partner of each of Radius Venture Partners III (Ohio), Radius Venture Partners III QP and Radius Venture Partners III and Radius Ventures, LLC is the investment advisor to each of Radius Venture Partners III (Ohio), Radius Venture Partners III QP and Radius Venture Partners III. Daniel Lubin and Jordan Davis are the managing members of both Radius Venture Partners III, LLC and Radius Ventures, LLC and share voting and dispositive power with respect to the shares held by each of Radius Venture Partners III (Ohio), Radius Venture Partners III QP and Radius Venture Partners III.
(3): Consists of (a) 1,470,590 shares of common stock issuable upon the conversion of 1,470,590 shares of Series A preferred stock held by Emerald Stage2 Ventures, L.P., or Emerald Stage2 Ventures, (b) 331,804 shares of common stock issuable upon the conversion of 331,804 shares of Series A-1 preferred stock held by Emerald Stage2 Ventures and (c) 50,000 shares of common stock held by Emerald Stage2 Ventures. Stage2 Capital Ventures Associates, L.P. is the general partner of Emerald Stage2 Ventures and Stage2 Capital Associates G.P., LLC is the general partner of Stage2 Capital Ventures Associates, L.P. Bruce Luehrs and Saul Richter are officers of Stage2 Capital Associates G.P., LLC and share voting and dispositive power with respect to the shares held by Emerald Stage2 Ventures.
(4): Consists of (a) 1,559,118 shares of common stock and (b) 57,473 shares of common stock issuable upon the exercise of warrants within 60 days of November 30, 2015.
(5): Drs. Calvin and Orsula Knowlton are spouses and the number and percentage of beneficial ownership of each represents their aggregate combined ownership, including their combined ownership of The Calvin and Orsula Knowlton Foundation, Inc., over which Drs. Calvin and Orsula Knowlton have shared voting and investment power and Dr. Calvin Knowlton's ownership of The Knowlton Foundation, Inc., over which Dr. Calvin Knowlton has sole voting and investment power. Consists of (a) 451,654 shares of common stock issuable upon the exercise of warrants within 60 days of November 30, 2015 held by Dr. Calvin Knowlton and Dr. Orsula Knowlton, (b) 757,409 shares of common stock held by Dr. Calvin Knowlton, (c) 913,699 shares of common stock held by Dr. Orsula Knowlton, (d) 100,000 shares of common stock held by The Calvin and Orsula Knowlton Foundation, Inc., for which Drs. Calvin and Orsula Knowlton serve as Secretary and President, respectively, (e) 100,000 shares of common stock held by The Knowlton Foundation, Inc., for which Dr. Calvin Knowlton serves as President, (f) 634,259 shares of common stock issuable upon the exercise of options within 60 days of November 30, 2015 by Dr. Calvin Knowlton and (g) 630,036 shares of common stock issuable upon the exercise of options within 60 days of November 30, 2015 by Dr. Orsula Knowlton.

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(6): Consists of 196,613 shares of common stock issuable upon the exercise of options within 60 days of November 30, 2015.
(7): Consists of 5,394,885 shares of common stock issuable as described in note (1) above. Mr. Bressner, a member of our board, is a member of Originate Growth GP, LLC and Originate Ventures LLC and, as such, may be deemed to have voting and investment power with respect to these shares.
(8): Consists of 3,602,796 shares of common stock issuable as described in note (2) above. Mr. Lubin, a member of our board, is a managing member of Radius Venture Partners III, LLC and Radius Ventures, LLC and, as such, may be deemed to have voting and investment power with respect to these shares.
(9): Consists of 1,852,394 shares of common stock issuable as described in note (3) above. Mr. Luehrs, a member of our board, is an officer of Stage2 Capital Associates G.P., LLC and, as such, may be deemed to have voting and investment power with respect to these shares.
(10): Consists of 187,083 shares of common stock issuable upon the exercise of options within 60 days of November 30, 2015.

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DESCRIPTION OF CAPITAL STOCK

Upon the completion of this offering and the filing of our amended and restated certificate of incorporation, our authorized capital stock will consist of shares of common stock, par value $.0001 per share, and shares of undesignated preferred stock, par value $.0001 per share. The following is a summary of the rights of our common and preferred stock and some of the provisions of our amended and restated certificate of incorporation and amended and restated bylaws, which will become effective upon the completion of this offering, and of the Delaware General Corporation Law. This summary is not complete. For more detailed information, please see our amended and restated certificate of incorporation and amended and restated bylaws, which are filed as exhibits to the registration statement of which this prospectus is a part, as well as the relevant provisions of the Delaware General Corporation Law.

Common Stock

Assuming as of September 30, 2015 (1) the automatic conversion of all outstanding shares of our preferred stock into shares of our common stock, (2) the redesignation of all of our Class A Non-Voting common stock and Class B Voting common stock into shares of our common stock, (3) the issuance of shares of our common stock upon the net exercise of outstanding warrants that would otherwise expire upon the completion of this offering, assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, each of (1) through (3) will occur upon the completion of this offering, and (4) the issuance of shares of restricted common stock under our 2014 Equity Compensation Plan to members of management immediately prior to the effective date of the registration statement of which this prospectus forms a part, there would have been shares of our common stock outstanding, held of record by stockholders, shares of our common stock subject to outstanding options and shares of our common stock issuable upon the exercise of outstanding warrants at a weighted average exercise price of $ per share. Based on (i) the above and (ii) the issuance of shares of common stock in this offering, there will be shares of our common stock outstanding upon the completion of this offering.

Voting

Our common stock is entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, including the election of directors, and does not have cumulative voting rights. Accordingly, the holders of a majority of the shares of our common stock entitled to vote in any election of directors can elect all of the directors standing for election.

Dividends

Subject to preferences that may be applicable to any then outstanding preferred stock, the holders of common stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of legally available funds.

Liquidation

In the event of our liquidation, dissolution or winding up, holders of our common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities, subject to the satisfaction of any liquidation preference granted to the holders of any outstanding shares of preferred stock.

Rights and Preferences

Holders of our common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to our common stock. The rights, preferences and

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privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.

Fully Paid and Nonassessable

All of our outstanding shares of common stock are, and the shares of common stock to be issued in this offering will be, fully paid and nonassessable.

Preferred Stock

As of September 30, 2015, there were 9,873,511 shares of preferred stock outstanding, held of record by six stockholders. Immediately prior to the completion of this offering, we will convert our Series A preferred stock, Series A-1 preferred stock and Series B preferred stock, into shares of our common stock. We expect that prior to the completion of the offering, we and our preferred shareholders will enter into an agreement, or otherwise amend the certificate of incorporation, to provide that the preferred stock will convert into shares of our common stock in connection with this offering.

Following this offering, under our amended and restated certificate of incorporation, our board of directors will have the authority, without further action by the stockholders, to issue up to shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the rights, preferences and privileges of the shares of each wholly unissued series and any qualifications, limitations or restrictions thereon and to increase or decrease the number of shares of any such series, but not below the number of shares of such series then outstanding.

Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or impair the liquidation rights of our common stock or otherwise adversely affect the rights of holders of our common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in our control and may adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock. We have no current plans to issue any shares of preferred stock.

Options

As of September 30, 2015, options to purchase an aggregate of 5,412,858 shares of our common stock at a weighted-average exercise price of $1.67 per share were outstanding.

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Warrants

The following table summarizes our outstanding warrants to purchase shares of our stock as of September 30, 2015:

Series of Warrant			Per Share Exercise Price		Expiration Date

Series A-1 preferred stock	250,000	1	$	0.800	March 2022
	62,500	1		0.800	October 2022
Series B preferred stock	105,005	1	$	2.860	April 2024
	481,863	1		2.990	December 2024
Class A Non-Voting common stock	206,400	49	$	0.250	May—October 2019
	15,000	3		0.275	May 2019
	10,000	1		0.500	December 2019
	1,000	1		0.500	March 2020
Class B Voting common stock	160,000	3	$	0.250	May—October 2019
	5,000	1		0.250	June 2021
	370,000	1		0.275	May—December 2019
	5,000	1		0.275	June 2021
	4,358	1		1.320	January 2023
	9,671	1		1.600	May—December 2023
	39,720	1		1.760	January—December 2023
	7,802	1		3.000	January—December 2024
	23,867	1		3.300	January—December 2024
	8,709	1		3.300	January—June 2025

In accordance with their terms, the warrants for the Class A Non-Voting common stock and the Class B Voting common stock expire upon the completion of this offering, unless exercised prior thereto. Upon the completion of this offering the outstanding warrants to purchase Series A-1 preferred stock, or the A-1 Warrants, and warrants to purchase Series B preferred stock, or the B Warrants, will each convert into warrants to purchase common stock. Assuming no warrants have been exercised as of September 30, 2015, upon the completion of this offering there will be outstanding (i) two A-1 Warrants to purchase an aggregate of 312,500 shares of common stock, each at an exercise price of $0.800 per share, and which expire on October 26, 2022 and the earlier of March 23, 2022 and three years from the date of completion of an initial public offering of the company's common stock, respectively, and (ii) two B Warrants to purchase an aggregate of 586,868 shares of common stock at an exercise price of $2.860 and $2.990 per share, respectively, with expiration dates of the earlier of April 22, 2024 and three years from the date of completion of an initial public offering of the company's common stock and December 31, 2024 and three years from the date of completion of an initial public offering of the company's common stock, respectively.

Each of the A-1 Warrants has a net exercise provision under which its holder may, in lieu of payment of the exercise price in cash, surrender the warrant and receive a net amount of shares based on the fair market value of our common stock at the time of exercise of the warrant after deduction of the aggregate exercise price. The A-1 Warrants and the B Warrants also contain provisions for the adjustment of the exercise price and the aggregate number of shares issuable upon the exercise of the warrant in the event of stock dividends, split-ups, subdivisions, recapitalization, reclassifications, reorganization, consolidation, merger or sale.

The holders of the A-1 Warrants and the B Warrants are entitled to registration rights under our Investor Rights Agreement, as described in more detail under "— Registration Rights."

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Registration Rights

Under our Investor Rights Agreement, upon the completion of this offering, holders of a total of shares of our common stock that will be outstanding after this offering, which includes shares of common stock issuable upon exercise of outstanding warrants, will have certain registration rights. The registration rights are described below.

Demand Registration Rights

At any time after 180 days after the completion of this offering, the holders of at least 25% of the shares of common stock issued upon conversion of the Series A preferred stock and the Series A-1 preferred stock, or the Series A Registrable Securities, then outstanding may request that we register all or a portion of their shares of common stock for sale under the Securities Act; provided that such Series A Registrable Securities have an aggregate price to the public in excess of $5.0 million. We will effect the registration as requested, unless, in the good faith judgment of our board of directors, such registration would be materially detrimental to us and our stockholders and should be delayed. We are not obligated to file a registration statement in certain circumstances, including after we have effected two registrations whereby we have, in each case, registered at least 75% of the Series A Registrable Securities requested by the holders thereof to be registered and during the 90-day period commencing with the date of the completion of this offering.

At any time after 180 days after the completion of this offering, the holders of at least 25% of the shares of common stock issued upon conversion of the Series B preferred stock, or the Series B Registrable Securities, then outstanding may request that we register all or a portion of their shares of common stock for sale under the Securities Act; provided that such Series B Registrable Securities have an aggregate price to the public in excess of $5.0 million. We will effect the registration as requested, unless, in the good faith judgment of our board of directors, such registration would be materially detrimental to the company and its stockholders and should be delayed. We are not obligated to file a registration statement in certain circumstances, including after we have effected two registrations whereby the company has in each case registered at least 75% of the Series B Registrable Securities requested by the holders thereof to be registered.

In addition, when we are eligible for the use of Form S-3, or any successor form, holders of the shares of at least 15% of the Series A Registrable Securities and Series B Registrable Securities then outstanding may make requests that we register all or a portion of their common stock for sale under the Securities Act on Form S-3, or any successor form, so long as the aggregate price to the public in connection with any such offering is at least $1.0 million. We are not obligated to file a Form S-3 pursuant to this provision on more than two occasions in any twelve-month period.

Incidental Registration Rights

In addition, if at any time after this offering we register any shares of our common stock, the holders of all shares having piggyback registration rights are entitled to notice of the registration and to include all or a portion of their shares of common stock in the registration.

Other Provisions

In the event that any registration in which the holders of registrable shares participate pursuant to the registration rights agreement is an underwritten public offering, the number of registrable shares to be included may, in specified circumstances, be limited due to market conditions.

We will pay all registration expenses, other than underwriting discounts and selling commissions, and the reasonable fees and expenses of a single special counsel for selling stockholders, related to any demand, piggyback and Form S-3 registration. The Investor Rights Agreement contains customary cross-indemnification provisions, pursuant to which we must indemnify selling stockholders in the event of

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material misstatements or omissions in the registration statement attributable to us, and they must indemnify us for material misstatements or omissions in the registration statement attributable to them.

The demand, piggyback and Form S-3 registration rights described above terminate upon a Qualified A Public Offering for the Series A Registrable Securities and a Qualified B Public Offering for the Series B Registrable Securities, as such terms are defined in our certificate of incorporation, as amended, as in effect prior to the completion of this offering.

Anti-Takeover Effects of Delaware Law and Our Charter and Bylaws

Provisions of Delaware law and our certificate of incorporation and bylaws could make it more difficult to acquire us by means of a tender offer, a proxy contest, open market purchases, removal of incumbent directors and otherwise. These provisions, summarized below, are expected to discourage types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging takeover or acquisition proposals because negotiation of these proposals could result in an improvement of their terms.

Delaware Anti-Takeover Law

We are subject to Section 203 of the Delaware General Corporation Law, or Section 203. Section 203 generally prohibits a public Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a period of three years after the date of the transaction in which the person became an interested stockholder, unless:

•: prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
•: the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (i) shares owned by persons who are directors and also officers and (ii) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
•: on or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66²/3% of the outstanding voting stock which is not owned by the interested stockholder.

Section 203 defines a business combination to include:

•: any merger or consolidation involving the corporation and the interested stockholder;
•: any sale, transfer, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;
•: subject to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder;
•: subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; and
•: the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

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In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.

The existence of this provision generally will have an anti-takeover effect for transactions not approved in advance by the board of directors, including discouraging attempts that might result in a premium over the market price for the shares of common stock held by stockholders.

Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws

Provisions of our amended and restated certificate of incorporation and amended and restated bylaws, which will become effective immediately prior to the completion of this offering, may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock. Among other things, our amended and restated certificate of incorporation and amended and restated bylaws:

•: permit our board of directors to issue up to shares of preferred stock, with any rights, preferences and privileges as they may designate (including the right to approve an acquisition or other change in our control);
•: provide that the authorized number of directors may be changed only by resolution of our board of directors;
•: provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;
•: divide our board of directors into three classes;
•: require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent;
•: provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner, and also specify requirements as to the form and content of a stockholder's notice;
•: do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose); and
•: provide that special meetings of our stockholders may be called only by the chairman of the board, our Chief Executive Officer or by our board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors.

The amendment of any of these provisions, with the exception of the ability of our board of directors to issue shares of preferred stock and designate any rights, preferences and privileges thereto, would require approval by the holders of at least 66²/3% of our then outstanding capital stock, voting together as a single class.

Choice of Forum and Fee-Shifting

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(c) any action asserting a claim against us arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws, (d) any action to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or amended and restated bylaws or (e) any other action asserting a claim against us that is governed by the internal affairs doctrine. We refer to each of these proceedings as a covered proceeding. In addition, our amended and restated certificate of incorporation will provide that if any action the subject matter of which is a covered proceeding is filed in a court other than the specified Delaware courts without the approval of our board of directors, which we refer to as a foreign action, the claiming party will be deemed to have consented to (1) the personal jurisdiction of the specified Delaware courts in connection with any action brought in any such courts to enforce the exclusive forum provision described above and (2) having service of process made upon such claiming party in any such enforcement action by service upon such claiming party's counsel in the foreign action as agent for such claiming party. Our amended and restated certificate of incorporation will also provide that, except to the extent prohibited by the DGCL, in the event that a claiming party initiates, asserts, joins, offers substantial assistance to or has a direct financial interest in any foreign action without the prior approval of our board of directors, each such claiming party will be obligated jointly and severally to reimburse us and any officer, director or other employee made a party to such proceeding for all fees, costs and expenses of every kind and description (including, but not limited to, all attorneys' fees and other litigation expenses) that the parties may incur in connection with such foreign action. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and to have consented to these provisions. However, the enforceability of similar forum provisions in other companies' certificates of incorporation or bylaws has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable.

NASDAQ Market Listing

We have applied to have our common stock listed on the NASDAQ Global Market under the symbol "TRHC."

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is . The transfer agent and registrar's address is .

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, no public market for our common stock existed, and a liquid trading market for our common stock may not develop or be sustained after this offering. Future sales of substantial amounts of our common stock in the public market, from time to time including shares issued upon exercise of outstanding options and warrants, or the anticipation of such sales, could adversely affect prevailing market prices of our common stock and could impair our ability to raise equity capital in the future. Furthermore, because only a limited number of shares of our common stock will be available for sale shortly after this offering due to certain contractual and legal restrictions on resale described below, sales of substantial amounts of our common stock in the public market after such restrictions lapse, or the anticipation of such sales, could adversely affect the prevailing market price of our common stock and our ability to raise equity capital in the future. We have applied to have our common stock listed on the NASDAQ Global Market under the symbol "TRHC."

Upon the completion of this offering, we will have outstanding shares of our common stock, after giving effect to the issuance of shares of our common stock in this offering, the automatic conversion of all outstanding shares of our preferred stock and the redesignation of all of our Class A Non-Voting common stock and Class B Voting common stock into shares of our commen stock. The number of shares outstanding upon the completion of this offering assumes no exercise of outstanding options or warrants.

All of the shares sold in this offering will be freely tradable unless purchased by our "affiliates," as that term is defined in Rule 144 under the Securities Act of 1933, as amended, or the Securities Act. The remaining shares of common stock outstanding after this offering will be restricted as a result of securities laws or lock-up agreements as described below. Following the expiration of the lock-up period, all shares will be eligible for resale, subject to compliance with Rule 144 or Rule 701 of the Securities Act, to the extent these shares have been released from any repurchase option that we may hold.

Subject to the lock-up agreements described in the section titled "Underwriting — Lock-Up Agreements," we may issue shares of common stock from time to time as consideration for future acquisitions, investments or other corporate purposes. In the event that any such acquisition, investment or other transaction is significant, the number of shares of common stock that we may issue may in turn be significant. We may also grant registration rights covering those shares of common stock issued in connection with any such acquisition and investment.

In addition, shares of common stock that are either subject to outstanding options or warrants or reserved for future issuance under our equity compensation plans will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, the lock-up agreements or other similar contractual commitments restricting the sale of such shares and Rule 144 and Rule 701 of the Securities Act.

Rule 144

In general, under Rule 144 of the Securities Act, as in effect on the date of this prospectus, beginning 90 days after the date of this prospectus, any person who is not our affiliate at any time during the preceding three months, and who has beneficially owned their shares for at least six months, including the holding period of any prior owner other than one of our affiliates, would be entitled to sell an unlimited number of shares of our common stock provided current public information about us is available and, after owning such shares for at least one year, including the holding period of any prior owner other than one of our affiliates, would be entitled to sell an unlimited number of shares of our common stock without restriction.

Beginning 90 days after the date of this prospectus, a person who is our affiliate or who was our affiliate at any time during the preceding three months, and who has beneficially owned restricted securities for at least six months, including the holding period of any prior owner other than one of our

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affiliates, is entitled to sell within any three-month period a number of shares that does not exceed the greater of:

•: 1% of the number of shares of our common stock then outstanding, which will equal approximately shares, or shares if the underwriters exercise their over-allotment option in full, immediately following this offering, based on the number of shares of our common stock outstanding upon completion of this offering; or
•: the average weekly trading volume of our common stock on the NASDAQ Global Market during the four calendar weeks preceding the filing of a Notice of Proposed Sale of Securities pursuant to Rule 144 with respect to the sale.

Sales under Rule 144 by our affiliates are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

Upon expiration of the 180-day lock-up period described below, shares of our common stock will be eligible for sale under Rule 144. We cannot estimate the number of shares of our common stock that our existing stockholders will elect to sell under Rule 144.

Rule 701

In general, under Rule 701 of the Securities Act, any of an issuer's employees, directors, officers, consultants or advisors who purchases shares from the issuer in connection with a compensatory stock or option plan or other written agreement before the effective date of a registration statement under the Securities Act, is entitled to sell such shares 90 days after such effective date in reliance on Rule 144. An affiliate of the issuer can resell shares in reliance on Rule 144 without having to comply with the holding period requirement, and non-affiliates of the issuer can resell shares in reliance on Rule 144 without having to comply with the current public information and holding period requirements.

Lock-up Agreements

As described under the section entitled "Underwriting — Lock-Up Agreements," we, along with our directors and executive officers and substantially all of our other stockholders, have agreed with the underwriters that, for a period of 180-days following the date of this prospectus, we or they will not issue (in the case of us), offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any shares of our common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock, whether owned directly or with respect to which we or they have beneficial ownership within the rules and regulations of the SEC, subject to specified exceptions. The underwriters may, in their sole discretion, at any time without prior notice, release all or any portion of the shares from the restrictions in any such agreement.

Holders of our Series A preferred stock, Series A-1 preferred stock and Series B preferred stock are parties to our Investor Rights Agreement, dated as of June 30, 2014. Pursuant to the terms of this agreement, each holder agreed not to engage in the type of transactions set forth above, for a period specified by us or a representative of our underwriters of our common stock, or other securities, not to exceed 180 days following the effective date of our registration statement filed under the Securities Act with respect to an initial public offering.

Substantially all holders of our common and preferred stock, including each beneficial owner of more than 5% of our voting securities and each of our other officers and directors to the extent they own any of our capital stock, are parties to our Stockholders Agreement, dated as of June 30, 2014. Pursuant to the terms of this agreement, each signatory who is a holder of common stock agreed not to engage in the type of transactions set forth above, for a period specified by us or a representative of our underwriters of our common stock, or other securities, not to exceed 180 days following the effective date of our registration statement filed under the Securities Act with respect to an initial public offering.

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Equity Compensation Plans

We intend to file one or more registration statements on Form S-8 under the Securities Act to register all shares of common stock subject to outstanding stock options and common stock issuable under our equity compensation plans. We expect to file the registration statement covering such shares shortly after the date of this prospectus, permitting the resale of such shares by non-affiliates in the public market without restriction under the Securities Act and the sale by affiliates in the public market, subject to compliance with the resale provisions of Rule 144. For more information on our equity compensation plans, see section titled "Executive Compensation — Equity Compensation Plans."

Registration Rights

Upon the completion of this offering, holders of a total of shares of our common stock that will be outstanding after this offering, which includes shares of common stock issuable upon exercise of outstanding warrants, are entitled to demand that we file a registration statement or request that we cover their shares by a registration statement that we otherwise file. For more information, see section titled "Description of Capital Stock — Registration Rights." Except for shares purchased by affiliates, registration of their shares under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration statement, subject to the expiration of the lock-up period and to the extent these shares have been released from any repurchase option that we may hold.

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MATERIAL U.S. TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF COMMON STOCK

The following is a general discussion of material U.S. federal income and estate tax considerations relating to the ownership and disposition of our common stock issued pursuant to this offering by a non-U.S. holder. For purposes of this discussion, the term "non-U.S. holder" means a beneficial owner of our common stock that is not, for U.S. federal income tax purposes:

•: an individual who is a citizen or resident of the United States;
•: a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or of any political subdivision of the United States;
•: an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
•: a trust, if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust or if the trust has a valid election to be treated as a U.S. person under applicable U.S. Treasury regulations.

An individual may be treated as a resident instead of a nonresident of the United States in any calendar year for U.S. federal income tax purposes if the individual was present in the United States for at least 31 days in that calendar year and for an aggregate of at least 183 days during the three-year period ending with the current calendar year. For purposes of this calculation, all of the days present in the current year, one-third of the days present in the immediately preceding year and one-sixth of the days present in the second preceding year are counted. Residents are taxed for U.S. federal income tax purposes as if they were U.S. citizens.

This discussion is based on current provisions of the U.S. Internal Revenue Code of 1986, as amended, which we refer to as the Code, existing and proposed U.S. Treasury Regulations promulgated thereunder, current administrative rulings and judicial decisions, all as in effect as of the date of this prospectus and all of which are subject to change or to differing interpretation, possibly with retroactive effect. Any change could alter the tax consequences to non-U.S. holders described in this prospectus. In addition, the Internal Revenue Service, or the IRS, could challenge one or more of the tax consequences described in this prospectus.

We assume in this discussion that each non-U.S. holder holds shares of our common stock as a capital asset (generally, property held for investment). This discussion does not address all aspects of U.S. federal income and estate taxation that may be relevant to a particular non-U.S. holder in light of that non-U.S. holder's individual circumstances nor does it address any aspects of U.S. state, local or non-U.S. taxes. This discussion also does not consider any specific facts or circumstances that may apply to a non-U.S. holder and does not address the special tax rules applicable to particular non-U.S. holders, such as:

•: insurance companies;
•: tax-exempt organizations;
•: financial institutions;
•: brokers or dealers in securities;
•: pension plans;
•: controlled foreign corporations;
•: passive foreign investment companies;
•: owners that have a functional currency other than the U.S. dollar;

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•: owners that hold our common stock as part of a straddle, hedge, conversion transaction, synthetic security or other integrated investment;
•: owners that hold or receive shares of our common stock pursuant to the exercise of an employee stock option or otherwise as compensation; and
•: certain U.S. expatriates.

In addition, this discussion does not address the tax treatment of partnerships or persons who hold their common stock through partnerships or other entities that are pass-through entities for U.S. federal income tax purposes. A partner in a partnership or other pass-through entity that will hold our common stock should consult his, her or its own tax advisor regarding the tax consequences of the ownership and disposition of our common stock through a partnership or other pass-through entity, as applicable.

This discussion is for general information only and it is not tax advice. Prospective investors should consult their own tax advisors regarding the U.S. federal, state, local and non-U.S. income and other tax considerations of acquiring, holding and disposing of our common stock.

Dividends

As discussed under "Dividend Policy" above, we do not currently expect to make distributions in respect of our common stock. If we pay distributions on our common stock, those distributions generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. If a distribution exceeds our current and accumulated earnings and profits, the excess will be treated as a tax-free return of the non-U.S. holder's investment in our common stock, up to such holder's tax basis in the common stock. Any remaining excess will be treated as capital gain, subject to the tax treatment described below under the heading "Gain on Disposition of common stock." Any distribution would also be subject to the discussion below under the headings "Information Reporting and Backup Withholding Tax" and "FATCA."

Dividends paid to a non-U.S. holder generally will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty between the United States and such holder's country of residence.

Dividends that are treated as effectively connected with a trade or business conducted by a non-U.S. holder within the United States, and, if an applicable income tax treaty so provides that are attributable to a permanent establishment or a fixed base maintained by the non-U.S. holder within the United States, are generally exempt from the 30% withholding tax if the non-U.S. holder satisfies applicable certification and disclosure requirements (generally including provision of a valid IRS Form W-8ECI (or applicable successor form) certifying that the dividends are effectively connected with the non-U.S. holder's conduct of a trade or business within the United States). However, such U.S. effectively connected income, net of specified deductions and credits, is taxed at the same graduated U.S. federal income tax rates applicable to U.S. persons (as defined in the Code). Any U.S. effectively connected income received by a non-U.S. holder that is a corporation may also, under certain circumstances, be subject to an additional "branch profits tax" at a 30% rate or such lower rate as may be specified by an applicable income tax treaty between the United States and such holder's country of residence.

A non-U.S. holder of our common stock who claims the benefit of an applicable income tax treaty between the United States and such holder's country of residence generally will be required to provide a properly executed IRS Form W-8BEN or W-BEN-E (or successor form) and satisfy applicable certification and other requirements. Non-U.S. holders are urged to consult their own tax advisors regarding their entitlement to benefits under a relevant income tax treaty.

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A non-U.S. holder that is eligible for a reduced rate of U.S. withholding tax under an income tax treaty may obtain a refund or credit of any excess amounts withheld by timely filing an appropriate claim with the IRS.

Gain on Disposition of Common Stock

Subject to the discussion below under the headings "Information Reporting and Backup Withholding Tax" and "FATCA", a non-U.S. holder generally will not be subject to U.S. federal income tax on gain recognized on a disposition of our common stock unless:

•: the gain is effectively connected with the non-U.S. holder's conduct of a trade or business in the United States, and, if an applicable income tax treaty so provides, the gain is attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the United States; in these cases, the non-U.S. holder will be taxed on a net income basis at the regular graduated rates and in the manner applicable to U.S. persons, and, if the non-U.S. holder is a foreign corporation, an additional branch profits tax at a rate of 30%, or a lower rate as may be specified by an applicable income tax treaty, may also apply;
•: the non-U.S. holder is a non-resident alien present in the United States for 183 days or more in the taxable year of the disposition and certain other requirements are met, in which case the non-U.S. holder will be subject to a 30% tax (or such lower rate as may be specified by an applicable income tax treaty) on the net gain derived from the disposition, which may be offset by U.S.-source capital losses of the non-U.S. holder, if any; or
•: we are or have been, at any time during the five-year period preceding such disposition (or the non-U.S. holder's holding period, if shorter) a "U.S. real property holding corporation" unless our common stock is regularly traded on an established securities market and the non-U.S. holder held no more than 5% of our outstanding common stock, directly or indirectly, at any time during the shorter of the five-year period ending on the date of the disposition or the period that the non-U.S. holder held our common stock. Generally, a corporation is a "U.S. real property holding corporation" if the fair market value of its "U.S. real property interests" equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business. Although there can be no assurance, we believe that we are not currently, and we do not anticipate becoming, a "U.S. real property holding corporation" for U.S. federal income tax purposes. No assurance can be provided that our common stock will be regularly traded on an established securities market for purposes of the rule described above. If we are a U.S. real property holding corporation and either our common stock is not regularly traded on an established securities market or a non-U.S. holder holds more than 5% of our outstanding common stock, directly or indirectly, during the applicable testing period, such non-U.S. holder's gain on the disposition of shares of our common stock generally will be taxed in the same manner as gain that is effectively connected with the conduct of a U.S. trade or business, except that the branch profits tax generally will not apply.

Information Reporting and Backup Withholding Tax

We must report annually to the IRS and to each non-U.S. holder the gross amount of the distributions on our common stock paid to such holder and the tax withheld, if any, with respect to such distributions. Non-U.S. holders may have to comply with specific certification procedures to establish that the holder is not a U.S. person (as defined in the Code) in order to avoid backup withholding at the applicable rate, currently 28%, with respect to dividends on our common stock. Generally, a holder will comply with such procedures if it provides a properly executed IRS Form W-8BEN or W-8-BEN-E (or other applicable Form W-8) or otherwise meets documentary evidence requirements for establishing that it is a non-U.S. holder, or otherwise establishes an exemption. Dividends paid to non-U.S. holders subject

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to withholding of U.S. federal income tax, as described above under "Dividends," will generally be exempt from U.S. backup withholding.

Information reporting and backup withholding generally will apply to the proceeds of a disposition of our common stock by a non-U.S. holder effected by or through the U.S. office of any broker, U.S. or foreign, unless the holder certifies its status as a non-U.S. holder and satisfies certain other requirements, or otherwise establishes an exemption. Generally, information reporting and backup withholding will not apply to a payment of disposition proceeds to a non-U.S. holder where the transaction is effected outside the United States through a non-U.S. office of a broker. However, for information reporting purposes, dispositions effected through a non-U.S. office of a broker with substantial U.S. ownership or operations generally will be treated in a manner similar to dispositions effected through a U.S. office of a broker. Non-U.S. holders should consult their own tax advisors regarding the application of the information reporting and backup withholding rules to them.

Copies of information returns may be made available to the tax authorities of the country in which the non-U.S. holder resides or is incorporated under the provisions of a specific treaty or agreement.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder can be refunded or credited against the non-U.S. holder's U.S. federal income tax liability, if any, provided that an appropriate claim is timely filed with the IRS.

FATCA

Pursuant to the Foreign Account Tax Compliance Act, or FATCA, and the Treasury regulations promulgated thereunder, a 30% U.S. federal withholding tax may apply to payments of dividends on, and, after December 31, 2016, gross proceeds from the sale or disposition of, our common stock if paid to a foreign entity unless (i) if the foreign entity is a "foreign financial institution," the foreign entity undertakes certain due diligence, reporting, withholding and certification obligations, (ii) if the foreign entity is not a "foreign financial institution," the foreign entity identifies certain of its U.S. equity and debt holders, or (iii) the foreign entity is otherwise exempt under FATCA.

Under certain circumstances, a non-U.S. holder may be eligible for refunds or credits of the tax. An intergovernmental agreement between the United States and an applicable foreign country may modify the requirements described in this paragraph. Non-U.S. holders should consult their own tax advisors regarding the possible implications of FATCA on their investment in our common stock and the entities through which they hold our common stock.

Federal Estate Tax

Common stock owned or treated as owned by an individual who is a non-U.S. holder (as specially defined for U.S. federal estate tax purposes) at the time of death will be included in the individual's gross estate for U.S. federal estate tax purposes and, therefore, may be subject to U.S. federal estate tax, unless an applicable estate tax or other treaty provides otherwise.

The preceding discussion of material U.S. federal tax considerations is for general information only. It is not tax advice. Prospective investors should consult their own tax advisors regarding the particular U.S. federal, state, local and non-U.S. tax consequences of purchasing, holding and disposing of our common stock, including the consequences of any proposed changes in applicable laws.

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UNDERWRITING

Subject to the terms and conditions set forth in an underwriting agreement, we have agreed to sell to the underwriters named below, and the underwriters, for whom Wells Fargo Securities, LLC and UBS Securities LLC are acting as joint-book running managers and representatives, have severally agreed to purchase, the respective numbers of shares of common stock appearing opposite their names below:

Underwriter		Number of Shares

Wells Fargo Securities, LLC
UBS Securities LLC
Piper Jaffray & Co.
Robert W. Baird & Co. Incorporated
Stifel, Nicolaus & Company, Incorporated

Total

All of the shares to be purchased by the underwriters will be purchased from us.

The underwriting agreement provides that the obligations of the several underwriters are subject to various conditions, including approval of legal matters by counsel. The shares of common stock are offered by the underwriters, subject to prior sale, when, as and if issued to and accepted by them. The underwriters reserve the right to withdraw, cancel or modify the offer and to reject orders in whole or in part.

The underwriting agreement provides that the underwriters are obligated to purchase all the shares of common stock offered by this prospectus if any are purchased, other than those shares covered by the option to purchase additional shares described below. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated.

Option to Purchase Additional Shares

We have granted a 30-day option to the underwriters to purchase up to a total of additional shares of our common stock at the initial public offering price per share less the underwriting discounts and commissions per share, as set forth on the cover page of this prospectus, and less any dividends or distributions declared, paid or payable on the shares that the underwriters have agreed to purchase from us but that are not payable on such additional shares. If the underwriters exercise this option in whole or in part, then the underwriters will be severally committed, subject to the conditions described in the underwriting agreement, to purchase the additional shares of our common stock in proportion to their respective commitments set forth in the prior table.

Discounts and Commissions

Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus and to certain dealers at that price less a concession of not more than $ per share, of which up to $ per share may be reallowed to other dealers. After the initial offering, the public offering price, concession and reallowance to dealers may be changed.

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The following table summarizes the underwriting discounts and commissions and the proceeds, before expenses, payable to us, both on a per share basis and in total, assuming either no exercise or full exercise by the underwriters of their option to purchase additional shares:

		Total

	Per Share	Without Option	With Option
Public offering price	$	$	$
Underwriting discounts and commissions	$	$	$
Proceeds, before expenses, to us	$	$	$

We estimate that the expenses of this offering payable by us, not including underwriting discounts and commissions, will be approximately $ . We have agreed to reimburse the underwriters for legal fees of up to $25,000 incurred in qualification of the offering with the Financial Industry Regulatory Authority, or FINRA, which amount is deemed by FINRA to be underwriting compensation.

Indemnification of Underwriters

The underwriting agreement provides that we will indemnify the underwriters against specified liabilities, including liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in respect of those liabilities.

Lock-Up Agreements

We, each of our directors and officers, the holders of substantially all of the other shares of our common stock outstanding prior to this offering, and the holders of substantially all of our options outstanding prior to this offering, have agreed, subject to specified exceptions, that, without the prior written consent of Wells Fargo Securities, LLC and UBS Securities LLC, we and they will not, during the period beginning on and including the date of this prospectus through and including the date that is the 180th day after the date of this prospectus, directly or indirectly:

•: issue (in the case of us), offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any shares of our common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock;
•: in the case of us, file or cause the filing of any registration statement under the Securities Act with respect to any shares of our common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock, other than registration statements on Form S-8 filed with the SEC after the completion date of this offering; or
•: enter into any swap or other agreement, arrangement, hedge or transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic consequences of ownership of our common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock,

whether any transaction described in any of the foregoing bullet points is to be settled by delivery of our common stock or other capital stock, other securities, in cash or otherwise, or publicly announce an intention to do any of the foregoing.

Wells Fargo Securities, LLC and UBS Securities LLC may, in their sole discretion and at any time or from time to time, without notice, release all or any portion of the shares or other securities subject to the lock-up agreements. Any determination to release any shares or other securities subject to the lock-up agreements would be based on a number of factors at the time of determination, which may

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include the market price of the common stock, the liquidity of the trading market for the common stock, general market conditions, the number of shares or other securities proposed to be sold or otherwise transferred and the timing, purpose and terms of the proposed sale or other transfer.

NASDAQ Global Market Listing

We expect to have our common stock listed on the NASDAQ Global Market under the symbol "TRHC."

Stabilization

In order to facilitate this offering of our common stock, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the market price of our common stock. Specifically, the underwriters may sell more shares of common stock than they are obligated to purchase under the underwriting agreement, creating a short position. A short sale is covered if the short position is no greater than the number of shares of common stock available for purchase by the underwriters under the option to purchase additional shares. The underwriters may close out a covered short sale by exercising their option to purchase additional shares or purchasing common stock in the open market. In determining the source of common stock to close out a covered short sale, the underwriters may consider, among other things, the market price of common stock compared to the price payable under the option to purchase additional shares. The underwriters may also sell shares of common stock in excess of the option to purchase additional shares, creating a naked short position. The underwriters must close out any naked short position by purchasing shares of common stock in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after the date of pricing of this offering that could adversely affect investors who purchase in this offering.

As an additional means of facilitating this offering, the underwriters may bid for, and purchase, common stock in the open market to stabilize the price of our common stock, so long as stabilizing bids do not exceed a specified maximum. The underwriting syndicate may also reclaim selling concessions allowed to an underwriter or a dealer for distributing common stock in this offering if the underwriting syndicate repurchases previously distributed common stock to cover syndicate short positions or to stabilize the price of the common stock.

The foregoing transactions, if commenced, may raise or maintain the market price of our common stock above independent market levels or prevent or retard a decline in the market price of the common stock.

The foregoing transactions, if commenced, may be effected on the NASDAQ Global Market or otherwise. Neither we nor any of the underwriters makes any representation that the underwriters will engage in any of these transactions and these transactions, if commenced, may be discontinued at any time without notice. Neither we nor any of the underwriters makes any representation or prediction as to the direction or magnitude of the effect that the transactions described above, if commenced, may have on the market price of our common stock.

Discretionary Accounts

The underwriters have informed us that they do not intend to confirm sales to accounts over which they exercise discretionary authority in excess of 5% of the total number of shares of common stock offered by them.

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Pricing of this Offering

Prior to this offering, there has been no public market for our common stock. Consequently, the initial public offering price for our common stock will be determined between us and the representative of the underwriters. The factors to be considered in determining the initial public offering price include:

•: prevailing market conditions;
•: our results of operations and financial condition;
•: financial and operating information and market valuations with respect to other companies that we and the representative of the underwriters believe to be comparable or similar to us;
•: the present state of our development; and
•: our future prospects.

An active trading market for our common stock may not develop. It is possible that the market price of our common stock after this offering will be less than the initial public offering price. In addition, the estimated initial public offering price range appearing on the cover of this preliminary prospectus is subject to change as a result of market conditions or other factors.

Relationships

The underwriters and/or their respective affiliates may in the future provide various financial advisory, investment banking, commercial banking and other financial services to us, for which they may receive compensation.

Sales Outside the United States

No action has been or will be taken in any jurisdiction (except in the United States) that would permit an initial public offering of the common stock, or the possession, circulation or distribution of this prospectus or any other material relating to us or the common stock in any jurisdiction where action for that purpose is required. Accordingly, the common stock may not be offered or sold, directly or indirectly, and neither of this prospectus nor any other offering material or advertisements in connection with the common stock may be distributed or published, in or from any country or jurisdiction except in compliance with any applicable rules and regulations of any such country or jurisdiction.

Each of the underwriters may arrange to sell common stock offered by this prospectus in certain jurisdictions outside the United States, either directly or through affiliates, where they are permitted to do so. In that regard, Wells Fargo Securities, LLC may arrange to sell shares in certain jurisdictions through an affiliate, Wells Fargo Securities International Limited, or WFSIL. WFSIL is a wholly-owned indirect subsidiary of Wells Fargo & Company and an affiliate of Wells Fargo Securities, LLC. WFSIL is a U.K.-incorporated investment firm regulated by the Financial Conduct Authority. Wells Fargo Securities is the trade name for certain corporate and investment banking services of Wells Fargo & Company and its affiliates, including Wells Fargo Securities, LLC and WFSIL.

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive, each, a Relevant Member State, an offer to the public of any shares of common stock which are the subject of the offering contemplated by this prospectus, the Shares, may not be made in that Relevant Member State except that an offer to the public in that Relevant Member State of

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any Shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

(a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000; and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;

(c) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the representatives of the underwriters; or

(d) in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of Shares shall result in a requirement for the publication by us or any underwriter of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an "offer to the public" in relation to any Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any Shares to be offered so as to enable an investor to decide to purchase any Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in the Relevant Member State and the expression "Prospectus Directive" means Directive 2003/71 EC (including the 2010 PD Amending Directive, in the case of Early Implementing Member States) and includes any relevant implementing measure in each Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.

United Kingdom

This prospectus and any other material in relation to the shares described herein is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospective Directive, or qualified investors, that also (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or the Order, (ii) who fall within Article 49(2)(a) to (d) of the Order or (iii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). The shares are only available to, and any invitation, offer or agreement to purchase or otherwise acquire such shares will be engaged in only with, relevant persons. This offering memorandum and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this prospectus or any of its contents.

The distribution of this prospectus in the United Kingdom to anyone not falling within the above categories is not permitted and may contravene the Financial Services and Markets Act of 2000. No person falling outside those categories should treat this prospectus as constituting a promotion to him, or act on it for any purposes whatever. Recipients of this prospectus are advised that we, the underwriters and any other person that communicates this prospectus are not, as a result solely of communicating this prospectus, acting for or advising them and are not responsible for providing recipients of this prospectus with the protections which would be given to those who are clients of any aforementioned entities that is subject to the Financial Services Authority Rules.

France

This prospectus (including any amendment, supplement or replacement thereto) have not been approved either by the Autorité des marchés financiers or by the competent authority of another State

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that is a contracting party to the Agreement on the European Economic Area and notified to the Autorité des marchés financiers; no security has been offered or sold and will be offered or sold, directly or indirectly, to the public in France within the meaning of Article L. 411-1 of the French Code Monétaire et Financier except to permitted investors, or Permitted Investors, consisting of persons licensed to provide the investment service of portfolio management for the account of third parties, qualified investors (investisseurs qualifiés) acting for their own account and/or a limited circle of investors (cercle restreint d'investisseurs) acting for their own account, with "qualified investors" and "limited circle of investors" having the meaning ascribed to them in Articles L. 411-2, D. 411-1, D. 411-2, D. 411-4, D. 744-1, D. 754-1 and D. 764-1 of the French Code Monétaire et Financier; none of this prospectus or any other materials related to the offer or information contained therein relating to our securities has been released, issued or distributed to the public in France except to Permitted Investors; and the direct or indirect resale to the public in France of any securities acquired by any Permitted Investors may be made only as provided by Articles L. 411-1, L. 411-2, L. 412-1 and L. 621-8 to L. 621-8-3 of the French Code Monétaire et Financier and applicable regulations thereunder.

Notice to the Residents of Germany

This document has not been prepared in accordance with the requirements for a securities or sales prospectus under the German Securities Prospectus Act (Wertpapierprospektgesetz), the German Sales Prospectus Act (Verkaufsprospektgesetz), or the German Investment Act (Investmentgesetz). Neither the German Federal Financial Services Supervisory Authority (Bundesanstalt fur Finanzdienstleistungsaufsicht—BaFin) nor any other German authority has been notified of the intention to distribute the securities in Germany. Consequently, the securities may not be distributed in Germany by way of public offering, public advertisement or in any similar manner AND THIS DOCUMENT AND ANY OTHER DOCUMENT RELATING TO THE OFFERING, AS WELL AS INFORMATION OR STATEMENTS CONTAINED THEREIN, MAY NOT BE SUPPLIED TO THE PUBLIC IN GERMANY OR USED IN CONNECTION WITH ANY OFFER FOR SUBSCRIPTION OF THE SECURITIES TO THE PUBLIC IN GERMANY OR ANY OTHER MEANS OF PUBLIC MARKETING. The securities are being offered and sold in Germany only to qualified investors which are referred to in Section 3, paragraph 2 no. 1, in connection with Section 2, no. 6, of the German Securities Prospectus Act. This document is strictly for use of the person who has received it. It may not be forwarded to other persons or published in Germany.

Switzerland

This document does not constitute a prospectus within the meaning of Art. 652a of the Swiss Code of Obligations. The shares of common stock may not be sold directly or indirectly in or into Switzerland except in a manner which will not result in a public offering within the meaning of the Swiss Code of Obligations. Neither this document nor any other offering materials relating to the shares of common stock may be distributed, published or otherwise made available in Switzerland except in a manner which will not constitute a public offer of the shares of common stock in Switzerland.

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LEGAL MATTERS

The validity of the shares of common stock offered hereby is being passed upon for us by Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania. Cooley LLP, New York, New York is acting as counsel for the underwriters in this offering.

EXPERTS

The consolidated financial statements of Tabula Rasa HealthCare, Inc. and subsidiaries as of December 31, 2013 and 2014, and for the years then ended, have been included herein in reliance upon the report of KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the December 31, 2014 consolidated financial statements contains an explanatory paragraph that states that we have incurred net losses since inception and do not currently have the wherewithal to repay a note payable related to an acquisition that is due on June 30, 2016, which raises substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of that uncertainty.

The audited financial statements of the Medliance Business, a business of Medliance LLC, as of December 31, 2013, and for the years ended December 31, 2013 and 2014, have been included herein in reliance upon the report of KPMG LLP, independent auditors, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

The audited financial statements of Capstone Performance Systems, LLC, as of December 31, 2013, and for the year ended December 31, 2013 and the period from January 1, 2014 through April 21, 2014, have been included herein in reliance upon the report of KPMG LLP, independent auditors, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act, with respect to the shares of common stock being offered by this prospectus. This prospectus does not contain all of the information in the registration statement and its exhibits. For further information with respect to us and the common stock offered by this prospectus, we refer you to the registration statement and its exhibits. Statements contained in this prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement.

You can read our SEC filings, including the registration statement, over the Internet at the SEC's website at www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities at 100 F Street NE, Washington, D.C. 20549. You may also obtain copies of these documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities. You may also request a copy of these filings, at no cost, by writing us at 2400 Boston Street, Baltimore, Maryland 21224 or telephoning us at (410) 522 - 8707.

Upon the completion of this offering, we will be subject to the information reporting requirements of the Exchange Act, and we will file reports, proxy statements and other information with the SEC. These reports, proxy statements and other information will be available for inspection and copying at the public reference room and web site of the SEC referred to above. We also maintain a website at www.tabularasahealthcare.com, at which, following the completion of this offering, you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information contained in, or that can be accessed through, our website is not incorporated by reference in, and is not part of, this prospectus.

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INDEX TO FINANCIAL STATEMENTS

		Page

Tabula Rasa HealthCare, Inc.
Audited Financial Statements
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of December 31, 2013 and December 31, 2014		F-3
Consolidated Statements of Operations for the Years Ended December 31, 2013 and December 31, 2014		F-4
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Deficit for the Years Ended December 31, 2013 and December 31, 2014		F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2013 and December 31, 2014		F-6
Notes to Consolidated Financial Statements		F-7
Unaudited Interim Financial Statements
Consolidated Balance Sheets as of December 31, 2014 and September 30, 2015		F-47
Consolidated Statements of Operations for the Nine Months Ended September 30, 2014 and September 30, 2015		F-48
Consolidated Statement of Redeemable Convertible Preferred Stock and Stockholders' Deficit for the Nine Months Ended September 30, 2015		F-49
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2014 and September 30, 2015		F-50
Notes to Unaudited Consolidated Interim Financial Statements		F-51
Medliance Business (A Business of Medliance LLC)
Audited Financial Statements
Independent Auditors' Report		F-67
Balance Sheet as of December 31, 2013		F-68
Statements of Operations for the years ended December 31, 2013 and December 31, 2014		F-69
Statements of Changes in Net Parent Investment for the years ended December 31, 2013 and December 31, 2014		F-70
Statements of Cash Flows for the years ended December 31, 2013 and December 31, 2014		F-71
Notes to Financial Statements		F-72
Capstone Performance Systems, LLC
Audited Financial Statements
Independent Auditors' Report		F-76
Balance Sheet as of December 31, 2013		F-77
Statements of Operations for the year ended December 31, 2013 and the period from January 1, 2014 through April 21, 2014		F-78
Statements of Members' Equity for the year ended December 31, 2013 and the period from January 1, 2014 through April 21, 2014		F-79
Statements of Cash Flows for the year ended December 31, 2013 and the period from January 1, 2014 through April 21, 2014		F-80
Notes to Financial Statements		F-81
Pro Forma Combined Financial Information (unaudited)
Basis of Presentation		F-85
Pro Forma Combined Statement of Operations for the year ended December 31, 2014 (unaudited)		F-86
Notes to Pro Forma Combined Statement of Operations (unaudited)		F-87

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
Tabula Rasa HealthCare, Inc.:

We have audited the accompanying consolidated balance sheets of Tabula Rasa HealthCare, Inc. and subsidiaries (formerly CareKinesis, Inc.) as of December 31, 2013 and 2014, and the related consolidated statements of operations, redeemable convertible preferred stock and stockholders' deficit, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Tabula Rasa HealthCare, Inc. and subsidiaries as of December 31, 2013 and 2014, and the results of their operations and their cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred net losses since inception and does not currently have the wherewithal to repay a note payable related to an acquisition that is due on June 30, 2016, which raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to this matter are described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ KPMG LLP

Philadelphia, Pennsylvania
August 31, 2015

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TABULA RASA HEALTHCARE, INC.
CONSOLIDATED BALANCE SHEETS
($ amounts in thousands, except share amounts)

	December 31

	2013			2014
Assets
Current assets:
Cash	$	6,027		$	4,122
Restricted cash		—			500
Accounts receivable, net		2,086			4,302
Inventories		1,021			2,040
Rebates receivable		203			968
Prepaid expenses and other current assets		152			316

Total current assets		9,489			12,248
Property and equipment, net		2,519			2,221
Software development costs, net		2,011			2,254
Goodwill		189			21,606
Intangible assets, net		—			19,993
Other assets		325			501

Total assets	$	14,533		$	58,823



Liabilities, redeemable convertible preferred stock and stockholders' deficit
Current liabilities:
Line of credit	$	—		$	6,860
Current portion of long-term debt		1,714			2,121
Notes payable to related parties		1,089			1,014
Acquisition-related consideration payable		—			4,370
Acquisition-related contingent consideration		—			1,079
Accounts payable		2,713			4,558
Accrued expenses and other liabilities		854			2,068

Total current liabilities		6,370			22,070
Line of credit		6,860			—
Long-term debt		1,521			12,989
Long-term notes payable related to acquisition		—			14,350
Long-term acquisition-related consideration payable		—			224
Long-term acquisition-related contingent consideration		—			7,300
Warrant liability		679			2,783
Other long-term liabilities		—			102

Total liabilities		15,430			59,818

Commitments and contingencies (Note 16)
Redeemable convertible preferred stock:
Series A and A-1 redeemable convertible preferred stock, $0.0001 par value, 7,224,266 shares authorized, 6,911,766 shares issued and outstanding at December 31, 2013 and 2014 (liquidation preference of $6,216 at December 31, 2014)		5,798			6,165
Series B redeemable convertible preferred stock, $0.0001 par value, 3,548,614 shares authorized, 2,961,745 shares issued and outstanding at December 31, 2013 and 2014 (liquidation preference of $4,927 at December 31, 2014)		9,325			12,842

Total redeemable convertible preferred stock		15,123			19,007

Stockholders' deficit:
Common stock, $0.0001 par value; 27,836,869 shares authorized; 7,580,396 and 8,021,093 shares issued and outstanding at December 31, 2013 and 2014, respectively		1			1
Additional paid-in capital		—			—
Accumulated deficit		(16,021	)		(20,003	)

Total stockholders' deficit		(16,020	)		(20,002	)

Total liabilities, redeemable convertible preferred stock and stockholders' deficit	$	14,533		$	58,823

See accompanying notes to consolidated financial statements.

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TABULA RASA HEALTHCARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
($ amounts in thousands, except share and per share amounts)

	Year Ended December 31,

	2013			2014
Revenue:
Product revenue	$	25,143		$	46,878
Service revenue		—			1,550

Total revenue		25,143			48,428

Cost of revenue, exclusive of depreciation and amortization shown below:
Product cost		20,921			37,073
Service cost		—			739

Total cost of revenue		20,921			37,812

Gross profit		4,222			10,616

Operating expenses:
Research and development		1,338			1,660
Sales and marketing		1,775			2,272
General and administrative		2,482			3,970
Change in fair value of acquisition-related contingent consideration expense		—			790
Depreciation and amortization		1,118			1,817

Total operating expenses		6,713			10,509

(Loss) income from operations		(2,491	)		107
Other expense:
Change in fair value of warrant liability		547			269
Interest expense		833			1,354

Total other expense		1,380			1,623

Loss before income taxes		(3,871	)		(1,516	)
Income tax benefit		—			(409	)

Net loss		(3,871	)		(1,107	)
Accretion of redeemable convertible preferred stock		(5,346	)		(3,884	)

Net loss attributable to common stockholders	$	(9,217	)	$	(4,991	)



Net loss per share attributable to common stockholders, basic and diluted	$	(1.22	)	$	(0.63	)



Weighted average common shares outstanding, basic and diluted		7,525,931			7,862,025



Pro forma net loss per share attributable to common stockholders, basic and diluted (unaudited)				$	(0.06	)



Pro forma weighted average common shares outstanding, basic and diluted (unaudited)					17,735,536

See accompanying notes to consolidated financial statements.

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TABULA RASA HEALTHCARE, INC.
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
($ amounts in thousands, except share amounts)

															Stockholders' Deficit

	Redeemable Convertible Preferred Stock														Common Stock
	Series A				Series A-1				Series B						Class A				Class B
	Series A				Series A-1				Series B						Class A				Class B					Additional Paid-in Capital			Accumulated Deficit			Total Stockholders' Deficit
	Shares		Amount		Shares		Amount		Shares		Amount		Total		Shares		Amount		Shares			Amount		Additional Paid-in Capital			Accumulated Deficit			Total Stockholders' Deficit
Balance, January 1, 2013		4,411,766	$	3,340		2,500,000	$	2,107		—	$	—	$	5,447		3,193,655	$	—		4,280,590		$	1	$	2,984		$	(9,757	)	$	(6,772	)
Sale of redeemable convertible preferred stock, net of expenses of $181		—		—		—		—		2,626,188		3,819		3,819		—		—		—			—		—			—			—
Accretion of redeemable convertible preferred stock		—		216		—		135		—		4,995		5,346		—		—		—			—		(3,253	)		(2,093	)		(5,346	)
Conversion of promissory note		—		—		—		—		335,557		511		511		—		—		—			—		—			—			—
Cancellation of common stock warrants		—		—		—		—		—		—		—		—		—		—			—		—			(300	)		(300	)
Transfer of common stock		—		—		—		—		—		—		—		190,832		—		(190,832	)		—		—			—			—
Sale of common stock		—		—		—		—		—		—		—		103,875		—		—			—		163			—			163
Exercise of stock options		—		—		—		—		—		—		—		2,276		—		—			—		1			—			1
Issuance of common stock warrants		—		—		—		—		—		—		—		—				—			—		16			—			16
Stock-based compensation expense		—		—		—		—		—		—		—		—		—		—			—		89			—			89
Net loss		—		—		—		—		—		—		—		—		—		—			—		—			(3,871	)		(3,871	)

Balance, December 31, 2013		4,411,766		3,556		2,500,000		2,242		2,961,745		9,325		15,123		3,490,638		—		4,089,758			1		—			(16,021	)		(16,020	)
Issuance of common stock in connection with acquisition of St. Mary Prescription Pharmacy		—		—		—		—		—		—		—		157,500		—		—			—		291			—			291
Issuance of common stock in connection with acquisition of Capstone Performance Systems, LLC		—		—		—		—		—		—		—		203,358		—		—			—		374			—			374
Accretion of redeemable convertible preferred stock		—		225		—		142		—		3,517		3,884		—		—		—			—		(1,009	)		(2,875	)		(3,884	)
Transfer of common stock		—		—		—		—		—		—		—		63,333		—		(63,333	)		—		—			—			—
Exercise of stock options		—		—		—		—		—		—		—		79,839		—		—			—		59			—			59
Issuance of common stock warrants		—		—		—		—		—		—		—		—		—		—			—		31			—			31
Stock-based compensation expense		—		—		—		—		—		—		—		—		—		—			—		254			—			254
Net loss		—		—		—		—		—		—		—		—		—		—			—		—			(1,107	)		(1,107	)

Balance, December 31, 2014		4,411,766	$	3,781		2,500,000	$	2,384		2,961,745	$	12,842	$	19,007		3,994,668	$	—		4,026,425		$	1	$	—		$	(20,003	)	$	(20,002	)

See accompanying notes to consolidated financial statements.

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TABULA RASA HEALTHCARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

	Year Ended December 31,

	2013			2014
Cash flows from operating activities:
Net loss	$	(3,871	)	$	(1,107	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		1,118			1,817
Amortization of deferred financing costs and debt discount		166			259
Payment of imputed interest on debt		—			(13	)
Deferred income tax benefit		—			(422	)
Issuance of common stock warrants		16			31
Write-off in-process software development costs		—			63
Stock-based compensation		89			254
Change in fair value of warrant liability		547			269
Change in fair value of acquisition-related contingent consideration, net of certain payments		—			730
Changes in operating assets and liabilities, net of effect from acquisitions:
Accounts receivable, net		(884	)		(1,388	)
Inventories		(337	)		(792	)
Rebates receivable		(104	)		(715	)
Prepaid expenses and other current assets		(63	)		(77	)
Other assets		(36	)		(30	)
Accounts payable		801			1,383
Accrued expenses and other liabilities		403			604
Other long-term liabilities		—			4

Net cash (used in) provided by operating activities		(2,155	)		870

Cash flows from investing activities:
Purchases of property and equipment		(366	)		(230	)
Software development costs		(479	)		(738	)
Change in restricted cash		—			(500	)
Purchase of businesses, net of cash acquired		—			(13,448	)

Net cash used in investing activities		(845	)		(14,916	)

Cash flows from financing activities:
Net proceeds from sale of preferred stock		3,819			—
Proceeds from sale of common stock		164			59
Payment for cancellation of warrants		(300	)		—
Payments for debt financing costs		(90	)		(212	)
Proceeds from notes payable to related parties		1,699			100
Repayments of notes payable to related parties		(260	)		(175	)
Borrowings on line of credit		6,940			—
Repayments of line of credit		(1,140	)		—
Payments of acquisition-related consideration		—			(487	)
Payments of contingent consideration		—			(440	)
Proceeds from long-term debt		25			15,000
Repayments of long-term debt		(1,989	)		(1,704	)

Net cash provided by financing activities		8,868			12,141

Net increase (decrease) in cash		5,868			(1,905	)
Cash, beginning of period		159			6,027

Cash, end of period	$	6,027		$	4,122



Supplemental disclosure of cash flow information:
Acquisition of equipment under capital leases	$	774		$	326



Additions to property, equipment, and software development purchases included in accounts payable	$	21		$	53



Cash paid for interest	$	629		$	1,080



Accretion of redeemable convertible preferred stock to redemption value	$	5,346		$	3,884



Conversion of promissory note to Series B redeemable convertible preferred stock	$	511		$	—



Fair value of promissory notes entered into in connection with Medliance acquisition	$	—		$	14,347



Fair value of preferred stock warrants issued to lender	$	—		$	1,835

See accompanying notes to consolidated financial statements.

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Table of Contents

TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

1. Corporate Formation and Reorganization

Effective June 30, 2014, CareKinesis, Inc. ("CareKinesis") and its wholly-owned subsidiaries St. Mary Prescription Pharmacy ("SMPP"), Capstone Performance Systems, LLC ("Capstone") and CareVentions, Inc. ("CareVentions"), were restructured to create a parent holding company, Tabula Rasa HealthCare, Inc. (the "Company"). To accomplish the restructuring, the Company and a new, wholly-owned, merger subsidiary of the Company were incorporated under the laws of the state of Delaware, and the new merger subsidiary was merged with and into CareKinesis, with CareKinesis as the surviving corporation and a wholly owned subsidiary of the Company. As a result of the merger, the former stockholders of CareKinesis became stockholders of the Company, with each share of CareKinesis issued and outstanding immediately prior to the merger automatically converting into the same share, with the same rights and preferences and obligations with the Company as they had prior to the merger with CareKinesis. In addition, in connection with the reorganization, CareKinesis distributed all of the equity interests in each of Capstone and CareVentions to the Company such that Capstone and CareVentions became wholly owned subsidiaries of the Company. As CareKinesis and the Company are entities under common control, the consolidated financial statements reflect the historical carrying values of CareKinesis' assets and liabilities and its results of operations as if they were consolidated for all periods presented.

2. Nature of Business and Basis of Presentation

The Company provides patient-specific, data-driven technology and solutions that enable healthcare organizations to optimize medication regimens to improve patient outcomes, reduce hospitalizations, lower healthcare costs and manage risk. The Company delivers its solutions through a comprehensive suite of technology-enabled products and services for medication risk management and risk adjustment. The Company serves healthcare organizations that focus on populations with complex healthcare needs and extensive medication requirements. The Company's suite of cloud-based software solutions provides prescribers, pharmacists and healthcare organizations with sophisticated and innovative tools to better manage the medication-related needs of patients.

The Company's consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business. The Company has incurred net losses since inception and has an accumulated deficit of $20,003 as of December 31, 2014. Management believes that the Company's cash of $4,122 as of December 31, 2014 in addition to borrowing capacity under a line of credit and cash flows from operations are sufficient to fund the Company's planned operations through at least December 31, 2015, however, the Company does not have the wherewithal to repay a note payable related to an acquisition with a face value of $16,385 that is due on June 30, 2016 (note 9), which raises substantial doubt about the Company's ability to continue as a going concern. Management plans to repay the note with the proceeds from its planned initial public offering or, to the extent that the offering is delayed or not successful, management would seek to extend the note or obtain alternate sources of financing. There is no assurance that management's plans will be successful. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The ability of the Company to maintain successful operations will depend on, among other things, new business wins, the retention of clients, and the effectiveness of sales and marketing initiatives.

The Company is seeking to complete an initial public offering of its common stock, which would provide additional capital to fund its operations. Upon the closing of a qualified public offering on

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Table of Contents

TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

specified terms, all of the Company's outstanding redeemable convertible preferred stock will convert into shares of common stock. In the event the Company does not complete an initial public offering, the Company expects to seek additional funding through private financings or debt financing. The Company may not be able to obtain financing on acceptable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company's stockholders. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all.

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB").

3. Summary of Significant Accounting Policies

(a) Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates or assumptions.

On an ongoing basis, management evaluates its estimates and assumptions, including, but not limited to, those related to: (i) the fair value of assets acquired and liabilities assumed for business combinations, (ii) the valuation of the Company's common and preferred stock, (iii) the recognition and disclosure of contingent liabilities, (iv) the useful lives of long-lived assets (including definite-lived intangible assets), (v) the evaluation of revenue recognition criteria, (vi) assumptions used in the Black-Scholes option-pricing model to determine the fair value of equity and liability classified warrants and stock-based compensation instruments and (vii) the realizability of long-lived assets, including goodwill and intangible assets. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The Company has engaged and may, in the future, engage third-party valuation specialists to assist with estimates related to the valuation of its preferred and common stock, in addition to the valuation of assets and liabilities acquired. Such estimates often require the selection of appropriate valuation methodologies and models, and significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ from those estimates under different assumptions or circumstances.

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

(b) Revenue Recognition

The Company recognizes revenue from product sales or services rendered when (i) persuasive evidence of an arrangement exists, (ii) services have been rendered, (iii) the price to its client is fixed or determinable and (iv) collectability is reasonably assured.

When the Company enters into arrangements with multiple deliverables, it applies the accounting guidance for revenue arrangements with multiple deliverables and evaluates each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (i) whether the delivered item has value to the customer on a standalone basis, and (ii) if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. Revenue is allocated to each element in an arrangement based on a selling price hierarchy. The selling price for a deliverable is based on estimated selling prices (ESP) as vendor specific objective evidence or third party evidence is not available. The Company establishes ESP for the elements of its arrangements based upon its pricing practices and class of customers. The stated prices for the various deliverables of the Company's contracts are consistent across classes of customers.

Product Revenue

The Company enters into multiple-element arrangements with healthcare organizations to provide software enabled medication risk management solutions. Under these contracts, revenue is generated through the components listed below.

Prescription drug revenue

The Company sells prescription medications directly to healthcare organizations through its prescription fulfillment pharmacies. Prescription medication fees are based upon the prices stated in customer contracts for the prescription and include a dispensing fee. Prescription medication revenue, including dispensing fees, is recognized when the product is shipped to the customer. Prescription medications are considered a separate unit of accounting.

Per member per month fees—medication risk management services

The Company receives a fixed monthly administrative fee for each member in the program contracted for medication risk management services. This fee, which is included in Product Revenue in the consolidated statement of operations, is recognized on a monthly basis as medication risk management services are provided. The services associated with the per member per month fees are considered a separate unit of accounting.

Service Revenue

The Company enters into contracts with healthcare organizations to provide (i) risk adjustment and (ii) pharmacy cost management services, which include training client staff and providers about documentation and diagnosis coding, analyzing clients' data collection and submission processes, and delivering meaningful analytics for understanding reimbursement complexities.

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

Under the risk adjustment contracts, there are three revenue generating components:

Set up fees:

The Company's contracts with its risk adjustment service customers often require customers to pay non-refundable set up fees, which are deferred and recognized over the estimated term of the contract. These fees are charged at the beginning of the customer relationship as compensation for the Company's efforts to prepare the customer and configure its system for the data collection process. The set up activities do not represent a separate unit of accounting as they do not have value apart from the broader risk adjustment services contracts.

Per member per month fees—risk adjustment services

The Company receives a fixed monthly fee for each member in the program contracted for risk adjustment services. These services represent a separate unit of accounting and are offered independently from any other services. Revenue for these services is recognized each month as the related risk adjustment services are performed.

Hourly consulting fees

The Company contracts with customers to perform various risk adjustment services. Such services are billed on a time and materials basis, at agreed hourly rates. Consulting services represent a separate unit of accounting and are offered independently from any other services. Revenue for these services is recognized as time is incurred on the project.

The Company's pharmacy cost management services include subscription revenue from customers and revenues from drug manufacturers for the sale of drug utilization data. Subscription revenue is recognized monthly as either a flat fee or as a percentage of monthly transactions incurred. Data and statistics fees from drug manufacturers are recognized as revenue when received due to the unpredictable nature of the payments and because fees are not fixed and determinable until received.

(c) Cost of Product Revenue

Cost of product revenue includes all costs directly related to the medication risk management offering, including costs relating to the Company's pharmacists' collaboration on a patient's medication management, clinical analysis of the results and, when necessary, offering guidance to the prescriber based upon the review of the medication risk mitigation matrix and the individual patient's medical history, as well as the fulfillment and distribution of prescription drugs. Costs consist primarily of the purchase price of the prescription drugs the Company dispenses, expenses to package, dispense and distribute prescription drugs, expenses associated with the Company's medication care plan support centers and prescription fulfillment centers, including employment costs and stock-based compensation, and expenses related to the hosting of the Company's technology platform. Such costs also include direct overhead expenses, as well as allocated miscellaneous overhead costs. The Company allocates miscellaneous overhead costs among functions based on employee headcount.

(d) Cost of Service Revenue

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

(e) Research and Development

Research and development expenses consist primarily of salaries and related costs, including stock-based compensation expense, for personnel in the Company's research and development functions, costs relating to the design and development of new software and technology and enhancement of existing software and technology, including fees paid to third-party consultants, costs relating to quality assurance and testing, and other allocated facility-related overhead and expenses. Costs incurred in research and development are charged to expense as incurred.

(f) Stock-Based Compensation

The Company accounts for stock-based awards granted to employees and directors in accordance with ASC Topic 718, Compensation — Stock Compensation, which requires that compensation cost be recognized for awards based on the grant-date fair value of the award. That cost is recognized on a straight-line basis over the period during which an employee or director is required to provide service in exchange for the award — the requisite service period ("vesting period"). The grant-date fair value of employee and director stock-based awards is determined using the Black-Scholes option-pricing model.

Compensation expense for options granted to non-employees is determined based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured. Compensation expense is recognized over the period during which services are rendered by such non-employees until completed on a straight-line basis over the vesting period on each separate vesting tranche of the award, or the accelerated attribution method. At the end of each financial reporting period prior to completion of the service, the fair value of these awards is remeasured using the then-current fair value of the Company's common stock and updated assumption inputs in the Black-Scholes option-pricing model.

The Company classifies stock-based compensation expense in its statement of operations in the same manner in which the award recipient's payroll costs or recipients' service payments are classified.

The fair value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model. The Company historically has been a private company and lacks company-specific historical and implied volatility information. Therefore, the Company estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The expected term of the Company's stock options has been determined utilizing the "simplified" method. The expected term of the stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

(g) Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

tax rates is recognized in the period that includes the enactment date. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized.

(h) Accretion of Redeemable Convertible Preferred Stock

Accretion of redeemable convertible preferred stock includes the accretion of accruing dividends on and issuance costs of the Company's Series A, Series A-1 and Series B redeemable convertible preferred stock. The carrying values of Series A and Series A-1 redeemable convertible preferred stock are being accreted to their respective redemption values at each reporting period using the effective interest method, from the date of issuance to the earliest date the holders can demand redemption. The carrying value of Series B redeemable convertible preferred stock is being accreted to redemption value at each reporting period at the greater of (i) the original issuance price plus unpaid accrued dividends or (ii) the fair value of the redeemable convertible preferred stock.

(i) Net Loss per Share Attributable to Common Stockholders

The Company uses the two-class method to compute net loss attributable to common stockholders because the Company has issued securities, other than common stock, that contractually entitle the holders to participate in dividends and earnings of the Company. The two-class method requires net loss applicable to common stockholders for the period, after an allocation of earnings to participating securities, to be allocated between common and participating securities based upon their respective rights to receive distributed and undistributed earnings. The Company's preferred stockholders are entitled to receive annual cumulative dividends payable prior and in preference to dividends paid to holders of common stock when, as and if declared by the Company's Board of Directors (the "Board"). In the event a dividend is paid on common stock, holders of preferred stock are entitled to a proportionate share of any such dividend as if they were holders of common shares (on an as-if converted basis).

The unaudited pro forma net loss per share of common stock is computed using the weighted average number of shares of common stock outstanding after giving pro forma effect to the conversion of all issued and outstanding shares of preferred stock into shares of common stock upon the closing of the Company's contemplated initial public offering as if such conversion had occurred on January 1 of the applicable year, or the date of issuance, if later.

(j) Cash

Cash at December 31, 2013 and 2014 consists of cash on deposit with banks. The balances, at times, may exceed federally insured limits. The Company mitigates this risk by depositing funds with major financial institutions. The Company has not experienced any losses in such accounts, and believes it is not exposed to any significant credit risk. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2013 or 2014.

(k) Restricted cash

Restricted cash at December 31, 2014 consists of cash required to be held for deferred payments associated with the SMPP acquisition (note 4) and was $500 at December 31, 2014.

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Table of Contents

TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

(l) Accounts Receivable, net

Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and its clients' financial condition, the amount of receivables in dispute and the current receivables aging and current payment patterns. The Company reviews its allowance for doubtful accounts monthly. As of December 31, 2013 and 2014 the Company deemed this amount to be de minimis.

(m) Inventories

Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method.

(n) Property and Equipment, net

Property and equipment are stated at cost less accumulated depreciation. Additions or improvements that increase the useful life of existing assets are capitalized, while expenditures for repairs and maintenance that do not improve or extend the lives of the respective assets are charged to expense as incurred. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets. The Company depreciates computer hardware and purchased software over a life of three years and office furniture and equipment over a life of five years. Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the lease term. Property and equipment under capital leases are amortized over the shorter of the lease term or the estimated useful life of the asset. Upon retirement or sale, the cost and related accumulated depreciation of assets disposed of are removed from the accounts and any resulting gain or loss is included in the consolidated statements of operations.

(o) Software Development Costs, net

Certain development costs of the Company's internal-use software are capitalized in accordance with ASC Topic 350, Intangibles-Goodwill and Other ("ASC 350"), which outlines the stages of computer software development and specifies when capitalization of costs is required. The Company capitalizes certain costs incurred in connection with obtaining or developing internal-use software, including external direct costs of material and services and payroll costs for employees directly involved with the software development. Projects that are determined to be in the development stage are capitalized. Subsequent additions, modifications, or upgrades to internal-use software are capitalized to the extent that they allow the software to perform tasks it previously did not perform. Capitalized software costs are amortized beginning when the software project is substantially complete and the asset is ready for its intended use. Capitalized internal-use software costs are amortized using the straight-line method over the remaining estimated useful life of the Company's core software platform, which was four years during the year ended December 31, 2014. Costs incurred in the preliminary project stage and post-implementation stage, as well as maintenance and training costs, are expensed as incurred as part of research and development expense. As of December 31, 2013 and 2014, gross capitalized software costs were $2,883 and $3,644 and accumulated amortization was $872 and $1,390, respectively. Amortization expense for the years ended December 31, 2013 and 2014 was $384 and $518, respectively. As of December 31, 2013 and 2014, there was $184 and $328, respectively, of capitalized software costs that were not yet subject to amortization.

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Table of Contents

TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

(p) Impairment of Long-Lived Assets Including Other Intangible Assets

Long-lived assets consist of property and equipment, software development costs and definite-lived intangible assets. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. To date, the Company has not recorded any impairment losses on long-lived assets.

(q) Deferred Financing Costs

Costs related to obtaining debt financing are capitalized and amortized to interest expense over the term of the related debt using the effective — interest method. If debt is prepaid or retired early, the related unamortized deferred financing costs are written off in the period the debt is retired. Deferred financing costs of $102 and $240, net of accumulated amortization, are included in other assets on the accompanying consolidated balance sheets as of December 31, 2013 and 2014, respectively.

(r) Deferred Rent

Rent expense is recorded on a straight-line basis over the term of the lease. Lease incentives, including tenant improvement allowances, are recorded to deferred rent and amortized on a straight-line basis over the lease term and $37 and $33 are included in accrued expenses and other liabilities in the accompanying consolidated balance sheets as of December 31, 2013 and 2014, respectively.

(s) Warrant Liability

The Company's warrants to purchase shares of its preferred stock are classified as warrant liability and recorded at fair value. This warrant liability is subject to remeasurement at each balance sheet date and the Company recognizes any change in fair value in its statements of operations as a change in fair value of the warrant liability. The Company will continue to adjust the carrying value of the warrants for changes in the estimated fair value until such time as these instruments are exercised, expire or, upon the closing of this offering, convert into warrants to purchase shares of our common stock. At that time, the liabilities will be reclassified to additional paid-in capital, a component of stockholders' deficit.

(t) Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal fees and other expenses related to litigation are expensed as incurred and included in general and administrative expenses in the consolidated statements of operations.

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Table of Contents

TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

(u) Shipping and Handling Costs

Shipping and handling costs are charged to cost of product revenue when incurred. Shipping and handling costs totaled $868 and $1,394 for the years ended December 31, 2013 and 2014, respectively.

(v) Advertising Costs

Advertising costs are charged to operations when the advertising first takes place. The Company incurred advertising expense of $41 and $39 for the years ended December 31, 2013 and 2014, respectively.

(w) Business Combinations

The costs of business combinations are allocated to the assets acquired and liabilities assumed, in each case based on estimates of their respective fair values at the acquisition dates, using the purchase method of accounting. Fair values of intangible assets are estimated by valuation models prepared by management and third-party specialists. The assets purchased and liabilities assumed have been reflected in the Company's consolidated balance sheets, and the results are included in the consolidated statements of operations and consolidated statements of cash flows from the date of acquisition. Acquisition-related contingent consideration is classified as a liability. Additionally, any change in the fair value of the acquisition-related contingent consideration subsequent to the acquisition date, including changes from events after the acquisition date, will be recognized within general and administrative expense in the period of the estimated fair value change. Acquisition-related transaction costs, including legal and accounting fees and other external costs directly related to the acquisition, are recognized separately from the acquisition and expensed as incurred in general and administrative expenses in the consolidated statements of operations. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results.

(x) Goodwill

Goodwill consists of the excess purchase price over fair value of net tangible and intangible assets acquired.

Goodwill is not amortized, but instead tested for impairment annually. Goodwill is assessed for impairment on October 1^st of each year or more frequently if events or changes in circumstances indicate that the asset might be impaired. ASU 2011-08, Testing Goodwill for Impairment, provides an entity the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount prior to performing the two-step goodwill impairment test. If this is the case, the two-step goodwill impairment test is required. If it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required.

If the two-step goodwill impairment test is required, first, the fair value of the reporting unit is compared with its carrying amount (including goodwill). If the fair value of the reporting unit is less than its carrying amount, an indication of goodwill impairment exists for the reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting units' goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying amount, step two does not need to be performed.

For the years ended December 31, 2013 and 2014, the Company performed a qualitative assessment of goodwill and determined that it is not more-likely-than-not that the fair values of its reporting unit is less than the carrying amount. Accordingly, no impairment loss was recorded for the years ended December 31, 2013 or 2014.

(y) Concentration of Credit Risk

The Company's clients consist of healthcare organizations, which are sponsors of the federal Medicare Part D plan (prescription drug coverage plan) and dual funded by Medicaid and Medicare and, therefore, subject to the reporting requirements established by the Centers for Medicaid and Medicare Services ("CMS"). Under CMS guidelines, Medicare Part D sponsors are required to remit payment for claims within 14 calendar days of the date on which an electronic claim is received and within 30 calendar days of the date on which nonelectronically submitted claims are received. The Company extends credit to clients based upon such terms, as well as management's evaluation of creditworthiness, and generally collateral is not required.

Accounts receivable as a percentage of net accounts receivable at December 31, 2013 and 2014 and sales as a percentage of total revenues for the respective years with significant clients were as follows:

	Accounts Receivable						Revenue

	December 31,						December 31,
	2013			2014			2013			2014
Customer A		19	%		13	%		16	%		11	%
Customer B		less than 10	%		less than 10	%		10	%		less than 10	%
Customer C		10	%		less than 10	%		10	%		less than 10	%
Customer D		less than 10	%		less than 10	%		less than 10	%		10	%
Customer E		less than 10	%		13	%		less than 10	%		less than 10	%

(z) Segment Data

The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company's chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level. The Company's chief operating decision maker is the Chief Executive Officer. Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements. All revenues are generated and all tangible assets are held in the United States.

(aa) Fair Value of Financial Instruments

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities or other inputs that are observable or can be corroborated by observable market.

Level 3 — Unobservable inputs which are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

(bb) Recent Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 represents a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the Company expects to be entitled to receive in exchange for those goods or services. ASU 2014-09 sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed. For public companies, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017 and interim reporting periods within that reporting period. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company is currently evaluating the impact of ASU 2014-09 on the Company's consolidated financial statements and has not yet selected a transition method.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern ("ASU 2014-15"). ASU 2014-15 will explicitly require management to assess a company's ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The new standard will be effective in the first annual period ending after December 15, 2016. Early application is permitted. The Company is currently evaluating the disclosure impact of the adoption of ASU 2014-15 on the Company's consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. For public companies, ASU 2015-03 is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. ASU 2015-03 will be applied on a retrospective basis.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory ("ASU 2015-11"), which simplifies the subsequent measurement of inventories by replacing the current lower of cost or market test with a lower of cost and net realizable value test. ASU 2015-11 is

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2015-11 on the Company's consolidated financial statements.

4. Acquisitions

SMPP

On January 7, 2014, the Company acquired all of the authorized, issued and outstanding shares of capital stock of J.A. Robertson, Inc., doing business as St. Mary Prescription Pharmacy. SMPP is a pharmacy based in San Francisco, California that has been servicing the needs of Program of All-inclusive Care for the Elderly participants for over 30 years. The acquisition consideration was comprised of cash consideration of up to $2,000, consisting of $1,000 payable upon the closing of the acquisition, up to $500 payable following the six-month anniversary of the closing date, up to $300 payable following the 12-month anniversary of the closing date and a fixed $200 payable following the 24-month anniversary of the closing date. The first two cash payments made subsequent to the closing date were contingent upon the achievement of specified revenue targets, as defined below. The final payment on the 24-month anniversary of the closing date will be paid if the Company has not made any claims for indemnification pursuant to the purchase agreement. In addition to the cash consideration, the Company will issue up to 210,000 shares of Class A Non-Voting common stock consisting of 105,000 shares issued upon the closing of the acquisition, up to 52,500 shares due following the six-month anniversary of the closing date, up to 31,500 shares due following the 12-month anniversary of the closing date and a fixed amount 21,000 shares due following the 24-month anniversary of the closing date. The first two contingent stock payments made subsequent to the closing date are contingent upon the achievement of specified revenue targets, as defined below. The final contingent stock payment following the 24-month anniversary of the closing date shall be issued if the Company has not made any claims for indemnification pursuant to the purchase agreement.

SMPP acquisition-related contingent consideration was determined at two dates: following the six-month anniversary of the closing date up to $500 in cash and up to 52,500 shares of the Company's common stock ("First Contingent Payment Date") was payable and following the twelve-month anniversary of the closing date up to $300 in cash and up to 31,500 shares of the Company's common stock ("Second Contingent Payment Date") was payable. The actual consideration for the First Contingent Payment Date and the Second Contingent Payment Date was determined based on the average monthly revenue during the six-month period preceding the First Contingent Payment Date and the 12-month period preceding the Second Contingent Payment Date ("Measurement Periods"), respectively. If the average monthly revenue is equal to or exceeded the monthly revenue target, as defined in the agreement, during the applicable Measurement Period, the contingent payment for such Measurement Period was payable in full. If the average monthly revenue was less than the monthly revenue target for a Measurement Period, then an amount was payable equal to the maximum contingent payment multiplied by a fraction, the numerator of which was the average monthly revenue for the Measurement Period, the denominator of which was the monthly revenue target, with the cash amount and number of shares each reduced proportionately.

The Company, with the assistance of a third-party appraiser, utilized a Monte Carlo simulation to determine the estimated acquisition-date fair value of the acquisition-related contingent consideration of $810. The fair value measurement was based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

The Company paid $500 in cash and issued 52,500 shares of the Company's common stock, with a fair value of $96, in the third quarter of 2014 in satisfaction of the contingent consideration on the First Contingent Payment Date and $300 in cash and 31,500 shares of the Company's common stock, with a fair value of $94, in the first quarter of 2015 in satisfaction of the contingent consideration on the Second Contingent Payment Date.

The deferred, fixed acquisition-related cash consideration of $200 payable in January 2016 was recorded at its acquisition-date fair value of $180, using an assumed cost of debt of 5.5%. Additionally, the deferred, fixed stock payment of 21,000 shares of Class A Non-Voting common stock payable in January 2016 was recorded at its acquisition-date fair value of $34. These amounts are included in acquisition-related consideration payable in the consolidated balance sheet as of December 31, 2014. The $20 discount is being amortized to interest expense using the effective interest method through the consideration payment date. The Company amortized $10 of the discount to interest expense for the year ended December 31, 2014.

The final payment of $200 and issuance of 21,000 shares of common stock following the 24-month anniversary of the closing date will be issued if the Company has not made any claims for indemnification pursuant to the purchase agreement. No claims for indemnification have been made as of the date of the issuance of the consolidated financial statements.

The results of operations and financial position of SMPP are included in the Company's consolidated financial statements from the date of acquisition. Revenue and net income attributed to SMPP from the date of acquisition (January 7, 2014) through December 31, 2014 were approximately $6,209 and $577, respectively.

The following table summarizes the final allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:


Cash	$	9
Accounts receivable		321
Inventories		227
Other current assets		58
Trade name		370
Client relationships intangible asset		930
Non-competition agreement intangible asset		20
Goodwill		1,012

Total assets acquired		2,947
Accrued liabilities		(18	)
Trade accounts payable		(143	)
Deferred tax liability		(467	)
Deferred revenue		(101	)

Total purchase price, including contingent consideration of $810	$	2,218

The purchase price was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their acquisition-date estimated fair values. The identifiable intangible assets principally included a trade name, client relationships and a non-competition agreement, each of which are subject to amortization on a straight-line basis over 5, 7 and 3 years, respectively. The

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

weighted average amortization period for acquired intangible assets as of the date of acquisition is 6.38 years.

The Company, with the assistance of a third-party appraiser, assessed the fair value of the assets. The fair value of the trade name was estimated using an income approach, specifically known as the relief from royalty method. The relief from royalty method is based on a hypothetical royalty stream that would be received if the Company were to license the SMPP trade name, which the Company derived from the projected revenues of SMPP. The fair value of the client relationships was estimated using a discounted present value income approach. Under this method, an intangible asset's fair value is equal to the present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. To calculate fair value, the Company used cash flows discounted at a rate considered appropriate given the inherent risks associated with client relationships. The Company believes that the level and timing of cash flows appropriately reflect market participant assumptions. The fair value of the non-competition agreement was valued using the discounted earnings method. Under this method, lost earnings before interest and taxes were estimated for four discrete scenarios assuming the individual competes at different time periods during the life of the agreement. To calculate fair value, the Company used lost earnings before interest and taxes discounted at a rate considered appropriate given the inherent risks associated with the non-competition agreement. The Company believes that the level and timing of the lost earnings appropriately reflect market participant assumptions.

The amortization of intangible assets is deductible for income tax purposes.

The Company believes the goodwill related to the acquisition was a result of expected synergies to be realized from combining operations as well as access to new geographic, demographic and clinical markets, and is deductible for income tax purposes.

Capstone

On April 22, 2014, the Company used the funds provided by the April 2014 Eastward Loan (see note 10) to acquire substantially all of the assets, and assumed certain liabilities, of Capstone, a consulting business providing expert Medicare risk adjustment services for healthcare organizations. The acquisition consideration was comprised of cash consideration consisting of $3,000 payable upon the closing of the acquisition, $500 payable following the six-month anniversary of the closing date, and the greater of (i) $2,000 or (ii) an amount equal to five times earnings before interest, tax, depreciation and amortization ("EBITDA") of the business for the twelve month period ending on December 31, 2014 less the sum of the closing cash amount and interim cash amount of $500, which is payable following the 12-month anniversary of the closing date. In addition to the cash consideration, the Company agreed to issue up to 677,862 shares of Class A Non-Voting common stock consisting of 203,358 shares due upon the closing of the acquisition and a number of shares equal to the difference of (i) the product of 677,862 multiplied by a fraction, the numerator of which is the lesser of $2,000 or the net income of the business for the twelve month period ending on December 31, 2014, and the denominator of which is $2,000, less (ii) the closing share amount (203,358 shares), due following the 12-month anniversary of the closing date.

The Company, with the assistance of a third-party appraiser, utilized a Monte Carlo simulation to estimate the acquisition-date fair value of the acquisition-based contingent consideration of $75. The fair value measurement was based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

The Company paid $577 in cash and issued 35,730 shares of the Company's common stock, with a fair value of $107, in the second quarter of 2015 in full satisfaction of the contingent consideration at the 12-month anniversary of the closing date.

The deferred, fixed acquisition-related cash consideration of $500 payable at the six month anniversary of the closing was recorded at its acquisition-date fair value of $487, using an assumed cost of debt of 5.5%. The $13 discount was amortized to interest expense using the effective interest method through its payment date in the fourth quarter of 2014. The deferred, fixed portion of the acquisition-related consideration payable following the 12-month anniversary of the closing date of $2,000 was recorded at its acquisition-date fair value of $1,895 using an assumed cost of debt of 5.5%. This amount is included in acquisition-related consideration in the consolidated balance sheet at December 31, 2014 and was paid in the second quarter of 2015. The $105 discount is being amortized to interest expense using the effective interest method through its consideration payment date. The Company amortized $72 of the discount to interest expense for the year ended December 31, 2014.

The results of operations and financial position of Capstone are included in the Company's consolidated financial statements from the date of acquisition. Revenue and net income attributed to Capstone from the date of acquisition (April 22, 2014) through December 31, 2014 were approximately $1,525 and $284, respectively.

The following table summarizes the final allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:


Accounts receivable	$	149
Prepaid and other current assets		5
Trade name		150
Client relationships intangible asset		3,154
Non-competition agreement intangible asset		192
Goodwill		2,325

Total assets acquired		5,975
Accrued liabilities		(44	)
Trade accounts payable		(36	)
Deferred revenue		(64	)

Total purchase price, including contingent consideration of $75	$	5,831

The purchase price was allocated to the tangible assets and identifiable intangible assets acquired and liabilities assumed based on their acquisition-date estimated fair values. The identifiable intangible assets principally included a trade name, client relationships and a non-competition agreement, each of which are subject to amortization on a straight-line basis over 5, 11 and 4 years, respectively. The weighted average amortization period for acquired intangible assets as of the date of acquisition is 10.36 years.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

appropriately reflect market participant assumptions. The fair value of the non-competition agreement was valued using the discounted earnings method. To calculate fair value, the Company used lost earnings before interest and taxes discounted at a rate considered appropriate given the inherent risks associated with the non-competition agreement. The Company believes that the level and timing of the lost earnings appropriately reflect market participant assumptions.

The amortization of intangible assets is deductible for income tax purposes.

The Company believes the goodwill related to the acquisition was a result of expected synergies to be realized from combining operations and is deductible for income tax purposes.

Medliance LLC

On December 31, 2014, the Company acquired all of the authorized, issued and outstanding equity interests of Medliance LLC ("Medliance"), which provides pharmacy cost management services through data analytics. The acquisition consideration was comprised of $16,385 in non-cash consideration in the form of promissory notes to the sellers with a fair value of $14,347 (note 9) and cash consideration consisting of $12,000 payable upon closing and contingent purchase price consideration with an estimated fair value of $7,300 ("Medliance Earnout") due upon achieving specified revenue targets as of the 12, 24 and 36 month anniversaries of the acquisition. The Company paid $9,597 in cash upon closing in the fourth quarter of 2014, with the remaining $2,403 paid in the first quarter of 2015.

The aggregate Medliance acquisition-related contingent consideration is equal to the difference of (i) the product of yearly revenue for the 2015 calendar year multiplied by 4.5 minus (ii) $26,000 (the "Aggregate Earn-Out Amount"); provided, however, if the Aggregate Earn-Out Amount is a negative amount, the Aggregate Earn-Out Amount shall equal zero. The Aggregate Earn-Out Amount is payable in cash, subject to achieving specified revenue targets, at three intervals: one-third following the 12-month anniversary of the closing date (the "Twelve Month Contingent Payment Date"), one-third following the 24-month anniversary of the closing date (the "Twenty-four Month Contingent Payment Date") and the Aggregate Earn-Out Amount less any portion actually paid at the Twelve Month Contingent Payment Date and Twenty-four Month Contingent Payment Date, following the 36-month anniversary of the closing date.

The Aggregate Earn-Out Amount is payable based on the yearly revenue of the acquired business during the twelve month period preceding each Contingent Payment Date ("Measurement Period"). If the yearly revenue is equal to or exceeds the 2015 Medliance calendar year revenue target ("Yearly Revenue Target") during a Measurement Period, the portion of the Aggregate Earn-Out Amount due, as defined above, is payable in full. If the yearly revenue is less than the Yearly Revenue Target for a Measurement Period, then an amount shall be payable equal to the portion of the Aggregate Earn-Out Amount due multiplied by a fraction, the numerator of which is the yearly revenue for the Measurement Period and the denominator of which is the Yearly Revenue Target.

The Company, with the assistance of a third-party appraiser, utilized a Monte Carlo simulation to estimate the acquisition-date fair value of the acquisition-related contingent consideration of $7,300. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy.

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

The following table summarizes the final allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:


Cash	$	139
Accounts receivable		329
Prepaid and other current assets		24
Property and equipment		27
Other assets		16
Trade name		1,200
Developed technology-Pharmview		2,200
Developed technology-Postview		1,200
Client relationships intangible asset		10,600
Non-competition agreement intangible asset		440
Goodwill		18,080

Total assets acquired		34,255
Accrued liabilities		(48	)
Accrued distributions payable		(310	)
Trade accounts payable		(231	)

Total purchase price, including contingent consideration of $7,300	$	33,666

The purchase price was allocated to the tangible assets and identifiable intangible assets acquired and liabilities assumed based on their acquisition-date estimated fair values. The identifiable intangible assets principally included a trade name, developed technology, client relationships, and a non-competition agreement, each of which are subject to amortization on a straight-line basis being amortized over 5, 10, 10 and 5 years, respectively. The weighted average amortization period for acquired intangible assets as of the date of acquisition is 9.48 years.

The Company, with the assistance of a third-party appraiser, assessed the fair value of the assets. The fair value of the trade name was estimated using the relief from royalty method. The Company derived the hypothetical royalty income from the projected revenues of Medliance. The fair values of the developed technology and client relationships were estimated using a discounted present value income approach. To calculate fair value, the Company used cash flows discounted at a rate considered appropriate given the inherent risks associated with each intangible asset. The Company believes that the level and timing of cash flows appropriately reflect market participant assumptions. The fair value of the non-competition agreement was valued using the discounted earnings method. To calculate fair value, the Company used lost earnings before interest and taxes discounted at a rate considered appropriate given the inherent risks associated with the non-competition agreement. The Company believes that the level and timing of the lost earnings appropriately reflect market participant assumptions.

The amortization of intangible assets is deductible for income tax purposes.

The Company believes the goodwill related to the acquisition was a result of the addition of a complimentary line of business to the Company's current product offering and is deductible for income tax purposes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

Pro Forma Information

The unaudited pro forma results presented below include the results of the SMPP, Capstone and Medliance acquisitions as if they had been consummated as of January 1, 2013. The unaudited pro forma results include the amortization associated with acquired intangible assets and interest expense on debt to fund these acquisitions. Material nonrecurring charges directly attributable to the transactions are excluded. In addition, the unaudited pro forma results do not include any expected benefits of the acquisitions. Accordingly, the unaudited pro forma results are not necessarily indicative of either future results of operations or results that might have been achieved had the acquisitions been consummated as of January 1, 2013.

	Year Ended December 31,

	2013			2014
Revenue	$	39,692		$	55,412
Net loss		(7,335	)		(3,051	)
Net loss per share attributable to common stockholders — basic and diluted		(1.61	)		(0.87	)

5. Property and Equipment

As of December 31, 2013 and 2014, property and equipment consisted of the following:

		December 31,

	Estimated useful life	December 31,
	Estimated useful life	2013			2014
Computer hardware and purchased software	3 years	$	557		$	775
Office furniture and equipment	5 years		3,355			3,639
Leasehold improvements	5 years		333			366

			4,245			4,780
Less accumulated depreciation			(1,726	)		(2,559	)

		$	2,519		$	2,221

Depreciation and amortization expense for the years ended December 31, 2013 and 2014 was $734 and $833, respectively.

6. Goodwill and Intangible Assets

The Company's goodwill and related changes are as follows:


Balance at January 1, 2013 and 2014	$	189
Goodwill from 2014 acquisitions		21,417

Balance at December 31, 2014	$	21,606

There were no indicators of impairment during the years ended December 31, 2013 and 2014 and there are no accumulated impairment charges as of December 31, 2014.

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

There were no intangible assets as of December 31, 2013. Intangible assets consisted of the following as of December 31, 2014:

		Gross Value		Accumulated Amortization			Intangible Assets, net

Trade names	5.00	$	1,720	$	(92	)	$	1,628
Client relationships	10.02		14,684		(331	)		14,353
Non-competition agreements	4.64		652		(40	)		612
Developed technology	10.00		3,400		—			3,400

Total intangible assets		$	20,456	$	(463	)	$	19,993

Amortization expense for the year ended December 31, 2014 was $463. The estimated amortization expense for each of the next five years and thereafter is as follows:


2015	$	2,306
2016		2,306
2017		2,300
2018		2,266
2019		2,252
Thereafter		8,563

	$	19,993

7. Accrued Expenses and Other Liabilities

At December 31, 2013 and 2014, accrued expenses and other liabilities consisted of the following:

	December 31,

	2013		2014
Employee related expenses	$	590	$	1,361
Deferred revenue		182		325
Interest		45		25
Distributions payable		—		310
Other expenses		37		47

Total accrued expenses and other liabilities	$	854	$	2,068

8. Notes Payable with Related Parties

In December 2012, the Company entered into a $1.1 million demand promissory note with certain executive officers. The Company is able to borrow against this note as funds are needed by the Company at the discretion of the Board. As of December 31, 2013 and 2014, total borrowings outstanding under the promissory note were $839 and $664, respectively. Interest on the note is 6% annually and there are no stated repayment terms. The promissory note also provides for the issuance of warrants or stock options calculated based upon the principal outstanding on the last day of the prior month. The Company recognized $12 and $24 of interest expense in 2013 and 2014, respectively, for the value of the common stock warrants issued based on the principal outstanding at the end of each month (see note 12). Interest expense recognized on the note was $42 and $47 for the years ended December 31, 2013 and 2014, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

In February 2013, the Company entered into a convertible promissory note with a major stockholder that provided for aggregate borrowings of $500 with an annual interest rate of 6%. The proceeds of these borrowings were used to fund the Company's working capital needs at that time. During 2013, the Company recognized $12 in interest expense associated with the convertible promissory note. In June 2013, the Company entered into a Series B Preferred Stock Purchase Agreement (the "Series B Agreement") whereby the outstanding principal under such note, and all unpaid accrued interest, which equaled $511 in the aggregate, was converted into shares of Series B Redeemable Convertible preferred stock ("Series B") (see note 12).

In May 2013, the Company entered into a demand promissory note with a stockholder that provided for borrowings of $250. The proceeds of these borrowings were used to fund the Company's working capital needs at that time. Interest on the note is 6% annually and is payable monthly having commenced in June 2013. There are no stated repayment terms with respect to the principal amount outstanding under the note. The promissory note also provides for the issuance of warrants or stock options calculated based upon the principal outstanding on the last day of the prior month. The grants commenced in June 2013. The Company recognized $3 and $8 of interest expense in 2013 and 2014, respectively, for the value of the common stock warrants issued based on the principal outstanding at the end of each month (see note 12). Interest expense recognized on the note was $9 and $15 for the years ended December 31, 2013 and 2014, respectively.

In January 2014, the Company entered into a second promissory note with certain executive officers. The Company is able to borrow against this note as funds are needed by the Company at the discretion of the Board. As of December 31, 2014, total borrowings outstanding under the promissory note were $100. Interest on the note is 6% annually and there are no stated repayment terms. Interest expense recognized on the note was $6 for the year ended December 31, 2014.

9. Notes Payable Related to Acquisition

In December 2014, as part of the acquisition-related consideration of the Medliance acquisition (see note 4), the Company issued multiple subordinated convertible promissory notes (the "Medliance Notes") with certain officers and direct relatives of Medliance, for aggregate borrowings of $16,385. Interest is 8% annually and all unpaid principal and accrued interest is due and payable on June 30, 2016. Interest expense recognized was $4 for the year ended December 31, 2014. If an underwritten public offering on a firm commitment basis pursuant to an effective registration statement (a "Triggering IPO") occurs prior to the maturity date, all principal and interest shall immediately become due and payable upon closing of the Triggering IPO and the holders of the Medliance Notes shall have the option to elect to have the Company pay one of the following amounts: (i) all outstanding principal and accrued interest on the Medliance Notes as of the closing of the Triggering IPO; or (ii) a number of shares of the Company's common stock immediately prior to the closing of such Triggering IPO equal to the quotient obtained by dividing the outstanding principal amount (excluding interest) under the Medliance Notes as of the closing of the Triggering IPO by 92% of the price per share of the public offering price of the Company's common stock in the Triggering IPO, rounded to the nearest whole share.

The Company recorded the Medliance Notes at their aggregate acquisition date fair values of $14,347 and are being accreted up to their face values of $16,385 over the 18 month term using the effective-interest method. For the year ended December 31, 2014, the Company amortized $3 of the discount to interest expense.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

10. Lines of Credit and Long-Term Debt

(a) Lines of Credit

On January 28, 2011, the Company executed a line of credit with a bank (the "Line of Credit"). The Line of Credit was subsequently amended multiple times to allow for borrowings of up to $1,140. On December 30, 2013, the Company repaid the entire outstanding balance on the Line of Credit with the proceeds received from a Loan and Security Agreement (the "2013 Revolving Line") (see below) entered into with another bank.

The Line of Credit was collateralized by a lien upon all assets of the Company and was secured by a personal guarantee provided by the Company's Chairman and Chief Executive Officer. Interest on the Line of Credit was calculated at a variable rate based upon the prime rate plus a margin of 200 basis points. Interest expense on the Line of Credit was $60 for the year ended December 31, 2013.

On December 30, 2013, the Company entered into the 2013 Revolving Line with Silicon Valley Bank ("SVB"), which provided for borrowings in an aggregate amount up to $7,000 to be used for general corporate purposes, to fund a portion of the Company's acquisition of SMPP and for repayment of the previous Line of Credit (see above) and the convertible loan agreement with the New Jersey Economic Development Authority (the "NJEDA Loan") (see below). The Company's ability to borrow under the 2013 Revolving Line was based upon a specified borrowing base of committed monthly recurring revenue, as defined in the underlying Loan and Security Agreement. The 2013 Revolving Line was collateralized by a first priority security interest in all personal property of the Company and was scheduled to mature December 30, 2015. As of December 31, 2013 and 2014, the aggregate borrowings and outstanding balance on the 2013 Revolving Line amounted to $6,860, and available borrowings under the 2013 Revolving Line were $140.

Interest on the 2013 Revolving Line was payable monthly, and was calculated at a variable rate based upon SVB's prime rate plus 1.5%, with SVB's prime rate having a floor of 4.0%. The Company was required to pay fees of 0.25% per year on the average daily unused balance, payable quarterly in arrears. As of December 31, 2014, the interest rate on the 2013 Revolving Line was 5.5% and interest expense was $2 and $383 for the years ended December 31, 2013 and 2014, respectively. In connection with the 2013 Revolving Line, the Company recorded deferred financing costs of $90. The Company amortized the deferred financing costs associated with the 2013 Revolving Line to interest expense using the effective-interest method over the term of the 2013 Revolving Line and amortized $46 to interest expense for the year ended December 31, 2014.

The 2013 Revolving Line had several financial covenants including (i) maintaining a minimum unrestricted cash and unused availability balance of at least $1,500 (the liquidity covenant) and (ii) maintaining a certain minimum adjusted EBITDA, calculated as EBITDA less unfinanced capital expenditures. As of December 31, 2014, the Company was in compliance with all of the financial covenants of the 2013 Revolving Line.

On April 22, 2014, in connection with the loan agreement with Eastward Fund Management, LLC (the "April 2014 Eastward Loan") and subsequent asset purchase of Capstone (see note 4), the 2013 Revolving Line was amended to raise the liquidity covenant to $2,000, to be reduced to $1,000 upon payment of the earn-out of $2,000 on or before May 15, 2015 pursuant to the terms of the Capstone asset purchase agreement.

On April 29, 2015, the Company entered into a new revolving line (the "2015 Revolving Line") with Bridge Bank, National Association pursuant to a loan and security agreement, which provides for

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

borrowings in an aggregate amount up to $15,000 to be used for general corporate purposes including repayment of the 2013 Revolving Line (see note 18). The Company borrowed $10,000 under the 2015 Revolving Line at that time.

(b) Term Loans and Capital Lease Obligations

The following table represents the total term loans and capital lease obligations of the Company at December 31, 2013 and 2014:

	December 31,

	2013			2014
Tranche A Term Loan	$	600		$	334
Tranche B Term Loan		116			74
March 2012 Eastward Loan		1,258			444
Unamortized discount on March 2012 Eastward Loan		(36	)		(8	)

March 2012 Eastward Loan, net		1,222			436
April 2014 Eastward Loan		—			3,000
Unamortized discount on April 2014 Eastward Loan		—			(196	)

April 2014 Eastward Loan, net		—			2,804
December 2014 Eastward Loan		—			12,000
Unamortized discount on December 2014 Eastward Loan		—			(1,579	)

December 2014 Eastward Loan, net		—			10,421
Capital leases		1,297			1,041

Total long-term debt, net		3,235			15,110
Less current portion, net		(1,714	)		(2,121	)

Total long-term debt, less current portion, net	$	1,521		$	12,989

Term Loans

In January 2011, the Company entered into a loan agreement (the "Tranche A Term Loan") with Liberty Bell Bank ("Liberty Bank") that provided for aggregate borrowings of $1,265. The Tranche A Term Loan is collateralized by a first position lien upon a term life insurance policy on the life of the Company's Chairman and CEO in the amount of $500 and certain equipment with a net book value of $242 at December 31, 2014, and is secured by a personal guarantee provided by the Company's Chairman and Chief Executive Officer. Interest on the Tranche A Term Loan is calculated at a fixed rate of 6.5% per year. Principal and interest are due in monthly installments of $25 through the Tranche A Term Loan maturity date of January 28, 2016. Interest expense on the Tranche A Term Loan was $47 and $30 for the years ended December 31, 2013 and 2014, respectively.

In July 2011, the Company entered into another loan (the "Tranche B Term Loan") with Liberty Bank that provided for aggregate borrowings of $208. The Tranche B Term Loan is collateralized by a first position lien upon certain equipment with a net book value of $61 at December 31, 2014 and is secured by a personal guarantee provided by the Company's Chairman and Chief Executive Officer. Interest on the Tranche B Term Loan is calculated at a fixed rate of 6.5% per year. Principal and interest are due in monthly installments of $4 through the Tranche B term loan maturity date of July 14, 2016.

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

Interest expense on the Tranche B Term Loan was $9 and $6 for the years ended December 31, 2013 and 2014, respectively.

In March 2012, the Company entered into a loan agreement with Eastward Capital Partners V, L.P. (the "March 2012 Eastward Loan") that provided for aggregate borrowings of $2,000. The March 2012 Eastward Loan is collateralized by all of the Company's tangible and intangible assets (including its intellectual property), and is subordinated to all other credit facilities entered into and outstanding prior to the execution of the March 2012 Eastward Loan. Interest on the March 2012 Eastward Loan is calculated at an annual rate of 12%. Interest-only payments of $20 were due for the first nine months commencing April 2012, subject to term adjustment, as defined, followed by monthly principal and interest installments of $77 through the maturity date of June 1, 2015. Interest expense on the March 2012 Eastward Loan was $192 and $99 for the years ended December 31, 2013 and 2014, respectively.

In connection with the March 2012 Eastward Loan, the Company issued a warrant to purchase 250,000 shares of Series A-1 Redeemable Convertible preferred stock ("Series A-1") at $0.80 per share for an aggregate exercise price of $200. The warrant expires 10 years from the date of issuance, or three years from the date of closing of any initial public offering of the Company's common stock, whichever occurs earliest. The warrant was valued using the Black-Scholes option-pricing model and because the warrant is exercisable for a redeemable security it is liability classified. The estimated fair value of the preferred stock warrant on the date of issuance of $106 was recorded as a discount on the March 2012 Eastward Loan, with the corresponding credit to preferred stock liability. The preferred stock warrant is revalued at each reporting period to reflect any changes in fair value, with any gain or loss from the revaluation recorded in the statements of operations.

The debt discount is being amortized to interest expense using the effective—interest method over the term of the March 2012 Eastward Loan. For the years ended December 31, 2013 and 2014, the Company amortized $42 and $28, respectively, of the discount to interest expense. In connection with the March 2012 Eastward Loan, the Company recorded $48 in deferred financing costs, of which $19 and $10 was amortized to interest expense using the effective-interest method for the years ended December 31, 2013 and 2014, respectively.

In October 2012, the Company entered into the NJEDA Loan that provided for aggregate borrowings of $500. On December 30, 2013, the outstanding balance on the NJEDA Loan was fully repaid with the proceeds received from the 2013 Revolving Line. The NJEDA Loan bore interest at an annual rate of 4.3%. Interest expense on the NJEDA loan for the year ended December 31, 2013 was $21.

In connection with the NJEDA Loan, the Company issued a warrant to purchase 62,500 shares of Series A-1 at $0.80 per share for an aggregate purchase price of $50. The warrant expires 10 years from the date of issuance, or three years from the date of closing of any initial public offering of the Company's common stock, whichever occurs earliest. The warrant was valued using the Black-Scholes option-pricing model and because the warrant is exercisable for a redeemable security it is liability classified. The estimated fair value of the preferred stock warrant on the date of issuance of $26 was recorded as a discount on the NJEDA Loan, with the corresponding credit to the preferred stock liability. The preferred stock warrant is revalued at each reporting period to reflect any changes in fair value, with any gain or loss from the revaluation recorded in the statements of operations. The debt discount was amortized to interest expense.

Additionally, the Company recorded a debt discount of $26, which represented the value of the beneficial conversion feature ("BCF") of the NJEDA Loan. The value allocated to the BCF represented the excess of the fair market value of the underlying Series A-1 issued to the holder of the NJEDA Loan

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

over the adjusted value of the NJEDA Loan, after deducting the fair value ascribed to the warrants issued in connection with the NJEDA Loan. This additional debt discount was amortized to interest expense using the effective—interest method over the term of the NJEDA Loan. For the year ended December 31, 2013, the Company amortized $50 of the discount to interest expense.

The Company had recorded $44 in deferred financing costs related to the NJEDA Loan, of which $42 was recognized as interest expense for the year ended December 31, 2013.

In April 2014, the Company entered into the April 2014 Eastward Loan that provided for aggregate borrowings of $3,000. The April 2014 Eastward Loan is collateralized by all of the Company's tangible and intangible assets (including its intellectual property), and is subordinated to all other credit facilities entered into and outstanding prior to the execution of the April 2014 Eastward Loan. Interest on the April 2014 Eastward Loan is calculated at an annual rate of 11.5%. Interest-only payments of $29 are due for the first twelve months commencing May 2014, subject to term adjustment, as defined, followed by monthly principal and interest installments of $114 through the April 2014 Eastward Loan maturity date of October 31, 2017. Interest expense on the April 2014 Eastward Loan was $239 for the year ended December 31, 2014.

In connection with the April 2014 Eastward Loan, the Company issued a warrant to purchase 105,005 shares of Series B Redeemable Convertible preferred stock ("Series B") at $2.86 per share for an aggregate exercise price of $300. The warrant expires 10 years from the date of issuance, or three years from the date of closing of any initial public offering of the Company's common stock, whichever occurs earliest. The warrant was valued using the Black-Scholes option-pricing model and because the warrant is exercisable for a redeemable security it is liability classified. The estimated fair value of the preferred stock warrants on the date of issuance of $254 was recorded as a discount on the April 2014 Eastward Loan, with the corresponding credit to preferred stock liability. The preferred stock warrant is revalued at each reporting period to reflect any changes in fair value, with any gain or loss from the revaluation recorded in the statements of operations.

The debt discount is being amortized to interest expense using the effective—interest method over the term of the April 2014 Eastward Loan. For the year ended December 31, 2014, the Company amortized $57 of the discount to interest expense. In connection with the April 2014 Eastward Loan, the Company recorded $61 in deferred financing costs, of which $18 was amortized to interest expense using the effective-interest method in the year ended December 31, 2014.

In December 2014, the Company entered into a loan agreement with Eastward Capital Partners V, L.P. (the "December 2014 Eastward Loan") in connection with the Medliance acquisition that provided for aggregate borrowings of $12,000. The December 2014 Eastward Loan is collateralized by all of the Company's tangible and intangible assets (including its intellectual property), and is subordinated to all other credit facilities entered into and outstanding prior to the execution of the December 2014 Eastward Loan. Interest on the December 2014 Eastward Loan is calculated at an annual rate of 12%. Interest-only payments of $120 are due for the first twelve months commencing January 2015, subject to term adjustment, as defined, followed by monthly principal and interest installments of $460 through the December 2014 Eastward Loan maturity date of June 30, 2018. Interest expense on the December 2014 Eastward Loan was $4 for the year ended December 31, 2014.

In connection with the December 2014 Eastward Loan, the Company issued a warrant to purchase 481,863 shares of Series B at $2.99 per share for an aggregate exercise price of $1,440. The warrant expires 10 years from the date of issuance, or three years from the date of closing of any initial public offering of the Company's common stock, whichever occurs earliest. The warrant was valued using the

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

Black-Scholes option-pricing model and because the warrant is exercisable for a redeemable security it is liability classified. The estimated fair value of the preferred stock warrant on the date of issuance of $1,581 was recorded as a discount on the December 2014 Eastward Loan, with the corresponding credit to preferred stock liability. The preferred stock warrant is revalued at each reporting period to reflect any changes in fair value, with any gain or loss from the revaluation recorded in the statements of operations.

The debt discount is being amortized to interest expense using the effective—interest method over the term of the December 2014 Eastward Loan. For the year ended December 31, 2014, the Company amortized $2 of the discount to interest expense. In connection with the December 2014 Eastward Loan, the Company recorded $150 in deferred financing costs, of which a de minimis amount was amortized to interest expense using the effective-interest method in the year ended December 31, 2014.

Capital Lease Obligations

The Company has entered into leases for certain equipment and software, which are recorded as capital lease obligations. These leases have interest rates ranging from 13% to 26%. Interest expense related to the capital leases was $262 and $228 for the years ended December 31, 2013 and 2014, respectively.

Amortization of assets held under capital leases is included in depreciation and amortization expense. The net book value of equipment and software acquired under capital lease was $1,544 and $1,435 as of December 31, 2013 and 2014, respectively, and are reflected in property and equipment on the consolidated balance sheets.

(c) Other Financing

AmerisourceBergen Drug Corporation ("ABDC"), the primary supplier of the Company's pharmaceutical medications, has provided the Company with up to $3,875 of vendor financing. The vendor financing program was established in July 2010 and allows for extended payment terms on inventory purchases due in six monthly installments, subject to review and approval by ABDC. Additionally, the vendor financing program is secured by a second position lien on all assets of the Company, excluding intellectual property, which is subject to a third position lien. As of December 31, 2013 and 2014, the Company had $1,786 and $3,129, respectively, outstanding under this program and had extended payment terms on $333 and $0, respectively, with respect to these balances, all of which are included in accounts payable.

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

(d) Long-Term Debt Maturities

As of December 31, 2014, the Company's long-term debt is payable as follows:

	Term Loans			Capital Lease Obligations			Total Long-term Debt

2015	$	1,539		$	733		$	2,272
2016		5,678			378			6,056
2017		5,968			108			6,076
2018		2,667			18			2,685

		15,852			1,237			17,089
Less amount representing interest		—			(196	)		(196	)

Present value of payments		15,852			1,041			16,893
Less current portion		(1,531	)		(590	)		(2,121	)
Less discount on debt		(1,783	)		—			(1,783	)

	$	12,538		$	451		$	12,989

11. Income Taxes

The Company accounts for income taxes under ASC Topic 740 — Income Taxes ("ASC 740"). Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

The Company's loss before income taxes was $3,871 and $1,516 for the years ended December 31, 2013 and 2014, respectively, and the Company has no foreign sources of income or loss.

The expense (benefit) for income taxes consists of the following:

	Year Ended December 31,

	2013		2014
Current:
US federal	$	—	$	1
State and local		—		12

Total current		—		13
Deferred:
US federal		—		(410	)
State and local		—		(12	)

Total deferred		—		(422	)

Total expense (benefit)	$	—	$	(409	)

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

As of December 31, 2014, the Company had federal net operating loss ("NOL") carryforwards of $13,259 and state NOL carry forwards of $9,008, each of which are available to reduce future taxable income. The NOL carryforwards, if not utilized, will begin to expire in 2029 for federal purposes and in 2026 for state purposes.

The NOL carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. The NOLs may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, as well as similar state tax provisions. The Company has undergone ownership changes during the past three years which could limit the amount of NOLs that the Company can utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, will generally be determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years.

Through December 31, 2014, the Company had no unrecognized tax benefits or related interest and penalties accrued.

The principal components of the Company's deferred tax assets (liabilities) are as follows:

	December 31,

	2013			2014
Deferred tax assets:
Net federal operating loss carry forward	$	4,519		$	4,508
Net state operating loss carry forward		459			489
Other		141			386

Deferred tax assets		5,119			5,383
Less: valuation allowance		(4,672	)		(4,626	)

Deferred tax assets after valuation allowance		447			757
Deferred tax liabilities:
Fixed assets		(428	)		(540	)
Other		(19	)		(262	)

Deferred tax liabilities		(447	)		(802	)

Net deferred tax liabilities	$	—		$	(45	)

ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of available evidence, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative, the Company has recorded a full valuation allowance against its deferred tax assets at December 31, 2013 and 2014, respectively, because the Company's management has determined that is it more-likely-than-not that these assets will not be fully realized. The Company experienced a net increase (decrease) in valuation allowance of $1,182 and $(46) for the years ended December 31, 2013 and 2014, respectively.

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

The changes in valuation allowance were as follows:

	Year Ended December 31,

	2013		2014
Balance at the beginning of the period	$	3,490	$	4,672
Increase due to NOLs and temporary differences		1,182		376
Deferred benefit recognized		—		(422	)

Balance at the end of the period	$	4,672	$	4,626

A reconciliation of income tax (expense) benefit at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows:

	Year Ended December 31,

	2013			2014
Federal income tax expense at statutory rate		34.0	%		34.0	%
State taxes, net of federal benefit		3.7			3.5
Change in fair value of warrant liabilities		(4.8	)		(6.0	)
Change in valuation allowance		(30.5	)		7.1
Non-deductible stock compensation		(0.8	)		(5.1	)
Change in fair value of contingent consideration		—			(4.1	)
Other non-deductible expenses		(1.6	)		(2.4	)

Effective income tax rate		0.0	%		27.0	%

12. Redeemable Convertible Preferred Stock and Stockholders' Deficit

(a) Capitalization

As of December 31, 2014, the Company's amended and restated articles of incorporation stated that the aggregate number of shares of stock that the Company was authorized to issue was 38,609,749 shares with a par value of $0.0001 per share, including common stock authorized to be issued of 27,836,869 shares, consisting of 9,600,000 shares of Class A Non-Voting common stock and 18,236,869 shares of Class B Voting common stock, and convertible preferred stock authorized to be issued of 10,772,880, consisting of 4,411,766 shares of Series A Redeemable Convertible preferred stock ("Series A"), 2,812,500 shares of Series A-1 and 3,548,614 shares of Series B.

(b) Common Stock

The holders of Class A Non-Voting common stock have the same rights, preferences, privileges and restrictions as the holders of Class B Voting common stock with the exception of voting rights. The holders of Class B Voting common stock are entitled to one vote per share. The holders of Class A Non-Voting and Class B Voting common stock are entitled to receive dividends when, as and if declared by the Board, subject to payment of accrued dividends for redeemable convertible preferred stock. Class A Non-Voting and Class B Voting common stock are also subordinate to the redeemable convertible preferred stock with respect to liquidation, winding up and dissolution of the Company. No dividends have been declared through December 31, 2014.

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

(c) Redeemable Convertible Preferred Stock

The Company has issued Series A, Series A-1, and Series B redeemable convertible preferred stock. The redeemable convertible preferred stock is classified outside of stockholders' deficit because the shares contain redemption features that are not solely within the control of the Company.

In June 2013, the Company entered into the Series B Agreement in which the Company sold 2,626,188 shares of Series B at $1.52 per share for net proceeds of $3,819.

In connection with the sale of the Series B and pursuant to the Series B Agreement, indebtedness in the principal amount of $500 and accrued interest of $11 was converted into 335,557 shares of Series B at $1.52 per share in full satisfaction of all principal and interest owed to a certain debt holder (see note 10).

Issuance costs incurred in connection with the sale of preferred stock are being accreted on a straight-line basis through the earliest redemption period, which is June 28, 2018 for all series of preferred stock. For the years ended December 31, 2013 and 2014, the Company accreted $37 and $50, respectively, related to these costs.

The rights, preferences, privileges, and restrictions granted or imposed upon the holders of Series A, Series A-1 and Series B are as follows:

Dividends

The holders of Series A, Series A-1 and Series B are entitled to annual dividends at a rate of 6% of the stated value of $0.68 per share of Series A, $0.80 per share of Series A-1, and $1.52 per share of Series B. The dividends accrue from the original date of issuance of each share of Series A, Series A-1 and Series B, whether or not earned or declared, are cumulative and compound annually. The dividends are payable when, as and if declared by the Board. In the event that dividends are paid on any share of common stock (other than dividends paid in additional shares of common stock for which an adjustment to the conversion price is made), an additional dividend shall be paid with respect to each outstanding share of Series A, Series A-1 and Series B in an amount (on an as-if converted basis) equal to the amount paid or set aside for each share of common stock.

In the event of a liquidation event or upon redemption of any shares of outstanding Series A, Series A-1 or Series B, the Company shall pay such accumulated dividends as a condition to consummating such event.

Cumulative but unpaid dividends on the Series A and Series A-1 were $813 and $403, respectively, at December 31, 2014. Cumulative but unpaid dividends on the Series B were $417 at December 31, 2014.

Conversion

The Series A, Series A-1 and Series B shares are convertible, at the option of the holder at any time and from time to time, into shares of voting common stock of the Company as determined by dividing the original issue price of the Series A, the Series A-1 and the Series B by the conversion price, which initially shall be the original issue price.

The Series A, Series A-1 and Series B also have certain anti-dilution provisions in which the conversion price is to be adjusted should the Company issue additional shares of common stock, options, or other equity instruments at a price per share lower than the conversion price in effect prior to such issuance.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

All outstanding shares of Series A, Series A-1 and Series B shall automatically convert into shares of voting common stock of the Company, at the then effective applicable conversion price, upon the earlier of (i) the affirmative vote or consent in writing by the requisite holders, as defined in the amended and restated articles of incorporation, or (ii) the closing of the sale of shares of common stock in a qualified public offering, as defined in the amended and restated articles of incorporation, in which the initial public offering price per share is at least five times the original issue price of the respective series of preferred stock and the gross cash proceeds are at least $50,000.

As of December 31, 2014, all outstanding shares of Series A, Series A-1 and Series B redeemable convertible preferred stock were convertible into common stock on a one-for-one basis.

Redemption

The Series A, Series A-1 and Series B are redeemable upon written request of the requisite holders at any time after June 28, 2018. The Series A redemption amount is equal to the Series A original issue price of $0.68 per share plus all accrued and unpaid dividends. The Series A-1 redemption amount is equal to the Series A-1 original issue price of $0.80 per share plus all accrued and unpaid dividends. The Series B redemption amount is equal to the greater of (i) the Series B original issue price of $1.52 per share plus any accrued and unpaid dividends and any other dividends declared but unpaid thereon of such shares or (ii) the fair market value, as defined in the amended and restated articles of incorporation, as of the date of the Series B redemption request.

Series A and Series A-1 redemption amounts are payable in three equal annual installments commencing 180 days after receipt by the Company of a written notice requesting redemption provided by the requisite Series A and Series A-1 holders. The Series B redemption amount is payable within 180 days following receipt by the Company of a written notice requesting redemption provided by the requisite Series B holders.

The carrying values of the Series A, Series A-1 and Series B redeemable convertible preferred stock are being accreted to their redemption values through June 28, 2018. The redemption value of Series B is based on its estimated fair value at December 31, 2013 and 2014 because it is estimated to be greater than its original issue price plus accrued dividends.

Liquidation

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary (a "Liquidation Event"), the holders of Series B are entitled to receive prior and in preference to any distribution of any of the assets of the Company to the holder of any other classes of preferred stock or common stock, an amount per share equal to the original issuance price plus any accrued and unpaid dividends on such share (the "Preferred B Liquidation Amount"). In the event of any Liquidation Event, after the payment of the Preferred B Liquidation Amount, the holders of Series A and Series A-1 are entitled to receive prior and in preference to any distribution of any of the assets of the Company to the holder of any common stock, an amount per share equal to the original issuance price plus any accrued and unpaid dividends on such share (the "Preferred A Liquidation Amount"). In the event that the assets and funds of the Company that are available for distribution to its stockholders are insufficient to pay the holders of shares of Series B or Series A and Series A-1 the full preferential liquidation amounts that they are entitled to, then the holders of the Series B, Series A and Series A-1 will share ratably in any distribution of the assets and funds legally available for distribution based on the preferential amounts each such holder is entitled to receive and in the priority set forth above.

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

Participation Rights

After the payment in full of the Preferred B Liquidation Amount and the Preferred A Liquidation Amount (together, the "Preferred Liquidation Amount"), the assets and funds of the Company remaining available for distribution, if any, shall be distributed ratably among the holders of the Company's common stock and Series B, Series A, and Series A-1 (on an as-converted basis) (the "Participation Distribution"). The Participation Distribution will continue with respect to the Series A and Series A-1 only until the holders of Series A and Series A-1 have received for each share of Series A and Series A-1 held, an aggregate amount per share that equals three times the original issue price.

Voting

Each holder of the outstanding shares of Series A, Series A-1 and Series B is entitled to one vote per share of voting common stock into which the Series A, Series A-1 and Series B is convertible as of the record date for determining stockholders entitled to vote on such matters.

(d) Common Stock Warrants

As of December 31, 2014, the following warrants to purchase common stock were outstanding:

Warrants to Purchase		Exercise Price		Term	Expiration

Common-A	206,400	$	0.250	10 year	May-October 2019
Common-B	160,000		0.250	10 year	May-October 2019
Common-A	15,000		0.275	10 year	May 2019
Common-B	370,000		0.275	10 year	May-December 2019
Common-A	10,000		0.500	10 year	December 2019
Common-A	1,000		0.500	10 year	March 2020
Common-B	5,000		0.250	10 year	June 2021
Common-B	5,000		0.275	10 year	June 2021
Common-B	4,358		1.320	10 year	January 2023
Common-B	39,720		1.760	10 year	January-December 2023
Common-B	9,671		1.600	10 year	May-December 2023
Common-B	7,802		3.000	10 year	January-December 2024
Common-B	23,867		3.300	10 year	January-December 2024

During the years ended December 31, 2013 and 2014, the Company issued warrants to purchase 53,749 and 31,669 shares of common stock, respectively, at exercise prices from $1.32 to $1.76 and $3.00 to $3.30 per share, respectively, in connection with related party debt (see note 8). The Company recognized total interest expense of $16 and $31 associated with the equity-classified warrants issued in

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

2013 and 2014, respectively. The 2013 and 2014 warrants were valued using the Black-Scholes option-pricing model at the date of grant, and included the following weighted average assumptions:

	Year Ended December 31,

	2013			2014
Valuation assumptions:
Expected volatility		55	%		54	%
Expected life (years)		10.00			10.00
Risk-free interest rate		2.42	%		2.52	%
Dividend yield		—			—

In June 2013, in accordance with the Series B Agreement, the Company used $300 of the proceeds from the sale of the Series B to cancel warrants to purchase 1,258,970 shares of the Company's Class A Voting common stock.

(e) Preferred Stock Warrants

As of December 31, 2014, the following warrants to purchase redeemable convertible preferred stock were outstanding:

Warrants to Purchase		Exercise Price		Term	Expiration

Series A-1	250,000	$	0.800	10 year	March 2022
Series A-1	62,500		0.800	10 year	October 2022
Series B	105,005		2.860	10 year	April 2024
Series B	481,863		2.990	10 year	December 2024

In April 2014 and December 2014, the Company issued warrants to purchase 105,005 and 481,863 shares, respectively, of Series B at an exercise price of $2.86 and $2.99 per share, respectively, in connection with the April 2014 Eastward Loan and December 2014 Eastward Loan (note 10). No warrants were issued in 2013.

The warrants issued in 2014 were initially recorded at their fair value calculated using the Black-Scholes model, with the following weighted average assumptions:


Valuation assumptions:
Fair value of preferred stock	$	5.28
Expected volatility		55	%
Expected life (years)		10.00
Risk-free interest rate		2.27	%
Dividend yield		—

13. Stock-Based Compensation

The Company's 2014 Equity Compensation Plan, as amended and restated, effective as of June 30, 2014, (the "2014 Plan") authorizes the Company to grant up to 7,635,580 shares of common stock to the Company's employees and non-employees in the form of incentive stock options, nonqualified stock options, stock awards, stock units, stock appreciation rights and other equity-based awards. This pool

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

consists of 5,044,636 shares of Class A common stock and 2,590,944 shares of Class B common stock. In connection with a public offering, any remaining shares in the pool will be granted as restricted stock to certain executives as allocated at the discretion of the Chief Executive Officer. As of December 31, 2014, 2,115,064 shares were available for future grants under the Plan.

The option price per share cannot be less than the fair market value of a share on the date the option was granted, and in the case of incentive stock options granted to an employee owning more than 10% of the total combined voting power of all classes of stock of the Company, the option price shall not be less than 110% of the fair market value of Company stock on the date of grant. Stock option grants under the Plan generally expire 10 years from the date of grant, other than incentive stock option grants to 10% shareholders, which have a 5 year term, 90 days after termination, or one year after the date of death or termination due to disability. Stock options generally vest over a period of four years, with 25% of the options becoming exercisable on the one-year anniversary of the commencement date and the remaining shares vesting monthly thereafter for 36 months in equal installments of 2.08% per month.

The Company recorded $89 and $254 of stock-based compensation expense related to the vesting of employee and non-employee stock options for the years ended December 31, 2013 and 2014, respectively.

The estimated fair value of options granted was calculated using a Black-Scholes option-pricing model. The computation of expected option life for employees was determined based on the simplified method. The risk-free rate was based on the U.S. Treasury security with terms equal to the expected time of exercise as of the grant date. The Company's common stock is not publicly traded; therefore, expected volatility is based on the historical volatilities of selected public companies whose services are comparable to that of the Company.

The weighted average grant-date fair value of employee options granted during 2013 and 2014 was $0.22 and $0.81, respectively.

The table below outlines the weighted average assumptions for employee grants during the years ended December 31, 2013 and 2014:

	Year Ended December 31,

	2013			2014
Valuation assumptions:
Expected volatility		65.00	%		59.37	%
Expected life (years)		6.05			6.00
Risk-free interest rate		1.56	%		1.98	%
Dividend yield		—			—

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

The following table summarizes stock option activity under the 2014 Plan during the years ended December 31, 2013 and 2014:

			Weighted Average Exercise Price			Aggregate Intrinsic Value

Outstanding at January 1, 2013	2,852,795		$	0.68
Granted	2,278,545			1.70
Exercised	(2,276	)		0.46
Forfeited	(14,997	)		0.99

Outstanding at December 31, 2013	5,114,067			1.14	8.2	$	3,668
Granted	506,497			3.10
Exercised	(79,839	)		0.73
Forfeited	(20,209	)		2.15

Outstanding at December 31, 2014	5,520,516			1.32	7.3		9,334



Options vested and expected to vest at December 31, 2014	5,520,516		$	1.32	7.3	$	9,334



Exercisable at December 31, 2014	3,520,000		$	0.97	6.7	$	7,152

Included within the above table are 376,816 non-employee options outstanding as of December 31, 2014, of which 10,384 are unvested as of December 31, 2014 and therefore subject to remeasurement.

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company's common stock for those stock options that had exercise prices lower than the fair value of the Company's common stock.

The Company recorded stock-based compensation expense related to stock options for the years ended December 31, 2013 and 2014 in the following expense categories of its consolidated statements of operations:

	Year Ended December 31,

	2013		2014
Cost of revenue — product	$	18	$	57
Cost of revenue — service		—		3
Research and development		1		9
Sales and marketing		22		57
General and administrative		48		128

	$	89	$	254

As of December 31, 2014, there was $614 of total unrecognized compensation cost related to nonvested stock options granted under the 2014 Plan, which is expected to be recognized over a weighted average period of 2.5 years.

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

14. Net Loss per Share and Unaudited Pro Forma Net Loss per Share

(a) Net Loss per Share Attributable to Common Stockholders

Basic and diluted net loss per share attributable to common stockholders was calculated as follows:

	Year Ended December 31,

	2013			2014
Numerator:
Net loss	$	(3,871	)	$	(1,107	)
Accretion of redeemable convertible preferred stock to redemption value		(5,346	)		(3,884	)

Net loss attributable to common stockholders	$	(9,217	)	$	(4,991	)



Denominator:
Weighted average shares of common stock outstanding, basic and diluted		7,525,931			7,862,025



Net loss per share attributable to common stockholders, basic and diluted	$	(1.22	)	$	(0.63	)

The Company's potential dilutive securities, which include stock options, outstanding warrants to purchase shares of preferred and common stock and redeemable convertible preferred stock, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The following potential common shares, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

	Year Ended December 31,

	2013		2014
Stock options to purchase common stock		5,114,067		5,520,516
Common stock warrants		826,149		857,818
Preferred stock warrants		312,500		899,368
Redeemable convertible preferred stock (as converted to common stock)		9,873,511		9,873,511

		16,126,227		17,151,213

(b) Unaudited Pro Forma Net Loss per Share

The unaudited pro forma basic and diluted net loss per share attributable to common stockholders for the year ended December 31, 2014 gives effect to adjustments arising upon the closing of the initial public offering. The unaudited pro forma net loss attributable to common stockholders used in the calculation of unaudited basic and diluted pro forma net loss per share attributable to common stockholders does not include the effects of the accretion of redeemable convertible preferred stock to

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

redemption value because the calculation assumes that the conversion of redeemable convertible preferred stock into common stock has occurred on January 1, 2014.

The unaudited pro forma basic and diluted weighted average common shares outstanding used in the calculation of unaudited pro forma basic and diluted net loss per share attributable to common stockholders for the year ended December 31, 2014 give effect to the conversion upon the initial public offering of all outstanding shares of redeemable convertible preferred stock as of December 31, 2014 into 9,873,511 shares of common stock as if the conversion had occurred on January 1, 2014, assuming the IPO price per share is at least five times the original issue price of the respective series of preferred stock and the gross cash proceeds are at least $50,000.

Unaudited pro forma basic and diluted net loss per share attributable to common stockholders was calculated as follows:

	Year Ended December 31, 2014

Numerator:
Net loss attributable to common stockholders	$	(4,991	)
Pro forma adjustment to add back the accretion of redeemable convertible preferred stock		3,884

Pro forma net loss attributable to common stockholders	$	(1,107	)



Denominator:
Weighted average shares of common stock outstanding, basic and diluted		7,862,025
Pro forma adjustment for assumed conversion of all outstanding shares of redeemable convertible preferred stock upon the closing of the proposed initial public offering		9,873,511

Pro forma weighted average common shares outstanding, basic and diluted		17,735,536



Pro forma net loss per share attributable to common stockholders, basic and diluted	$	(0.06	)

15. Fair Value Measurements

The Company's financial instruments consist of accounts receivable, accounts payable and accrued expenses, acquisition-related contingent consideration, notes payable related to the acquisition, long-term notes payable to related parties and long-term debt. The carrying values of accounts receivable, accounts payable and accrued expenses are representative of their fair value due to the relatively short-term nature of those instruments. The carrying value of the Company's long-term notes payable to related to acquisition and long-term debt approximates fair value based on the terms of the debt. The long-term notes payable related to the acquisition were recorded on December 31, 2014 at their acquisition date fair values of $14,347. This valuation was determined using Level 3 inputs and is more fully described in note 4.

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

The Company has classified liabilities measured at fair value on a recurring basis at December 31, 2013 and 2014 as follows:

	Fair Value Measurement at Reporting Date Using

	Level 1		Level 2		Level 3		Balance as of December 31, 2013
Warrant liability	$	—	$	—	$	679	$	679

	$	—	$	—	$	679	$	679

	Fair Value Measurement at Reporting Date Using

	Level 1		Level 2		Level 3		Balance as of December 31, 2014
Warrant liability	$	—	$	—	$	2,783	$	2,783
Note payable related to acquisition		—		—		14,350		14,350
Acquisition-related contingent consideration — short-term		—		—		1,079		1,079
Acquisition-related contingent consideration — long-term		—		—		7,300		7,300

	$	—	$	—	$	25,512	$	25,512

The fair value of the preferred stock warrants at December 31, 2013 was estimated using an option pricing model with the following weighted-average assumptions: estimated life of 8.34 years, no dividend yield, risk-free interest rate of 3.04%, fair value of underlying instrument of $3.59 per share and volatility of 55.00%. The Company also applied a discount for lack of marketability of 30% to the resulting value from the option pricing model.

The fair value of the preferred stock warrants at December 31, 2014 was estimated using an option pricing model with the following weighted-average assumptions: estimated life of 8.99 years, no dividend yield, risk-free interest rate of 2.10%, fair value of underlying instrument of $4.93 per share and volatility of 55.00%. The Company also applied a discount for lack of marketability of 20% to the resulting value from the option pricing model.

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

The reconciliation of the warrant liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows:


Balance at January 1, 2013	$	132
Change in fair value		547

Balance at December 31, 2013		679
Issuances		1,835
Change in fair value		269

Balance at December 31, 2014	$	2,783

Acquisition-related contingent consideration is measured at fair value on a recurring basis using unobservable inputs, hence these instruments represent Level 3 measurements within the fair value hierarchy. The acquisition-related contingent consideration liability represents the estimated fair value of the additional cash consideration payable that is contingent upon the achievement of certain financial and performance milestones.

The fair value of SMPP acquisition-related contingent consideration at December 31, 2014 was estimated using the actual average monthly revenue for the twelve month period preceding the Second Contingent Payment Date of $498. As the average monthly revenue of $498 is greater than the monthly revenue target, the Company recorded the fair value of the full contingent consideration of $300 in cash and 31,500 shares of the Company's common stock. The fair value of the 31,500 shares of the Company's common stock were valued at $3.00 per share with the assistance of a third-party valuation specialist.

The fair value of the Capstone acquisition-related contingent consideration at December 31, 2014 was estimated using the amount of cash equal to five times the EBITDA of Capstone for the twelve month period ending on December 31, 2014 of $6,089 less $5,500, and a number of shares of the Company's common stock equal to 677,862 multiplied by a fraction, the numerator of which is Capstone twelve-month net income of $705, and the denominator of which is $2,000, minus 203,358 shares of the Company's common stock, or 35,370 shares of the Company's common stock. The fair value of the 35,370 shares of the Company's common stock were valued at $3.00 per share with the assistance of a third-party valuation specialist.

As the Medliance acquisition-related contingent consideration was recorded at the acquisition date of December 31, 2014, no remeasurement was required.

The Company had no acquisition-related contingent consideration for the year ended December 31, 2013. The changes in fair value of the Company's acquisition-related contingent consideration for the year ended December 31, 2014 was as follows:


Balance at January 1, 2014	$	—
Acquisition date fair value of SMPP contingent consideration		810
Acqusition date fair value of Capstone contingent consideration		75
Acquisition date fair value of Medliance contingent consideration		7,300
Fair value of cash consideration paid		(500	)
Fair value of equity consideration paid		(96	)
Adjustments to fair value measurement		790

Balance at December 31, 2014	$	8,379

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

The fair value of the SMPP contingent consideration was calculated to be $395 at December 31, 2014. The fair value of the Capstone contingent consideration was calculated to be $684 at December 31, 2014. The fair value of the Medliance contingent consideration was calculated to be $7,300 at December 31, 2014.

16. Commitments and Contingencies

(a) Leases

The Company has entered into various operating leases for office space expiring on various dates through 2018. Future minimum lease payments under operating leases as of December 31, 2014 are as follows:


2015	$	630
2016		283
2017		211
2018		62

Total minimum lease payments	$	1,186

Rent expense under these operating leases was $431 and $526 for the years ended December 31, 2013 and 2014, respectively. See note 18 for discussion of lease commitment executed in July 2015.

(b) Employment Agreements

The Company has employment agreements with certain non-executive officers and key employees that provide for, among other things, salary and performance bonuses.

(c) Legal Proceedings

The Company is not currently involved in any significant claims or legal actions that, in the opinion of management, will have a material adverse impact on the Company.

17. Related-Party Transactions

The Company has debt payable to certain members of the Board (note 8).

During 2013, a subsidiary of the Company engaged Credo2u LLC, a business intelligence company, to provide IT consulting services. Credo2u LLC is owned and operated by an immediate relative of the Company's Chairman and Chief Executive Officer and the Company's President. Costs incurred by the Company during 2013 for IT consulting services provided by the related party was $15. The Company did not incur any costs during 2014.

During 2013 and 2014, the Company engaged Knowlton Advisors LLC, a management consulting services company, to provide professional accounting services. Knowlton Advisors LLC is owned and operated by an immediate relative of the Company's Chairman and Chief Executive Officer and the Company's President. Costs incurred by the Company for professional accounting services provided by the related party were $30 and $19 during 2013 and 2014, respectively.

During 2014, the Company engaged Space Age Robotics LLC, an IT consulting services company, to provide professional IT client services. Space Age Robotics LLC is owned and operated by an

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TABULA RASA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
December 31, 2013 and 2014

immediate relative of the President and Chief Executive Officer of Capstone. Costs incurred by the Company for professional IT client services provided by the related party were $18 in 2014.

18. Subsequent Events

The Company has evaluated subsequent events from the balance sheets date through the date of the filing, the date at which the consolidated financial statements were available to be issued and there were no additional events that require recognition or disclosure in the consolidated financial statements other than the following items:

Loan and Security Agreement

On April 29, 2015, the Company entered into a new revolving line of credit (the "2015 Revolving Line") with a bank under a loan and security agreement, which provides for borrowings in an aggregate amount up to $15,000 (with $10,000 borrowed at the time) to be used for general corporate purposes including repayment of the 2013 Revolving Line (see note 10). The Company's ability to borrow under the 2015 Revolving Line is based upon a specified borrowing base equal to the Company's trailing three months of monthly recurring revenue, as defined. The 2015 Revolving Line is collateralized by a first priority security interest in all assets of the Company and matures on April 29, 2017.

Interest on the 2015 Revolving Line is due on the tenth calendar day of each month and is calculated at a variable rate based upon the bank's prime rate plus 1.0%, with the bank's prime rate having a floor of 3.25%. Upon the successful completion of a qualified initial public offering, the interest rate will be calculated at a variable rate based upon the bank's prime rate plus 0.5%.

Operating Lease Agreement

On August 21, 2015, the Company entered into three operating lease agreements to expand its dispensary operations and corporate office space in Moorestown, NJ. The leases commence upon the substantial completion of tenant improvement work completed by the landlord, estimated to be February 2016, and will continue for eleven years and eight months from the commencement date, with the option of the Company to extend the leases for one additional period of ten years. The total of the estimated base payments over the term of the lease are $17,591. In addition to the base rent payments, the Company will be obligated to pay a pro rata share of operating expenses and taxes.

Loan to Chief Executive Officers

On August 14, 2015, the Company made a loan to certain executive officers, pursuant to a promissory note, for an aggregate principal amount of $410. The note bears interest at 6% per annum.

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TABULA RASA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

	December 31, 2014			September 30, 2015			Pro Forma September 30, 2015

Assets
Current assets:
Cash	$	4,122		$	2,558		$	2,558
Restricted cash		500			200			200
Accounts receivable, net		4,302			5,253			5,253
Inventories		2,040			2,393			2,393
Rebates receivable		968			660			660
Prepaid expenses and other current assets		316			917			917

Total current assets		12,248			11,981			11,981
Property and equipment, net		2,221			1,975			1,975
Software development costs, net		2,254			2,415			2,415
Goodwill		21,606			21,606			21,606
Intangible assets, net		19,993			18,263			18,263
Other assets		501			2,101			2,101

Total assets	$	58,823		$	58,341		$	58,341



Liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)
Current liabilities:
Line of credit	$	6,860		$	10,000		$	10,000
Current portion of long-term debt		2,121			5,193			5,193
Notes payable to related parties		1,014			660			660
Notes payable related to acquisition		—			15,256			15,256
Acquisition-related consideration payable		4,370			232			232
Acquisition-related contingent consideration		1,079			2,091			2,091
Accounts payable		4,558			5,388			5,388
Accrued expenses and other liabilities		2,068			3,836			3,836

Total current liabilities		22,070			42,656			42,656
Long-term debt		12,989			9,148			9,148
Long-term notes payable related to acquisition		14,350			—			—
Long-term acquisition-related consideration payable		224			—			—
Long-term acquisition-related contingent consideration		7,300			3,861			3,861
Warrant liability		2,783			6,260			—
Other long-term liabilities		102			262			262

Total liabilities		59,818			62,187			55,927

Commitments and contingencies
Redeemable convertible preferred stock:
Series A and A-1 redeemable convertible preferred stock, $0.0001 par value, 7,224,266 shares authorized, 6,911,766 shares issued and outstanding at December 31, 2014 and September 30, 2015 (liquidation preference of $6,493 at September 30, 2015); no shares issued or outstanding, pro forma at September 30, 2015		6,165			6,453			—
Series B redeemable convertible preferred stock, $0.0001 par value, 3,548,614 shares authorized, 2,961,745 shares issued and outstanding at December 31, 2014 and September 30, 2015 (liquidation preference of $5,146 at September 30, 2015); no shares issued or outstanding, pro forma at September 30, 2015		12,842			24,612			—

Total redeemable convertible preferred stock		19,007			31,065			—

Stockholders' equity (deficit):
Common stock, $0.0001 par value; 27,836,869 shares authorized; 8,021,093 and 8,871,248 shares issued and outstanding at December 31, 2014 and September 30, 2015, respectively; 18,744,759 shares issued and outstanding, pro forma at September 30, 2015		1			1			2
Additional paid-in capital		—			—			37,324
Accumulated deficit		(20,003	)		(34,912	)		(34,912	)

Total stockholders' equity (deficit)		(20,002	)		(34,911	)		2,414

Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)	$	58,823		$	58,341		$	58,341

See accompanying notes to unaudited consolidated financial statements.

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TABULA RASA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)

	Nine Months Ended September 30,

	2014			2015
Revenue:
Product revenue	$	33,710		$	42,684
Service revenue		965			7,594

Total revenue		34,675			50,278

Cost of revenue, exclusive of depreciation and amortization shown below:
Product cost		26,940			32,811
Service cost		464			2,398

Total cost of revenue		27,404			35,209

Gross profit		7,271			15,069

Operating (income) expenses:
Research and development		1,148			1,879
Sales and marketing		1,573			2,071
General and administrative		2,672			5,374
Change in fair value of acquisition-related contingent consideration (income) expense		284			(1,348	)
Depreciation and amortization		1,309			2,935

Total operating (income) expenses		6,986			10,911

Income from operations		285			4,158
Other (income) expense:
Change in fair value of warrant liability		(18	)		3,477
Interest expense		988			4,418

Total other (income) expense		970			7,895

Loss before income taxes		(685	)		(3,737	)
Income tax (benefit) expense		(426	)		212

Net loss		(259	)		(3,949	)
Accretion of redeemable convertible preferred stock		(531	)		(12,058	)

Net loss attributable to common stockholders	$	(790	)	$	(16,007	)



Net loss per share attributable to common stockholders, basic and diluted	$	(0.10	)	$	(1.95	)



Weighted average common shares outstanding, basic and diluted		7,824,537			8,210,760



Pro forma net loss per share attributable to common stockholders, basic and diluted				$	(0.22	)



Pro forma weighted average common shares outstanding, basic and diluted					18,084,271

See accompanying notes to unaudited consolidated financial statements.

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TABULA RASA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
(In thousands, except share amounts)

															Stockholders' Deficit

	Redeemable Convertible Preferred Stock														Common Stock
	Series A				Series A-1				Series B						Class A				Class B
	Series A				Series A-1				Series B						Class A				Class B					Additional Paid-in Capital			Accumulated Deficit			Total Stockholders' Deficit
	Shares		Amount		Shares		Amount		Shares		Amount		Total		Shares		Amount		Shares			Amount		Additional Paid-in Capital			Accumulated Deficit			Total Stockholders' Deficit
Balance, January 1, 2015		4,411,766	$	3,781		2,500,000	$	2,384		2,961,745	$	12,842	$	19,007		3,994,668	$	—		4,026,425		$	1	$	—		$	(20,003	)	$	(20,002	)
Issuance of common stock in connection with satisfaction of contingent consideration related to acquisition of St. Mary Prescription Pharmacy		—		—		—		—		—		—		—		31,500		—		—			—		94			—			94
Issuance of common stock in connection with satisfaction of contingent consideration related to acquisition of Capstone Performance Systems, LLC		—		—		—		—		—		—		—		35,730		—		—			—		107			—			107
Accretion of redeemable convertible preferred stock		—		177		—		111		—		11,770		12,058		—		—		—			—		(1,098	)		(10,960	)		(12,058	)
Transfer of common stock		—		—		—		—		—		—		—		3,000		—		(3,000	)		—		—			—			—
Issuance of common stock warrants		—		—		—		—		—		—		—		—		—		—			—		16			—			16
Exercise of stock options		—		—		—		—		—		—		—		—		—		782,925			—		410			—			410
Stock-based compensation expense		—		—		—		—		—		—		—		—		—		—			—		471			—			471
Net loss		—		—		—		—		—		—		—		—		—		—			—		—			(3,949	)		(3,949	)

Balance, September 30, 2015		4,411,766	$	3,958		2,500,000	$	2,495		2,961,745	$	24,612	$	31,065		4,064,898	$	—		4,806,350		$	1	$	—		$	(34,912	)	$	(34,911	)

See accompanying notes to unaudited consolidated financial statements.

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TABULA RASA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

	Nine Months Ended September 30,

	2014			2015
Cash flows from operating activities:
Net loss	$	(259	)	$	(3,949	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		1,309			2,935
Amortization of deferred financing costs and debt discount		177			1,575
Payment of imputed interest on debt		—			(105	)
Deferred income tax (benefit) expense		(426	)		212
Issuance of common stock warrants		25			16
Other noncash items		—			(13	)
Stock-based compensation		190			471
Change in fair value of warrant liability		(18	)		3,477
Change in fair value of acquisition-related contingent consideration paid		284			(1,348	)
Changes in operating assets and liabilities, net of effect from acquisitions:
Accounts receivable, net		(869	)		(951	)
Inventories		(677	)		(353	)
Rebates receivable		(375	)		308
Prepaid expenses and other current assets		(142	)		(191	)
Other assets		(1	)		79
Acquisition-related contingent consideration paid		(60	)		(610	)
Accounts payable		375			322
Accrued expenses and other liabilities		777			912
Other long-term liabilities		—			(4	)

Net cash provided by operating activities	$	310		$	2,783

Cash flows from investing activities:
Purchases of property and equipment		(300	)		(135	)
Software development costs		(535	)		(669	)
Change in restricted cash		(500	)		300
Purchase of businesses, net of cash acquired		(3,991	)		(2,403	)

Net cash used in investing activities	$	(5,326	)	$	(2,907	)

Cash flows from financing activities:
Proceeds from sale of common stock		5			—
Payments for debt financing costs		(62	)		(69	)
Payments of initial public offering costs		—			(390	)
Proceeds from notes payable to related parties		100			—
Repayments of notes payable to related parties		(100	)		(354	)
Borrowings on line of credit		—			10,000
Repayments of line of credit		—			(6,860	)
Payments of acquisition-related consideration		—			(1,895	)
Payments of contingent consideration		(440	)		(267	)
Proceeds from long-term debt		3,000			—
Repayments of long-term debt		(1,294	)		(1,605	)

Net cash provided by (used in) financing activities		1,209			(1,440	)

Net decrease in cash		(3,807	)		(1,564	)
Cash, beginning of period		6,027			4,122

Cash, end of period	$	2,220		$	2,558



Supplemental disclosure of cash flow information:
Acquisition of equipment under capital leases	$	35		$	353



Additions to property, equipment and software development purchases included in accounts payable	$	22		$	15



Deferred offering costs included in accounts payable and accrued expenses and other liabilities	$	—		$	1,222



Cash paid for interest	$	808		$	1,807



Accretion of redeemable convertible preferred stock to redemption value	$	411		$	12,058



Fair value of preferred stock warrants issued to lender	$	253		$	—

See accompanying notes to unaudited consolidated financial statements.

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TABULA RASA HEALTHCARE, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
As of December 31, 2014 and September 30, 2015 and for the Nine Months Ended
September 30, 2014 and 2015

1. Nature of Business

2. Summary of Significant Accounting Policies

The Company's significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2014 included elsewhere in this prospectus. Since the date of those audited consolidated financial statements, there have been no changes to the Company's significant accounting policies, other than those detailed below.

(a) Liquidity

The Company's unaudited consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business. The Company has incurred net losses since inception and has an accumulated deficit of $34,912 as of September 30, 2015. The Company does not have the wherewithal to repay a note payable related to an acquisition with a face value of $16,385 that is due on June 30, 2016, which raises substantial doubt about the Company's ability to continue as a going concern. Management plans to repay the note with the proceeds from its planned initial public offering or, to the extent that the offering is delayed or not successful, management would seek to extend the note or obtain alternate sources of financing. There is no assurance that management's plans will be successful. The unaudited consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The ability of the Company to maintain successful operations will depend on, among other things, new business, the retention of clients, and the effectiveness of sales and marketing initiatives.

(b) Unaudited Interim Financial Statements

The accompanying consolidated balance sheet as of September 30, 2015, consolidated statements of operations and consolidated statements of cash flows for the nine months ended September 30, 2014 and 2015, the statement of redeemable convertible preferred stock and stockholders' deficit for the nine months ended September 30, 2015 and the related footnote disclosures are unaudited. The unaudited interim consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company's interim consolidated financial position as of September 30, 2015 and the results of its consolidated operations and its consolidated cash flows for the nine months ended September 30, 2014 and 2015. The results for the nine months ended September 30, 2015 are not necessarily indicative of results to be expected for the year ending December 31, 2015, any other interim periods, or any future year or period. The

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TABULA RASA HEALTHCARE, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Amounts in thousands, except share and per share data)
As of December 31, 2014 and September 30, 2015 and for the Nine Months Ended
September 30, 2014 and 2015

Company's management believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2014.

(c) Unaudited Pro Forma Information

In August 2015, the board of directors authorized management to confidentially submit a registration statement to the Securities and Exchange Commission to potentially sell shares to the public. The accompanying unaudited pro forma consolidated balance sheet as of September 30, 2015 has been prepared to give effect to (i) the conversion of all outstanding shares of redeemable convertible preferred stock into 9,873,511 shares of common stock upon the closing of the Company's initial public offering ("IPO") assuming the IPO price per share is at least five times the original issue price of the respective series of preferred stock and the gross cash proceeds are at least $50,000 and (ii) the reclassification of the warrant liability to additional paid-in capital as the warrants to purchase preferred stock become warrants to purchase common stock upon the closing of the IPO. The shares of common stock and any related estimated proceeds from the initial public offering ("IPO") are excluded from the pro forma information.

(d) Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates or assumptions.

(e) Deferred Offering Costs

The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs (non-current) until such financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders' deficit as a reduction of additional paid-in capital generated as a result of the offering. Should the equity financing no longer be considered probable of being consummated, all deferred offering costs will be charged to operating expenses in the consolidated statements of operations. The Company did not record any deferred offering costs as of December 31, 2014 and deferred offering costs were $1,612 as of September 30, 2015.

3. Acquisitions

SMPP

In connection with the St. Mary Prescription Pharmacy ("SMPP") acquisition, the Company paid $300 in cash and 31,500 shares of the Company's common stock with a fair value of $94 in the first quarter of 2015 in satisfaction of the contingent consideration on the Second Contingent Payment Date.

The results of operations and financial position of SMPP are included in the Company's consolidated financial statements from the date of acquisition. Revenue and net income attributed to SMPP from the date of acquisition (January 7, 2014) through September 30, 2014 were approximately $4,541 and $345, respectively.

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Capstone

In connection with the Capstone Performance Systems, LLC ("Capstone") acquisition, the Company paid $577 in cash and issued 35,730 shares of the Company's common stock, with a fair value of $107, in the second quarter of 2015 in full satisfaction of the contingent consideration at the 12-month anniversary of the closing date.

The results of operations and financial position of Capstone are included in the Company's consolidated financial statements from the date of acquisition. Revenue and net income attributed to Capstone from the date of acquisition (April 22, 2014) through September 30, 2014 were approximately $943 and $186, respectively.

Pro Forma Information

The unaudited pro forma results presented below include the effects of the SMPP, Capstone, and Medliance LLC ("Medliance") acquisitions as if they had been consummated as of January 1, 2014. The unaudited pro forma results include the amortization associated with acquired intangible assets and interest expense on debt to fund these acquisitions. There are no material nonrecurring charges directly attributable to the transactions that are excluded. In addition, the unaudited pro forma results do not include any expected benefits of the acquisitions. Accordingly, the unaudited pro forma results are not necessarily indicative of either future results of operations or results that might have been achieved had the acquisitions been consummated as of January 1, 2014.

	Nine Months Ended September 30, 2014

Revenue	$	40,335
Net loss		(3,171	)
Net loss per share attributable to common stockholders — basic and diluted		(0.47	)

4. Property and Equipment

Depreciation and amortization expense for the nine months ended September 30, 2014 and 2015 was $616 and $729, respectively.

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5. Intangible Assets

Intangible assets consisted of the following as of December 31, 2014 and September 30, 2015:

		Gross Value		Accumulated Amortization			Intangible Assets, net

December 31, 2014
Trade names	5.00	$	1,720	$	(92	)	$	1,628
Client relationships	10.02		14,684		(331	)		14,353
Non-competition agreements	4.64		652		(40	)		612
Developed technology	10.00		3,400		—			3,400

Total intangible assets		$	20,456	$	(463	)	$	19,993



September 30, 2015
Trade names	5.00	$	1,720	$	(350	)	$	1,370
Client relationships	10.02		14,684		(1,441	)		13,243
Non-competition agreements	4.64		652		(147	)		505
Developed technology	10.00		3,400		(255	)		3,145

Total intangible assets		$	20,456	$	(2,193	)	$	18,263

Amortization expense for the nine months ended September 30, 2014 and 2015 was $318 and $1,730, respectively.

6. Accrued Expenses and Other Liabilities

At December 31, 2014 and September 30, 2015, accrued expenses and other liabilities consisted of the following:

	December 31, 2014		September 30, 2015

Employee related expenses	$	1,361	$	1,591
Deferred revenue		325		356
Interest		25		1,049
Distributions payable		310		—
Deferred offering costs		—		775
Other expenses		47		65

Total accrued expenses and other liabilities	$	2,068	$	3,836

7. Notes Payable Related to Acquisition

In December 2014, as part of the acquisition-related consideration of the Medliance acquisition the Company issued multiple subordinated convertible promissory notes (the "Medliance Notes") with certain officers and direct relatives of Medliance, for aggregate borrowings of $16,385. Interest is 8% annually and all unpaid principal and unpaid and accrued interest is due and payable on June 30, 2016. Interest expense recognized was $0 and $980 for the nine months ended September 30, 2014 and 2015,

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respectively. If an underwritten public offering on a firm commitment basis pursuant to an effective registration statement (a "Triggering IPO") occurs prior to the maturity date, all principal and interest shall immediately become due and payable upon closing of the Triggering IPO and the holders of the Medliance Notes shall have the option to elect the Company to pay one of the following amounts: (i) all outstanding principal and accrued interest on the Medliance Notes as of the closing of the Triggering IPO; or (ii) a number of shares of the Company's common stock as of immediately prior to the closing of such Triggering IPO, equal to the quotient obtained by dividing the outstanding principal amount under the Medliance Notes as of the closing of the Triggering IPO by 92% of the price per share of the public offering price of the Company's common stock in the Triggering IPO, rounded to the nearest whole share.

The Company recorded the Medliance Notes at their aggregate acquisition date fair values of $14,347 and are being accreted up to their face values of $16,385 over the 18 month term using the effective-interest method. For the nine months ended September 30, 2015 the Company amortized $906 of the discount to interest expense.

8. Lines of Credit and Long-Term Debt

(a) Lines of Credit

On April 29, 2015 the Company entered into a new revolving line of credit (the "2015 Revolving Line") with Bridge Bank, National Association ("Bridge Bank") pursuant to a loan and security agreement, which provides for borrowings in an aggregate amount up to $15,000 to be used for general corporate purposes including repayment of the 2013 Revolving Line. The Company's ability to borrow under the 2015 Revolving Line is based upon a specified borrowing base equal to the Company's trailing three months of monthly recurring revenue, as defined. The 2015 Revolving Line is collateralized by a first priority security interest in all assets of the Company and matures on April 29, 2017. As of September 30, 2015, the aggregate borrowings outstanding under the 2015 Revolving Line was $10,000, and additional amounts available for borrowings under the 2015 Revolving Line was $5,000.

Interest on the 2015 Revolving Line is calculated at a variable rate based upon Bridge Bank's prime rate plus 1.0%, with Bridge Bank's prime rate having a floor of 3.25%. Upon the successful completion of a qualified initial public offering, the interest rate will be calculated at a variable rate based upon Bridge Bank's prime rate plus 0.5%. As of September 30, 2015, the interest rate on the 2015 Revolving Line was 4.25% and interest expense was $181 for the nine months ended September 30, 2015. In connection with the 2015 Revolving Line, the Company recorded deferred financing costs of $106, with $37 included in accrued expenses on the consolidated balance sheet at September 30, 2015. The Company is amortizing the deferred financing costs associated with the 2015 Revolving Line to interest expense using the effective-interest method over the term of the 2015 Revolving Line and amortized $22 to interest expense for the nine months ended September 30, 2015.

The 2015 Revolving Line has several financial covenants including (i) maintaining a minimum unrestricted cash and unused availability balance of at least $1,000 through December 31, 2015 and at least $1,500 thereafter (the liquidity covenant), (ii) maintaining a minimum adjusted EBITDA, and (iii) a minimum monthly recurring revenue retention rate, as defined in the underlying loan and security agreement. As of September 30, 2015, the Company was in compliance with all of the financial covenants related to the 2015 Revolving Line. As disclosed in note 7, the Company is required to pay $16,385 on June 30, 2016, or sooner upon the completion of a Triggering IPO, related to the Medliance

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Notes, which could adversely impact the Company's ability to maintain compliance with the liquidity covenant. Management plans to repay the note with the proceeds from its planned IPO or, to the extent that the offering is delayed or not successful, management would seek to extend the Medliance Notes or obtain alternate sources of financing. There is no assurance that management's plans will be successful.

(b) Term Loans and Capital Lease Obligations

The following table represents the total term loans and capital lease obligations of the Company at December 31, 2014 and September 30, 2015:

	December 31, 2014			September 30, 2015

Tranche A Term Loan	$	334		$	123
Tranche B Term Loan		74			40
March 2012 Eastward Loan		444			—
Unamortized discount on March 2012 Eastward Loan		(8	)		—

March 2012 Eastward Loan, net		436			—
April 2014 Eastward Loan		3,000			2,533
Unamortized discount on April 2014 Eastward Loan		(196	)		(124	)

April 2014 Eastward Loan, net		2,804			2,409
December 2014 Eastward Loan		12,000			12,000
Unamortized discount on December 2014 Eastward Loan		(1,579	)		(1,177	)

December 2014 Eastward Loan, net		10,421			10,823
Capital leases		1,041			946

Total long-term debt, net		15,110			14,341
Less current portion, net		(2,121	)		(5,193	)

Total long-term debt, less current portion, net	$	12,989		$	9,148

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(c) Long-Term Debt Maturities

As of September 30, 2015, the Company's long-term debt is payable as follows:

	Term Loans			Capital Lease Obligations			Total Long-term Debt

Remainder of 2015	$	382		$	230		$	612
2016		5,678			508			6,186
2017		5,968			238			6,206
2018		2,668			130			2,798

		14,696			1,106			15,802
Less amount representing interest		—			(160	)		(160	)

Present value of payments		14,696			946			15,642
Less current portion		(4,622	)		(571	)		(5,193	)
Less discount on debt		(1,301	)		—			(1,301	)

	$	8,773		$	375		$	9,148

9. Redeemable Convertible Preferred Stock and Stockholders' Deficit

(a) Common Stock

The holders of Class A Non-Voting common stock have the same rights, preferences, privileges, and restrictions as the holders of Class B Voting common stock with the exception of voting rights. The holders of Class B Voting common stock are entitled to one vote per share. The holders of Class A Non-Voting and Class B Voting common stock are entitled to receive dividends when, as and if declared by the Board, subject to payment of accrued dividends for redeemable convertible preferred stock. Class A Non-Voting and Class B Voting common stock are also subordinate to the redeemable convertible preferred stock with respect to liquidation, winding up and dissolution of the Company. No dividends have been declared through September 30, 2015.

(b) Redeemable Convertible Preferred Stock

The Company has issued Series A Redeemable Convertible Preferred Stock ("Series A"), Series A-1 and Series B redeemable convertible preferred stock. The redeemable convertible preferred stock is classified outside of stockholders' deficit because the shares contain redemption features that are not solely within the control of the Company.

The aggregate amount of cumulative but unpaid dividends on the Series A and Series A-1 were $983 and $510, respectively, at September 30, 2015. Cumulative but unpaid dividends on the Series B were $635 at September 30, 2015. The redemption value of Series B is based on its estimated fair value at December 31, 2014 and September 30, 2015 because it is estimated to be greater than its original issue price plus accrued dividends.

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(c) Common Stock Warrants

As of September 30, 2015, the following warrants to purchase common stock were outstanding:

Warrants to Purchase		Exercise Price		Term	Expiration

Common-A	206,400	$	0.250	10 year	May - October 2019
Common-B	160,000		0.250	10 year	May - October 2019
Common-A	15,000		0.275	10 year	May 2019
Common-B	370,000		0.275	10 year	May - December 2019
Common-A	10,000		0.500	10 year	December 2019
Common-A	1,000		0.500	10 year	March 2020
Common-B	5,000		0.250	10 year	June 2021
Common-B	5,000		0.275	10 year	June 2021
Common-B	4,358		1.320	10 year	January 2023
Common-B	39,720		1.760	10 year	January - December 2023
Common-B	9,671		1.600	10 year	May - December 2023
Common-B	7,802		3.000	10 year	January - December 2024
Common-B	23,867		3.300	10 year	January - December 2024
Common-B	8,709		3.300	10 year	January - June 2025

During the nine months ended September 30, 2014 and 2015, the Company issued warrants to purchase 16,715 and 8,709 shares of common stock, respectively, at exercise prices ranging from $3.00 to $3.30 and $3.30 per share, respectively, in connection with related party debt. The Company recognized total interest expense of $25 and $16 associated with the equity-classified warrants issued during the nine months ended September 30, 2014 and 2015, respectively. The warrants issued during the nine months ended September 30, 2014 and 2015 were valued using the Black-Scholes option-pricing model at the date of grant, and included the following weighted average assumptions:



Valuation assumptions:
Expected volatility	53	%	50	%
Expected life (years)	10.00		10.00
Risk-free interest rate	2.56	%	2.13	%
Dividend yield	—		—

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(d) Preferred Stock Warrants

As of September 30, 2015, the following warrants to purchase redeemable convertible preferred stock were outstanding:

Warrants to Purchase		Exercise Price		Term	Expiration

Series A-1	250,000	$	0.800	10 year	March 2022
Series A-1	62,500		0.800	10 year	October 2022
Series B	105,005		2.860	10 year	April 2024
Series B	481,863		2.990	10 year	December 2024

During the nine months ended September 30, 2014, the Company issued a warrant to purchase 105,005 shares of Series B redeemable convertible preferred stock at an exercise price of $2.86 per share in connection with the April 2014 Eastward Loan. No warrants were issued in during the nine months ended September 30, 2015.

The warrants issued in 2014 were initially recorded at their fair value calculated using the Black-Scholes model, with the following weighted average assumptions:

	Nine Months Ended September 30, 2014

Valuation assumptions:
Fair value of Preferred stock	$	4.61
Expected volatility		55	%
Expected life (years)		10.00
Risk-free interest rate		2.73	%
Dividend yield		—

10. Stock-Based Compensation

The Company's 2014 Equity Compensation Plan (the "2014 Plan") authorizes the Company to grant up to 7,635,580 shares of common stock to the Company's employees and non-employees in the form of incentive stock options, nonqualified stock options, stock awards, stock units, stock appreciation rights, and other equity-based awards. This pool consists of 5,044,636 shares of Class A common stock and 2,590,944 shares of Class B common stock. As of September 30, 2015, 1,159,504 shares were available for future grants under the 2014 Plan.

The Company recorded $190 and $471 of stock-based compensation expense related to the vesting of employee and non-employee stock options for the nine months ended September 30, 2014 and 2015, respectively.

The estimated fair value of options granted was calculated using a Black-Scholes option-pricing model. The computation of expected life for employees was determined based on the simplified method. The risk-free rate is based on the U.S. Treasury security with terms equal to the expected time of exercise as of the grant date. The Company's common stock is not publicly traded; therefore, expected volatility is based on the historical volatilities of selected public companies whose services are

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comparable to that of the Company. The table below sets forth the weighted average assumptions for employee grants during the nine months ended September 30, 2014 and 2015:



Valuation assumptions:
Expected volatility	59.46	%	55.12	%
Expected life (years)	6.00		6.05
Risk-free interest rate	1.98	%	1.75	%
Dividend yield	—		—

The following table summarizes stock option activity under the 2014 Plan for the nine months ended September 30, 2015:

			Weighted average exercise price			Aggregate intrinsic value

Outstanding at January 1, 2015	5,520,516		$	1.32
Granted	692,067			3.22
Exercised	(782,925	)		0.52
Forfeited	(16,800	)		2.56

Outstanding at September 30, 2015	5,412,858			1.67	7.3	$	30,784



Options vested and expected to vest at September 30, 2015	5,412,858		$	1.67	7.3	$	30,784



Exercisable at September 30, 2015	3,327,410		$	1.37	7.1	$	21,403

Included within the above table are 434,616 non-employee options outstanding as of September 30, 2015, of which 16,435 are unvested as of September 30, 2015 and therefore subject to remeasurement.

The weighted average grant-date fair value of employee options granted during the nine months ended September 30, 2014 and 2015 was $0.81 and $1.67, respectively.

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company's common stock as of September 30, 2015 for those stock options that had exercise prices lower than the fair value of the Company's common stock.

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The Company recorded stock-based compensation expense related to stock options for the nine months ended September 30, 2014 and 2015, in the following expense categories of its consolidated statement of operations:

	Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2015

Cost of revenue — product	$	44	$	75
Cost of revenue — service		2		17
Research and development		7		14
Sales and marketing		44		68
General and administrative		93		297

	$	190	$	471

As of September 30, 2015, there was $1,315 of total unrecognized compensation cost related to nonvested stock options granted under the 2014 Plan, which is expected to be recognized over a weighted average period of 2.3 years.

11. Net Loss per Share and Unaudited Pro Forma Net Loss per Share

(a) Net Loss per Share Attributable to Common Stockholders

Basic and diluted net loss per share attributable to common stockholders was calculated as follows:

	Nine Months Ended September 30,

	2014			2015
Numerator:
Net loss	$	(259	)	$	(3,949	)
Accretion of redeemable convertible preferred stock to redemption value		(531	)		(12,058	)

Net loss attributable to common stockholders	$	(790	)	$	(16,007	)



Denominator:
Weighted average shares of common stock outstanding, basic and diluted		7,824,537			8,210,760



Net loss per share attributable to common stockholders, basic and diluted	$	(0.10	)	$	(1.95	)

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excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

	Nine Months Ended September 30,

	2014		2015
Stock options to purchase common stock		5,590,662		5,412,858
Common stock warrants		850,935		866,527
Preferred stock warrants		417,505		899,368
Redeemable convertible preferred stock (as converted to common stock)		9,873,511		9,873,511

		16,732,613		17,052,264

(b) Unaudited Pro Forma Net Loss per Share

The unaudited pro forma basic and diluted net loss per share attributable to common stockholders for the nine months ended September 30, 2015 gives effect to adjustments arising upon the closing of the initial public offering. The unaudited pro forma net loss attributable to common stockholders used in the calculation of unaudited basic and diluted pro forma net loss per share attributable to common stockholders does not include the effects of the accretion of redeemable convertible preferred stock to redemption value because the calculation assumes that the conversion of redeemable convertible preferred stock into common stock has occurred on January 1, 2015.

The unaudited pro forma basic and diluted weighted average common shares outstanding used in the calculation of unaudited pro forma basic and diluted net loss per share attributable to common stockholders for the nine months ended September 30, 2015 give effect to the conversion upon the initial public offering of all outstanding shares of redeemable convertible preferred stock as of September 30, 2015 into 9,873,511 shares of common stock as if the conversion had occurred on January 1, 2015, assuming the IPO price per share is at least five times the original issue price of the respective series of preferred stock and the gross cash proceeds are at least $50,000.

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Unaudited pro forma basic and diluted net loss per share attributable to common stockholders was calculated as follows:

	Nine Months Ended September 30, 2015

Numerator:
Net loss attributable to common stockholders	$	(16,007	)
Pro forma adjustment to add back the accretion of redeemable convertible preferred stock		12,058

Pro forma net loss attributable to common stockholders	$	(3,949	)



Denominator:
Weighted average shares of common stock outstanding, basic and diluted		8,210,760
Pro forma adjustment for assumed conversion of all outstanding shares of redeemable convertible preferred stock upon the closing of the proposed initial public offering		9,873,511

Pro forma weighted average common shares outstanding, basic and diluted		18,084,271



Pro forma net loss per share attributable to common stockholders, basic and diluted	$	(0.22	)

12. Fair Value Measurements

The Company's financial instruments consist of accounts receivable, accounts payable, accrued expenses, acquisition-related contingent consideration, notes payable related to acquisition, long-term notes payable to related parties, and long-term debt. The carrying values of accounts receivable, accounts payable and accrued expenses are representative of their fair value due to the relatively short-term nature of those instruments. The carrying value of the Company's long-term notes payable to related parties and long-term debt approximates fair value based on the terms of the debt. The long-term notes payable to related parties were recorded on December 31, 2014 at their acquisition date fair values of $14,347. This valuation was determined using Level 3 inputs.

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The Company has classified liabilities measured at fair value on a recurring basis at December 31, 2014 and September 30, 2015 as follows:

	Fair Value Measurement at Reporting Date Using

	Level 1		Level 2		Level 3		Balance as of December 31, 2014
Warrant liability	$	—	$	—	$	2,783	$	2,783
Note payable related to acquisition		—		—		14,350		14,350
Acquisition-related contingent consideration — short-term		—		—		1,079		1,079
Acquisition-related contingent consideration — long-term		—		—		7,300		7,300

	$	—	$	—	$	25,512	$	25,512

	Fair Value Measurement at Reporting Date Using

	Level 1		Level 2		Level 3		Balance as of September 30, 2015
Warrant liability	$	—	$	—	$	6,260	$	6,260
Note payable related to acquisition		—		—		15,256		15,256
Acquisition-related contingent consideration — short-term		—		—		2,091		2,091
Acquisition-related contingent consideration — long-term		—		—		3,861		3,861

	$	—	$	—	$	27,468	$	27,468

The fair value of the preferred stock warrants at December 31, 2014 was estimated using an option pricing model with the following weighted-average assumptions: estimated life of 8.99 years, no dividend yield, risk-free interest rate of 2.1%, fair value of underlying instrument of $4.93 per share and volatility of 55.00%. The Company also applied a discount for lack of marketability of 20% to the resulting value from the option pricing model.

The fair value at September 30, 2015 of warrants to purchase shares of preferred stock was estimated using an option pricing model with the following weighted-average assumptions: estimated life of 8.24 years, no dividend yield, risk-free interest rate of 1.93%, fair value of underlying instrument of $9.49 per share, and volatility of 57.41%. The Company also applied a discount for lack of marketability of 15% to the resulting value from the option pricing model.

The Company developed its own assumptions that do not have observable inputs or available market data to support the fair value. This method of valuation involves using inputs such as the fair value of the Company's various classes of preferred stock, stock price volatility, the contractual term of the warrants, risk-free interest rates, and dividend yields. Due to the nature of these inputs, the valuation of the warrants is considered a Level 3 measurement. The Company accounts for its redeemable convertible preferred stock warrants as liabilities in accordance with the guidance for accounting for certain financial instruments with characteristics of both liabilities and equity, as warrants entitle the

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holder to purchase preferred stock that is considered contingently redeemable. The warrant liability is recorded on its own line item on the Company's consolidated balance sheets. The warrant liability is marked-to-market each reporting period with the change in fair value recorded on its own line in the consolidated statement of operations until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified as an equity instrument.

The reconciliation of the warrant liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows:


Balance at January 1, 2015	$	2,783
Change in fair value		3,477

Balance at September 30, 2015	$	6,260

The fair value of the Medliance acquisition-related contingent consideration at September 30, 2015 was determined using estimated 2015 Medliance revenue of $7,197 as part of the formula to determine the Aggregate Earn-out Amount. A reduction in the Aggregate Earn-out Amount of $1,348 was calculated based on estimated lost future revenues from a lost customer which occurred in 2015, using an average of claims per month for that customer and current data and statistics revenue rates.

The changes in fair value of the Company's acquisition-related contingent consideration for the nine months ended September 30, 2015 was as follows:


Balance at January 1, 2015	$	8,379
Fair value of cash consideration paid		(877	)
Fair value of equity consideration issued		(202	)
Adjustments to fair value measurement		(1,348	)

Balance at September 30, 2015	$	5,952

The fair value of the Medliance deferred payments was calculated to be $5,952 at September 30, 2015.

13. Related-Party Transactions

The Company engaged Knowlton Advisors LLC, a management consulting services company, to provide professional accounting services. Knowlton Advisors LLC is owned and operated by an immediate relative of the Company's Chairman and Chief Executive Officer and the Company's President. Costs incurred by the Company for professional accounting services provided by the related party were $14 and $9 for the nine months ended September 30, 2014 and 2015, respectively.

The Company engaged Space Age Robotics LLC, an IT consulting services company, to provide professional IT client services. Space Age Robotics LLC is owned and operated by an immediate relative of the President and Chief Executive Officer of Capstone. Costs incurred by the Company for

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professional IT client services provided by the related party were $13 and $23 for the nine months ended September 30, 2014 and 2015, respectively.

On August 14, 2015, the Company made a loan to certain executive officers, pursuant to a promissory note, for an aggregate principal amount of $410. The note bears interest at 6% per annum. As of September 30, 2015, the note had a balance of $410 and was included in prepaid expenses and other current assets on the Company's unaudited consolidated balance sheet. On December 8, 2015, the executive officers repaid the loan in full by offsetting amounts due to them pursuant to demand promissory notes the Company previously issued.

14. Commitments & Contingencies

Operating Lease Agreements

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Independent Auditors' Report

The Board of Directors
Tabula Rasa HealthCare, Inc.:

We have audited the accompanying financial statements of the Medliance Business (a Business of Medliance LLC), which comprise the balance sheet as of December 31, 2013, and the related statements of operations, changes in net parent investment, and cash flows for the years ended December 31, 2014 and December 31, 2013, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Medliance Business (a Business of Medliance LLC) as of December 31, 2013, and the results of its operations and its cash flows for the years ended December 31, 2014 and December 31, 2013 in accordance with U.S. generally accepted accounting principles.

/s/ KPMG LLP

Philadelphia, Pennsylvania
August 31, 2015

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MEDLIANCE BUSINESS
(A Business of Medliance LLC)
Balance Sheet
December 31, 2013

	2013

Assets
Current assets:
Cash	$	486,653
Accounts receivable, less allowance for doubtful accounts of $17,397		305,539
Prepaid expenses and other current assets		14,482

Total current assets		806,674
Property and equipment, net		61,241
Other assets		11,615

Total assets	$	879,530



Liabilities and Net Parent Investment
Current liabilities:
Accounts payable	$	229,656
Accrued expenses and other liabilities		162,347

Total current liabilities		392,003
Commitments and contingencies (note 4)
Net parent investment		487,527

Total liabilities and net parent investment	$	879,530

See accompanying notes to financial statements.

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MEDLIANCE BUSINESS
(A Business of Medliance LLC)
Statements of Operations
Years ended December 31, 2013 and 2014

	2013		2014

Revenues	$	6,147,377	$	6,300,996
Cost of revenues		2,036,536		2,050,668

Gross profit		4,110,841		4,250,328

Operating expenses:
Research and development		13,781		74,073
Sales and marketing		206,121		124,279
General and administrative		1,455,146		1,369,443
Depreciation and amortization		33,428		26,198

Total operating expenses		1,708,476		1,593,993

Income from operations		2,402,365		2,656,335
Other income, net		1,654		218

Net income	$	2,404,019	$	2,656,553

See accompanying notes to financial statements.

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MEDLIANCE BUSINESS
(A Business of Medliance LLC)
Statements of Changes in Net Parent Investment


Balance, January 1, 2013	$	479,020
Net income		2,404,019
Net transfer to parent		(2,395,512	)

Balance, December 31, 2013		487,527
Net income		2,656,553
Net transfer to parent		(2,908,116	)

Balance, December 31, 2014	$	235,964

See accompanying notes to financial statements.

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MEDLIANCE BUSINESS
(A Business of Medliance LLC)
Statements of Cash Flows
Years ended December 31, 2013 and 2014

	2013			2014

Cash flows from operating activities:
Net income	$	2,404,019		$	2,656,553
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		33,428			26,198
Provision for allowance for doubtful accounts		39,082			10,817
Loss on disposal of property and equipment		—			1,638
Changes in assets and liabilities:
Accounts receivable		(60,594	)		(34,283	)
Prepaid expenses and other current assets		19,939			(9,806	)
Other assets		(440	)		—
Accounts payable		45,285			2,851
Accrued expenses and other liabilities		45,878			(93,357	)

Net cash provided by operating activities		2,526,597			2,560,611

Cash flows from investing activities:
Purchases of property and equipment		(9,934	)		—

Net cash used in investing activities		(9,934	)		—

Cash flows from financing activities:
Net transfer to parent		(2,395,512	)		(2,908,116	)

Net cash used in financing activities		(2,395,512	)		(2,908,116	)

Net increase (decrease) in cash		121,151			(347,505	)
Cash, beginning of year		365,502			486,653

Cash, end of year	$	486,653		$	139,148

See accompanying notes to financial statements.

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MEDLIANCE BUSINESS
(A Business of Medliance LLC)
Notes to Financial Statements
December 31, 2013 and 2014

(1) Description of Business

The accompanying financial statements include the assets and liabilities and the related operations of the Medliance Business (the "Business"). The financial statements include the activity and related accounts of the Business. All intercompany accounts and transactions have been eliminated.

The Business provides technology and data analysis to approximately 1,300 post-acute care facilities nationwide to help manage their pharmacy costs.

The Business's primary offering is a real-time pharmacy adjudication, management and reporting tool called PharmView. The Business also offers a retrospective PostView product and a set of complementary professional services.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The Business was acquired by Tabula Rasa HealthCare, Inc. ("TRHC") at the close of business on December 31, 2014. Separate financial statements historically have not been prepared for the Business. The accompanying balance sheet, statements of operations, and statements of cash flows have been derived from the historical accounting records of Medliance LLC (the "Company") and have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The separate financial statements of the Business exclude the Company's investments in consolidated subsidiaries and the related intercompany receivables, which were not acquired by TRHC and debt that was not related to the Business and was not assumed by TRHC. The separate financial statements of the Business include all other assets, liabilities, revenues, and expenses of the Company.

(b) Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(c) Cash

The Business considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash at December 31, 2013 consists of cash on deposit with banks. There are no cash equivalents at December 31, 2013.

(d) Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest. The Business maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and its customers' financial condition, the amount of receivables in dispute, and the current receivables aging and current payment patterns. The Business reviews its allowance for doubtful accounts monthly. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

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MEDLIANCE BUSINESS
(A Business of Medliance LLC)
Notes to Financial Statements — (Continued)
December 31, 2013 and 2014

(e) Property and Equipment

Property and equipment are stated at cost. Additions or improvements that increase the useful life of existing assets are capitalized, while expenditures for repairs and maintenance are charged to expense as incurred. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets. The Business depreciates computer hardware and purchased software over a life of three to five years and office furniture and equipment over a life of five years. Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the lease term.

(f) Impairment of Long-Lived Assets

Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, then an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. As of December 31, 2013 and 2014, management does not believe that a revision to the remaining useful lives or write-down of long-lived assets is required.

(g) Revenue Recognition

The Business recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the seller's price to the buyer is fixed or determinable, and (iv) collectability is reasonably assured.

The Business enters into contracts with post-acute care facilities to provide its PharmView services, which include immediate claim adjudication, electronic invoice reconciliation, real-time pharmacy notification, and performance and facility reports. PharmView is a subscription service and the fee components are fixed and are contractually agreed to in advance. Revenues generated from PharmView subscriptions are recognized monthly as the services are rendered.

PostView data is typically provided to post-acute care customers at no charge. The Business is able to sell the data collected through the PharmView and PostView services through its software provider, which aggregates the data collected from the Business and other customers and sells this data to pharmaceutical companies. The pharmaceutical companies pay the software provider data and statistics revenue for the data. The software provider then remits payment to the Business. The price is not fixed or determinable when the data is sold to the pharmaceutical companies because they have the ability to reject data at their discretion. Therefore, revenues generated from data and statistics are recognized at the time when payments are remitted to the Business by the software provider.

(h) Concentration of Credit Risk

The Business extends credit to customers based upon management's evaluation of creditworthiness, and generally collateral is not required. Revenues from the Business's software provider represented 48% and 70% of total revenues for the years ended December 31, 2013 and 2014, respectively. Accounts receivable from three customers represented 19%, 11%, and 11%, respectively, of total accounts receivable at December 31, 2013.

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MEDLIANCE BUSINESS
(A Business of Medliance LLC)
Notes to Financial Statements — (Continued)
December 31, 2013 and 2014

(i) Research and Development

Research and development expenses consist primarily of (a) salaries and related personnel costs related to the Business's research and development efforts, (b) payments to suppliers for design and consulting services, (c) costs relating to the design and development of new services and enhancement of existing services, (d) quality assurance and testing, and (e) other related overhead. Costs incurred in research and development are charged to expense as incurred.

(j) Income Taxes

As a limited liability company, the Company is treated as a partnership for federal and state income tax purposes. Accordingly, no provision has been made for income taxes in the accompanying financial statements of the Business, since all items of income or loss are required to be reported on the income tax returns of the members of the Company, who are responsible for any taxes thereon.

(k) Uncertain Tax Positions

The Business follows accounting requirements associated with uncertainty in income taxes using the provisions of Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") 740, Income Taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not that the positions will be sustained upon examination by the taxing authorities. FASB ASC 740 also provides guidance for derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

As of December 31, 2013 and 2014, the Business had no uncertain tax positions that qualified for either recognition or disclosure in the financial statements. Additionally, the Business had no interest and penalties related to income taxes.

The Company files income tax returns in the U.S. federal jurisdiction and in various state and local jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by taxing authorities for years before 2011.

(3) Property and Equipment

As of December 31, 2013, property and equipment consisted of the following:

	Estimated useful life	2013

Computer hardware and software	3 to 5 years	$	44,132
Furniture and equipment	5 years		69,439
Leasehold improvements	7 years		63,190

			176,761
Less accumulated depreciation and amortization			(115,520	)

		$	61,241

Depreciation and amortization expense for the years ended December 31, 2013 and 2014 was $33,428 and $26,198, respectively.

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MEDLIANCE BUSINESS
(A Business of Medliance LLC)
Notes to Financial Statements — (Continued)
December 31, 2013 and 2014

(4) Commitments and Contingencies

(a) Leases

The Business has entered into various operating leases for office space and vehicles expiring on various dates through 2016.

Rent expense under these operating leases was $80,120 and $81,310 for the years ended December 31, 2013 and 2014, respectively.

(b) Legal Proceedings

The Business is not currently involved in any significant claims or legal actions that, in the opinion of management, will have a material adverse impact on the Business.

(5) Subsequent Events

The Business has evaluated subsequent events from the balance sheet date through August 31, 2015, the date at which the financial statements were available to be issued.

On December 31, 2014, the Business was acquired by TRHC in exchange for total consideration at closing of $28,404,301, which included $12,000,000 paid in cash and the issuance of promissory notes to the members of the Company for $16,384,865. In addition, TRHC agreed to pay further cash consideration contingent upon the future financial performance of the Business. As of December 31, 2014, the contingent consideration was estimated to be $7,300,000.

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Independent Auditors' Report

The Board of Directors
Tabula Rasa HealthCare, Inc.:

We have audited the accompanying financial statements of Capstone Performance Systems, LLC, which comprise the balance sheet as of December 31, 2013, and the related statements of operations, members' equity, and cash flows for the year ended December 31, 2013 and the period from January 1, 2014 through April 21, 2014 and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Auditors' Responsibility

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Capstone Performance Systems, LLC as of December 31, 2013, and the results of its operations and its cash flows for the year ended December 31, 2013 and the period from January 1, 2014 through April 21, 2014 in accordance with U.S. generally accepted accounting principles.

/s/ KPMG LLP

Philadelphia, Pennsylvania
August 31, 2015

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CAPSTONE PERFORMANCE SYSTEMS, LLC
Balance Sheet

	December 31, 2013

Assets
Current assets:
Cash and cash equivalents	$	23,359
Accounts receivable		94,851
Prepaid expenses and other current assets		9,536

Total current assets		127,746
Property and equipment, net		25,595
Due from related parties		908,525

Total assets	$	1,061,866



Liabilities and Members' Equity
Current liabilities:
Accounts payable	$	5,080
Accrued expenses and other liabilities		116,472
Unearned revenues		34,793

Total current liabilities		156,345
Unearned revenues		10,581

Total liabilities		166,926

Commitments and contingencies (note 5)
Members' equity		894,940

Total liabilities and members' equity	$	1,061,866

See accompanying notes to financial statements.

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CAPSTONE PERFORMANCE SYSTEMS, LLC
Statements of Operations

	Year Ended December 31, 2013		January 1, 2014 Through April 21, 2014

Revenues	$	1,676,834	$	595,402
Cost of revenues, exclusive of depreciation shown below		623,932		261,711

Gross profit		1,052,902		333,691

Operating expenses:
Sales and marketing		31,056		4,585
General and administrative		64,138		23,307
Shared services — related party		324,000		133,045
Depreciation		9,301		3,508

Total operating expenses		428,495		164,445

Income from operations		624,407		169,246
Other income, net		6,521		—

Net income	$	630,928	$	169,246

See accompanying notes to financial statements.

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CAPSTONE PERFORMANCE SYSTEMS, LLC
Statements of Members' Equity


Balance, January 1, 2013	$	265,012
Net income		630,928
Member distributions		(1,000	)

Balance, December 31, 2013		894,940
Net income		169,246
Member distributions		(6,346	)

Balance, April 21, 2014	$	1,057,840

See accompanying notes to financial statements.

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CAPSTONE PERFORMANCE SYSTEMS, LLC
Statements of Cash Flows

	Year Ended December 31, 2013			January 1, 2014 Through April 21, 2014

Cash flows from operating activities:
Net income	$	630,928		$	169,246
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		9,301			3,508
Changes in assets and liabilities:
Accounts receivable		(43,409	)		(17,132	)
Prepaid expenses and other current assets		(9,536	)		(2,601	)
Accounts payable		(3,047	)		6,419
Accrued expenses and other liabilities		73,668			17,229
Unearned revenues		33,374			19,253

Net cash provided by operating activities		691,279			195,922

Cash flows from investing activities:
Purchases of property and equipment		(22,632	)		—
Net transfers with related parties		(669,878	)		(136,575	)

Net cash used in investing activities		(692,510	)		(136,575	)

Cash flows from financing activities:
Member distributions		(1,000	)		(6,346	)

Net cash used in financing activities		(1,000	)		(6,346	)

Net (decrease) increase in cash and cash equivalents		(2,231	)		53,001
Cash and cash equivalents, beginning of period		25,590			23,359

Cash and cash equivalents, end of period	$	23,359		$	76,360

See accompanying notes to financial statements.

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CAPSTONE PERFORMANCE SYSTEMS, LLC
Notes to Financial Statements
April 21, 2013 and December 31, 2014

(1) Description of Business

Capstone Performance Systems, LLC (the "Company"), a Colorado limited liability company, was founded in 2012. The Company partners with Programs of All-Inclusive Care for the Elderly ("PACE") to provide Medicare risk adjustment services. The Company possesses experience and expertise in the development and analysis of risk adjustment processes and systems to capture timely, complete, and accurate data for PACE organizations throughout the country. The Company's profits and losses are allocated among the members as provided for in the current limited liability company operating agreement.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

Substantially all of the assets, and certain liabilities of the Company, were acquired by CareKinesis, Inc. ("CareKinesis") on April 22, 2014. The accompanying audited financial statements have been prepared for the periods before the acquisition, including the period from January 1, 2014 through April 21, 2014 and the year ended December 31, 2013 (see Note 7).

(b) Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(c) Supplemental Disclosures of Cash Flow Information

For the year ended December 31, 2013 and the period from January 1, 2014 to April 21, 2014, the Company paid interest of $1,873 and $937, respectively.

(d) Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash at December 31, 2013 consists of cash on deposit with banks. There are no cash equivalents at December 31, 2013.

(e) Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and its customers' financial condition, the amount of receivables in dispute, and the current receivables aging and current payment patterns. The Company reviews its allowance for doubtful accounts monthly. The Company has not recorded an allowance for doubtful accounts at December 31, 2013.

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CAPSTONE PERFORMANCE SYSTEMS, LLC
Notes to Financial Statements — (Continued)
April 21, 2013 and December 31, 2014

(f) Property and Equipment

Property and equipment are stated at cost. Additions or improvements that increase the useful life of existing assets are capitalized, while expenditures for repairs and maintenance are charged to expense as incurred. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets. The Company depreciates computer hardware over a life of five years and purchased software over a life of three years.

(g) Impairment of Long-Lived Assets

Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, then an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. As of December 31, 2013 and April 21, 2014, management does not believe that a revision to the remaining useful lives or write-down of long-lived assets is required.

(h) Revenue Recognition

The Company enters into contracts with PACE organizations to provide risk adjustment services, which include assessing the quality of data collection, assessing the quality of diagnosis data processing and reporting, and providing expert ongoing support to assure complete and accurate data for compliance with the Centers for Medicare & Medicaid Services requirements. Under these contracts, there are three revenue generating components: set-up fees, monthly administrative per member per month fees, and hourly consulting rate charges. The fee components are fixed and are contractually agreed to in advance. The Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the seller's price to the buyer is fixed or determinable, and (iv) collectability is reasonably assured.

Revenues generated from set-up fees are deferred and are recognized ratably over the estimated term of the contract. Revenues generated from per member per month fees are recognized monthly when census data is reported. Revenues from hourly consulting rate charges are recognized when the services have been rendered.

(i) Concentration of Credit Risk

The Company extends credit to customers based upon management's evaluation of creditworthiness, and generally collateral is not required. For the year ended December 31, 2013, three customers represented 25%, 18%, and 10%, respectively, of total revenues. The accounts receivable related to four customers as of December 31, 2013 represented 27%, 22%, 15%, and 14%, respectively, of total accounts receivable. For the period from January 1, 2014 to April 21, 2014, three customers represented 24%, 10%, and 10%, respectively, of total revenues.

(j) Income Taxes

As a limited liability company, the Company is treated as a partnership for federal and state income tax purposes. Accordingly, no provision has been made for income taxes in the accompanying financial statements, since all items of income or loss are required to be reported on the income tax returns of the members, who are responsible for any taxes thereon.

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CAPSTONE PERFORMANCE SYSTEMS, LLC
Notes to Financial Statements — (Continued)
April 21, 2013 and December 31, 2014

(k) Uncertain Tax Positions

The Company follows accounting requirements associated with uncertainty in income taxes using the provisions of Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") 740, Income Taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not that the positions will be sustained upon examination by the taxing authorities. FASB ASC 740 also provides guidance for derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

As of December 31, 2013 and April 21, 2014, the Company had no uncertain tax positions that qualified for either recognition or disclosure in the financial statements. Additionally, the Company had no interest and penalties related to income taxes.

The Company files income tax returns in the U.S. federal jurisdiction and in various state and local jurisdictions. With few exceptions, the Company is subject to U.S. federal, state and local income tax examinations by taxing authorities for all years since inception.

(3) Property and Equipment

Property and equipment consisted of the following:

	Estimated Useful Life	December 31, 2013

Computer software	3 years	$	25,420
Computer hardware	5 years		10,257

			35,677
Less accumulated depreciation			(10,082	)

		$	25,595

Depreciation expense for the year ended December 31, 2013 and the period from January 1, 2014 to April 21, 2014 was $9,301 and $3,508, respectively.

(4) Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following:

	December 31, 2013

Payroll and related benefits	$	83,169
Credit card liability		24,149
Other		5,394
Professional services		3,760

	$	116,472

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CAPSTONE PERFORMANCE SYSTEMS, LLC
Notes to Financial Statements — (Continued)
April 21, 2013 and December 31, 2014

(5) Commitments and Contingencies

(a) Leases

The Company leases office space from a related party on a month to month basis (see Note 6). As of April 21, 2014, the Company had no future commitments related to these leases.

Rent expense under these operating leases was $500 and $920 and for the year ended December 31, 2013 and the period from January 1, 2014 to April 21, 2014, respectively (see Note 6).

(b) Legal Proceedings

The Company is not currently involved in any significant claims or legal actions that, in the opinion of management, will have a material adverse impact on the Company.

(6) Related-Party Transactions

Advances due from related parties are noninterest-bearing and have no formal repayment terms. Amounts due from related parties consisted of the following:

	December 31, 2013

Altitude Edge Consulting, LLC	$	662,277
Peak Pace Solutions, LLC		246,248

	$	908,525

During the year ended December 31, 2013 and the period from January 1, 2014 to April 21, 2014, the Company performed consulting services for Altitude Edge Consultants, LLC (AEC). AEC is owned and operated by the members of the Company. Revenues recognized from AEC during the year ended December 31, 2013 and the period from January 1, 2014 to April 21, 2014 were $7,750 and $12,250, respectively.

During the year ended December 31, 2013 and the period from January 1, 2014 to April 21, 2014, AEC performed accounting and administrative services for the Company. During the year ended December 31, 2013 and the period from January 1, 2014 to April 21, 2014, AEC charged the Company a total of $324,000 and $133,045, respectively, for these services. In addition, the Company provided noninterest-bearing cash advances to AEC.

During the year ended December 31, 2013 and the period from January 1, 2014 to April 21, 2014, the Company performed consulting services for Peak Pace Solutions, LLC (Peak). Peak is owned and operated by the members of the Company. Revenues recognized from Peak during the year ended December 31, 2013 and the period from January 1, 2014 to April 21, 2014 were $54,500 and $22,932, respectively. In addition, the Company provided noninterest-bearing cash advances to Peak.

During the year ended December 31, 2013 and the period from January 1, 2014 to April 21, 2014, the Company recognized rent expense of $500 and $920, respectively, for office space leased from Peak.

(7) Subsequent Events

The Company has evaluated subsequent events from the balance sheets date through August 31, 2015, the date at which the financial statements were available to be issued.

On April 22, 2014, substantially all of the assets of the Company were acquired by CareKinesis in exchange for the assumption by CareKinesis of certain enumerated liabilities of the Company, total cash consideration of $6,077,054, and 239,088 shares of common stock of CareKinesis.

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UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
BASIS OF PRESENTATION

The unaudited pro forma combined financial information has been developed by applying pro forma adjustments to the historical audited consolidated financial statements of Tabula Rasa Healthcare, Inc. (the "Company") appearing elsewhere in this prospectus. The unaudited pro forma combined statement of operations gives pro forma effect to the consummation of the acquisitions of Capstone Performance Systems, LLC ("Capstone") and Medliance LLC ("Medliance"), which occurred on April 22, 2014 and December 31, 2014, respectively, as if they had occurred on January 1, 2014.

The unaudited pro forma combined financial information gives effect to events that are (1) directly attributable to the Capstone and Medliance transactions, (2) factually supportable and (3) expected to have a continuing impact on the combined company. The unaudited pro forma combined statement of operations for the year ended December 31, 2014 shows the impact of the acquisition method of accounting under Financial Accounting Standards Board ASC 805, Business Combinations.

Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with this unaudited pro forma combined financial information.

The unaudited pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable under the circumstances. The unaudited pro forma combined financial information is presented for informational purposes only. The unaudited pro forma combined financial information does not purport to represent what the Company's results of operations would have been had the Capstone and Medliance transactions actually occurred on January 1, 2014, nor does it purport to project the Company's results of operations for any future period or as of any future date. The unaudited pro forma combined financial information should be read in conjunction with the section entitled "Selected Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements of the Company, Capstone and Medliance and related notes included elsewhere in this prospectus.

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Unaudited Pro Forma Combined Statement of Operations
for the Year Ended December 31, 2014
(In thousands, except share and per share amounts)

	Tabula Rasa HealthCare			Capstone Historical For the Period January 1, 2014 through April 21, 2014		Medliance Historical For the Period January 1, 2014 through December 30, 2014		Pro Forma Adjustments			Notes	Pro Forma Combined

Revenue:
Product revenue	$	46,878		$	—	$	—	$	—			$	46,878
Service revenue		1,550			595		6,301		—				8,446

Total revenue		48,428			595		6,301		—				55,324

Cost of revenue, exclusive of depreciation and amortization shown below:
Product cost		37,073			—		—		—				37,073
Service cost		739			262		2,051		—				3,052

Total cost of revenue		37,812			262		2,051		—				40,125

Gross profit		10,616			333		4,250		—				15,199

Operating expenses:
Research and development		1,660			—		74		—				1,734
Sales and marketing		2,272			5		124		—				2,401
General and administrative		3,970			156		1,369		(351	)	(a)		5,144
Change in fair value of acquisition-related contingent consideration expense		790			—		—		—				790
Depreciation and amortization		1,817			4		26		1,804		(b)		3,651

Total operating expenses		10,509			165		1,593		1,453				13,720

Income (loss) from operations		107			168		2,657		(1,453	)			1,479
Other expense:
Change in fair value of warrant liability		269			—		—		—				269
Interest expense		1,354			—		—		4,775		(c)		6,129

Total other expense		1,623			—		—		4,775				6,398

(Loss) income before income taxes		(1,516	)		168		2,657		(6,228	)			(4,919	)
Income tax benefit		(409	)		—		—		—				(409	)

Net (loss) income		(1,107	)		168		2,657		(6,228	)			(4,510	)
Accretion of redeemable convertible preferred stock		(3,884	)		—		—		—				(3,884	)

Net (loss) income attributable to common stockholders	$	(4,991	)	$	168	$	2,657	$	(6,228	)		$	(8,394	)



Net loss per share attributable to common stockholders, basic and diluted	$	(0.63	)									$	(1.06	)



Weighted average common shares outstanding, basic and diluted		7,862,025							61,843		(d)		7,923,868

See accompanying Notes to Unaudited Pro Forma Combined Statement of Operations.

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Notes to Unaudited Pro Forma Combined Statement of Operations

(a): Acquisition-related costs and related party shared services

Reflects elimination of acquisition-related costs included in the historical consolidated financial statements of the Company of $218, which were directly attributable to the acquisitions, but are not expected to have a continuing impact on the results of the combined entity, and elimination of $133 of shared services expense that related to accounting and administrative services performed for Capstone by related parties prior to the acquisition but are not expected to have a continuing impact on the results of the combined entity.
(b): Amortization-related costs

Represents the additional amortization of acquired intangible assets of $1,834 based on fair values and useful lives for the finite lived intangibles acquired of between four and eleven years, and the elimination of Capstone's and Medliance's historical intangible asset amortization expense of $4 and $26, respectively. Amortization expense has been calculated on a straight-line basis.
(c): Interest on acquisition related debt

Represents additional interest incurred on debt used to fund the acquisitions of Capstone and Medliance as if the borrowings took place on January 1, 2014.
(d): Weighted average common shares outstanding

Shares used to calculate unaudited pro forma combined net loss per share were adjusted to reflect the issuance of 203,358 shares of common stock as consideration in the Capstone acquisition as if the shares were issued on January 1, 2014.

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Shares
Tabula Rasa HealthCare, Inc.
Common Stock

PROSPECTUS

, 2016


Wells Fargo Securities		UBS Investment Bank

	Piper Jaffray

Baird		Stifel

Through and including , 2016 (25 days after the commencement of this offering), all dealers that buy, sell or trade shares of our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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Part II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth the expenses to be incurred in connection with the offering described in this registration statement, other than underwriting discounts and commissions, all of which will be paid by the registrant. All amounts are estimates except the Securities and Exchange Commission registration fee and the Financial Industry Regulatory Authority, Inc. filing fee.

	Amount

Securities and Exchange Commission registration fee	$	*
Financial Industry Regulatory Authority, Inc. filing fee		*
NASDAQ Global Market initial listing fee		*
Accountants' fees and expenses		*
Legal fees and expenses		*
Blue Sky fees and expenses		*
Transfer Agent's fees and expenses		*
Printing and engraving expenses		*
Miscellaneous		*

Total Expenses	$	*

*: To be filed by amendment.

Item 14. Indemnification of Directors and Officers.

Section 102 of the Delaware General Corporation Law permits a corporation to eliminate the personal liability of its directors or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his or her duty of loyalty to the corporation or its stockholders, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock purchase or redemption in violation of Delaware corporate law or derived an improper personal benefit. Our amended and restated certificate of incorporation that will be effective upon the closing of this offering provides that no director shall be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability, except to the extent that the Delaware General Corporation Law prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty.

Section 145 of the Delaware General Corporation Law provides that a corporation has the power to indemnify a director, officer, employee or agent of the corporation and certain other persons serving at the request of the corporation in related capacities against expenses (including attorneys' fees), judgments, fines and amounts paid in settlements actually and reasonably incurred by the person in connection with an action, suit or proceeding to which he or she is or is threatened to be made a party by reason of such position, if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnify for such expenses which the Court of Chancery or such other court shall deem proper.

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Our certificate of incorporation that will be effective upon the closing of the offering provides that we will indemnify each person who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of us) by reason of the fact that he or she is or was, or has agreed to become, our director or officer, or is or was serving, or has agreed to serve, at our request as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise, all such persons being referred to as an Indemnitee, or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding and any appeal therefrom, if such Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interests, and, with respect to any criminal action or proceeding, he or she had no reasonable cause to believe his or her conduct was unlawful.

Our certificate of incorporation that will be effective upon the closing of the offering also provides that we will indemnify any Indemnitee who was or is a party to an action or suit by or in the right of us to procure a judgment in our favor by reason of the fact that the Indemnitee is or was, or has agreed to become, our director or officer, or is or was serving, or has agreed to serve, at our request as a director, officer, partner, employee or trustee or, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys' fees) and, to the extent permitted by law, amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding, and any appeal therefrom, if the Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interests, except that no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to us, unless a court determines that, despite such adjudication but in view of all of the circumstances, he or she is entitled to indemnification of such expenses. Notwithstanding the foregoing, to the extent that any Indemnitee has been successful, on the merits or otherwise, he or she will be indemnified by us against all expenses (including attorneys' fees) actually and reasonably incurred by him or her or on his or her behalf in connection therewith. If we do not assume the defense, expenses must be advanced to an Indemnitee under certain circumstances.

We have entered into indemnification agreements with our directors and intend to enter into indemnification agreements with our executive officers prior to the completion of this offering. In general, these agreements provide that we will indemnify the director or executive officer to the fullest extent permitted by law for claims arising in his or her capacity as a director or officer of our company or in connection with their service at our request for another corporation or entity. The indemnification agreements also provide for procedures that will apply in the event that a director or executive officer makes a claim for indemnification and establish certain presumptions that are favorable to the director or executive officer.

We maintain a general liability insurance policy that covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers.

The underwriting agreement we will enter into in connection with the offering of common stock being registered hereby provides that the underwriters will indemnify, under certain conditions, our directors and officers (as well as certain other persons) against certain liabilities arising in connection with such offering.

Item 15. Recent Sales of Unregistered Securities.

Set forth below is information regarding shares of common stock and preferred stock issued, and options granted, by the Registrant since January 1, 2012 that were not registered under the Securities Act of 1933, as amended, or the Securities Act. Also included is the consideration, if any, received by the

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Registrant for such shares and options and information relating to the section of the Securities Act, or rule of the Securities and Exchange Commission, under which exemption from registration was claimed.

(a) Issuances of Securities

In April 2015, we issued 35,730 shares of our common stock to Capstone Holdings, LLC at a price of $3.00 per share as deferred consideration in connection with the acquisition of Capstone Performance Systems, LLC.

In January 2015, we issued 31,500 shares of our common stock to Gary Tom at a price of $3.00 per share as deferred consideration in connection with the acquisition of J.A. Robertson, Inc.

From January 2014 through June 2015, we issued warrants to Drs. Calvin and Orsula Knowlton to purchase an aggregate amount of 32,576 shares of our common stock at an exercise price of $3.30 per share in connection with the promissory note they were originally issued in September 2012.

From January 2014 through December 2014, we issued warrants to Dr. John Durham and Mrs. Joann Durham to purchase an aggregate amount of 7,802 shares of our common stock at an exercise price of $3.00 per share in connection with the promissory note they were issued in May 2013.

In December 2014, we issued a warrant to Eastward Capital Partners to purchase an aggregate amount of 481,863 shares of Series B preferred stock at an exercise price of $2.99 per share in connection with the December 2014 Eastward Loan.

In December 2014, we issued subordinated convertible promissory notes in an aggregate principal amount of $16,384,865 in connection with the acquisition of Medliance LLC.

In July 2014, we issued 52,500 shares of our common stock to Gary Tom at a price of $1.84 per share as deferred consideration in connection with the acquisition of J.A. Robertson, Inc.

In April 2014, we issued 203,358 shares of our common stock to Capstone Holdings, LLC at a price of $1.84 per share as deferred consideration in connection with the acquisition of Capstone Performance Systems, LLC.

In April 2014, we issued a warrant to Eastward Capital Partners to purchase up to 105,005 shares of Series B preferred stock at an exercise price of $2.86 per share in connection with the April 2014 Eastward Loan.

In January 2014, we issued a promissory note for an aggregate principal amount of $100,000 to Drs. Calvin and Orsula Knowlton.

In January 2014, we issued 105,000 shares of our common stock to Gary Tom at a price of $1.86 per share as deferred consideration in connection with the acquisition of J.A. Robertson, Inc.

From May 2013 through December 2013, we issued warrants to Dr. John Durham and Mrs. Joann Durham to purchase an aggregate amount of 9,671 shares of our common stock at an exercise price of $1.60 per share in connection with the promissory note they were issued in May 2013.

In June 2013, we sold to investors 2,961,745 shares of our Series B preferred stock at a purchase price of $1.52312 per share for aggregate consideration of $4,511,096.

In May 2013, we issued a promissory note in an aggregate principal amount of $250,000 to Dr. John Durham and Mrs. Joann Durham.

In February 2013, we sold 9,375 shares of our common stock to Joseph Nyzio and Katy Nyzio at a price of $1.60 per share.

In January 2013, we sold 31,250 shares of our common stock to Gary Yetman and 31,250 shares of our common stock to Pamela Adams and William J. Adams, both at a price of $1.60 per share.

In January 2013, we sold 16,000 shares of our common stock to James M. Goers and Jackie G. Goers, 8,000 shares of our common stock to Barry J. Goers and 8,000 shares of our common stock to Brett C. Goers, each at a price of $1.50 per share.

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In January 2013, we issued warrants to Drs. Calvin and Orsula Knowlton to purchase an aggregate amount of 4,358 shares of our common stock at an exercise price of $1.32 per share, and from January 2013 through December 2013, we issued warrants to Drs. Calvin and Orsula Knowlton to purchase an aggregate amount of 39,720 shares of our common stock at an exercise price of $1.76 per share, in connection with the promissory note they were originally issued in September 2012.

In October 2012, we issued a warrant to the New Jersey Economic Development Authority to purchase an aggregate amount of 62,500 shares of Series A-1 preferred stock at an exercise price of $0.80 per share in connection with a convertible loan agreement with aggregate borrowings of $500.

In December 2012, we issued a $150,000 promissory note to Drs. Calvin and Orsula Knowlton, which was amended several times through September 26, 2013, when it was increased to an aggregate principal amount of $1,099,109.

Between April 2012 and September 2012, we sold, at a price of $1.20 per share, 29,302 shares of our common stock to Equity Trust Co. Custodian FBO Richard Greene IRA, 41,667 shares of our common stock to Joseph Nyzio and Katy Nyzio, 20,798 shares of our common stock to Irene Voltis and John Voltis and 4,841 shares of our common stock to Jeffrey Knowlton, a son of Dr. Calvin Knowlton, our Chief Executive Officer and Chairman.

In March 2012, we issued a warrant to Eastward Capital Partners to purchase an aggregate amount of 250,000 shares of Series A-1 preferred stock at an exercise price of $0.80 per share in connection with a loan agreement with aggregate borrowings of $2,000.

In March 2012, we sold 12,500 shares of our common stock to Babette F. Perry at a price of $0.80 per share.

In February 2012, we sold to investors 625,000 shares of Series A-1 preferred stock at a purchase price of $0.80 per share for aggregate consideration of $500,000.

In January 2012, we sold 125,000 shares of our common stock to Gary E. Yetman at a price of $0.80 per share.

No underwriters were involved in the foregoing sales of securities. The securities described in this section (a) of Item 15 were issued to investors in reliance upon the exemption from the registration requirements of the Securities Act, as set forth in Section 4(2) under the Securities Act relative to transactions by an issuer not involving any public offering, to the extent an exemption from such registration was required. All purchasers of shares of our preferred stock described above represented to us in connection with their purchase that they were accredited investors and were acquiring the shares for their own account for investment purposes only and not with a view to, or for sale in connection with, any distribution thereof and that they could bear the risks of the investment and could hold the securities for an indefinite period of time. The purchasers received written disclosures that the securities had not been registered under the Securities Act and that any resale must be made pursuant to a registration statement or an available exemption from such registration.

Reorganization Transaction

Effective June 30, 2014, in order to facilitate the administration, management and development of our business, we implemented a holding company reorganization pursuant to which we became the new parent company and CareKinesis became our direct, wholly owned subsidiary. To implement the reorganization, we formed CK Merger Sub, Inc. The holding company structure was implemented by the merger of CK Merger Sub, Inc. with and into CareKinesis, with CareKinesis surviving the merger as our direct, wholly owned subsidiary. As a result of the reorganization, each share of CareKinesis issued and outstanding immediately prior to the merger automatically converted into the same share, with the same rights and preferences, in our company. The business conducted by CareKinesis immediately prior to the corporate reorganization continues to be conducted by CareKinesis following the reorganization. In addition, in connection with the reorganization, CareKinesis distributed all of the equity interests in two

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of its wholly owned subsidiaries, Capstone Performance Systems, LLC, or Capstone, and CareVentions, Inc., to us.

(b) Stock Option and Restricted Stock Grants

Since January 1, 2012, we granted options to purchase an aggregate of 4,471,830 shares of our common stock, with the weighted average exercise price of $1.92 per share, to our employees, directors, advisors and consultants pursuant to our 2014 Equity Compensation Plan. As of September 30, 2015, 1,063,218 options to purchase shares of our common stock had been exercised for aggregate consideration of $520,862, options to purchase 153,806 shares of our common stock had been forfeited and options to purchase 5,412,858 shares of our common stock remained outstanding at a weighted-average exercise price of $1.67. Immediately prior to the effective date of the registration statement of which this prospectus forms a part, we expect to issue shares of our common stock as restricted stock under our 2014 Equity Compensation Plan to members of management at a price of $0.0001 per share.

The restricted stock, stock options and the common stock issuable upon the exercise of such options as described in this section (b) of Item 15 were issued pursuant to written compensatory plans or arrangements with the Registrant's employees, directors and consultants, in reliance on the exemption provided by Rule 701 promulgated under the Securities Act. All recipients either received adequate information about the Registrant or had access, through employment or other relationships, to such information.

All of the foregoing securities described in sections (a) and (b) of Item 15 are deemed restricted securities for purposes of the Securities Act. All certificates representing the issued shares of capital stock described in this Item 15 included appropriate legends setting forth that the securities had not been registered and the applicable restrictions on transfer.

Item 16. Exhibits and Financial Statement Schedules.

The exhibits to the registration statement are listed in the Exhibit Index attached hereto and incorporated by reference herein.

Item 17. Undertakings.

(a) The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(1): For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the

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registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2): For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Moorestown, State of New Jersey, on this 4^th day of January, 2016.


		TABULA RASA HEALTHCARE, INC.
		By:		/s/ DR. CALVIN H. KNOWLTON Dr. Calvin H. Knowlton Chief Executive Officer

SIGNATURES AND POWER OF ATTORNEY

We, the undersigned officers and directors of Tabula Rasa HealthCare, Inc., hereby severally constitute and appoint Dr. Calvin H. Knowlton and Brian W. Adams, and each of them singly (with full power to each of them to act alone), our true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution in each of them for him and in his name, place and stead, and in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and any other registration statement for the same offering pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities held on the dates indicated.

Signature	Title	Date


/s/ BRIAN W. ADAMS Brian W. Adams	Chief Financial Officer (Principal Financial and Accounting Officer)	January 4, 2016
/s/ GLEN BRESSNER Glen Bressner	Director	January 4, 2016
/s/ DR. CALVIN H. KNOWLTON Dr. Calvin H. Knowlton	Chairman of the Board of Directors Chief Executive Officer (Principal Executive Officer)	January 4, 2016
/s/ DR. ORSULA V. KNOWLTON Dr. Orsula V. Knowlton	President and Director	January 4, 2016

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Signature	Title	Date


/s/ DANIEL LUBIN Daniel Lubin	Director	January 4, 2016
/s/ BRUCE LUEHRS Bruce Luehrs	Director	January 4, 2016
/s/ A GORDON TUNSTALL A Gordon Tunstall	Director	January 4, 2016

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EXHIBIT INDEX

		Description of Exhibit

1.1	*	Form of Underwriting Agreement
2.1	#	Membership Interest Purchase Agreement, dated as of December 31, 2014, by and between Tabula Rasa HealthCare, Inc., Fred Smith III, Olds Family 2002 Trust, Stephen F. Olds and Thomas Olds, Jr.
2.2	#	Asset Purchase Agreement, dated as of April 22, 2014, by and among Capstone Performance Systems, LLC (Delaware), CareKinesis, Inc., Capstone Performance Systems, LLC (Colorado), PPS Holdings, Inc. and David M. Reyes and Ronda L. Hackbart-Reyes
2.3	#	Stock Purchase Agreement, dated as of November 27, 2013, by and between CareKinesis, Inc. and Gary Tom, as amended
3.1		Certificate of Incorporation of Tabula Rasa HealthCare, Inc., as amended, as currently in effect
3.2	*	Form of Amended and Restated Certificate of Incorporation of Tabula Rasa HealthCare, Inc. (to become effective immediately prior to the completion of this offering)
3.3	*	Form of Amended and Restated Bylaws of Tabula Rasa HealthCare, Inc. (to become effective immediately prior to the completion of this offering)
4.1		Investor Rights Agreement, dated as of June 30, 2014
4.2		Stockholders Agreement, dated as of June 30, 2014, as amended
4.3		Form of Warrant to Purchase Shares of Class A Common Stock
4.4		Form of Warrant to Purchase Shares of Class B Common Stock
4.5		Preferred Series A-1 Convertible Stock Warrant, dated as of March 23, 2012, issued to Eastward Capital Partners V, L.P., as amended by that Preferred Series B Convertible Stock Warrant, dated as of December 31, 2014, issued to Eastward Fund Management, LLC, included as exhibit 4.7
4.6		Preferred Series B Convertible Stock Warrant, dated as of April 22, 2014, issued to Eastward Fund Management, LLC, as amended by that Preferred Series B Convertible Stock Warrant, dated as of December 31, 2014, issued to Eastward Fund Management, LLC, included as exhibit 4.7
4.7		Preferred Series B Convertible Stock Warrant, dated as of December 31, 2014, issued to Eastward Fund Management, LLC
4.8	*	Preferred Series A-1 Convertible Stock Warrant, dated as of October 26, 2012, issued to the New Jersey Economic Development Authority
4.9		Form of Subordinated Note, dated December 31, 2014
4.10		Promissory Note, dated May 20, 2013, issued to Dr. John Durham and Mrs. Joann Durham
5.1	*	Opinion of Morgan, Lewis & Bockius LLP
10.1	+	Tabula Rasa HealthCare, Inc. 2014 Equity Compensation Plan, as amended, including forms of Incentive Stock Option Agreement, Nonqualified Stock Option Agreements and Restricted Stock Agreement thereunder
10.2	+	Tabula Rasa HealthCare, Inc. Leadership Exit Bonus Plan
10.3	+	Tabula Rasa HealthCare, Inc. Company Management Plan

Table of Contents

		Description of Exhibit

10.4	+	Tabula Rasa HealthCare, Inc. Valuation Incentive Award Plan
10.5	*	Form of Indemnification Agreement
10.6		Loan and Security Agreement, dated as of April 29, 2015, by and among Bridge Bank, National Association and Tabula Rasa HealthCare, Inc., CareKinesis, Inc., CareVentions, Inc., Capstone Performance Systems, LLC, J.A. Robertson, Inc. and Medliance LLC
10.7		Master Lease Agreement, dated as of December 31, 2014, by and among Eastward Fund Management, LLC and CareKinesis, Inc., J.A. Robertson, Inc., Capstone Performance Systems, LLC, CareVentions, Inc., Tabula Rasa HealthCare, Inc. and Medliance LLC
10.8		Master Lease Agreement, dated as of April 22, 2014, by and among Eastward Fund Management, LLC and CareKinesis, Inc., J.A. Robertson, Inc. and Capstone Performance Systems, LLC
10.9		Lease Agreement, dated August 21, 2015, by and between 228 Strawbridge Associates, LLC and Tabula Rasa HealthCare, Inc. (Suite 100)
10.10		Lease Agreement, dated August 21, 2015, by and between 228 Strawbridge Associates, LLC and Tabula Rasa HealthCare, Inc. (Suite 200)
10.11		Lease Agreement, dated August 21, 2015, by and between 228 Strawbridge Associates, LLC and Tabula Rasa HealthCare, Inc. (Suite 300)
21.1		Subsidiaries of Tabula Rasa HealthCare, Inc.
23.1		Consent of KPMG LLP as to Tabula Rasa HealthCare, Inc.
23.2		Consent of KPMG LLP as to Medliance Business
23.3		Consent of KPMG LLP as to Capstone Performance Systems, LLC
23.4	*	Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5.1)
23.5		Consent of AEC Consulting, LLC
24.1		Power of Attorney (included in the signature page to this registration statement)

*: To be filed by amendment.
**: Previously filed.
+: Management contract or compensatory agreement.
#: Schedules to the agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The company undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.

EX-2.1 2 a2226891zex-2_1.htm EX-2.1

Exhibit 2.1

Execution Version

MEMBERSHIP INTEREST PURCHASE AGREEMENT

dated as of December 31, 2014

by and between

TABULA RASA HEALTHCARE, INC.,

FRED SMITH III,

OLDS FAMILY 2002 TRUST,

STEPHEN F. OLDS

AND,

SOLELY FOR THE LIMITED PURPOSES SET FORTH HEREIN,

THOMAS OLDS, JR.

MEMBERSHIP INTEREST PURCHASE AGREEMENT

THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Agreement”) is made as of the 31st day of December, 2014 by and between Tabula Rasa Healthcare, Inc., a Delaware corporation (the “Purchaser”), and Fred Smith III, Olds Family 2002 Trust, created under declaration of trust dated June 3, 2002, as amended, and Stephen F. Olds (each, a “Seller” and collectively, the “Sellers”) and, solely for the limited purposes set forth herein, Thomas Olds, Jr. (“T. Olds”)

BACKGROUND

The Sellers collectively own all of the issued and outstanding membership interests (the “Interests”) of Medliance LLC, an Arizona limited liability company (the “Company”).

The Purchaser desires to acquire from the Sellers, and the Sellers desire to sell to the Purchaser, the Interests, on the terms and subject to the conditions set forth in this Agreement.

As an inducement to Purchaser to enter into this Agreement, and in consideration of the Purchase Price received on the Closing Date and the right to receive the Contingent Payments, if any, by the Sellers, T. Olds, who is a direct or indirect owner or beneficiary of the Olds Family 2002 Trust, desires to agree to the restrictive covenants set forth in Section 4.3.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises, representations, warranties and covenants hereinafter set forth and for other good and valuable consideration, and intending to be legally bound hereby, the parties hereto agree as follows:

1. Purchase and Sale.

1.1 Purchase and Sale of the Interests.

(a) Subject to the terms and conditions of this Agreement, the Purchaser shall acquire at the Closing and the Sellers shall sell to the Purchaser at the Closing, free and clear of any mortgage, pledge, lien, conditional sale agreement, security agreement, transfer restriction, encumbrance or other charge (collectively, “Liens”), all of the Interests in exchange for the consideration specified below in this Section 1.1.

(b) The Purchaser shall pay to the Sellers a purchase price of $28,384,865, subject to the right to receive additional consideration as and to the extent set forth in this Section 1.1 (as may be adjusted, the “Purchase Price”), as follows:

(i) at the Closing, $12,000,000 in cash and $16,384,865 pursuant to promissory notes in the form attached hereto as Exhibit A (the “Seller Notes”);

(ii) following the twelve-month anniversary of the Closing Date (the “First Contingent Payment Date”), one-third of the Aggregate Earn-Out Amount in cash, subject to and conditioned upon achievement of certain conditions as specified in Section 1.1(d) and subject to the right of setoff of the Purchaser set forth in Section 5.1(g);

(iii) following the 24-month anniversary of the Closing Date (the “Second Contingent Payment Date”), one-third of the Aggregate Earn-Out Amount in cash, subject to and conditioned upon achievement of certain conditions as specified in Section 1.1(d) and subject to the right of setoff of the Purchaser set forth in Section 5.1(g); and.

(iv) following the 36-month anniversary of the Closing Date (the “Third Contingent Payment Date” and together with the First Contingent Payment Date and the Second Contingent Payment Date, the “Contingent Payment Dates”), the Aggregate Earn-Out Amount less any portion of the Aggregate Earn-Out Amount actually paid pursuant to Sections 1.1(b)(ii) and (iii), in cash, subject to and conditioned upon achievement of certain conditions as specified in Section 1.1(d) and subject to the right of setoff of the Purchaser set forth in Section 5.1(g).

(c) All cash payments by the Purchaser shall be made by wire transfer of immediately available funds to an account or accounts designated in writing by the Sellers, in accordance with the Sellers’ pro rata ownership of the Interests as set forth on Schedule 1.1(c) hereto.

(d) The contingent Purchase Price payments payable pursuant to Sections 1.1(b)(ii), (iii) and (iv) (each, a “Contingent Payment”) at each Contingent Payment Date shall be payable based on the Yearly Revenue during the twelve-month period preceding each Contingent Payment Date (each, a “Measurement Period”). If the Yearly Revenue is equal to or exceeds the Yearly Revenue Target during a Measurement Period, the Contingent Payment for such Measurement Period shall be payable in full. If the Yearly Revenue is less than the Yearly Revenue Target for a Measurement Period, then an amount shall be payable equal to the maximum Contingent Payment with respect to such Measurement Period, multiplied by a fraction, the numerator of which is the Yearly Revenue for such Measurement Period, the denominator of which is the Yearly Revenue Target. By way of example, if the Yearly Revenue for the Measurement Period ending on the Second Contingent Payment Date is equal to 50% of the Yearly Revenue Target and the Aggregate Earn-Out Amount is $6,000,000, the Contingent Payment payable to the Sellers at the Second Contingent Payment Date would be equal to $1,000,000 in cash ($2,000,000 x .5). For the avoidance of doubt, in no event shall the amounts of the Contingent Payments exceed the maximum amounts set forth in Sections 1.1(b)(ii), (iii) and (iv). Each Contingent Payment shall be paid no later than 30 days following the final determination of the Yearly Revenue for the applicable Measurement Period.

(e) For purposes of this Section 1.1, the “Aggregate Earn-Out Amount” shall be equal to the difference of (i) the product of (A) the Yearly Revenue for the 2015 calendar year multiplied by (B) 4.5 minus (ii) $26,000,000; provided, however, if the Aggregate Earn-Out Amount is a negative amount, the Aggregate Earn-Out Amount shall be equal to zero and no Contingent Payment shall be due and payable pursuant to Sections 1.1(b)(ii), (iii) and (iv).

1.2 Closing; Delivery.

(a) The purchase and sale of the Interests (the “Closing”) shall take place remotely via the exchange of documents and signatures, at 10:00 a.m., on the date hereof, or at

such other time and place as the Sellers and the Purchaser mutually agree upon, orally or in writing (the “Closing Date”). The closing shall be deemed effective as of 11:59 p.m. California time on December 31, 2014.

(b) The Sellers shall deliver, or cause to be delivered, the following to the Purchaser at or prior to the Closing:

(i) certificates for the Interests, duly endorsed in blank or accompanied by transfer powers duly endorsed in blank;

(ii) an affidavit issued to the Purchaser by an officer of the Company as required by Treasury Regulation Section 1.1445-2(c)(3) certifying that the Company has not been a United States real property holding corporation (as the term is defined in the Code and the Treasury Regulations promulgated in connection therewith) at any time during the five year period ending on the Closing Date in form and substance reasonably satisfactory to the Purchaser;

(iii) a certificate from the Secretary of the Company certifying the articles of organization and operating agreement of the Company;

(iv) a certificate confirming the good standing of the Company in its jurisdiction of formation;

(v) a tax clearance certificate from the Arizona Department of Revenue dated within five days of the Closing Date indicating that all tax filing and tax payment requirements have been satisfied as of such date;

(vi) letters of resignation in the name of and executed by each member of the board of managers of the Company and each officer of the Company resigning his or her position as a manager and/or officer of the Company effective as of the Closing Date;

(vii) copies of the Employment Agreements, duly executed by each of the Key Employees;

(viii) evidence reasonably satisfactory to the Purchaser that (a) all Indebtedness of the Company shall have been satisfied prior to the Closing, and (b) all Liens except Permitted Liens in and upon any of the properties and assets of the Company shall have been released prior to the Closing;

(ix) a license agreement in the form attached hereto as Exhibit B, duly executed by Medliance Technology Services, LLC, pursuant to which Medliance Technology Services, LLC will license to the Purchaser certain intellectual property previously owned by the Company as more fully set forth therein (the “License Agreement”); and

(x) such other agreements, consents, documents, instruments and writings as are reasonably required to be delivered by the Sellers at or prior to the Closing Date pursuant to this Agreement or otherwise reasonably required in connection herewith, including

all such other instruments as the Purchaser or its counsel may reasonably request in connection with the purchase of the Interests contemplated hereby.

(i) the portion of the Purchase Price payable at the Closing pursuant to Section 1.1(b)(i), including the Seller Notes;

(ii) copies of the Employment Agreements, duly executed by the Purchaser;

(iii) the License Agreement; and

(iv) such other agreements, consents, documents, instruments and writings as are reasonably required to be delivered by the Purchaser at or prior to the Closing Date pursuant to this Agreement or otherwise reasonably required in connection herewith.

1.3 Defined Terms Used in this Agreement. In addition to the terms defined above or elsewhere in this Agreement, the following terms used in this Agreement shall have the meanings set forth or referenced below.

“409A Plan” is defined in Section 2.14(g).

“Acts” is defined in Section 2.2(d).

“Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including, without limitation, any general partner, managing member, officer or director of such Person or any investment fund now or hereafter existing that is controlled by one or more general partners or managing members of, such Person.

“Aggregate Earn-Out Amount” is defined in Section 1.1(e).

“Agreement” is defined above in the preamble.

“Closing” is defined in Section 1.2(a).

“Closing Date” is defined in Section 1.2(a).

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” is defined above in the background.

“Contingent Payment” is defined in Section 1.1(d).

“Contingent Payment Dates” is defined in Section 1.1(b)(iv).

“Employee Benefit Plan” is defined in Section 2.14(f).

“Employment Agreements” means the employment agreements by and between each of the Key Employees and the Purchaser substantially in the form as Exhibit C hereto.

“Environmental Laws” means any law, regulation or other applicable requirement relating to (i) releases or threatened release of Hazardous Substance; (ii) pollution or protection of employee health or safety, public health or the environment; or (iii) the manufacture, handling, transport, use, treatment, storage or disposal of Hazardous Substances.

“ERISA” is defined in Section 2.14(f).

“Financial Statements” is defined in Section 2.12(a).

“First Contingent Payment Date” is defined in Section 1.1(b)(ii).

“Governmental Entity” means any United States federal or state governmental or quasi-governmental or regulatory authority, any political subdivision, agency, commission, authority, department, division or instrumentality thereof, any court, arbitral tribunal, arbitrator or other dispute mediator, or any other similar domestic or foreign entity.

“Governmental Order” means any writ, order, decree (including a consent decree), ruling, injunction, cease-and-desist order, judgment or similar act, order or enforcement action of or by any Governmental Entity (in each case, whether preliminary or final).

“Hazardous Substance” is defined in Section 2.18.

“Indebtedness” means, at a particular time, without duplication, all of the following: (a) all obligations of the Company, whether current or long-term, for borrowed money and all obligations of the Company evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (b) all direct or contingent obligations of the Company available to be drawn under issued and outstanding letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments; (c) net obligations of the Company under any swap contract; (d) all obligations of the Company in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business); (e) obligations secured by a Lien on property owned or being purchased by the Company; (f) any liabilities or obligations under capitalized leases with respect to which the Company is liable, contingently or otherwise, as obligor, guarantor or otherwise, and (g) all guarantees of the Company in respect of any of the foregoing.

“Indemnifiable Claims” means, with respect to the indemnification obligations of the Sellers, a Purchaser Indemnifiable Claim, and with respect to the indemnification obligations of the Purchaser, a Seller Indemnifiable Claim.

“Indemnified Party” means, with respect to the indemnification obligations of the Sellers, the Purchaser Indemnitees, and with respect to the indemnification obligations of the Purchaser, the Seller Indemnitees.

“Indemnifying Party” means, with respect to a Purchaser Indemnitee, the Sellers, and with respect to a Seller Indemnitee, the Purchaser.

“Intellectual Property” means (i) trademarks and service marks (whether or not registered), applications for trademarks and service marks, trade names, logos, trade dress and other proprietary indicia and all goodwill associated therewith; (ii) documentation, advertising copy, marketing materials, specifications, mask works, drawings, graphics, databases, recordings and other works of authorship, whether or not protected by copyright; (iii) financial, marketing and business data, pricing and cost information and plans (including business and marketing plans), (iv) customer and supplier lists and (v) internet web-sites, URLs and domain names.

“Interests” is defined above in the background.

“Key Employees” means each of Fred Smith III, Stephen F. Olds, Candy Rebstock and Diane Mitrevski.

“Knowledge” including similar phrases such as “to the Sellers’ knowledge” or “to the knowledge of the Sellers” shall mean the knowledge of the Sellers and the Key Employees, including facts of which the Sellers or the Key Employees, in the reasonably prudent exercise of their duties, should be aware.

“Law” means any statute, law (including common law), constitution, treaty, ordinance, code, order, decree, judgment, rule, regulation and any other binding requirement or determination of any Governmental Entity.

“Leased Real Property” is defined in Section 2.11(a).

“License Agreement” is defined in Section 1.2(b)(ix).

“Liens” is defined in Section 1.1(a).

“Losses” is defined in Section 5.1(b).

“Material Adverse Effect” means a material adverse effect on the financial condition, properties, prospects, business or results of operations of the Company; provided, however, that any such effect resulting from any change (A) in law, rule, or regulation or U.S. generally accepted accounting principles GAAP or interpretations thereof that applies to the Company, (B) in economic or business conditions generally or (C) resulting from the announcement of the transactions contemplated by this Agreement shall not be considered when determining if a Material Adverse Effect has occurred.

“Material Contract” is defined in Section 2.9(b).

“Measurement Period” is defined in Section 1.1(d).

“Noncompete Period” is defined in Section 4.3(a).

“PCBs” is defined in Section 2.18.

“Permits” is defined in Section 2.15(a).

“Permitted Liens” mean (a) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens arising or incurred in the ordinary course of business for amounts which are not material and not yet due and payable, (b) Liens arising under sales contracts and equipment leases with third parties entered into in the ordinary course of business, which Liens are reflected in the Financial Statements and set forth on Schedule 1.4, and (c) Liens for Taxes and other governmental charges that are not due and payable or delinquent.

“Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

“Purchase Price” is defined in Section 1.1(b).

“Purchaser” is defined above in the preamble.

“Purchaser Indemnifiable Claims” is defined in Section 5.1(b).

“Purchaser Indemnitees” is defined in Section 5.1(c).

“Restricted Business” is defined in Section 4.3(a).

“Second Contingent Payment Date” is defined in Section 1.1(b)(iii).

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Seller Indemnitees” is defined in Section 5.1(b).

“Seller Indemnifiable Claims” is defined in Section 5.1(c).

“Seller Notes” is defined in Section 1.1(b).

“Sellers” is defined above in the preamble.

“T. Olds” is defined above in the preamble.

“Third Contingent Payment Date” is defined in Section 1.1(b)(iv).

elect a majority of the Board of Directors or others performing similar functions with respect to such Person is directly or indirectly owned or controlled by such party and/or by any one or more of its Subsidiaries.

“Subsidiary Transfer” means the sale of all of the equity ownership of Vroozi, Inc., LTC Supply Source, LLC, and QVO, Inc.

“Tax” or “Taxes” means any and all federal, state, local or foreign net or gross income, gross receipts, net proceeds, sales, use, ad valorem, value added, franchise, bank shares, withholding, payroll, employment, excise, property, deed, stamp, alternative or add-on minimum, environmental, profits, windfall profits, transaction, license, lease, service, service use, occupation, severance, energy, unemployment, social security, workers’ compensation, capital, premium and other taxes, assessments, customs, duties, fees, levies or other governmental charges of any nature whatever, whether disputed or not, together with any interest, penalties, additions to tax, or additional amounts with respect thereto.

“Tax Returns” means any return, declaration, report, statement, information statement or other document filed or required to be filed with respect to Taxes (including any attached schedules), including any claims for refunds of Taxes, any information returns, any amended returns, any declarations of estimated Tax and any amendments or supplements of any of the foregoing.

“Transaction Documents” means this Agreement, the Employment Agreements, the Seller Notes, the License Agreement and any other certificate, instrument or document executed by any of the parties hereto in connection herewith.

“Yearly Revenue” means for any period the actual yearly gross revenue during such period of the business of the Company calculated in accordance with United States generally accepted accounting principles applied on a consistent basis throughout the periods involved.

“Yearly Revenue Target” means an amount equal to the Yearly Revenue for the 2015 calendar year.

2. Representations and Warranties of the Sellers. The Sellers hereby represent and warrant to the Purchaser that, except as set forth on the Disclosure Schedule attached as Exhibit D to this Agreement, which exceptions shall be deemed to be part of the representations and warranties made hereunder, the following representations are true, correct and complete as of the date hereof and as of the Closing. The Disclosure Schedule is arranged in sections corresponding to the numbered and lettered sections and subsections contained in this Section 2.

2.1 Organization, Good Standing, Corporate Power and Qualification. The Company is a limited liability company duly formed, validly existing and in good standing under the laws of its jurisdiction of formation and has all requisite limited liability company power and authority to carry on its business as presently conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to result in a material liability to the Company.

2.2 Ownership.

(a) Immediately prior to the Closing, the authorized equity interests of the Company consist of membership interests equaling 100%, all of which are issued and outstanding and held by the Sellers as set forth on Section 2.2(a) of the Disclosure Schedule. The Interests are owned of record and beneficially by the Sellers free and clear of all Liens. Upon transfer of the Interests to the Purchaser in accordance with the terms of Section 1, the Purchaser will receive valid title to the Interests, free and clear of all Liens.

(b) There are no outstanding options, warrants, rights (including conversion or preemptive rights, rights of first refusal and phantom stock rights), proxy, voting, transfer restrictions, agreements, undertakings or obligations of any kind relating to any securities of the Company, including the purchase, sale, acquisition, issuance or grant from the Company of any of its securities.

(c) The Company is not under any obligation, and has not granted any rights, to register any of its securities (whether presently outstanding or that may hereafter be issued). No Seller has entered into any agreement with respect to the voting or transfer of equity securities of the Company.

(d) All issued and outstanding Interests (i) have been duly authorized and validly issued and (ii) were issued in accordance with all applicable Laws, including, without limitation, the registration requirements of the Securities Act, and applicable state securities Laws (such state securities Laws, together with the Securities Act, the “Acts”) or pursuant to an exemption from such registration requirements.

(e) The Company does not currently have any obligation (contingent or otherwise) to purchase or redeem any of its membership interests on or prior to the Closing Date or following the Closing.

2.3 Subsidiaries. The Company does not own any capital stock, equity or similar interest or other proprietary interest, directly or indirectly, in any other Person.(1)

2.4 Authorization. Each Seller has the requisite power and authority to (a) execute and deliver the Transaction Documents to which he is or will be a party, (b) perform the transactions contemplated by this Agreement to be performed by him and (c) satisfy or perform, as the case may be, his obligations under those Transaction Documents to which he is or will be a party. Such execution, delivery and performance by each Seller has been duly authorized by all necessary corporate or other action. Each Transaction Document executed and delivered by each Seller has been duly executed and delivered by such Seller and constitutes a valid and binding obligation of such Seller, enforceable against such Seller in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other laws of general application relating to or affecting the enforcement of creditors’ rights generally.

(1) Note to Sellers: The Company’s two current subsidiaries will be transferred out of the Company prior to the Closing, with evidence of such transfer delivered to the Purchaser. Any assets held by such subsidiaries and used in the Company’s business should be transferred to the Company prior to the Closing.

2.5 Governmental Consents and Filings. Assuming the accuracy of the representations made by the Purchaser in Section 3 of this Agreement, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any Governmental Entity is required in connection with the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated by this Agreement.

2.6 Litigation. There is no claim, action, suit, proceeding, arbitration, complaint, charge or investigation pending or to the Sellers’ knowledge, currently threatened (i) against the Company or against any officer, manager or employee of the Company and affecting the Company; (ii) that questions the validity of this Agreement or the right of the Sellers to enter into it, or to consummate the transactions contemplated by this Agreement; or (iii) that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. Neither the Company nor any of its officers, managers or employees is a party or is named as subject to the provisions of any Governmental Order (in the case of officers, directors or employees, such as would affect the Company). There is no action, suit, proceeding or investigation by the Company pending or which the Company intends to initiate. The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or, to the knowledge of the Sellers, threatened in writing (or any basis therefor known to the Company) involving the prior employment of any of the Company’s employees, their services provided in connection with the Company’s business, or any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers.

2.7 Intellectual Property. Except as set forth in Section 2.7(a) of the Disclosure Schedule:

(a) The Company owns, or is licensed or otherwise possesses enforceable rights to use, all Intellectual Property used in or necessary for the conduct of its business as currently conducted. There are no claims or demands pending by any other person or entity pertaining to any of such Intellectual Property nor, to the knowledge of the Sellers, is there a claim or demand threatened, and no proceedings have been instituted or, to the knowledge of the Sellers, threatened which challenge the rights of the Company with respect to such Intellectual Property.

(b) With respect to Intellectual Property that is owned by the Company, all such Intellectual Property is owned free and clear of Liens except Permitted Liens. All patents, patent applications, provisional patents, trademarks, trademark applications, trademark registrations, service marks, service work applications, service mark registrations and registered copyrights which are owned by the Company are listed in Section 2.7(b) of the Disclosure Schedule. All such patents, patent applications, provisional patents, trademarks, trademark registrations, trademark applications and registered copyrights have been duly registered in, filed in or issued by the United States Patent and Trademark Office, the United States Register of Copyrights or the corresponding offices of other jurisdictions as identified in Section 2.7(b) of the Disclosure Schedule, and have been properly maintained and renewed in accordance with all applicable provisions of Law and administrative regulations of the United States and each such jurisdiction.

(c) All licenses or other agreements under which the Company is granted rights in Intellectual Property of any third person or entity are listed in Section 2.7(c) of the Disclosure Schedule. All such licenses or other agreements are in full force and effect, there is no default by the Company or to the knowledge of the Sellers by any other party thereto, and all of the rights of the Company thereunder are transferable without restriction or royalty of any kind (including, without limitation, to any successor-in-interest as a result of a merger, consolidation, asset sale or similar transaction resulting in a change of control). To the Sellers’ knowledge, the licensors under such licenses and other agreements have and, at the time of the grant of such licenses or agreements, had all requisite power and authority to grant the rights purported to be conferred thereby. The execution, delivery and performance of this Agreement, and the sale and delivery of the Interests pursuant hereto will not, with or without the passage of time or giving of notice or both, materially impair or otherwise affect the rights of the Company under any such license or agreement.

(d) All licenses or other agreements under which the Company has granted rights to others in its Intellectual Property are listed in Section 2.7(d) of the Disclosure Schedule. All such licenses or other agreements are in full force and effect, there is no default by the Company or to the Sellers’ knowledge by any other party thereto, and all of the rights of the Company thereunder are freely transferable without restriction or royalty of any kind (including, without limitation, to any successor-in-interest as a result of a merger, consolidation, asset sale or similar transaction resulting in a change of control). The execution, delivery and performance of this Agreement, and the sale and delivery of the Interests pursuant hereto will not, with or without the passage of time or giving of notice or both, materially impair or otherwise affect the rights of the Company under any such license or agreement.

(e) The Company has taken all commercially reasonable measures required to establish and preserve its ownership of all Intellectual Property developed by, or on behalf of, the Company. The Company has required all current and prior employees and all consultants and independent contractors having access to, or who were involved in the development of, any of the Intellectual Property owned or developed by the Company, to execute agreements that provide valid written assignment of all inventions and developments conceived or created by them in the course of their employment or services, and to the Sellers’ knowledge all such persons or entities are in compliance with such agreements. No Seller has any knowledge of any infringement by others of any of the Intellectual Property of the Company. To the Sellers’ knowledge, it is not and will not be necessary to use any inventions of any of its employees (or persons it intends to hire) made prior to their employment by the Company in order to conduct the business of the Company as currently conducted. All current and all former employees and all consultants and independent contractors hired by the Company have agreed to maintain the confidentiality of all confidential and proprietary information of the Company and of any information of third parties received by the Company under an obligation of confidentiality.

(f) The Company has not infringed, does not infringe, and, by conducting its business as currently conducted, will not infringe or unlawfully or wrongfully use the Intellectual Property of any third person or entity. No proceeding charging the Company with infringement of any Intellectual Property of any third person or entity has been filed or, to the Sellers’ knowledge, is threatened in writing to be filed. To the Sellers’ knowledge, there exists no

unexpired patent or patent application which includes claims that would be infringed by the current products of the Company as currently conducted.

(g) To the Sellers’ knowledge, the Company is not making unauthorized use of any confidential information or trade secrets of any person or entity, including without limitation, any former employer of any past or present employee of the Company.

2.8 Compliance with Laws and Other Instruments. The Company is not in violation or default (a) of any provisions of its articles of organization, operating agreement or equivalent governing documents, as applicable, (b) of any instrument, judgment, order, writ or decree, (c) under any note, indenture or mortgage, or (d) under any material lease, agreement or contract to which it is a party or by which it is bound that is required to be listed on the Disclosure Schedule. The Company is not in material violation or default of any provision of any Laws applicable to the Company. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either (i) a default under any such provision, instrument, judgment, order, writ, decree, material contract or agreement or (ii) an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture or nonrenewal of any material permit or license applicable to the Company.

2.9 Agreements.

(a) Section 2.9(a) of the Disclosure Schedule lists all agreements, understandings, arrangements or other commitments to which the Company is a party or by which it is bound, (i) that are terminable without the consent of the Company and that, if terminated, would reasonably be likely to result in a material liability to the Company, or (ii) that involve or may involve (A) obligations (contingent or otherwise) of the Company, or payments to the Company, in each case in excess of $25,000, (B) the license of any Intellectual Property by the Company to any third party or by a third party to the Company, other than licenses of the Company’s software and products on a non-exclusive basis in the ordinary course of business, (C) provisions restricting or affecting the Company’s products or services, (D) indemnification by the Company with respect to infringement of proprietary rights, (E) a potential strategic transaction or sale of the Company, or (F) any other agreement, understanding or instrument to which the Company is a party or by which it is bound that is material to the Company.

(b) Section 2.9(b) of the Disclosure Schedule lists all agreements, understandings, arrangements or other commitments with Company customers to which the Company is a party or by which it is bound that were entered into or renewed on or after September 1, 2014.

(c) Each agreement, understanding, arrangement or other commitment which is required to be set forth in Section 2.9(a) or Section 2.9(b) of the Disclosure Schedule, (each, a “Material Contract”), is in full force and effect and is valid, binding and enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other Laws of general application affecting enforcement of creditors’ rights, and (ii) as limited by general principles of equity that restrict the availability of

equitable remedies. The Sellers have made available via an online data room to the Purchaser complete and correct copies of all such Material Contracts.

(d) Neither the Company nor to the Sellers’ knowledge any other party is in violation or default under any Material Contract and, to the Sellers’ knowledge, no event has occurred which with notice, lapse of time or both would constitute a violation or default thereunder. The execution, delivery and performance of this Agreement, and the sale and delivery of the Interests pursuant hereto will not, with or without the passage of time or giving of notice or both, result in any such violation, or be in conflict with or constitute a default under any Material Contract.

2.10 Certain Transactions.

(a) Other than (i) customary employee benefits generally made available to all employees, and (ii) as set forth in Section 2.10(a) of the Disclosure Schedule, there are no agreements, understandings or proposed transactions between the Company and any of its directors, officers, managers, consultants or employees, or any Affiliate thereof.

(b) Except as set forth in Section 2.10(b) of the Disclosure Schedule, the Company is not indebted, directly or indirectly, to any of its directors, managers, officers or employees or to their respective spouses or children or to any Affiliate of any of the foregoing, other than in connection with expenses or advances of expenses incurred in the ordinary course of business. None of the Company’s directors, managers, officers or employees, or any members of their immediate families, or any Affiliate of the foregoing are, directly or indirectly, indebted to the Company or have any (i) material commercial, industrial, banking, consulting, legal, accounting, charitable or familial relationship with the Company’s customers, suppliers, service providers, joint venture partners, licensees and competitors, (ii) direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation which competes with the Company except that managers, officers or employees or any members of their immediate families may own stock in (but not exceeding two percent (2%) of the outstanding capital stock of) publicly traded companies that may compete with the Company, or (iii) financial interest in any Material Contract with the Company.

2.11 Real Property and Personal Property.

(a) The Company does not own any real property. All real property leased by the Company (the “Leased Real Property”) is identified in Section 2.11(a) of the Disclosure Schedule. The schedule of Leased Real Property set forth in Section 2.11(a) of the Disclosure Schedule is a complete, accurate and correct list of the Company’s Leased Real Property. Each of the leases for the Leased Real Property set forth in Section 2.11(a) of the Disclosure Schedule is in full force and effect and has not been modified, amended or altered, in writing or otherwise. Neither the Company, nor to the knowledge of the Sellers, any other party thereto is in default under any of such leases, nor has any event occurred which, with the giving of notice or the passage of time, or both, would give rise to a default. There exists no pending or, to the Sellers’ knowledge, threatened condemnation, confiscation, eminent domain proceeding, dispute, claim, demand or similar proceeding with respect to, or which could materially and adversely affect, the

continued use and enjoyment of the Leased Real Properties. To the Sellers’ knowledge, there are no circumstances that would entitle any Governmental Entities or other Person to take possession or otherwise restrict use, possession or occupation of any Leased Real Property. The use and operation of the Leased Real Properties by the Company is in compliance in all material respects with all applicable Laws, including, without limitation, all applicable building codes, environmental, zoning, subdivision and land use laws. The Company has not received any written notice, and to the Sellers’ knowledge no notice is currently threatened, from any Governmental Entities advising it of a material violation (or an alleged material violation) of any such laws or regulations.

(b) The Company has title to all of its personal property and assets free and clear of all Liens, except Permitted Liens. All such personal property and assets are in good working condition, ordinary wear and tear excepted. With respect to the personal property and assets it leases, the Company is in compliance with such leases and holds a valid leasehold interest free of any Liens except Permitted Liens. The Financial Statements reflect all personal property and assets of the Company (other than assets disposed of in the ordinary course of business since November 30, 2014), and such properties and assets are sufficient for the Company to conduct its business as currently conducted.

2.12 Financial Matters.

(a) The Sellers have delivered to the Purchaser (i) the Company’s unaudited financial statements (including balance sheet, income statement and statement of cash flows) for the fiscal years ended December 31, 2013, December 31, 2012 and December 31, 2011 and (ii) the Company’s unaudited financial statements for the interim period from January 1, 2014 to November 30, 2014 (collectively, the “Financial Statements”). The Financial Statements have been prepared in accordance with United States generally accepted accounting principles, applied on a consistent basis throughout the periods indicated, except that the unaudited Financial Statements may not contain all footnotes required by generally accepted accounting principles. The Financial Statements fairly present in all material respects the financial condition and results of operations of the Company as of the dates, and for the periods, indicated therein, subject in the case of the unaudited Financial Statements to normal year-end audit adjustments which are not material. Except as set forth in the Financial Statements, the Company does not have material liabilities or obligations, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to November 30, 2014 and (ii) obligations under contracts and commitments incurred in the ordinary course of business, which, in all such cases, individually and in the aggregate are not material. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with United States generally accepted accounting principles.

(b) Except as set forth on Section 2.12(b) of the Disclosure Schedule, since November 30, 2014, the Company has not made any distributions to any of its members with respect to any membership interests.

financial condition or operating results of the Company from that reflected in the Financial Statements, except changes in the ordinary course of business; (b) any damage, destruction or loss, whether or not covered by insurance, in excess of $25,000; (c) any waiver or compromise by the Company of a valuable right or of a material debt owed to it; (d) any satisfaction or discharge of any Lien or payment of any obligation by the Company, except in the ordinary course of business and the satisfaction or discharge of which would not reasonably be expected to be material; (e) any change to a Material Contract; (f) any material change in any compensation arrangement or agreement with any employee, officer, director, manager, stockholder or interestholder; (g) any resignation or termination of employment of any officer or employee of the Company; (h) any mortgage, pledge, transfer of a security interest in, or Lien, created by the Company, with respect to any of its material properties or assets, except Permitted Liens; (i) any loans or guarantees made by the Company to or for the benefit of its employees, officers, directors or managers, or any members of their immediate families, other than travel advances and other advances made in the ordinary course of its business; (j) any incurrence of Indebtedness; (k) any sale, assignment or transfer of any Intellectual Property; (l) any sale, assignment or transfer of any assets of the Company other than in the ordinary course of its business; (m) any receipt of notice that there has been a loss of, or material order cancellation by, any major customer of the Company; (n) to the Sellers’ knowledge, any other event or condition of any character, that would reasonably be expected to result in a Material Adverse Effect; or (o) any arrangement or commitment by the Company to do any of the things described in this Section 2.13.

2.14 Employee Matters.

(a) Section 2.14(a) of the Disclosure Schedule sets forth a detailed, true and correct description of all compensation, including salary, bonus, severance obligations and deferred compensation paid or payable for each officer, employee, consultant and independent contractor of the Company who received compensation in excess of $50,000 for the fiscal year ended December 31, 2013 or is anticipated to receive compensation in excess of $50,000 for the fiscal year ending December 31, 2014. Section 2.14(a) of the Disclosure Schedule sets forth all employment agreements entered into by the Company, and the Sellers have made available to the Purchaser a copy of each such employment agreement. Each such agreement is in full force and effect and is valid, binding and enforceable in accordance with its terms and neither the Company nor to the Sellers’ knowledge any employee is in violation or default under any such agreements and, to the Sellers’ knowledge, no event has occurred which with notice, lapse of time or both would constitute a violation or default thereunder.

(b) To the Sellers’ knowledge, none of the employees of the Company is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any Governmental Order, that would materially interfere with such employee’s ability to promote the interest of the Company or that would conflict with the Company’s business. To the Sellers’ knowledge, each employee devotes substantially all of the employee’s professional time, attention, diligence and effort to further the business and promote the success of the Company and no such employee is currently involved or proposes to be involved in any other business venture, whether or not competitive with the business of the Company. Neither the execution or delivery of this Agreement, nor the carrying on of the business of the Company by the employees of the Company, nor the conduct of the business of

the Company as now conducted, will, to the knowledge of the Sellers, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any such employee is now obligated.

(c) The Company is not delinquent in payments to any of its employees, consultants or independent contractors for any wages, salaries, commissions, bonuses or other direct compensation for any service performed for it to the date hereof, any amounts required to be reimbursed to such employees, consultants or independent contractors, or any social welfare and housing fund contribution required to be paid for such employees. The Company has complied in all material respects with all applicable equal employment opportunity Laws and with other Laws related to employment, including those related to wages, hours, worker classification and collective bargaining. The Company withheld and paid to the appropriate Governmental Entity or is holding for payment not yet due to such Governmental Entity all amounts required to be withheld from employees of the Company and is not liable for any arrears of wages, taxes, penalties or other sums for failure to comply with any of the foregoing.

(d) To the Sellers’ knowledge, no employee whose employment is material to the business of the Company intends to terminate employment with the Company or is otherwise, for any reason, likely to become unavailable to continue as an employee, nor does the Company have a present intention to terminate the employment of any of the foregoing. The employment of each employee of the Company is terminable at the will of the Company. Except as required by law, the Company does not have any obligation, including with respect to severance, continued benefits or any other payment, to any employee upon termination of employment. The Company does not have any policy, practice, plan or program of paying severance pay or any form of severance compensation in connection with the termination of employment services.

(e) Section 2.14(e) of the Disclosure Schedule sets forth all grants of options, and the terms thereof, to all directors, officers, employees, managers and consultants of the Company. No equity incentive awards have been granted to any director, officer, employees, manager or consultant of the Company except as set forth in Section 2.14(e) of the Disclosure Schedule. All grants of option are and have at all times been in compliance with all applicable Laws.

Law. The Company is not required to make any payments or contributions to any Employee Benefit Plan pursuant to any collective bargaining agreement or any applicable labor relations Law. The Company does not maintain or contribute to and, has never maintained or contributed to any Employee Benefit Plan providing or promising any health or other nonpension benefits to terminated employees (other than continuation coverage, at the maximum applicable premium permitted to be charged by the Company, required under Section 4980B of the Code, or Section 601 of the ERISA).

(g) Any “nonqualified deferred compensation plan” (as such term is defined under Section 409A(d)(1) of the Code and the guidance thereunder) under which the Company is obligated to make or promises to make, payments (each, a “409A Plan”) complies in all material respects, in both form and operation, with the requirements of Section 409A of the Code and the guidance thereunder. No payment to be made under any 409A Plan is, or will be, subject to the penalties of Section 409A(a)(1) of the Code.

(h) The Company is not bound by or subject to (and none of its assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and no labor union has requested or, to the knowledge of the Sellers, has sought to represent any of the employees, representatives or agents of the Company. There is no strike or other labor dispute involving the Company pending, or to the Sellers’ knowledge, threatened, nor is the Company aware of any labor organization activity involving its employees.

2.15 Certain Regulatory Matters.

(a) The Company holds all permits, licenses, variances, exemptions, certificates, consents, product listings, establishment registrations, orders, approvals, clearances and other authorizations from Governmental Entities which are required for the conduct of its business (collectively, the “Permits”), and all periodic reports required to be filed with respect thereto are accurate and complete in all material respects. The Company is not in default in any material respect under any Permit.

(b) No Governmental Entity has issued any notice, warning letter, regulatory letter, untitled letter or other communication or correspondence to the Company, alleging that the Company or any Affiliate of the Company is or was in violation of any law, regulation, rule, ordinance, clearance, approval, permission, authorization, consent, exemption, guidance or guideline applicable to the activities conducted by the Company, or alleging that the Company or any Affiliate was or is the subject of any pending, threatened or anticipated administrative agency or Governmental Entity investigation, proceeding, review or inquiry related to such activities, or that there are circumstances currently existing which might reasonably be expected to lead to any loss of or refusal to renew any of the Permits.

(c) The Company has timely filed all registrations, declarations, reports, notices, forms and other filings required to be filed by it with any Governmental Entity, and all amendments or supplements to any of the foregoing and has paid all fees and assessments due and payable in connection therewith. The information contained in such declarations, reports, notices, forms and other filings was at the time of filing and is complete and accurate in all

material respects, and timely amendments were filed, as necessary, to correct or update any information reflected in such declarations, reports, notices, forms and other filings.

(d) All of the employees of the Company who are required to be licensed or registered to conduct the business of the Company are duly licensed or registered in each jurisdiction and with each Governmental Entity in which or with which such licensing or registration is so required and such registrations are in full force and effect.

(e) The Company has not, and no officer, director, employee or representative of the Company on behalf of the Company, has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns; or (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any rules or regulations hereunder, or any comparable foreign law or statute.

2.16 Tax Returns and Payments. There are no federal, state, county, local or foreign Taxes due and payable by the Company which have not been timely paid. There are no accrued and unpaid federal, state, country, local or foreign Taxes of the Company which are due, whether or not assessed or disputed. There have been no examinations or audits of any Tax returns or reports by any applicable Governmental Entity. The Company has duly and timely filed all federal, state, county, local and foreign Tax Returns required to have been filed by it and there are in effect no waivers of applicable statutes of limitations with respect to Taxes for any year, and each such Tax Return is complete and correct. At all times since its organization, for U.S. federal income Tax purposes and applicable state and local income and franchise Tax purposes, the Company has been a partnership.

2.17 Insurance. Section 2.17 of the Disclosure Schedule sets forth a true and complete list of all insurance policies owned or held by the Company. Such policies afford coverage to the Company in amounts and against all risks customarily insured against by Persons possessing similar assets or operating similar businesses in similar locations. All such policies are in full force and effect with extended coverage, all premiums with respect thereto have been paid to the extent due and payable, and no notice of cancellation, termination, non-renewal or material increase in premiums with respect to any such policy has been received, or to the Sellers’ knowledge is expected to be received, by the Company. Any claims made against any insurance policies of the Company are described in Section 2.17 of the Disclosure Schedule.

2.18 Environmental and Safety Laws. (a) The Company is and has been in compliance with all Environmental Laws; (b) there has been no release or to the Sellers’ knowledge threatened release of any pollutant, contaminant or toxic or hazardous material, substance or waste, or petroleum or any fraction thereof, (each a “Hazardous Substance”) on, upon, into or from any site currently or heretofore owned, leased or otherwise used by the Company; (c) there have been no Hazardous Substances generated by the Company that have been disposed of or come to rest at any site that has been included in any published U.S. federal, state or local “superfund” site list or any other similar list of hazardous or toxic waste sites published by any Governmental Entity in the United States; and (d) to Sellers’ knowledge, there are no underground storage tanks located on, no polychlorinated biphenyls (“PCBs”) or PCB-

containing equipment used or stored on, and no hazardous waste as defined by the Resource Conservation and Recovery Act, as amended, stored on, any site owned or operated by the Company, except for the storage of hazardous waste in compliance with Environmental Laws. The Sellers have made available to the Purchaser true and complete copies of all material environmental records, reports, notifications, certificates of need, permits, pending permit applications, correspondence, engineering studies, and environmental studies or assessments.

2.19 Sufficiency of Assets. The Company has clear, good, and marketable title to, or a valid leasehold interest in, all of the assets of the Company, free and clear of all Liens, except for Permitted Liens. The assets of the Company, together with the intellectual property licensed to the Purchaser pursuant to the License Agreement, constitute all of the assets and property that are necessary for the operation of the business of the Company as conducted as of the date hereof. Upon the Closing, the Purchaser (through its ownership of the Company) shall continue to be vested with good title or a valid leasehold interest in all of the assets of the Company. Except for any intellectual property licensed to the Company following the Closing pursuant to the License Agreement, since October 1, 2014, neither the Company nor the Sellers have transferred, assigned or otherwise conveyed any assets primarily used, primarily held for use, or acquired or developed for use primarily in connection with the business and operations of the Company. The Subsidiary Transfer has not, and shall not, negatively impact the operations or financial condition of the Company.

2.20 Completeness of Disclosure. No representation or warranty by the Sellers in this Agreement, and no statement made by the Sellers in the Disclosure Schedule, or any certificate or other document furnished or to be furnished to the Purchaser pursuant hereto, or in connection with the negotiation, execution or performance of this Agreement, contains or will at the Closing contain any untrue statement of a material fact or omits or will omit to state a material fact required to be stated herein or therein or necessary to make any statement herein or therein not misleading. Except as specifically set forth in this Agreement or the Disclosure Schedule, there are no facts or circumstances of which any Seller is aware that could be expected to have, individually or in the aggregate, a Material Adverse Effect.

3. Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Sellers that:

3.1 Organization, Good Standing, Corporate Power and Qualification. The Purchaser is a corporation duly formed, validly existing and in good standing under the laws of its jurisdiction of formation, and has all requisite corporate power and authority to carry on its business as presently conducted and as proposed to be conducted.

3.2 Authorization. The Purchaser has the requisite power and authority to (a) execute and deliver the Transaction Documents to which it is or will be a party, (b) perform the transactions contemplated by this Agreement to be performed by it and (c) satisfy or perform, as the case may be, its obligations under those Transaction Documents to which it is or will be a party. Such execution, delivery and performance by the Purchaser have been duly authorized by all necessary corporate or other action. Each Transaction Document executed and delivered by the Purchaser has been duly executed and delivered by the Purchaser and constitutes a valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its

terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other laws of general application relating to or affecting the enforcement of creditors’ rights generally.

3.3 Litigation. There is no claim, action, suit, proceeding, arbitration, complaint, charge or investigation pending or to the Purchaser’s knowledge, currently threatened against the Purchaser that questions the validity of this Agreement or the right of the Purchaser to enter into it, or to consummate the transactions contemplated by this Agreement or that would reasonably be expected to have, either individually or in the aggregate, a materially adverse effect on the Purchaser.

3.4 Compliance with Laws and Other Instruments. The Purchaser is not in violation or default (a) of any provisions of its articles of organization, operating agreement or equivalent governing documents, as applicable, (b) of any instrument, judgment, order, writ or decree, (c) under any note, indenture or mortgage, or (d) under any lease, agreement or contract to which it is a party or by which it is bound, except for any such violation or default that would not reasonably be likely to result in a materially adverse effect.

4. Certain Covenants.

4.1 Further Assurances. Each Seller and the Purchaser agree that, from time to time after the Closing Date, they will execute and deliver such further instruments, and take such other action as may be reasonably necessary or desirable to carry out the purposes and intents of this Agreement. Each Party shall cooperate as reasonably requested by the other Party to facilitate the transactions contemplated herein. If, in connection with the Subsidiary Transfer, any assets (other than intellectual property assets that shall be licensed to the Company following the Closing pursuant to the terms of the License Agreement) primarily used, primarily held for use, or acquired or developed for use primarily in the business of the Company was held in the name of any such Subsidiary, the Sellers shall promptly cause such assets to be transferred to the Company, without any consideration, and the Sellers shall take any other actions reasonably necessary to vest such ownership interest in the Company. The Sellers represent, covenant and agree that all employees and consultants who devotes his, her or its primary business time in connection with, or is otherwise primarily assigned to, the business of the Company, but has been employed or engaged by a Subsidiary that has been transferred or sold pursuant to the Subsidiary Transfer, has been reassigned such that the employee or consultant, as the case may be, is employed or engaged by the Company immediately following the Subsidiary Transfer.

4.2 Tax Matters. Following the Closing, the Sellers shall pay, or shall reimburse the Company for, any unpaid Tax imposed on or relating to the Company or any Subsidiary of the Company with respect to any Tax period or portion thereof ending on or prior to the Closing Date, including any Taxes which arise from the Subsidiary Transfer. Stephen F. Olds shall have the ability to review any Tax Returns of the Company for any Tax period or portion thereof ending on or prior to the Closing Date before the filing thereof.

4.3 Restrictive Covenants.

(a) In consideration of the benefits received in connection with the transactions contemplated hereby, and such other good and valuable consideration, the receipt and sufficiency of which is acknowledged, each Seller and T. Olds agrees that, for the period beginning on the Closing Date and ending five years after the Closing Date (the “Noncompete Period”), such Seller and T. Olds shall not directly or indirectly own, manage, control, participate in, consult with, render services for, operate or in any manner engage (including individually or in association with any Person) in any business anywhere in the world that, directly or indirectly, has as a business purpose or conducts any activity which is or may reasonably be construed to be competitive with the business of the Purchaser or any of its Subsidiaries (including, for the purpose of this Section 4.3, the Company, but specifically excluding Vroozi, Inc., LTC Supply Source, LLC, and QVO, Inc.) as currently conducted or as proposed to be conducted as evidenced by the books and records of the Purchaser and its Subsidiaries as of the Closing Date (the “Restricted Business”).

(b) During the Noncompete Period, each Seller and T. Olds shall not directly or indirectly (whether individually or through another Person) (i) call on or solicit any Person who or which is, at that time, or has been within two years prior thereto, a customer of the Purchaser or any of its Subsidiaries to the extent related to the Restricted Business; (ii) solicit the employment of or hire any Person who at the time of such solicitation or hiring or who within one year prior thereto, is or was employed by the Purchaser or any of its Subsidiaries on a full or part-time basis; (iii) on such Seller’s or T. Olds’ behalf, or on behalf of any competitor, call upon any Person as a prospective acquisition candidate who was, to the knowledge of such Seller or T. Olds, either called upon by the Purchaser or any of its Subsidiaries as a prospective acquisition candidate or was the subject of an acquisition analysis by the Purchaser or any of its Subsidiaries to the extent related to the Restricted Business; or (iv) disparage, defame or discredit the Purchaser or any of its Subsidiaries or engage in any activity which would have the effect of disparaging, defaming or discrediting the Purchaser or any of its Subsidiaries.

(c) Each Seller and T. Olds acknowledges that the restrictions contained in this Section 4.3 are reasonable and necessary to protect the legitimate interests of the Purchaser and its Subsidiaries. Each Seller and T. Olds acknowledges that any violation of this Section 4.3 will result in irreparable injury to the Purchaser and its Subsidiaries and agrees that the Purchaser shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of this Section 4.3 by any Seller or T. Olds, which rights shall be cumulative and in addition to any other rights or remedies to which the Purchaser may be entitled.

(d) In the event that any covenant contained in this Section 4.3 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 4.3 and each provision thereof 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.

(e) The restrictive covenants set forth in this Section 4.3 shall terminate and be of no further force or effect if the Purchaser breaches any payment obligations pursuant to the terms of any Seller Note and the Purchaser fails to cure such breach in accordance with the terms of such Seller Note.

5. Miscellaneous.

5.1 Survival; Indemnification.

(a) The representations and warranties set forth in Sections 2.1, 2.2, 2.4, 2.10 and 2.19, and all of the covenants and agreements made in this Agreement, the Schedules and Exhibits hereto and in any other agreement, certificate, document or instrument furnished in connection with the Closing shall survive the Closing indefinitely and shall in no way be affected by any investigation or knowledge of the subject matter of any such investigation made by or on behalf of the Purchaser or the Sellers. All other representations and warranties set forth in this Agreement shall survive the Closing for a period of 24 months, except for the representations and warranties set forth in the preceding sentence and the representations and warranties contained in Sections 2.8, 2.14, 2.16 and 2.18 which shall survive the Closing until sixty (60) days after the expiration of the applicable statute of limitations period (after giving effect to any waivers and extensions thereof) and, in each instance, all such representations and warranties shall in no way be affected by any investigation or knowledge of the subject matter of any such investigation made by or on behalf of the Purchaser or the Sellers.

(b) From and after the Closing, the Purchaser agrees, to hold harmless, defend and indemnify the Sellers and their respective successors and permitted assigns (all of the foregoing are collectively referred to as the “Seller Indemnitees”) against any and all damages, liabilities, losses, costs and expenses (including reasonable attorneys’ fees and expenses) (“Losses”), whether or not arising out of third-party claims, based upon, or arising out of, or relating to, (i) any inaccuracy in, or any breach by the Purchaser of any representation or warranty or other statement contained in this Agreement, the Schedules or Exhibits hereto or any other agreement, certificate, document or instrument furnished pursuant to this Agreement in connection with the Closing, (ii) any breach by the Purchaser of any covenant set forth in this Agreement, the Schedules or Exhibits hereto or any other agreement, certificate, document or instrument delivered in connection with the Closing or (iii) or (iii) any claims arising from Purchaser’s operation of the Company after the Closing (clauses (i), (ii) and (iii) together, (the “Purchaser Indemnifiable Claims”).

(c) From and after the Closing, each Seller and T. Olds hereby agrees to jointly and severally hold harmless, defend and indemnify the Purchaser, its Affiliates and each of their partners, executive officers, directors, employees, stockholders, members, agents and representatives (collectively, referred to as the “Purchaser Indemnitees”) against any and all Losses, whether or not arising out of third-party claims, based upon, or arising out of, or relating to, (i) any inaccuracy in, or any breach by any of the Sellers of any representation or warranty or

other statement contained in this Agreement, the Schedules or Exhibits hereto or any other agreement, certificate, document or instrument furnished pursuant to this Agreement in connection with the Closing, (ii) any breach by any of the Sellers or T. olds of any covenant set forth in this Agreement, the Schedules or Exhibits hereto or any other agreement, certificate, document or instrument delivered in connection with the Closing, (iii) any adjustments/true-ups in excess of $20,000 for any pre-Closing Date calendar month for payments received from Catamaran, Inc., formerly known as SXC Health Solutions, Inc., for prior billing periods pursuant to that certain Agreement for Pharmacy Benefit Administration Services, dated as of January 23, 2004, by and between SXC Health Solutions, Inc. and the Company, as amended by Amendment Agreement dated December 1, 2005, (iv) any liability arising from, or related to, the Subsidiary Transfer or (v) any liabilities or obligations of any Subsidiary of the Company relating to the period prior to the date hereof (clauses (i), (ii), (iii), (iv) and (v) together, the “Seller Indemnifiable Claims”).

(d) An Indemnifying Party shall reimburse, promptly following request therefor, all reasonable expenses incurred by an Indemnified Party in connection with any Indemnifiable Claim, including, without limitation, any threatened, pending or completed action, suit, arbitration, investigation or other proceeding arising out of, or relating to, any Indemnifiable Claim.

(e) If any Indemnified Party intends to seek indemnification pursuant to this Section 5.1, such Indemnified Party shall promptly notify the Indemnifying Party in writing of such claim. The Indemnified Party will provide the Indemnifying Party with prompt notice of any third party claim in respect of which indemnification is sought. The failure to provide either such notice will not affect any rights hereunder except to the extent the Indemnifying Party is materially prejudiced thereby.

(f) If such claim involves a claim by a third party against the Indemnified Party, the Indemnifying Party may, within thirty (30) calendar days after receipt of the notice provided pursuant to Section 5.1(e) and upon notice to the Indemnified Party, assume, through counsel of its own choosing and at its expense, the settlement or defense thereof, and the Indemnified Party shall reasonably cooperate with the Indemnifying Party in connection therewith; provided that the Indemnified Party may participate in such settlement or defense through counsel chosen by it and at its own expense. If the Indemnifying Party elects not to defend against, negotiate, settle or otherwise deal with a third party claim which relates to Losses suffered hereunder, the Indemnified Party may defend against, negotiate, and with the consent of the Indemnifying Party, such consent not to be unreasonably withheld, settle or otherwise deal with such third party claim. The failure of the Indemnifying Party to participate in, conduct or control the defense of a third party claim shall not relieve the Indemnifying Party of any obligation it may have hereunder. No settlement of any such claim shall limit the Indemnified Party’s indemnification rights for any other Losses which are not expressly covered by a settlement and the Indemnifying Party shall only be relieved from liability for Losses covered by a settlement to the extent the settlement provides an unqualified release from all liability in respect of the applicable indemnification claim.

(g) Without limiting any remedies available at Law or in equity, the Purchaser shall have the right to set off any amounts to which it may be entitled in connection with an Indemnifiable Claim against any amounts otherwise payable to the Sellers.

(h) The rights to indemnification set forth in this Section 5.1 are in addition to, and not in limitation of, all rights and remedies to which any party may be entitled. All remedies provided under this Agreement, by Law or otherwise afforded to any party, shall be cumulative and not alternative.

5.2 Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided, however, that no party hereto may assign its rights or delegate its obligations, in whole or in part, under this Agreement without the prior written consent of the other parties hereto except that the Purchaser may assign or delegate its rights and obligations under this Agreement, in whole or in part, to an Affiliate of the Purchaser or to any Person who acquires all or substantially all of the capital stock or assets of the Purchaser. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

5.3 Governing Law. This Agreement and any controversy arising out of or relating to this Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware.

5.4 Counterparts; Facsimile. This Agreement may be executed and delivered by facsimile or “.pdf” signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

5.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

5.6 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page, or to such e-mail address, facsimile number or address as subsequently modified by written notice given in accordance with this Section 5.6. If notice is given to the Sellers, a copy shall also be sent to Kevin E. Monson, Facsimile: 714.426.8009 (that shall not constitute notice), and if notice is given to the Purchaser, a copy shall also be given to Stephen M. Goodman, Morgan, Lewis & Bockius LLP, 1701 Market Street, Philadelphia, PA 19103, Facsimile: 215.963.5001 (that shall not constitute notice).

5.7 No Finder’s Fees. Each party represents that it neither is nor will be obligated for any finder’s or broker’s fee or commission in connection with this transaction. The Purchaser agrees to indemnify and to hold harmless the Sellers from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser or any of its officers, employees or representatives is responsible. The Sellers agree to jointly and severally indemnify and hold harmless the Purchaser from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Sellers or the Company is responsible.

5.8 Fees and Expenses. Except as provided above or as otherwise expressly provided herein, the Purchaser and the Sellers shall pay their own fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement, including the fees, costs and expenses of its financial advisors, accountants and counsel.

5.9 Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Sellers and the Purchaser. Any amendment or waiver effected in accordance with this Section 5.9 shall be binding upon the Purchaser and the Sellers.

5.10 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

5.11 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

5.12 Entire Agreement. This Agreement (including the Exhibits and Schedules hereto) and the Transaction Documents constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled.

5.13 Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any

suit, action or other proceeding arising out of or based upon this Agreement except in the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

5.14 Publicity. The Sellers and the Purchaser shall jointly agree on the timing and content of any public disclosure by relating to the investment and other transaction contemplated hereby. In addition, no Seller shall use the names of the Purchaser or any of the Purchaser’s Affiliates in any trade publication, in any marketing materials or otherwise to the general public without the prior written consent of the Purchaser, which consent may be withheld in its sole discretion. This Section 5.14 may not be amended, waived or modified without the prior written consent of the Purchaser, which may be withheld in its sole discretion.

[Signature pages to follow]

IN WITNESS WHEREOF, the parties have executed this Membership Interest Purchase Agreement as of the date first written above.

	PURCHASER:

	TABULA RASA HEALTHCARE, INC.


	By:	/s/ Brian Adams
	Name: Brian Adams
	Title: Chief Financial Officer

	Address:
	110 Marter Ave, Suite 309
	Moorestown, NJ 08057
	Attention: Brian Adams


	SELLERS:


	/s/ Fred Smith III
	FRED SMITH III

	Address:
	1225 E. Warner Rd
	Tempe, AZ 85284

	OLDS FAMILY 2002 TRUST


	By:	/s/ Thomas Olds, Jr.
	Name:	Thomas Olds, Jr.
	Its:	Trustee


	By:	/s/ Kelly Olds
	Name:	Kelly Olds
	Its:	Trustee

	Address:
	56 Golden Eagle
	Irvine, CA 92603

[Signature Page to Membership Interest Purchase Agreement]

	/s/ Stephen F. Olds
	STEPHEN F. OLDS

	Address:
	18301 Von Karman, Suite 470
	Irvine, CA 92612


	Solely for the limited purposes set forth herein

	/s/ Thomas Olds, Jr.
	THOMAS OLDS, JR.

	Address:
	56 Golden Eagle
	Irvine, CA 92603

[Signature Page to Membership Interest Purchase Agreement]

EX-2.2 3 a2226891zex-2_2.htm EX-2.2

Exhibit 2.2

EXECUTION VERSION

ASSET PURCHASE AGREEMENT

dated as of April 22, 2014

by and among

Capstone Performance Systems, LLC (Delaware),

CareKinesis, Inc.,

Capstone Performance Systems, LLC (Colorado),

PPS Holdings, Inc.

and

David M. Reyes and Ronda L. Hackbart-Reyes

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of the 22nd day of April, 2014 (the “Effective Date”) by and among Capstone Performance Systems, LLC, a Delaware limited liability company (the “Purchaser”), CareKinesis, Inc., a Delaware corporation (“Parent”), Capstone Performance Systems, LLC, a Colorado limited liability company (the “Seller”), PPS Holdings, Inc., a Colorado corporation (“Seller Parent”), and David M. Reyes and Ronda L. Hackbart-Reyes (together, the “Shareholders”, and together with the Seller and Seller Parent, the “Seller Parties”).

BACKGROUND

The Shareholders together own all of the issued and outstanding equity interests of Seller Parent, and Seller Parent and the Shareholders together own all of the issued and outstanding membership interests of the Seller. The Seller owns and operates the Business.

The Purchaser desires to acquire from the Seller, and the Seller desires to sell to the Purchaser, the Purchased Assets, on the terms and subject to the conditions set forth in this Agreement.

1. Purchase and Sale.

1.1 Purchase and Sale of Purchased Assets.

(a) Subject to the terms and conditions of this Agreement, the Purchaser shall acquire at the Closing, and the Seller shall grant, sell, convey, assign, transfer and deliver to the Purchaser at the Closing, free and clear of any mortgage, pledge, lien, conditional sale agreement, security agreement, transfer restriction, encumbrance or other charge (collectively, “Liens”), all of the assets, properties, business, goodwill and rights of every kind, and description, real, personal and mixed, tangible and intangible, owned by the Seller wherever situated on the Closing Date, other than the Excluded Assets (the “Purchased Assets”), including the following:

(i) all inventory;

(ii) all fixed assets, furniture, fixtures, automobiles, leasehold improvements, tooling, machinery and equipment;

(iii) all records with respect to suppliers, employees and other aspects of the Business; provided, however, to the extent the Seller is required to retain originals of such records to comply with applicable Laws, such originals shall not be included within the Purchased Assets but the Seller shall provide the Purchaser with copies thereof;

(iv) all confidential or proprietary information of the Seller or any of its Affiliates that is used in the Business;

(v) all telephone numbers and facsimile numbers currently used in the Business;

(vi) all manufacturing, warehouse and office supplies;

(vii) all rights under any contracts set forth on Schedule 1.1(a)(vii) (the “Assumed Contracts”), and any deposits or other rights pertaining thereto;

(viii) all claims against third parties existing as of the Closing Date, whether or not arising under the Material Contracts;

(ix) all rights under any Permits;

(x) all rights related to any prepaid expenses to the extent related to the Assumed Liabilities;

(xi) all the assets of the Seller, whether or not otherwise described in this Section 1.1(a), as set forth on the balance sheet of the Seller as of March 31, 2014, other than the Excluded Assets;

(xii) all rights to any trademarks, tradenames or other Intellectual Property owned or used by the Seller, including the name “Capstone Performance Systems” and any derivation thereof;

(xiii) all accounts receivable related to services performed on or after April 1, 2014 (“Purchased Accounts Receivable”); and

(xiv) all rights under any insurance policies or Assumed Contracts to the extent such proceeds arise from or relate to the Purchased Assets or Assumed Liabilities.

(b) Notwithstanding the foregoing, the Purchased Assets shall not include any of the following (the “Excluded Assets”):

(i) all cash and cash equivalents;

(ii) all accounts receivable related to services performed prior to April 1, 2014 (“Excluded Accounts Receivable”);

(iii) the corporate seals, charter documents, minute books, stock books, tax returns, books of account or other records having to do with the corporate organization of the Seller;

(iv) the rights that accrue or will accrue to the Seller Parties under this Agreement;

(v) all contracts of the Seller not set forth on Schedule 1.1(a)(vii) (the “Excluded Contracts”);

(vi) the assets specified on Schedule 1.1(b);

(vii) except as otherwise provided in Section 1.1(a)(xiv), all insurance policies and all rights thereunder;

(viii) all rights, refunds, deposits and credits related to Retained Liabilities, Excluded Assets or Excluded Contracts;

(ix) all personnel records and other records required to be retained by the Seller in accordance with applicable Laws;

(x) the Employee Benefit Plans of the Seller;

(xi) all books and records related to the Excluded Assets; and

(xii) all Material Contracts, Permits or other rights that are not assignable pursuant to their terms or applicable Laws.

1.2 Purchase Price.

(a) In consideration of grant, sale, conveyance, assignment, transfer and delivery of the Purchased Assets to the Purchaser and the assumption by the Purchaser of the Assumed Liabilities and the covenants of the Seller Parties set forth in Section 4.4, the Purchaser and Parent shall pay to the Seller or its designee a purchase price (the “Purchase Price”) consisting of cash and up to 677,862 shares of Parent Stock as follows:

(i) at the Closing, $3,000,000 in cash (the “Closing Cash Amount”) and 203,358 shares of Parent Stock (the “Closing Share Amount”);

(ii) at the six-month anniversary of the Closing Date, an amount in cash equal to $500,000 (the “Interim Cash Amount”); and

(iii) at the twelve-month anniversary of the Closing Date, (A) an amount in cash equal to the greater of (1) $2,000,000 or (2) an amount equal to (I) five times the EBITDA of the Business for the twelve month period ending on December 31, 2014 minus (II) the sum of the Closing Cash Amount and Interim Cash Amount; and (B) a number of shares of Parent Stock equal to (i) 677,862 multiplied by a fraction, the numerator of which is lesser of $2,000,000 or the net income of the Business for the twelve month period ending on December 31, 2014, and the denominator of which is $2,000,000, minus (ii) the Closing Share Amount.

(b) For purposes of determining the portion of the Purchase Price payable pursuant to Section 1.2(a)(ii):

(i) the EBITDA and net income of the Business during the twelve month period ending on December 31, 2014 shall not include any expenses of the Business that are not set forth on the budget attached hereto as Schedule 1.2(b); and

(ii) the net income of the Business shall include a deduction for the amount of Taxes that would be payable assuming the Purchaser operated the Business as a standalone company (i.e., not taking into account any offsets or deductions that may be available as part of a consolidated Tax filing with Parent).

(c) The parties have mutually agreed to use a price of $2.857 per share of Parent Stock to determine the number of shares of Parent Stock to be included in the Purchase Price. All cash payments by the Purchaser shall be made by wire transfer of immediately available funds to an account or accounts designated in writing by the Seller Parties.

1.3 Allocation of the Purchase Price. The Purchaser shall prepare and deliver a purchase price allocation to the Seller within 120 days after the Closing Date (the “Asset Allocation”), and the parties agree that the Purchase Price will be allocated to the Purchased Assets for all purposes (including Tax and financial accounting purposes) in accordance with such Asset Allocation. Except as may be required by Law, the parties will (a) file or cause to be filed all Tax Returns (including Internal Revenue Service Form 8594) in a manner consistent with the Asset Allocation (as determined pursuant to this Section 1.3) and (b) not take any action inconsistent therewith.

1.4 Assumption of Assumed Liabilities.

(a) At the Closing, the Purchaser shall assume and agrees to pay, discharge or perform, as appropriate, when due only the liabilities of the Seller specifically identified below in this Section 1.4(a) (collectively, the “Assumed Liabilities”), other than the Retained Liabilities:

(i) all accounts payable, payroll and other liabilities of the Business first arising for services rendered after the Closing Date; and

(ii) any obligations under the Assumed Contracts.

(b) Notwithstanding Section 1.4(a) or any other provision of this Agreement, the Purchaser is not assuming under this Agreement or any other Transaction Document any liability that is not specifically identified as an Assumed Liability under Section 1.4(a), including any of the following (each, an “Retained Liability”):

(i) any liability arising out of any default by the Seller of any provision of any contract;

(ii) any product liability or similar claim for injury to any Person or property, regardless of when made or asserted, that arises out of or is based upon any express or implied representation, warranty, agreement or guarantee made by the Seller, or alleged to have been made by the Seller, or that is imposed or asserted to be imposed by operation of Law in connection with any service performed or product sold or leased by or on behalf of the Seller on or prior to the Closing Date;

(iii) any Tax payable by the Seller with respect to the Business, the Purchased Assets or other properties or operations of the Seller for any period (or portion thereof) ending on or prior to the Closing;

(iv) any transfer, documentary, sales, use, stamp, registration or other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement or the transactions contemplated hereby;

(v) any liability under or in connection with any Excluded Assets;

(vi) any liability arising prior to the Closing Date or as a result of the Closing for severance, bonuses or any other form of compensation to any employees, agents or independent contractors of the Seller, whether or not employed by the Purchaser or Parent after the Closing;

(vii) any liability of the Seller arising or incurred in connection with the negotiation, preparation and execution of this Agreement and the transactions contemplated hereby;

(viii) any liability (including any environmental liability) arising from or related to any event, fact, circumstance or condition existing or arising on or before the Closing Date;

(ix) any liability for money borrowed by the Seller or any Affiliate thereof;

(x) all accounts payable, payroll and other liabilities of the Business for services rendered on or prior to the Closing Date;

(xi) any liabilities under the Seller’s Employee Benefit Plans; and

(xii) any other liability, regardless of when made or asserted, that is not specifically assumed hereunder.

1.5 Closing; Delivery.

(a) The purchase and sale of the Purchased Assets (the “Closing”) shall take place remotely via the exchange of documents and signatures, at 10:00 a.m., on the date hereof, subject to the satisfaction or waiver of the conditions to the consummation of the transactions set forth in Sections 5 and 6, or at such other time and place as the Seller Parties, the Purchaser and Parent mutually agree upon, orally or in writing (which time is designated as the “Closing Date”).

(b) At the Closing, subject to the terms and conditions of this Agreement, the parties shall execute and deliver the Bill of Sale, Assignment and Assumption Agreement and such other documents, instruments and agreements as are required by this Agreement.

1.6 Defined Terms Used in this Agreement. In addition to the terms defined above or elsewhere in this Agreement, the following terms used in this Agreement shall have the meanings set forth or referenced below.

“409A Plan” is defined in Section 2.14(g).

“Acts” is defined in Section 2.2(d).

“Agreement” is defined above in the preamble.

“Altitude Edge” means Altitude Edge Consultants, LLC, a Colorado limited liability company.

“Asset Allocation” is defined in Section 1.3.

“Assumed Contracts” is defined in Section 1.1(a)(vii).

“Assumed Liabilities” is defined in Section 1.4(a).

“Bill of Sale, Assignment and Assumption Agreement” means the Bill of Sale, Assignment and Assumption Agreement by and between the Seller and the Purchaser substantially in the form as Exhibit A hereto.

“Business” means the existing and prospective business, operations, facilities and other assets, financial condition, results of operations, finances, markets, products, competitive position and supplies, and personnel of the Seller.

“Capital Interests” means an interest designated by the Seller and intended to subject its record owner to the rights and obligations of a member thereof, within the meaning of the Operating Agreement.

“Closing” is defined in Section 1.5(a).

“Closing Cash Amount” is defined in Section 1.2(a)(i).

“Closing Date” is defined in Section 1.5(a).

“Closing Share Amount” is defined in Section 1.2(a)(i).

“Code” means the Internal Revenue Code of 1986, as amended.

“Consulting Agreement” means the Consulting Agreement by and between Altitude Edge and the Purchaser substantially in the form as Exhibit B hereto.

“EBITDA” means earnings before interest, taxes, depreciation and amortization.

“Effective Date” is defined above in the preamble.

“Employee Benefit Plan” is defined in Section 2.14(f).

“Employment Agreement” means the employment agreement by and between the Key Employee and the Purchaser substantially in the form as Exhibit C hereto.

“Environmental Laws” is defined in Section 2.18.

“ERISA” is defined in Section 2.14(f).

“Excluded Accounts Receivable” is defined in Section 1.1(b)(ii).

“Excluded Assets” is defined in Section 1.1(b).

“Excluded Contracts” is defined in Section 1.1(b)(iv).

“Financial Statements” is defined in Section 2.12(a).

“Fully-Diluted Basis” is defined in Section 2.2(a).

“Governmental Entity” means any United States or foreign supranational, national, federal, state, provincial, municipal, county, regional or local governmental or quasi-governmental or regulatory authority, any political subdivision, agency, commission, authority, department, division or instrumentality thereof, any court, arbitral tribunal, arbitrator or other dispute mediator, or any other similar domestic or foreign entity.

“Hazardous Substance” is defined in Section 2.18.

“Indebtedness” means, at a particular time, without duplication, all of the following: (a) all obligations of the Seller, whether current or long-term, for borrowed money and all obligations of the Seller evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (b) the maximum of all direct or contingent obligations of the Seller available to be drawn under issued and outstanding letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments; (c) net obligations of the Seller under any swap contract; (d) all obligations of the Seller in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business); (e) obligations secured by a Lien on property owned or being purchased by the Seller; (f) any liabilities or obligations under capitalized leases with respect to which the Seller are liable, contingently or otherwise, as obligor, guarantor or otherwise, and (g) all guarantees of the Seller in respect of any of the foregoing.

“Indemnifiable Claims” means, with respect to the indemnification obligations of the Seller Parties, a Purchaser Indemnifiable Claim, and with respect to the indemnification obligations of the Purchaser and Parent, a Seller Indemnifiable Claim.

“Indemnified Party” means, with respect to the indemnification obligations of the Seller Parties, the Purchaser Indemnitees, and with respect to the indemnification obligations of the Purchaser and Parent, the Seller Indemnitees.

“Indemnifying Party” means, with respect to a Purchaser Indemnitee, the Seller Parties, and with respect to a Seller Indemnitee, the Purchaser and Parent.

“Intellectual Property” means (i) inventions (whether or not patentable), trade secrets, technical data, databases, customer lists, designs, tools, methods, processes, technology, ideas, knowhow and other confidential or proprietary information and materials; (ii) trademarks and service marks (whether or not registered), applications for trademarks and service marks, trade names, logos, trade dress and other proprietary indicia and all goodwill associated therewith; (iii) documentation, advertising copy, marketing materials, specifications, mask works, drawings, graphics, databases, recordings and other works of authorship, whether or not protected by copyright; (iv) source code, object code, data and operating files, user manuals, documentation, flow charts, algorithms, compilers, development tools, maintenance records and other materials related to computer programs; and (v) internet web-sites, URLs and domain names.

“Interim Cash Amount” is defined in Section 1.2(a)(ii).

“Key Employee” means Richard Schamp, MD.

“Knowledge” including similar phrases such as “to the Seller Parties’ knowledge” or “to the knowledge of the Seller Parties” shall mean the knowledge of the Shareholders and any manager, officer or executive employee of the Seller or Seller Parent, including facts of which managers, officers and/or executive employees, in the reasonably prudent exercise of their duties, should be aware.

“Leased Real Property” is defined in Section 2.11(a).

“Liens” is defined in Section 1.1(a).

“Losses” is defined in Section 7.1(b).

“Material Contract” is defined in Section 2.9(b).

“Memorandum of Understanding” means the Memorandum of Understanding by and between Peak PACE and the Purchaser substantially in the form as Exhibit D hereto.

“Noncompete Period” is defined in Section 4.4(a).

“Operating Agreement” means the Operating Agreement of the Seller, dated as of July 1, 2012.

“Parent” is defined above in the preamble.

“Parent Stock” means non-voting common stock, par value $0.0001 per share, of Parent.

“PCBs” is defined in Section 2.18.

“Peak PACE” means Peak PACE Solutions, LLC, a Colorado limited liability company.

“Permits” is defined in Section 2.15(a).

“Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

“Principal Representations” is defined in Section 7.1(b).

“Purchased Accounts Receivable” is defined in Section 1.1(a)(xiii).

“Purchased Assets” is defined in Section 1.1(a).

“Purchase Price” is defined in Section 1.2(a).

“Purchaser” is defined above in the preamble.

“Purchaser Indemnifiable Claims” is defined in Section 7.1(c).

“Purchaser Indemnitees” is defined in Section 7.1(b).

“Referral Agreement” means the Referral Agreement by and between Altitude Edge, Peak PACE, the Purchaser and Parent substantially in the form as Exhibit E hereto.

“Retained Liability” is defined in Section 1.4(b).

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Seller” is defined above in the preamble.

“Seller Indemnifiable Claims” is defined in Section 7.1(b).

“Seller Indemnitees” is defined in Section 7.1(c).

“Seller Parent” is defined above in the preamble.

“Seller Parties” is defined above in the preamble.

“Shareholders” is defined above in the preamble.

“Subsidiary” or “Subsidiaries” means, with respect to any party, any Person of which (i) such party or any Subsidiary of such party is a general partner or (ii) at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the Board of Directors or others performing similar functions with respect to such Person is directly or indirectly owned or controlled by such party and/or by any one or more of its Subsidiaries.

“Transaction Documents” means this Agreement, the Bill of Sale, Assignment and Assumption Agreement, the Consulting Agreement, the Employment Agreement, the Memorandum of Understanding, the Referral Agreement and any other certificate, instrument or document executed by any of the parties hereto in connection herewith.

2. Representations and Warranties of the Seller Parties. The Seller Parties hereby represent and warrant to the Purchaser that, except as set forth on the Disclosure Schedule attached as Exhibit F to this Agreement, which exceptions shall be deemed to be part of the representations and warranties made hereunder, the following representations are true, correct and complete as of the date hereof and as of the Closing. The Disclosure Schedule is arranged in sections corresponding to the numbered and lettered sections and subsections contained in this Section 2.

2.1 Organization, Good Standing, Corporate Power and Qualification. The Seller is a limited liability company duly formed, validly existing and in good standing under the laws of its jurisdiction of formation and has all requisite limited liability company power and authority to carry on its business as presently conducted and as proposed to be conducted. The Seller is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to have a Material Adverse Effect.

2.2 Ownership.

(a) Immediately prior to the Closing, the authorized and outstanding membership interests of the Seller are as set forth on Section 2.2(a) of the Disclosure Schedule, and Schedule 2.2(a) of the Disclosure Schedule sets forth a capitalization table of the Seller as of immediately prior to the Effective Date, on an as-converted, Fully-Diluted Basis. Such capitalization table identifies by name and number of securities owned and each holder of the Seller’s outstanding securities. The membership interests of the Seller are owned of record and beneficially by Seller Parent and the Shareholders free and clear of all Liens. For purposes of this Agreement, “Fully-Diluted Basis” means all Capital Interests issued and outstanding (including, all vested, unvested, earned or unearned Capital Interests, whether subject to time, milestone or other contractual provisions with respect thereto), and any and all Capital Interests issuable assuming the conversion, exchange or exercise of all outstanding options, warrants and any other security directly or indirectly convertible into or exercisable for Capital Interests.

(b) Other than the Capital Interests as set forth in Section 2.2(a) of the Disclosure Schedule, there are no outstanding options, warrants, rights (including conversion or preemptive rights, rights of first refusal and phantom stock rights), proxy, voting, transfer restrictions, agreements, undertakings or obligations of any kind relating to any securities of any of the Seller, including the purchase, sale, acquisition, issuance or grant from any of the Seller of any of their securities.

(c) The Seller is not under any obligation, and has not granted any rights, to register any of its securities (whether presently outstanding or that may hereafter be issued). Except as contemplated in the Operating Agreement, no member of the Seller has entered into any agreement with respect to the voting or transfer of equity securities of the Seller.

(d) All issued and outstanding Capital Interests (i) have been duly authorized and validly issued and (ii) were issued in accordance with all applicable Laws, including, without limitation, the registration requirements of the Securities Act, and applicable state securities Laws (such state securities Laws, together with the Securities Act, the “Acts”) or pursuant to an exemption from such registration requirements.

(e) The Seller does not have, and from and after the Closing will not have (except as set forth in the Operating Agreement), any obligation (contingent or otherwise) to purchase or redeem any of its membership interests.

2.3 Subsidiaries. The Seller does not own any capital stock, equity or similar interest or other proprietary interest, directly or indirectly, in any other Person.

2.4 Authorization. Each Seller Party has the requisite power and authority to (a) execute and deliver the Transaction Documents to which it is or will be a party, (b) perform the transactions contemplated by this Agreement to be performed by it and (c) satisfy or perform, as the case may be, its obligations under those Transaction Documents to which it is or will be a party. Such execution, delivery and performance by each Seller Party have been duly authorized by all necessary corporate or other action, including approval by Seller Parent and the Shareholders. Each Transaction Document executed and delivered by each Seller Party has been duly executed and delivered by such Seller Party and constitutes a valid and binding obligation of such Seller Party, enforceable against such Seller Party in accordance with its terms, except as

limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other laws of general application relating to or affecting the enforcement of creditors’ rights generally.

2.5 Governmental Consents and Filings. Assuming the accuracy of the representations made by the Purchaser in Section 3 of this Agreement, except as set forth in Section 2.5 of the Disclosure Schedule, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local Governmental Entity is required in connection with the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated by this Agreement.

2.6 Litigation. There is no claim, action, suit, proceeding, arbitration, complaint, charge or investigation pending or to any of the Seller Parties’ knowledge, currently threatened (i) against the Seller Parties or any officer, manager or employee of the Seller; (ii) that questions the validity of this Agreement or the right of the Seller Parties to enter into it, or to consummate the transactions contemplated by this Agreement; or (iii) that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. Neither the Seller Parties nor, to the Seller Parties’ knowledge, any of the officers, managers or employees of the Seller, is a party or is named as subject to the provisions of any Governmental Order (in the case of officers, directors or employees, such as would affect the Seller). There is no action, suit, proceeding or investigation by the Seller Parties pending or which any of the Seller Parties intends to initiate. The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or threatened in writing (or any basis therefor known to the Seller Parties) involving the prior employment of any of the Seller’s employees, their services provided in connection with the Business, or any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers.

2.7 Intellectual Property. Except as set forth in Section 2.7(a) of the Disclosure Schedule:

(a) The Seller owns, or is licensed or otherwise possesses enforceable rights to use, all Intellectual Property used in or necessary for the conduct of the Business as currently conducted and as proposed to be conducted. There are no claims or demands pending by any other person or entity pertaining to any of such Intellectual Property nor, to the knowledge of any of the Seller Parties, is there a claim or demand threatened, and no proceedings have been instituted or, to the knowledge of any of the Seller Parties, threatened which challenge the rights of the Seller with respect to such Intellectual Property.

(b) With respect to Intellectual Property that is owned by the Seller, all such Intellectual Property is owned free and clear of Liens. All patents, patent applications, provisional patents, trademarks, trademark applications, trademark registrations, service marks, service work applications, service mark registrations and registered copyrights which are owned by the Seller are listed in Section 2.7(b) of the Disclosure Schedule. All such patents, patent applications, provisional patents, trademarks, trademark registrations, trademark applications and registered copyrights have been duly registered in, filed in or issued by the United States Patent and Trademark Office, the United States Register of Copyrights or the corresponding offices of other jurisdictions as identified in Section 2.7(b) of the Disclosure Schedule, and have been

properly maintained and renewed in accordance with all applicable provisions of Law and administrative regulations of the United States and each such jurisdiction.

(c) All licenses or other agreements under which the Seller is granted rights in Intellectual Property of any third Person are listed in Section 2.7(c) of the Disclosure Schedule. All such licenses or other agreements are in full force and effect. There is no default by the Seller or to the knowledge of any of the Seller Parties by any other party thereto, and all of the rights of the Seller thereunder are transferable without restriction or royalty of any kind (including, without limitation, to any successor-in-interest as a result of a merger, consolidation, asset sale or similar transaction resulting in a change of control). To the Seller Parties’ knowledge, the licensors under such licenses and other agreements have and, at the time of the grant of such licenses or agreements, had all requisite power and authority to grant the rights purported to be conferred thereby. The execution, delivery and performance of this Agreement, and the purchase and sale of the Purchased Assets and assumption of the Assumed Liabilities pursuant hereto will not, with or without the passage of time or giving of notice or both, impair or otherwise affect the rights of the Purchaser following the Closing under any such license or agreement.

(d) All licenses or other agreements under which the Seller has granted rights to others in its Intellectual Property are listed in Section 2.7(d) of the Disclosure Schedule. All such licenses or other agreements are in full force and effect, there is no default by the Seller or to the Seller Parties’ knowledge by any other party thereto, and all of the rights of the Seller thereunder are freely transferable without restriction or royalty of any kind (including, without limitation, to any successor-in-interest as a result of a merger, consolidation, asset sale or similar transaction resulting in a change of control). The execution, delivery, and performance of this Agreement, and the purchase and sale the Purchased Assets and assumption of the Assumed Liabilities pursuant hereto will not, with or without the passage of time or giving of notice or both, impair or otherwise affect the rights of the Purchaser following the Closing under any such license or agreement.

(e) The Seller has taken all commercially reasonable measures required to establish and preserve its ownership of all Intellectual Property developed by, or on behalf of, the Seller. The Seller has required all current and prior employees and all consultants and independent contractors having access to, or who were involved in the development of, any of the Intellectual Property owned or developed by the Seller, to execute agreements that provide valid written assignment of all inventions and developments conceived or created by them in the course of their employment or services, and to the Seller Parties’ knowledge all such persons or entities are in compliance with such agreements. None of the Seller Parties has any knowledge of any infringement by others of any of its Intellectual Property. To each of the Seller Parties’ knowledge, it is not and will not be necessary to use any inventions of any of its employees (or persons it intends to hire) made prior to their employment by the Seller. All current and all former employees and all consultants and independent contractors hired by the Seller have agreed to maintain the confidentiality of all confidential and proprietary information of the Seller and of any information of third parties received by the Seller under an obligation of confidentiality.

(f) The Seller has not infringed, does not infringe and, by conducting the Business as currently conducted or as proposed to be conducted, will not infringe or unlawfully

or wrongfully use the Intellectual Property of any third person or entity. No proceeding charging the Seller with infringement of any Intellectual Property of any third Person has been filed or, to each of the Seller Parties’ knowledge, is threatened to be filed. To each of the Seller Parties’ knowledge, there exists no unexpired patent or patent application which includes claims that would be infringed by the current products of the Seller as currently conducted.

(g) To the Seller Parties’ knowledge, the Seller is not making unauthorized use of any confidential information or trade secrets of any person or entity, including without limitation, to each of the Seller Parties’ knowledge, any former employer of any past or present employee of the Seller.

2.8 Compliance with Laws and Other Instruments. The Seller is not in violation or default (a) of any provisions of the Operating Agreement or its articles of organization, (b) of any instrument, judgment, order, writ or decree, (c) under any note, indenture or mortgage, or (d) under any lease, agreement or contract to which it is a party or by which it is bound that is required to be listed on the Disclosure Schedule. The Seller is not in material violation or default of any provision of any Laws applicable to the Seller. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either (i) a default under any such provision, instrument, judgment, order, writ, decree, contract or agreement or (ii) an event which results in the creation of any lien, charge or encumbrance upon any Purchased Assets or the suspension, revocation, forfeiture, or nonrenewal of any material permit or license applicable to the Business.

2.9 Agreements.

(a) Section 2.9(a) of the Disclosure Schedule lists all agreements, understandings, arrangements or other commitments to which the Seller is a party or by which it is bound, (i) that are terminable without the consent of the Seller and that, if terminated, would reasonably be likely to have a Material Adverse Effect on the Seller, or (ii) that involve or may involve (A) obligations (contingent or otherwise) of the Seller, or payments to the Seller, in each case in excess of $25,000, (B) the license of any Intellectual Property by the Seller to any third party or by a third party to the Seller, other than licenses of the Seller’s software and products on a non-exclusive basis in the ordinary course of business, (C) provisions restricting or affecting the Seller’s products or services, (D) indemnification by the Seller with respect to infringement of proprietary rights, (E) a potential strategic transaction or sale of the Seller, or (F) any other agreement, understanding or instrument to which the Seller is a party or by which it is bound that is material to the Business.

(b) Each agreement, understanding, arrangement or other commitment which is required to be set forth in Section 2.9(a) of the Disclosure Schedule, (each, a “Material Contract”), is in full force and effect and is valid, binding and enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other Laws of general application affecting enforcement of creditors’ rights, and (ii) as limited by general principles of equity that restrict the availability of equitable remedies. The Seller Parties have furnished to the Purchaser complete and correct copies of all such Material Contracts.

(c) Neither the Seller nor to the Seller Parties’ knowledge any other party is in violation or default under any Material Contract and, to each of the Seller Parties’ knowledge, no event has occurred which with notice, lapse of time or both would constitute a violation or default thereunder. The execution, delivery and performance of this Agreement, and the purchase and sale of the Purchased Assets and assumption of the Assumed Liabilities pursuant hereto will not, with or without the passage of time or giving of notice or both, result in any such violation, or be in conflict with or constitute a default under any Material Contract.

2.10 Certain Transactions.

(a) Other than (i) customary employee benefits generally made available to all employees, and (ii) as set forth in Section 2.10(a) of the Disclosure Schedule, there are no agreements, understandings or proposed transactions between the Seller and any of its members, directors, officers, managers, consultants or employees, or any Affiliate thereof.

(b) The Seller is not indebted, directly or indirectly, to any of its members, directors, managers, officers or employees or to their respective spouses or children or to any Affiliate of any of the foregoing, other than in connection with expenses or advances of expenses incurred in the ordinary course of business. None of the Seller’s members, directors, managers, officers or employees, or any members of their immediate families, or any Affiliate of the foregoing are, directly or indirectly, indebted to the Seller or have any (i) material commercial, industrial, banking, consulting, legal, accounting, charitable or familial relationship with any of the Seller’s customers, suppliers, service providers, joint venture partners, licensees and competitors, (ii) direct or indirect ownership interest in any firm or corporation with which the Seller is affiliated or with which the Seller has a business relationship, or any firm or corporation which competes with the Business except that managers, officers or employees or any members of their immediate families may own stock in (but not exceeding two percent (2%) of the outstanding capital stock of) publicly traded companies that may compete with the Business or (iii) financial interest in any contract with the Seller.

2.11 Real Property and Personal Property; Purchased Assets.

(a) The Seller does not own any real property. All real property leased by the Seller (the “Leased Real Property”) is identified in Section 2.11(a) of the Disclosure Schedule. The schedule of Leased Real Property set forth in Section 2.11(a) of the Disclosure Schedule is a complete, accurate and correct list of the Seller’s Leased Real Property. Each of the leases for the Leased Real Property set forth in Section 2.11(a) of the Disclosure Schedule is in full force and effect and has not been modified, amended or altered, in writing or otherwise. Neither the Seller, nor to the knowledge of any of the Seller Parties, any other party thereto is in default under any of such leases, nor has any event occurred which, with the giving of notice or the passage of time, or both, would give rise to a default. There exists no pending or, to any the Seller Parties’ knowledge, threatened condemnation, confiscation, eminent domain proceeding, dispute, claim, demand or similar proceeding with respect to, or which could materially and adversely affect, the continued use and enjoyment of the Leased Real Properties. To any of the Seller Parties’ knowledge, there are no circumstances that would entitle any Governmental Entities or other Person to take possession or otherwise restrict use, possession or occupation of any Leased Real Property. The use and operation of the Leased Real Properties by the Seller is

in compliance with all applicable Laws, including, without limitation, all applicable building codes, environmental, zoning, subdivision and land use laws. None of the Seller Parties has received notice from any Governmental Entities advising it of a violation (or an alleged violation) of any such laws or regulations.

(b) All of the personal property and assets of the Seller are in good working condition, ordinary wear and tear excepted. With respect to the personal property and assets it leases, the Seller is in compliance with such leases and holds a valid leasehold interest free of any Liens other than those of the lessors of such property or assets. The Financial Statements reflect all personal property and assets of the Seller (other than assets disposed of in the ordinary course of business since December 31, 2013).

(c) The Seller has title to all of the Purchased Assets free and clear of all Liens, except for statutory liens for the payment of current taxes that are not yet delinquent and Liens that arise in the ordinary course of business and do not materially impair the Seller’s ownership or use of such property or assets. The Purchased Assets will furnish the Purchaser with all of the capacity and rights to produce, license, develop, use, sell, distribute, install and service the products and to perform the same services in the same manner as presently being produced, licensed, developed or performed by the Seller and as currently contemplated to be produced, licensed, developed or performed by the Seller. The Purchased Assets represent all assets used in and necessary to conduct, and are sufficient to conduct, the Business as currently conducted and as proposed to be conducted. The Seller currently maintains good working relationships with all of the material customers of the Business, none of such customers has given any Seller Party notice terminating, canceling or reducing or threatening to terminate, cancel or reduce any agreement or relationship with the Business, and no Seller Party is aware of any intention of any such customer to terminate or materially reduce the amount of products or services purchased from the Business.

2.12 Financial Matters.

(a) The Seller Parties have delivered to the Purchaser (i) the Seller’s unaudited financial statements (including balance sheet, income statement and statement of cash flows) for the fiscal years ended December 31, 2013, December 31, 2012 and December 31, 2011 and for the interim period from January 1, 2014 to March 31, 2014 (collectively, the “Financial Statements”). The Financial Statements have been prepared in accordance with United States generally accepted accounting principles, applied on a consistent basis throughout the periods indicated, except that the unaudited Financial Statements may not contain all footnotes required by generally accepted accounting principles. The Financial Statements fairly present in all material respects the financial condition and results of operations of the Seller as of the dates, and for the periods, indicated therein, subject in the case of the unaudited Financial Statements to normal year-end audit adjustments which are not material. Except as set forth in the Financial Statements, the Seller does not have material liabilities or obligations, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to March 31, 2014 and (ii) obligations under contracts and commitments incurred in the ordinary course of business, which, in all such cases, individually and in the aggregate are not material. The Seller maintains and will continue to maintain a standard system of accounting established and administered in accordance with United States generally accepted accounting principles.

(b) Except as set forth on Section 2.12(b) of the Disclosure Schedule, since December 31, 2013, the Seller has not made any distributions to any of its members with respect to any Capital Interests.

2.13 Changes. Except as set forth on Section 2.13 of the Disclosure Schedule, the Seller has been operating the Business in the ordinary course consistent with past practice, and since December 31, 2013 there has not been:

(a) any change in the assets, liabilities, financial condition or operating results of the Seller from that reflected in the Financial Statements, except changes in the ordinary course of business;

(b) any damage, destruction or loss, whether or not covered by insurance, in excess of $25,000;

(d) any satisfaction or discharge of any Lien or payment of any obligation by the Seller, except in the ordinary course of business and the satisfaction or discharge of which would not reasonably be expected to be material;

(e) any change to a Material Contract;

(f) any material change in any compensation arrangement or agreement with any employee, officer, member or interestholder;

(g) any resignation or termination of employment of any officer or employee of the Seller;

(h) any mortgage, pledge, transfer of a security interest in, or Lien, created by the Seller, with respect to any of its material properties or assets, except Liens for taxes not yet due or payable and liens that arise in the ordinary course of business and do not materially impair the Seller’s ownership or use of such property or assets;

(i) any loans or guarantees made by the Seller to or for the benefit of its employees, officers, directors or managers, or any members of their immediate families, other than travel advances and other advances made in the ordinary course of its business;

(j) any incurrence of Indebtedness;

(k) any sale, assignment or transfer of any Intellectual Property;

(l) any sale, assignment or transfer of any assets of the Seller other than in the ordinary course of its business;

(m) any receipt of notice that there has been a loss of, or material order cancellation by, any major customer of the Business;

(n) to each of the Seller Parties’ knowledge, any other event or condition of any character, that would reasonably be expected to result in a Material Adverse Effect; or

(o) any arrangement or commitment by the Seller to do any of the things described in this Section 2.13.

2.14 Employee Matters.

(a) Section 2.14(a) of the Disclosure Schedule sets forth a detailed, true and correct description of all compensation, including salary, bonus, severance obligations and deferred compensation paid or payable for each officer, employee, consultant and independent contractor of the Seller who received compensation in excess of $50,000 for the fiscal year ended December 31, 2013 or is anticipated to receive compensation in excess of $50,000 for the fiscal year ending December 31, 2014. Section 2.14(a) of the Disclosure Schedule sets forth all employment agreements entered into by the Seller, and the Seller Parties have made available to the Purchaser a true and correct copy of each such employment agreement. Each such agreement is in full force and effect and is valid, binding and enforceable in accordance with its terms and neither the Seller nor to the Seller Parties’ knowledge any employee is in violation or default under any such agreements and, to the Seller Parties’ knowledge, no event has occurred which with notice, lapse of time or both would constitute a violation or default thereunder.

(b) To the Seller Parties’ knowledge, none of the Seller’s employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any Governmental Order, that would materially interfere with such employee’s ability to promote the interest of the Seller or that would conflict with the Business. To the Seller Parties’ knowledge, each employee devotes substantially all of the employees professional time, attention, diligence and effort to further the Business and promote the success of the Seller and no such employee is currently involved or proposes to be involved in any other business venture, whether or not competitive with the Business. Neither the execution or delivery of this Agreement, nor the carrying on of the Business by the employees of the Seller, nor the conduct of the Business as now conducted and as presently proposed to be conducted, will, to the knowledge of the Seller Parties, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any such employee is now obligated.

(c) The Seller is not delinquent in payments to any of its employees, consultants or independent contractors for any wages, salaries, commissions, bonuses or other direct compensation for any service performed for it to the date hereof, any amounts required to be reimbursed to such employees, consultants or independent contractors, or any social welfare and housing fund contribution required to be paid for such employees. The Seller has complied in all material respects with all applicable equal employment opportunity Laws and with other Laws related to employment, including those related to wages, hours, worker classification and collective bargaining. The Seller withheld and paid to the appropriate Governmental Entity or is holding for payment not yet due to such Governmental Entity all amounts required to be withheld from employees of the Seller and is not liable for any arrears of wages, taxes, penalties or other sums for failure to comply with any of the foregoing.

(d) To the Seller Parties’ knowledge, no employee whose employment is material to the Business intends to terminate employment with the Seller or is otherwise, for any reason, likely to become unavailable to continue as a employee, nor does the Seller have a present intention to terminate the employment of any of the foregoing. The employment of each employee of the Seller is terminable at the will of the Seller. Except as required by law, the Seller does not have any obligation, including with respect to severance, continued benefits or any other payment, to any employee upon termination of employment. The Seller does not have any policy, practice, plan or program of paying severance pay or any form of severance compensation in connection with the termination of employment services.

(e) Section 2.14(e) of the Disclosure Schedule sets forth all grants of options or Capital Interests, and the terms thereof, to all directors, officers, employees, managers and consultants of the Seller. No equity incentive awards have been granted to any director, officer, employees, manager or consultant of the Seller except as set forth in Section 2.14(e) of the Disclosure Schedule. All grants of option or Capital Interests are and have at all times been in compliance with all applicable Laws.

(f) The Seller does not maintain or contribute to any employee benefit plan, pension plan, interest option, bonus or incentive plan, severance pay policy or agreement, statutory deferred compensation agreement, or any similar plan or agreement (an “Employee Benefit Plan”) other than the Employee Benefit Plans identified in Section 2.14(f) of the Disclosure Schedule. No other corporation, trade or business exists which would be treated together with the Seller as a single “employer” under the provisions of Section 414(b), (c), (m) or (o) of the Code). Each Employee Benefit Plan has been and is currently administered in compliance with its constituent documents and all reporting, disclosure and other requirements of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the Code and any other Law applicable to such Employee Benefit Plan. There are no unfunded obligations of the Seller under any retirement, pension, profit-sharing, deferred compensation plan or similar program, and any employee contributions withheld from payroll have been timely and fully contributed to the appropriate Employee Benefit Plan as required under applicable Law. The Seller is not required to make any payments or contributions to any Employee Benefit Plan pursuant to any collective bargaining agreement or any applicable labor relations Law. The Seller does not maintain or contribute to and, to each of the Seller Parties’ knowledge, has never maintained or contributed to any Employee Benefit Plan providing or promising any health or other nonpension benefits to terminated employees (other than continuation coverage, at the maximum applicable premium permitted to be charged by the Seller, required under Section 4980B of the Code, or Section 601 of the ERISA).

(g) Any “nonqualified deferred compensation plan” (as such term is defined under Section 409A(d)(1) of the Code and the guidance thereunder) under which the Seller is obligated to make or promises to make, payments (each, a “409A Plan”) complies in all material respects, in both form and operation, with the requirements of Section 409A of the Code and the guidance thereunder. To the knowledge of the Seller Parties, no payment to be made under any 409A Plan is, or will be, subject to the penalties of Section 409A(a)(1) of the Code.

(h) The Seller is not bound by or subject to (and none of its assets or properties is bound by or subject to) any written or oral, express or implied, contract,

commitment or arrangement with any labor union, and no labor union has requested or, to the knowledge of the Seller Parties, has sought to represent any of the employees, representatives or agents of the Seller. There is no strike or other labor dispute involving the Seller pending, or to the Seller Parties’ knowledge, threatened, nor are any of the Seller Parties aware of any labor organization activity involving the employees of the Seller.

2.15 Certain Regulatory Matters.

(a) The Seller holds all permits, licenses, variances, exemptions, certificates, consents, product listings, establishment registrations, orders, approvals, clearances and other authorizations from Governmental Entities which are required for the conduct of the Business (collectively, the “Permits”), and all periodic reports required to be filed with respect thereto are accurate and complete in all material respects. The Seller is not in default in any material respect under any Permit.

(b) Except as set forth in Section 2.15(b) of the Disclosure Schedule, no Governmental Entity has issued any notice, warning letter, regulatory letter, untitled letter or other communication or correspondence to the Seller Parties, alleging that the Seller or any Affiliate of the Seller is or was in violation of any law, regulation, rule, ordinance, clearance, approval, permission, authorization, consent, exemption, guidance or guideline applicable to the activities conducted by the Seller, or alleging that the Seller or any Affiliate was or is the subject of any pending, threatened or anticipated administrative agency or Governmental Entity investigation, proceeding, review or inquiry related to such activities, or that there are circumstances currently existing which might reasonably be expected to lead to any loss of or refusal to renew any of the Permits.

(c) Except as set forth in Section 2.15(c) of the Disclosure Schedule, the Seller has timely filed all registrations, declarations, reports, notices, forms and other filings required to be filed by it with the any Governmental Entity, and all amendments or supplements to any of the foregoing and has paid all fees and assessments due and payable in connection therewith. The information contained in such declarations, reports, notices, forms and other filings was at the time of filing and is complete and accurate in all material respects, and timely amendments were filed, as necessary, to correct or update any information reflected in such declarations, reports, notices, forms and other filings.

(d) All of the employees of the Seller who are required to be licensed or registered to conduct the Business are duly licensed or registered in each jurisdiction and with each Governmental Entity in which or with which such licensing or registration is so required and such registrations are in full force and effect.

(e) The Seller has not, and to the knowledge of the Seller Parties’, no officer, director, employee or representative of the Seller on behalf of the Seller, has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns; or (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any rules or regulations hereunder, or any comparable foreign Law.

2.16 Tax Returns and Payments. There are no federal, state, county, local or foreign Taxes dues and payable by the Seller which have not been timely paid. There are no accrued and unpaid federal, state, country, local or foreign Taxes of the Seller which are due, whether or not assessed or disputed. There have been no examinations or audits of any Tax returns or reports by any applicable federal, state, local or foreign Governmental Entity. The Seller has duly and timely filed all federal, state, county, local and foreign Tax Returns required to have been filed by it and there are in effect no waivers of applicable statutes of limitations with respect to Taxes for any year, and each such Tax Return is complete and correct. At all times since its formation, for U.S. federal income Tax purposes and applicable state and local income and franchise Tax purposes, the Seller has been a limited liability company.

2.17 Insurance. Section 2.17 of the Disclosure Schedule sets forth a true and complete list of all insurance policies owned or held by the Seller. Such policies afford coverage to the Seller in amounts and against all risks customarily insured against by Persons possessing similar assets or operating similar businesses in similar locations. All such policies are in full force and effect with extended coverage, all premiums with respect thereto have been paid to the extent due and payable, and no notice of cancellation, termination, non renewal or material increase in premiums with respect to any such policy has been received, or to the Seller Parties’ knowledge is expected to be received, by the Seller. Any claims made against any insurance policies of the Seller are described in Section 2.17 of the Disclosure Schedule.

2.18 Environmental and Safety Laws. (a) The Seller is and has been in compliance with all Environmental Laws; (b) there has been no release or to the Seller Parties’ knowledge threatened release of any pollutant, contaminant or toxic or hazardous material, substance or waste, or petroleum or any fraction thereof, (each a “Hazardous Substance”) on, upon, into or from any site currently or heretofore owned, leased or otherwise used by the Seller; (c) there have been no Hazardous Substances generated by the Seller that have been disposed of or come to rest at any site that has been included in any published U.S. federal, state or local “superfund” site list or any other similar list of hazardous or toxic waste sites published by any Governmental Entity in the United States; and (d) there are no underground storage tanks located on, no polychlorinated biphenyls (“PCBs”) or PCB-containing equipment used or stored on, and no hazardous waste as defined by the Resource Conservation and Recovery Act, as amended, stored on, any site owned or operated by the Seller, except for the storage of hazardous waste in compliance with Environmental Laws. The Seller Parties have made available to the Purchaser true and complete copies of all material environmental records, reports, notifications, certificates of need, permits, pending permit applications, correspondence, engineering studies, and environmental studies or assessments.

For purposes of this Section 2.18, “Environmental Laws” means any law, regulation or other applicable requirement relating to (i) releases or threatened release of Hazardous Substance; (ii) pollution or protection of employee health or safety, public health or the environment; or (iii) the manufacture, handling, transport, use, treatment, storage or disposal of Hazardous Substances.

2.19 Completeness of Disclosure. No representation or warranty by the Seller Parties in this Agreement, and no statement made by the Seller Parties in the Disclosure Schedule, or any certificate or other document furnished or to be furnished to the Purchaser pursuant hereto,

or in connection with the negotiation, execution or performance of this Agreement, contains or will at the Closing contain any untrue statement of a material fact or omits or will omit to state a material fact required to be stated herein or therein or necessary to make any statement herein or therein not misleading. Except as specifically set forth in this Agreement or the Disclosure Schedule, there are no facts or circumstances of which the Seller Parties are aware that could be expected to have, individually or in the aggregate, a Material Adverse Effect.

3. Representations and Warranties of the Purchaser and Parent. The Purchaser and Parent hereby represent and warrant to the Seller Parties that:

3.1 Organization, Good Standing, Corporate Power and Qualification. The Purchaser is a limited liability company duly formed, validly existing and in good standing under the laws of its jurisdiction of formation, and has all requisite limited liability company power and authority to carry on its business as presently conducted and as proposed to be conducted. Parent is a corporation duly formed, validly existing and in good standing under the laws of its jurisdiction of formation, and has all requisite corporate power and authority to carry on its business as presently conducted and as proposed to be conducted.

3.2 Ownership.

(a) Immediately prior to the Closing, the authorized and outstanding shares of capital stock of Parent are as set forth on Schedule 3.2(a).

(b) Except as set forth on Schedule 3.2(b), there are no outstanding options, warrants, rights (including conversion or preemptive rights, rights of first refusal and phantom stock rights), proxy, voting, transfer restrictions, agreements, undertakings or obligations of any kind relating to any securities of Parent.

(c) Except as set forth on Schedule 3.2(c), Parent is not under any obligation, and has not granted any rights, to register any of its securities (whether presently outstanding or that may hereafter be issued), and Parent has not entered into any agreement with respect to the voting or transfer of equity securities of Parent.

(d) All issued and outstanding shares of Parent Stock (i) have been duly authorized and validly issued and (ii) were issued in accordance with all applicable Laws, including, without limitation, the registration requirements of the Acts, or pursuant to an exemption from such registration requirements.

(e) When issued in compliance with the provisions of this Agreement, the shares of Parent Stock to be issued to the Seller will be (i) validly issued, (ii) issued in compliance with applicable Laws and (iii) free of any Liens; provided, however, that the shares of Parent Stock may be subject to restrictions on transfer under state and/or federal securities Laws.

(f) Parent does not have, and from and after the Closing will not have, any obligation (contingent or otherwise) to purchase or redeem any of its shares of capital stock.

3.3 Authorization. Each of the Purchaser and Parent has the requisite power and authority to (a) execute and deliver the Transaction Documents to which it is or will be a party, (b) perform the transactions contemplated by this Agreement to be performed by it and (c) satisfy or perform, as the case may be, its obligations under those Transaction Documents to which it is or will be a party. Such execution, delivery and performance by the Purchaser and Parent have been duly authorized by all necessary corporate or other action. Each Transaction Document executed and delivered by the Purchaser and Parent has been duly executed and delivered by such party and constitutes a valid and binding obligation of such party, enforceable against such party in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other laws of general application relating to or affecting the enforcement of creditors’ rights generally.

4. Certain Covenants.

4.1 Further Assurances. The Seller Parties, the Purchaser and Parent agree that, from time to time before and after the Closing Date, they will execute and deliver such further instruments, and take such other action as may be reasonably necessary or desirable to carry out the purposes and intents of this Agreement. The Seller Parties shall cooperate as reasonably requested by the Purchaser or Parent to facilitate the transactions contemplated herein.

4.2 Tax Matters. Following the Closing, the Seller Parties shall pay, or shall reimburse the Purchaser for, any unpaid Tax imposed on or relating to the Seller, the Business or the Purchased Assets with respect to any Tax period or portion thereof ending on or prior to the Closing Date.

4.3 Liens. The Seller Parties shall have caused, prior to the Effective Date, all Liens in and upon any of the Purchased Assets to be released, in form and substance reasonably satisfactory to the Purchaser.

4.4 Restrictive Covenants.

(a) In consideration of the benefits received in connection with the transactions contemplated hereby, and such other good and valuable consideration, the receipt and sufficiency of which is acknowledged, (i) each Seller Party agrees that, for the period beginning on the Effective Date and ending five years after the Effective Date (the “Noncompete Period”), such Seller Party shall not, and shall cause Altitude Edge and Peak PACE not to, directly or indirectly own, manage, control, participate in, consult with, render services for, operate or in any manner engage (including individually or in association with any Person) in any business anywhere in the world that, directly or indirectly, has as a business purpose or conducts any activity which is or may reasonably be construed to be competitive with the business of Parent, the Purchaser or any of their Subsidiaries as conducted at any time prior to or during the Noncompete Period, and (ii) each of Parent and the Purchaser agrees that, for the Noncompete Period, each of Parent and the Purchaser shall not directly or indirectly own, manage, control, participate in, consult with, render services for, operate or in any manner engage (including individually or in association with any Person) in any business anywhere in the world that, directly or indirectly, has as a business purpose or conducts any activity which is

or may reasonably be construed to be competitive with the businesses of Altitude Edge or Peak PACE as currently conducted.

(b) During the Noncompete Period, each Seller Party shall not directly or indirectly (whether individually or through another Person) (i) call on or solicit any Person who or which is, at that time, or has been within two years prior thereto, a customer of Parent, the Purchaser or any of their Subsidiaries; (ii) solicit the employment of or hire any Person who at the time of such solicitation or hiring or who within one year prior thereto, is or was employed by Parent, the Purchaser or any of their Subsidiaries on a full or part-time basis; (iii) on such Seller Party’s behalf, or on behalf of any competitor, call upon any Person as a prospective acquisition candidate who was, to the knowledge of such Seller Party, either called upon by Parent, the Purchaser or any of their Subsidiaries as a prospective acquisition candidate or was the subject of an acquisition analysis by Parent, the Purchaser or any of their Subsidiaries; or (iv) disparage, defame or discredit Parent, the Purchaser or any of their Subsidiaries or engage in any activity which would have the effect of disparaging, defaming or discrediting Parent, the Purchaser or any of their Subsidiaries.

(c) Each Seller Party acknowledges that the restrictions contained in this Section 4.4 are reasonable and necessary to protect the legitimate interests of Parent, the Purchaser and their Subsidiaries. Each Seller Party acknowledges that any violation of this Section 4.4 will result in irreparable injury to Parent, the Purchaser and their Subsidiaries and agrees that Parent and the Purchaser shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of this Section 4.4 by such Seller Party, which rights shall be cumulative and in addition to any other rights or remedies to which Parent or the Purchaser may be entitled.

(d) Each of Parent and the Purchaser acknowledges that the restrictions contained in this Section 4.4 are reasonable and necessary to protect the legitimate interests of the Shareholders. Each of Parent and the Purchaser acknowledges that any violation of this Section 4.4 will result in irreparable injury to the Shareholders and agrees that the Shareholders shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of this Section 4.4 by Parent or the Purchaser, which rights shall be cumulative and in addition to any other rights or remedies to which the Shareholders may be entitled.

(e) In the event that any covenant contained in this Section 4.4 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 4.4 and each provision thereof 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.

4.5 Accounts Receivable; Expenses.

(a) From and after the Closing, (i) if any of the Seller Parties or any of their Affiliates receive or collect any funds relating to any Purchased Accounts Receivable, such Seller Party or its Affiliate shall remit any such amounts to the Purchaser within five (5) days after the day on which such Seller Party or its Affiliate receives such sum, and (ii) if any of the Purchaser, Parent or any of their Affiliates receive or collect any funds relating to any Excluded Accounts Receivable, the Purchaser, Parent or its Affiliate shall remit any such amounts to the Seller within five (5) days after the day on which the Purchaser, Parent or its Affiliate receives such sum.

(b) Within fifteen (15) days following the Closing, the Seller shall prepare and deliver to the Purchaser an invoice for all expenses of the Business related to the period from April 1, 2014 through the day prior to the Closing Date, less any Purchased Accounts Receivable that have been collected by the Seller prior to the Closing (the “Expense Statement”), which shall be paid by the Purchaser within ten (10) days of its receipt unless any amounts on such Expense Statement are disputed by the Purchaser, in which case the parties shall work in good faith to resolve such disputes and if they are unable to do so such disputes will be resolved pursuant to Section 7.13.

5. Conditions to the Purchaser’s and Parent’s Obligations at Closing. The obligations of the Purchaser to purchase the Purchased Assets and assume the Assumed Liabilities and of Parent to issue the Shares at the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

5.1 Bill of Sale, Assignment and Assumption Agreement. The Seller shall have executed and delivered the Bill of Sale, Assignment and Assumption Agreement.

5.2 Employment Agreement. The Key Employee shall have executed and delivered the Employment Agreement.

5.3 Altitude Edge and Peak PACE Agreements. The Purchaser shall have received the Consulting Agreement, the Memorandum of Understanding and the Referral Agreement, each duly executed by Altitude Edge and Peak PACE, as applicable.

5.4 No Material Adverse Change. There shall have been no event that has had, or would be reasonably expected to have, a Material Adverse Effect.

5.5 Secretary’s Certificate. The Secretary of the Seller shall have delivered to the Purchaser at the Closing a certificate certifying (a) the articles of organization and Operating Agreement of the Seller, (b) true and complete copies of all resolutions adopted by the managers and members of the Seller authorizing the execution, delivery and performance of this Agreement, 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 (c) the incumbency and specimen signature of each officer of the Seller executing this Agreement and the other agreements and documents delivered pursuant to this Agreement, and a certification by another officer of the Seller as to the incumbency and signature of the Secretary of the Seller.

5.6 Good Standing. The Purchaser shall have received a certificate confirming the good standing of the Seller in its jurisdiction of formation.

5.7 FIRPTA Certificate. The Purchaser shall have received from the Seller a certificate of non-foreign status meeting the requirements of Treasury Regulation section 1.1445-2(b)(2).

5.8 Joinder to Stockholders Agreement. Parent shall have received a joinder to the Amended and Restated Stockholders Agreement of Parent, dated as of June 28, 2013, duly executed by the recipient of shares of Parent Stock pursuant to Section 1.2, in form and substance satisfactory to Parent.

5.9 Other Instruments. The Purchaser shall have received from the Seller Parties such other instruments of conveyance and transfer, in form reasonably satisfactory to the Purchaser and its counsel, as shall be necessary and effective to transfer and assign to, and vest in, the Purchaser all of the Seller’s right, title and interest in and to the Purchased Assets, and simultaneously with such deliveries, all such steps will be taken by the Seller as may be required to put the Purchaser in actual possession and operating control of the Purchased Assets.

5.10 Regulatory Approvals. All authorizations, approvals and permits, if any, of any Governmental Entity or regulatory body of the United States or of any state that are required to be obtained, in connection with the transactions contemplated by this Agreement shall have been duly obtained and shall be effective.

6. Conditions of the Seller Parties’ Obligations at Closing. The obligations of the Seller Parties to sell the Purchased Assets to the Purchaser at the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

6.1 Bill of Sale, Assignment and Assumption Agreement. The Seller shall have received a duly executed copy of the Bill of Sale, Assignment and Assumption Agreement.

6.2 Employment Agreement. The Key Employee shall have received a duly executed copy of the Employment Agreement.

6.3 Altitude Edge and Peak PACE Agreements. The Seller shall have received the Consulting Agreement, the Memorandum of Understanding and the Referral Agreement, each duly executed by the Purchaser and Parent, as applicable.

6.4 Regulatory Approvals. All authorizations, approvals or permits, if any, of any Governmental Entity or regulatory body of the United States or of any state that are required in connection with the transactions contemplated by this Agreement shall be obtained and effective.

7. Miscellaneous.

7.1 Survival; Indemnification of the Purchaser and Parent.

(a) The representations, warranties, covenants and agreements made in this Agreement, the Schedules and Exhibits hereto and in any other agreement, certificate, document

or instrument furnished in connection with the Closing shall survive the Closing and shall in no way be affected by any investigation or knowledge of the subject matter of any such investigation made by or on behalf of the Purchaser, Parent or the Seller Parties.

(b) The Seller Parties hereby agree to jointly and severally hold harmless, defend and indemnify the Purchaser, Parent, their Affiliates and each of their respective partners, executive officers, directors, employees, stockholders, members, agents and representatives (collectively, referred to as the “Purchaser Indemnitees”) against any and all damages, liabilities, losses, costs and expenses (including reasonable attorneys’ fees and expenses) (“Losses”), whether or not arising out of third-party claims, based upon, or arising out of, or relating to, (i) any inaccuracy in, or any breach by any of the Seller Parties of any representation or warranty or other statement contained in Sections 2.1 (Organization), 2.2 (Ownership), 2.3 (Subsidiaries), 2.4 (Authorization), 2.5 (Governmental Consents and Filings), 2.7 (Intellectual Property), 2.8 (Compliance with Laws and Other Instruments), 2.10 (Certain Transactions), 2.11(c) (Purchased Assets), 2.15 (Employee Matters), 2.17 (Tax Returns and Payments) and 2.19 (Environmental and Safety Laws) (together the “Principal Representations”), the Schedules or Exhibits hereto or any other agreement, certificate, document or instrument furnished pursuant to any of the Principal Representations in connection with the Closing, (ii) any breach by any of the Seller Parties of any covenant set forth in this Agreement, the Schedules or Exhibits hereto or any other agreement, certificate, document or instrument delivered in connection with the Closing, or (iii) the Retained Liabilities (collectively, the “Seller Indemnifiable Claims”).

(c) The Purchaser and Parent hereby agree to jointly and severally hold harmless, defend and indemnify the Seller Parties and their Affiliates and each of their respective partners, executive officers, directors, employees, stockholders, members, agents and representatives (collectively, referred to as the “Seller Indemnitees”) against any and all Losses, whether or not arising out of third-party claims, based upon, or arising out of, or relating to, (i) any inaccuracy in, or any breach by any of the Purchaser or Parent of any representation or warranty or other statement contained in this Agreement, the Schedules or Exhibits hereto or any other agreement, certificate, document or instrument delivered in connection with the Closing, or (ii) any breach by the Purchaser or Parent of any covenant set forth in this Agreement, the Schedules or Exhibits hereto or any other agreement, certificate, document or instrument delivered in connection with the Closing (collectively, the “Purchaser Indemnifiable Claims”).

(d) The Indemnifying Party shall reimburse, promptly following request therefor, all expenses incurred by an Indemnified Party in connection with any Indemnifiable Claim, including, without limitation, any threatened, pending or completed action, suit, arbitration, investigation or other proceeding arising out of, or relating to, any Indemnifiable Claim.

(e) The rights to indemnification set forth in this Section 7.1 are in addition to, and not in limitation of, all rights and remedies to which the parties hereto may be entitled. All remedies provided under this Agreement, by Law or otherwise afforded to any party, shall be cumulative and not alternative.

(f) The Purchaser shall have the right to set off any amounts to which it may be entitled in connection with a Seller Indemnifiable Claim against any amounts otherwise payable to the Seller pursuant to Section 1.2.

7.2 Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided, however, that no party hereto may assign its rights or delegate its obligations, in whole or in part, under this Agreement without the prior written consent of the other parties hereto except that the Purchaser may assign or delegate its rights and obligations under this Agreement, in whole or in part, to an Affiliate formed for the purposes of the transactions contemplated by this Agreement. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

7.3 Governing Law. This Agreement and any controversy arising out of or relating to this Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware.

7.4 Counterparts; Facsimile. This Agreement may be executed and delivered by facsimile or “.pdf” signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

7.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

7.6 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page, or to such e-mail address, facsimile number or address as subsequently modified by written notice given in accordance with this Section 7.7. If notice is given to any of the Seller Parties, a copy shall also be sent to Kristofer M. Simms, Caplan and Earnest LLC, 1800 Broadway, Suite 200, Boulder, CO, 80302, Facsimile: 303.440.3967, and if notice is given to the Purchaser or Parent, a copy shall also be given to Stephen M. Goodman, Morgan, Lewis & Bockius LLP, 1701 Market Street, Philadelphia, PA 19103, Facsimile: 215.963.5001.

7.7 No Finder’s Fees. Each party represents that it neither is nor will be obligated for any finder’s or broker’s fee or commission in connection with this transaction. Each of the Purchaser and Parent agree to indemnify and to hold harmless the Seller Parties from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted

liability) for which the Purchaser or Parent or any of their respective officers, employees or representatives is responsible. The Seller Parties agree to indemnify and hold harmless the Purchaser and Parent from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which any of the Seller Parties is responsible.

7.8 Fees and Expenses. Except as provided above or as otherwise expressly provided herein, the Purchaser, Parent and the Seller Parties shall pay their own fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement, including the fees, costs and expenses of its financial advisors, accountants and counsel.

7.9 Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Seller Parties, on the one hand, and the Purchaser and Parent, on the other hand. Any amendment or waiver effected in accordance with this Section 7.9 shall be binding upon the Purchaser, Parent and each Seller Party.

7.10 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

7.11 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

7.12 Entire Agreement. This Agreement (including the Exhibits and Schedules hereto) and the Transaction Documents constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled.

7.13 Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject

personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

7.14 Publicity. The Seller Parties, on the one hand, and the Purchaser and Parent, on the other hand, shall jointly agree on the timing and content of any public disclosure by relating to the transactions contemplated hereby. In addition, the Seller Parties shall not use the names of the Purchaser, Parent or any of their Affiliates in any trade publication, in any marketing materials or otherwise to the general public without the prior written consent of the Purchaser and Parent, which consent may be withheld in their sole discretion. This Section 7.14 may not be amended, waived or modified without the prior written consent of the Purchaser and Parent, which may be withheld in their sole discretion.

7.15 Bulk Sales. If applicable, the Purchaser and the Seller Parties hereby waive compliance with the bulk sales Laws and any other similar Laws in any applicable jurisdiction in respect of the transactions contemplated hereby; provided, however, that the Seller Parties shall pay and discharge when due all claims of creditors asserted against the Purchaser or the Purchased Assets by reason of such noncompliance and shall take promptly all necessary actions required to remove any Lien which may be placed upon any of the Purchased Assets by reason of such noncompliance.

[Signature pages to follow]

IN WITNESS WHEREOF, the parties have executed this Asset Purchase Agreement as of the date first written above.

	PURCHASER:

	CAPSTONE PERFORMANCE SYSTEMS, LLC

	By:	/s/ Brian Adams
	Name: Brian Adams
	Title: Vice President


	Address:
	c/o CareKinesis, Inc.
	110 Marter Ave, Suite 309
	Moorestown, NJ 08057
	Attention: Calvin Knowlton


	PARENT:

	CAREKINESIS, INC.

	By:	/s/ Brian Adams
	Name: Brian Adams
	Title: Vice President


	Address:
	110 Marter Ave, Suite 309
	Moorestown, NJ 08057
	Attention: Calvin Knowlton

[Signature Page to Asset Purchase Agreement]

	SELLER:

	CAPSTONE PERFORMANCE SYSTEMS, LLC

	By:	/s/David M. Reyes
	Name: David M. Reyes
	Title: Manager

	Address:
	6640 Gunpark Drive
	Boulder, CO 80301


	SELLER PARENT:

	PPS HOLDINGS, INC.

	By:	/s/David M. Reyes
	Name: David M. Reyes
	Title: President

	Address:
	6640 Gunpark Drive
	Boulder, CO 80301


	SHAREHOLDERS:


	/s/David M. Reyes
	DAVID M. REYES

	Address:
	6640 Gunpark Drive
	Boulder, CO 80301


	/s/ David M. Reyes POA for Ronda L. Hackbart-Reyes
	RONDA L. HACKBART-REYES

	Address:
	6640 Gunpark Drive
	Boulder, CO 80301

[Signature Page to Asset Purchase Agreement]

EX-2.3 4 a2226891zex-2_3.htm EX-2.3

Exhibit 2.3

Execution Version

STOCK PURCHASE AGREEMENT

dated as of November 27, 2013

by and between

CAREKINESIS, INC.

and

GARY TOM

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of the 27th day of November, 2013 by and between CareKinesis, Inc., a Delaware corporation (the “Purchaser”), and Gary Tom (the “Seller”).

BACKGROUND

The Seller owns all of the issued and outstanding shares of common stock, no par value (the “Shares”), of J. A. Robertson, Inc. d/b/a St. Mary Prescription Pharmacy, a California corporation (the “Company”).

The Purchaser desires to acquire from the Seller, and the Seller desires to sell to the Purchaser, the Shares, on the terms and subject to the conditions set forth in this Agreement.

1. Purchase and Sale.

1.1 Purchase and Sale of the Shares.

(a) Subject to the terms and conditions of this Agreement, the Purchaser shall acquire at the Closing and the Seller shall sell to the Purchaser at the Closing, free and clear of any mortgage, pledge, lien, conditional sale agreement, security agreement, transfer restriction, encumbrance or other charge (collectively, “Liens”), all of the Shares in exchange for the consideration specified below in this Section 1.1.

(b) The Purchaser shall pay to the Seller a purchase price of up to $2,600,000 (the “Purchase Price”) consisting of up to $2,000,000 in cash and up to 210,000 shares of Purchaser Stock as follows:

(i) at the Closing, $1,000,000 in cash and 105,000 shares of Purchaser Stock;

(ii) following the six-month anniversary of the Closing Date (the “First Contingent Payment Date”), up to $500,000 in cash and up to 52,500 shares of Purchaser Stock, subject to and conditioned upon achievement of certain conditions as specified in Section 1.1(d) and subject to the right of setoff of the Purchaser set forth in Section 8.1(k), and with such cash portion to be paid from the Escrow Funds pursuant to the terms and conditions of the Escrow Agreement;

(iii) following the 12-month anniversary of the Closing Date (the “Second Contingent Payment Date” and together with the First Contingent Payment Date, the “Contingent Payment Dates”), up to $300,000 in cash and up to 31,500 shares of Purchaser Stock , subject to and conditioned upon achievement of certain conditions as specified in Section 1.1(d) and subject to the right of setoff of the Purchaser set forth in Section 8.1(k), and with such

cash portion to be paid from the Escrow Funds pursuant to the terms and conditions of the Escrow Agreement; and

(iv) at the 24-month anniversary of the Closing Date, $200,000 in cash and 21,000 shares of Purchaser Stock, subject to the right of setoff of the Purchaser set forth in Section 8.1(k), and with such cash portion to be from the Escrow Funds pursuant to the terms and conditions of the Escrow Agreement.

(c) The Seller and the Purchaser have mutually agreed to use a price of $2.857 per share of Purchaser Stock to determine the number of shares of Purchaser Stock to be included in the Purchase Price. All cash payments by the Purchaser or Escrow Agent shall be made by wire transfer of immediately available funds to an account or accounts designated in writing by the Seller or the Purchaser, as applicable.

(d) The contingent Purchase Price payments payable pursuant to Sections 1.1(b)(ii) and (iii) (each, a “Contingent Payment”) at each Contingent Payment Date shall be payable based on the Average Monthly Revenue during the six-month period preceding the First Contingent Payment Date and the 12-month period preceding the Second Contingent Payment Date (each, a “Measurement Period”). If the Average Monthly Revenue is equal to or exceeds the Monthly Revenue Target during a Measurement Period, the Contingent Payment for such Measurement Period shall be payable in full (i.e. the full cash amount and full number of shares of Purchaser Stock), and the Purchaser and the Seller shall cause Escrow Agent to release such amount from the Escrow Funds to the Seller. If the Average Monthly Revenue is less than the Monthly Revenue Target for a Measurement Period, then an amount shall be payable equal to the maximum Contingent Payment with respect to such Measurement Period, multiplied by a fraction, the numerator of which is the Average Monthly Revenue for such Measurement Period, the denominator of which is the Monthly Revenue Target, with the cash amount and number of shares of Purchaser Stock each reduced proportionately, and the Purchaser and the Seller shall cause Escrow Agent to release such amount from the Escrow Funds to the Seller and to release the balance of the maximum Contingent Payment with respect to such Measurement Period from the Escrow Funds to the Purchaser. By way of example, if the Average Monthly Revenue for the Measurement Period ending on the First Contingent Payment Date is equal to 50% of the Monthly Revenue Target, the Contingent Payment payable to the Seller from the Escrow Funds pursuant to the terms and conditions of the Escrow Agreement at the First Contingent Payment Date would be equal to $250,000 in cash ($500,000 x .5) and 26,250 shares of Purchaser Stock (52,500 x .5), and the balance of $250,000 would be released from the Escrow Funds to the Purchaser. For the avoidance of doubt, in no event shall the amounts of the Contingent Payments exceed the maximum amounts set forth in Sections 1.1(b)(ii) and (iii). Each Contingent Payment shall be paid no later than 30 days following the applicable Contingent Payment Date. Notwithstanding the foregoing, if any of the following events occurs during the period following the Closing until one year after the Closing, any Contingent Payment not yet paid to the Seller shall be payable on its respective Contingent Payment Date based on the Average Monthly Revenue for the period prior to the date of such event: (i) the dissolution or winding up of the Company, (ii) a merger of the Company into another company or a merger of another company into the Company, (iii) the sale of substantially all the assets or stock of the Company, (iv) the termination of the Seller’s employment by the Company except for “Cause” (as Cause is defined in the Seller’s Employment Agreement with the Company), (v) the Seller’s

termination of his Employment Agreement with the Company for “Good Reason” (as such term is defined in the Seller’s Employment Agreement with the Company), or (vi) the cessation of operations of the Company or the loss of regulatory approvals necessary for the Company to operate in the ordinary course, in each case resulting from the actions or omissions of the Purchaser or the Company after the Closing (and, for the avoidance of doubt, unrelated to any actions or omissions of the Seller or other employees of the Company, or any facts or circumstances existing prior to the Closing), including but not limited to a breach by the Company or the Purchaser of any of the post-closing covenants in Section 4.3 below. Further, in the event the Company sells or transfers a portion of its business consisting of clients who were clients of the Company as of the Closing Date (the “Transferred Clients”) during the one-year period following the Closing (the date of such sale or transfer, the “Transfer Date”), the Monthly Revenue Target shall be reduced for each Measurement Period following the Transfer Date by an amount equal to (x) the Average Monthly Revenue derived from the Transferred Clients during the period from the Closing until the Transfer Date multiplied by (y) a fraction, the numerator of which is the number of months remaining in such Measurement Period following the Transfer Date, and the denominator of which is the total number of months in the Measurement Period.

1.2 Closing; Delivery.

(a) The purchase and sale of the Shares (the “Closing”) shall take place remotely via the exchange of documents and signatures, at 10:00 a.m., within two (2) Business Days after all closing conditions set forth in Sections 5 and 6 are satisfied or waived (other than those to be satisfied at the Closing itself), or at such other time and place as the Seller and the Purchaser mutually agree upon, orally or in writing (the “Closing Date”).

(b) The Seller shall deliver, or cause to be delivered, the following to the Purchaser at or prior to the Closing:

(i) certificates for the Shares, duly endorsed in blank or accompanied by transfer powers duly endorsed in blank;

(iii) a certificate from the Secretary of the Company certifying the articles of incorporation and bylaws of the Company;

(iv) a certificate confirming the good standing of the Company in its jurisdiction of formation;

(v) letters of resignation in the name of and executed by each member of the board of directors of the Company and each officer of the Company resigning his or her position as a director and/or officer of the Company effective as of the Closing Date;

(vi) a DEA Power of Attorney for the Company, duly executed by the Seller and duly notarized, in substantially the form attached hereto as Exhibit A (the “Power of Attorney”);

(vii) a notification letter from the Company regarding its National Council for Prescription Drugs Program provider number and its National Provider Identifier number, each duly executed by the Seller and duly notarized, in substantially the form attached hereto as Exhibit B (the “Pharmacy Letter”);

(viii) written confirmation that it has executed and delivered, or cause to be delivered, to the California Department of Health Care Services a Medi-Cal Successor Liability with Joint and Several Liability Agreement, in substantially the form attached hereto as Exhibit F (the “Joint and Several Liability Agreement”), pursuant to which the Purchaser accepts joint and several liability for all debts arising from the Company’s existing Medi-Cal participation agreement;

(ix) the Escrow Agreement, duly executed by the Seller and Escrow Agent;

(x) a spousal consent, duly executed by the spouse of the Seller, in substantially the form attached hereto as Exhibit G; and

(xi) such other agreements, consents, documents, instruments and writings as are reasonably required to be delivered by the Seller at or prior to the Closing Date pursuant to this Agreement or otherwise reasonably required in connection herewith, including all such other instruments as the Purchaser or its counsel may reasonably request in connection with the purchase of the Shares contemplated hereby.

(i) the portion of the Purchase Price payable at the Closing pursuant to Section 1.1(b)(i);

(ii) a certificate confirming the good standing of the Purchaser in its jurisdiction of formation;

(iii) the Power of Attorney, duly executed by the Purchaser;

(iv) written confirmation that it has executed and delivered, or cause to be delivered, to the California Department of Health Care Services the Joint and Several Liability Agreement;

(v) written confirmation that it has executed and delivered, or cause to be delivered, at least two (2) days prior to the Closing Date a Medi-Cal participating pharmacy provider application;

(vi) written confirmation that it has executed and delivered, or cause to be delivered, at least sixty (60) days prior to the Closing Date a full change of ownership application with the California Department of Consumer Affairs Board of Pharmacy (the “Board of Pharmacy”);

(vii) the Escrow Agreement, duly executed by the Purchaser; and

(viii) such other agreements, consents, documents, instruments and writings as are reasonably required to be delivered by the Purchaser at or prior to the Closing Date pursuant to this Agreement or otherwise reasonably required in connection herewith.

1.3 Escrow. On or prior to the Closing Date, the Purchaser shall (i) deposit One Million Dollars ($1,000,000) (the “Escrow Funds”) with Wells Fargo Bank, National Association (“Escrow Agent”), by wire transfer of immediately available funds to be held in accordance with the terms and conditions of an escrow agreement in substantially the form attached hereto as Exhibit C, with such changes as Escrow Agent may reasonably require (“Escrow Agreement”), with such Escrow Funds to be to be released as set forth in the Escrow Agreement and Sections 1.1(d) and 8.1(j) of this Agreement. The Purchaser shall be responsible for the payment of all fees owed to the Escrow Agent as provided in the Escrow Agreement.

1.4 Defined Terms Used in this Agreement. In addition to the terms defined above or elsewhere in this Agreement, the following terms used in this Agreement shall have the meanings set forth or referenced below.

“409A Plan” is defined in Section 2.14(g).

“Acts” is defined in Section 2.2(d).

“Agreement” is defined above in the preamble.

“Average Monthly Revenue” means for any period the average monthly gross revenue during such period of the business of the Company derived from clients who were clients of the Company as of the Closing Date; provided that Average Monthly Revenue shall exclude any revenue derived from the Company’s biotechnology business.

“Board of Pharmacy” is defined in Section 1.2(c)(vi).

“Closing” is defined in Section 1.2(a).

“Closing Date” is defined in Section 1.2(a).

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” is defined above in the background.

“Contingent Payment” is defined in Section 1.1(d).

“Contingent Payment Dates” is defined in Section 1.1(b)(iii).

“Employee Benefit Plan” is defined in Section 2.14(f).

“Employment Agreements” means the employment agreements by and between each of the Key Employees and the Purchaser substantially in the form as Exhibit D hereto.

“ERISA” is defined in Section 2.14(f).

“Escrow Agent” is defined in Section 1.3.

“Escrow Agreement” is defined in Section 1.3.

“Escrow Funds” is defined in Section 1.3.

“Escrow Termination Date” is defined in Section 8.1(i).

“Financial Statements” is defined in Section 2.12(a).

“First Contingent Payment Date” is defined in Section 1.1(b)(ii).

“Fundamental Representations” means the representations and warranties set forth in Sections 2.1, 2.2, 2.3, 2.4, 3.1, 3.2 and 3.3.

“Hazardous Substance” is defined in Section 2.18.

“Indebtedness” means, at a particular time, without duplication, all of the following: (a) all obligations of the Company, whether current or long-term, for borrowed money and all obligations of the Company evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (b) the maximum of all direct or contingent obligations of the Company available to be drawn under issued and outstanding letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments; (c) net obligations of the Company under any swap contract; (d) all obligations of the Company in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business); (e) obligations secured by a Lien on property owned or being purchased by the Company; (f) any liabilities or obligations under capitalized leases with respect to which the Company is liable, contingently or otherwise, as obligor, guarantor or otherwise, and (g) all guarantees of the Company in respect of any of the foregoing.

“Indemnifiable Claims” means, with respect to the indemnification obligations of the Seller, a Purchaser Indemnifiable Claim, and with respect to the indemnification obligations of the Purchaser, a Seller Indemnifiable Claim.

“Indemnified Party” means, with respect to the indemnification obligations of the Seller, the Purchaser Indemnitees, and with respect to the indemnification obligations of the Purchaser, the Seller Indemnitees.

“Indemnifying Party” means, with respect to a Purchaser Indemnitee, the Seller, and with respect to a Seller Indemnitee, the Purchaser.

“Joint and Several Liability Agreement” is defined in Section 1.2(b)(viii).

“Key Employees” means each of the Seller, Jennifer Carlson, Ligia Erika Martinez and Marina Bresker.

“Knowledge” including similar phrases such as “to the Seller’s knowledge” or “to the knowledge of the Seller” shall mean, with respect to the Seller’s representations and warranties, the knowledge of the Key Employees, including facts of which the Key Employees, in the reasonably prudent exercise of their duties, should be aware, and, with

respect to the Purchaser’s representations and warranties, the knowledge of any officer of the Purchaser, including facts of which such officer, in the reasonably prudent exercise of their duties, should be aware.

“Leased Real Property” is defined in Section 2.11(a).

“Liens” is defined in Section 1.1(a).

“Losses” is defined in Section 8.1(b).

“Material Adverse Effect” means any material adverse change in or effect (financial or other), or any event or circumstance that would reasonably likely have a material adverse change in or effect (financial or other), on the business, results of operations, assets (including intangible assets), liabilities, property, prospects or financial condition of the Company or the Purchaser, as the context indicates, except to the extent resulting from (A) changes affecting generally the Company’s or the Purchaser’s industries, as applicable, or (B) an act of war or terrorism or similar calamity or any escalation or worsening of the same, other than to the extent such circumstances in clauses (A) or (B) affect the Company or the Purchaser in a disproportionate manner as compared to other businesses in the industry in which the Company or the Purchaser operates, as applicable.

“Material Contract” is defined in Section 2.9(b).

“Measurement Period” is defined in Section 1.1(d).

“Monthly Revenue Target” means an amount equal to $416,666.67.

“Noncompete Period” is defined in Section 4.7(a).

“PCBs” is defined in Section 2.18.

“Permits” is defined in Section 2.15(a).

“Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

“Pharmacy Letter” is defined in Section 1.2(b)(vii).

“Power of Attorney” is defined in Section 1.2(b)(vi).

“Proposal” is defined in Section 4.6.

“Purchase Price” is defined in Section 1.1(b).

“Purchaser” is defined above in the preamble.

“Purchaser Financial Statements” is defined in Section 3.7(a).

“Purchaser Indemnifiable Claims” is defined in Section 8.1(b).

“Purchaser Indemnitees” is defined in Section 8.1(c).

“Purchaser Stock” means non-voting common stock, par value $0.0001 per share, of the Purchaser.

“Second Contingent Payment Date” is defined in Section 1.1(b)(iii).

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Seller” is defined above in the preamble.

“Seller Indemnitees” is defined in Section 8.1(b).

“Seller Indemnifiable Claims” is defined in Section 8.1(c).

“Shares” is defined above in the background.

“Transfer Dates” is defined in Section 1.1(d).

“Transferred Clients” is defined in Section 1.1(d).

fees, levies or other governmental charges of any nature whatever, whether disputed or not, together with any interest, penalties, additions to tax, or additional amounts with respect thereto.

“Transaction Documents” means this Agreement, the Employment Agreements, the Power of Attorney, the Pharmacy Letter, the Escrow Agreement and any other certificate, instrument or document executed by any of the parties hereto in connection herewith.

“Unresolved Claims” is defined in Section 8.1(i).

2. Representations and Warranties of the Seller. The Seller hereby represents and warrants to the Purchaser that, except as set forth on the Disclosure Schedule attached as Exhibit E to this Agreement, which exceptions shall be deemed to be part of the representations and warranties made hereunder, the following representations are true, correct and complete as of the date hereof and as of the Closing. The Disclosure Schedule is arranged in sections corresponding to the numbered and lettered sections and subsections contained in this Section 2.

2.1 Organization, Good Standing, Corporate Power and Qualification. The Company is a corporation duly formed, validly existing and in good standing under the laws of its jurisdiction of formation and has all requisite corporate power and authority to carry on its business as presently conducted and as proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to have a Material Adverse Effect.

2.2 Ownership.

(a) Immediately prior to the Closing, the authorized shares of capital stock of the Company consist of 500 shares of common stock, all of which are issued and outstanding and held by the Seller. The Shares are owned of record and beneficially by the Seller free and clear of all Liens. Upon transfer of the Shares to the Purchaser in accordance with the terms of Section 1, the Purchaser will receive valid title to the Shares, free and clear of all Liens.

(c) The Company is not under any obligation, and has not granted any rights, to register any of its securities (whether presently outstanding or that may hereafter be issued).

The Seller has not entered into any agreement with respect to the voting or transfer of equity securities of the Company.

(d) All issued and outstanding Shares (i) have been duly authorized and validly issued and (ii) were issued in accordance with all applicable Laws, including, without limitation, the registration requirements of the Securities Act, and applicable state securities Laws (such state securities Laws, together with the Securities Act, the “Acts”) or pursuant to an exemption from such registration requirements.

(e) The Company does not have, and from and after the Closing will not have, any obligation (contingent or otherwise) to purchase or redeem any of its shares of capital stock.

2.3 Subsidiaries. The Company does not own any capital stock, equity or similar interest or other proprietary interest, directly or indirectly, in any other Person.

2.4 Authorization. The Seller has the requisite power and authority to (a) execute and deliver the Transaction Documents to which he is or will be a party, (b) perform the transactions contemplated by this Agreement to be performed by him and (c) satisfy or perform, as the case may be, his obligations under those Transaction Documents to which he is or will be a party. Such execution, delivery and performance by the Seller has been duly authorized by all necessary corporate or other action. Each Transaction Document executed and delivered by the Seller has been duly executed and delivered by the Seller and constitutes a valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other laws of general application relating to or affecting the enforcement of creditors’ rights generally.

2.5 Governmental Consents and Filings. Assuming the accuracy of the representations made by the Purchaser in Section 3 of this Agreement, except as set forth on Section 2.5 of the Disclosure Schedule, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any Governmental Entity is required in connection with the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated by this Agreement.

2.6 Litigation. There is no claim, action, suit, proceeding, arbitration, complaint, charge or investigation pending or to the Seller’s knowledge, currently threatened (i) against the Company or to the Seller’s knowledge against any officer, manager or employee of the Company and having a Material Adverse Effect on the Company; (ii) that questions the validity of this Agreement or the right of the Seller to enter into it, or to consummate the transactions contemplated by this Agreement; or (iii) that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. Neither the Company nor, to the Seller’s knowledge, any of its officers, managers or employees is a party or is named as subject to the provisions of any Governmental Order (in the case of officers, directors or employees, such as would affect the Company). There is no action, suit, proceeding or investigation by the Company pending or which the Company intends to initiate. The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or threatened in writing (or any basis therefor known to the Company) involving the prior employment of any of the Company’s

employees, their services provided in connection with the Company’s business, or any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers.

2.7 Intellectual Property. Except as set forth in Section 2.7(a) of the Disclosure Schedule:

(a) The Company owns, or is licensed or otherwise possesses enforceable rights to use, all Intellectual Property used in or necessary for the conduct of its business as currently conducted and as proposed to be conducted. There are no claims or demands pending by any other person or entity pertaining to any of such Intellectual Property nor, to the knowledge of the Seller, is there a claim or demand threatened, and no proceedings have been instituted or, to the knowledge of the Seller, threatened which challenge the rights of the Company with respect to such Intellectual Property.

(c) All licenses or other agreements under which the Company is granted rights in Intellectual Property of any third person or entity are listed in Section 2.7(c) of the Disclosure Schedule. All such licenses or other agreements are in full force and effect, there is no default by the Company or to the knowledge of the Seller by any other party thereto, and all of the rights of the Company thereunder are transferable without restriction or royalty of any kind (including, without limitation, to any successor-in-interest as a result of a merger, consolidation, asset sale or similar transaction resulting in a change of control). The execution, delivery and performance of this Agreement, and the sale and delivery of the Shares pursuant hereto will not, with or without the passage of time or giving of notice or both, impair or otherwise affect the rights of the Company under any such license or agreement.

(d) All licenses or other agreements under which the Company has granted rights to others in its Intellectual Property are listed in Section 2.7(d) of the Disclosure Schedule. All such licenses or other agreements are in full force and effect. The execution, delivery and performance of this Agreement, and the sale and delivery of the Shares pursuant hereto will not, with or without the passage of time or giving of notice or both, impair or otherwise affect the rights of the Company under any such license or agreement.

(e) The Seller does not have any knowledge of any infringement by others of any of its Intellectual Property. To the Seller’s knowledge, it is not and will not be necessary to use any inventions of any of its employees (or persons it intends to hire) made prior to their employment by the Company.

(f) To the Seller’s knowledge, the Company has not infringed, does not infringe, and, by conducting its business as currently conducted or as proposed to be conducted,

will not infringe or unlawfully or wrongfully use the Intellectual Property of any third person or entity. No proceeding charging the Company with infringement of any Intellectual Property of any third person or entity has been filed or, to the Seller’s knowledge, is threatened to be filed. To the Seller’s knowledge, there exists no unexpired patent or patent application which includes claims that would be infringed by the current products of the Company as currently conducted.

(g) To the Seller’s knowledge, the Company is not making unauthorized use of any confidential information or trade secrets of any person or entity, including without limitation, to the Seller’s knowledge, any former employer of any past or present employee of the Company.

2.8 Compliance with Laws and Other Instruments. Except as set forth in Section 2.8 of the Disclosure Schedule, the Company is not in material violation or default (a) of any provisions of its articles of incorporation, bylaws or equivalent governing documents, as applicable, (b) of any instrument, judgment, order, writ or decree, (c) under any note, indenture or mortgage, or (d) under any lease, agreement or contract to which it is a party or by which it is bound that is required to be listed on the Disclosure Schedule. Except as set forth in Section 2.8 of the Disclosure Schedule, the Company is not in material violation or default of any provision of any Laws applicable to the Company. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either (i) a default under any such provision, instrument, judgment, order, writ, decree, contract or agreement or (ii) an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture or nonrenewal of any material permit or license applicable to the Company.

2.9 Agreements.

(a) Section 2.9(a) of the Disclosure Schedule lists all material agreements, understandings, arrangements or other commitments to which the Company is a party or by which it is bound, (i) that are terminable without the consent of the Company and that, if terminated, would reasonably be likely to have a Material Adverse Effect on the Company, or (ii) that involve or may involve (A) obligations (contingent or otherwise) of the Company, or payments to the Company, in each case in excess of $50,000, (B) the license of any Intellectual Property by the Company to any third party or by a third party to the Company, other than licenses of the Company’s software and products on a non-exclusive basis in the ordinary course of business, (C) provisions restricting or affecting the Company’s products or services, (D) indemnification by the Company with respect to infringement of proprietary rights, (E) a potential strategic transaction or sale of the Company, or (F) any other agreement, understanding or instrument to which the Company is a party or by which it is bound that is material to the Company.

by general principles of equity that restrict the availability of equitable remedies. The Seller has furnished to the Purchaser complete and correct copies of all such Material Contracts.

(c) Neither the Company nor to the Seller’s knowledge any other party is in material violation or default under any Material Contract and, to the Seller’s knowledge, no event has occurred which with notice, lapse of time or both would constitute a violation or default thereunder. The execution, delivery and performance of this Agreement, and the sale and delivery of the Shares pursuant hereto will not, with or without the passage of time or giving of notice or both, result in any such violation, or be in conflict with or constitute a default under any Material Contract.

2.10 Certain Transactions.

(b) The Company is not indebted, directly or indirectly, to any of its directors, managers, officers or employees or to their respective spouses or children or to any Affiliate of any of the foregoing, other than in connection with expenses or advances of expenses incurred in the ordinary course of business. None of the Company’s directors, managers, officers or employees, or any members of their immediate families, or any Affiliate of the foregoing are, directly or indirectly, indebted to the Company or have any (i) material commercial, industrial, banking, consulting, legal, accounting, charitable or familial relationship with the Company’s customers, suppliers, service providers, joint venture partners, licensees and competitors, (ii) direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation which competes with the Company except that managers, officers or employees or any members of their immediate families may own stock in (but not exceeding two percent (2%) of the outstanding capital stock of) publicly traded companies that may compete with the Company, or (iii) financial interest in any contract with the Company.

2.11 Real Property and Personal Property.

(a) The Company does not own any real property. All real property leased by the Company (the “Leased Real Property”) is identified in Section 2.11(a) of the Disclosure Schedule. The schedule of Leased Real Property set forth in Section 2.11(a) of the Disclosure Schedule is a complete, accurate and correct list of the Company’s Leased Real Property. Each of the leases for the Leased Real Property set forth in Section 2.11(a) of the Disclosure Schedule is in full force and effect and has not been modified, amended or altered, in writing or otherwise. Neither the Company, nor to the knowledge of the Seller, any other party thereto is in default under any of such leases, nor has any event occurred which, with the giving of notice or the passage of time, or both, would give rise to a default. There exists no pending or, to the Seller’s knowledge, threatened condemnation, confiscation, eminent domain proceeding, dispute, claim, demand or similar proceeding with respect to, or which could materially and adversely affect, the continued use and enjoyment of the Leased Real Properties. To the Seller’s knowledge, there are

no circumstances that would entitle any Governmental Entities or other Person other than the Seller’s landlord to take possession or otherwise restrict use, possession or occupation of any Leased Real Property. The use and operation of the Leased Real Properties by the Company is in compliance with all applicable Laws, including, without limitation, all applicable building codes, environmental, zoning, subdivision and land use laws. The Company has not received notice from any Governmental Entities advising it of a violation (or an alleged violation) of any such laws or regulations.

(b) The Company has title to all of its personal property and assets free and clear of all Liens, except Permitted Liens. All such personal property and assets are in good working condition, ordinary wear and tear excepted. With respect to the personal property and assets it leases, the Company is in compliance with such leases and holds a valid leasehold interest free of any Liens except Permitted Liens. The Financial Statements reflect all material personal property and assets of the Company (other than assets disposed of in the ordinary course of business since December 31, 2012), and such properties and assets are sufficient for the Company to conduct its business as currently conducted.

2.12 Financial Matters.

(a) The Seller has delivered to the Purchaser (i) the Company’s unaudited financial statements (including balance sheet, income statement and statement of cash flows) for the fiscal years ended December 31, 2012, December 31, 2011 and December 31, 2010 and (ii) the Company’s unaudited financial statements for the interim period from January 1, 2013 to September 30, 2013 (collectively, the “Financial Statements”). The Financial Statements have been prepared in accordance with United States generally accepted accounting principles, applied on a consistent basis throughout the periods indicated, except that the unaudited Financial Statements may not contain all footnotes required by generally accepted accounting principles. The Financial Statements fairly present in all material respects the financial condition and results of operations of the Company as of the dates, and for the periods, indicated therein, subject in the case of the unaudited Financial Statements to normal year-end audit adjustments which are not material. Except as set forth in the Financial Statements, the Company does not have material liabilities or obligations, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to January 31, 2013 and (ii) obligations under contracts and commitments incurred in the ordinary course of business, which, in all such cases, individually and in the aggregate are not material. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with United States generally accepted accounting principles.

(b) Except as set forth on Section 2.12(b) of the Disclosure Schedule, since December 31, 2012, the Company has not made any distributions to any of its stockholders with respect to any shares of capital stock.

2.13 Changes. Except as set forth on Section 2.13 of the Disclosure Schedule, the Company has been operating its business in the ordinary course consistent with past practice, and since December 31, 2012 there has not been (a) any change in the assets, liabilities, financial condition or operating results of the Company from that reflected in the Financial Statements, except changes in the ordinary course of business; (b) any damage, destruction or loss, whether

or not covered by insurance, in excess of $25,000; (c) any waiver or compromise by the Company of a valuable right or of a material debt owed to it; (d) any loans or guarantees made by the Company to or for the benefit of its employees, officers, directors or managers, or any members of their immediate families, other than travel advances and other advances made in the ordinary course of its business; (e) any sale, assignment or transfer of any Intellectual Property other than in the ordinary course of business; (f) any sale, assignment or transfer of any assets of the Company other than in the ordinary course of its business; (g) any receipt of notice that there has been a loss of, or material order cancellation by, any major customer of the Company; (h) to the Seller’s knowledge, any other event or condition of any character, that would reasonably be expected to result in a Material Adverse Effect; or (i) any arrangement or commitment by the Company to do any of the things described in this Section 2.13.

2.14 Employee Matters.

(a) Section 2.14(a) of the Disclosure Schedule sets forth a detailed, true and correct description of all compensation, including salary, bonus, severance obligations and deferred compensation paid or payable for each officer, employee, consultant and independent contractor of the Company who received compensation in excess of $50,000 for the fiscal year ended December 31, 2012 or is anticipated to receive compensation in excess of $50,000 for the fiscal year ending December 31, 2013. Section 2.14(a) of the Disclosure Schedule sets forth all employment agreements entered into by the Company, and the Seller has made available to the Purchaser a copy of each such employment agreement. Each such agreement is in full force and effect and is valid, binding and enforceable in accordance with its terms and neither the Company nor to the Seller’s knowledge any employee is in violation or default under any such agreements and, to the Seller’s knowledge, no event has occurred which with notice, lapse of time or both would constitute a violation or default thereunder.

(b) To the Seller’s knowledge, none of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any Governmental Order, that would materially interfere with such employee’s ability to promote the interest of the Company or that would conflict with the Company’s business. To the Seller’s knowledge, each employee devotes substantially all of the employee’s professional time, attention, diligence and effort to further the business and promote the success of the Company and no such employee is currently involved or proposes to be involved in any other business venture, whether or not competitive with the business of the Company. Neither the execution or delivery of this Agreement, nor the carrying on of the business of the Company by the employees of the Company, nor the conduct of the business of the Company as now conducted and as presently proposed to be conducted, will, to the knowledge of the Seller, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any such employee is now obligated.

with other Laws related to employment, including those related to wages, hours, worker classification and collective bargaining. The Company withheld and paid to the appropriate Governmental Entity or is holding for payment not yet due to such Governmental Entity all amounts required to be withheld from employees of the Company and is not liable for any arrears of wages, taxes, penalties or other sums for failure to comply with any of the foregoing.

(d) To the Seller’s knowledge, no employee whose employment is material to the business of the Company intends to terminate employment with the Company or is otherwise, for any reason, likely to become unavailable to continue as an employee, nor does the Company have a present intention to terminate the employment of any of the foregoing. The employment of each employee of the Company is terminable at the will of the Company. Except as required by law, the Company does not have any obligation, including with respect to severance, continued benefits or any other payment, to any employee upon termination of employment. The Company does not have any policy, practice, plan or program of paying severance pay or any form of severance compensation in connection with the termination of employment services.

(f) The Company does not maintain or contribute to any employee benefit plan, pension plan, interest option, bonus or incentive plan, severance pay policy or agreement, statutory deferred compensation agreement, or any similar plan or agreement (an “Employee Benefit Plan”) other than the Employee Benefit Plans identified in Section 2.14(f) of the Disclosure Schedule. No other corporation, trade or business exists which would be treated together with the Company as a single “employer” under the provisions of Section 414(b), (c), (m) or (o) of the Code). Each Employee Benefit Plan has been and is currently administered in compliance with its constituent documents and all reporting, disclosure and other requirements of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the Code and any other Law applicable to such Employee Benefit Plan. There are no unfunded obligations of the Company under any retirement, pension, profit-sharing, deferred compensation plan or similar program, and any employee contributions withheld from payroll have been timely and fully contributed to the appropriate Employee Benefit Plan as required under applicable Law. The Company is not required to make any payments or contributions to any Employee Benefit Plan pursuant to any collective bargaining agreement or any applicable labor relations Law. The Company does not maintain or contribute to and, to the Seller’s knowledge, has never maintained or contributed to any Employee Benefit Plan providing or promising any health or other nonpension benefits to terminated employees (other than continuation coverage, at the maximum applicable premium permitted to be charged by the Company, required under Section 4980B of the Code, or Section 601 of the ERISA).

(g) Any “nonqualified deferred compensation plan” (as such term is defined under Section 409A(d)(1) of the Code and the guidance thereunder) under which the Company is

obligated to make or promises to make, payments (each, a “409A Plan”) complies in all material respects, in both form and operation, with the requirements of Section 409A of the Code and the guidance thereunder. To the knowledge of the Seller, no payment to be made under any 409A Plan is, or will be, subject to the penalties of Section 409A(a)(1) of the Code.

(h) The Company is not bound by or subject to (and none of its assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and no labor union has requested or, to the knowledge of the Seller, has sought to represent any of the employees, representatives or agents of the Company. There is no strike or other labor dispute involving the Company pending, or to the Seller’s knowledge, threatened, nor is the Company aware of any labor organization activity involving its employees.

2.15 Certain Regulatory Matters.

(b) Except as set forth in Section 2.15(b) of the Disclosure Schedule, no Governmental Entity has issued any notice, warning letter, regulatory letter, untitled letter or other communication or correspondence to the Company, alleging that the Company or any Affiliate of the Company is or was in violation of any law, regulation, rule, ordinance, clearance, approval, permission, authorization, consent, exemption, guidance or guideline applicable to the activities conducted by the Company, or alleging that the Company or any Affiliate was or is the subject of any pending, threatened or anticipated administrative agency or Governmental Entity investigation, proceeding, review or inquiry related to such activities, or that there are circumstances currently existing which might reasonably be expected to lead to any loss of or refusal to renew any of the Permits.

(c) Except as set forth in Section 2.15(c) of the Disclosure Schedule, the Company has timely filed all registrations, declarations, reports, notices, forms and other filings required to be filed by it with any Governmental Entity, and all amendments or supplements to any of the foregoing and has paid all fees and assessments due and payable in connection therewith. The information contained in such declarations, reports, notices, forms and other filings was at the time of filing and is complete and accurate in all material respects, and timely amendments were filed, as necessary, to correct or update any information reflected in such declarations, reports, notices, forms and other filings.

(e) The Company has not, and to the knowledge of the Seller, no officer, director, employee or representative of the Company on behalf of the Company, has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns; or (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any rules or regulations hereunder, or any comparable foreign law or statute.

2.16 Tax Returns and Payments. There are no federal, state, county, local or foreign Taxes due and payable by the Company which have not been timely paid. There are no accrued and unpaid federal, state, country, local or foreign Taxes of the Company which are due, whether or not assessed or disputed. There have been no examinations or audits of any Tax returns or reports by any applicable Governmental Entity. The Company has duly and timely filed all federal, state, county, local and foreign Tax Returns required to have been filed by it and there are in effect no waivers of applicable statutes of limitations with respect to Taxes for any year, and each such Tax Return is complete and correct. At all times since its incorporation, for U.S. federal income Tax purposes and applicable state and local income and franchise Tax purposes, the Company has been a corporation.

2.17 Insurance. Section 2.17 of the Disclosure Schedule sets forth a true and complete list of all insurance policies owned or held by the Company. Such policies afford coverage to the Company in amounts and against all risks customarily insured against by Persons possessing similar assets or operating similar businesses in similar locations. All such policies are in full force and effect with extended coverage, all premiums with respect thereto have been paid to the extent due and payable, and no notice of cancellation, termination, non-renewal or material increase in premiums with respect to any such policy has been received. Any claims made against any insurance policies of the Company are described in Section 2.17 of the Disclosure Schedule.

2.18 Environmental and Safety Laws. (a) The Company is and has been in compliance with all Environmental Laws; (b) there has been no release or to the Seller’s knowledge threatened release of any pollutant, contaminant or toxic or hazardous material, substance or waste, or petroleum or any fraction thereof, (each a “Hazardous Substance”) on, upon, into or from any site currently or heretofore owned, leased or otherwise used by the Company; (c) there have been no Hazardous Substances generated by the Company that have been disposed of or come to rest at any site that has been included in any published U.S. federal, state or local “superfund” site list or any other similar list of hazardous or toxic waste sites published by any Governmental Entity in the United States; and (d) there are no underground storage tanks located on, no polychlorinated biphenyls (“PCBs”) or PCB-containing equipment used or stored on, and no hazardous waste as defined by the Resource Conservation and Recovery Act, as amended, stored on, any site owned or operated by the Company, except for the storage of hazardous waste in compliance with Environmental Laws. The Seller has made available to the Purchaser true and complete copies of all material environmental records, reports, notifications, certificates of need, permits, pending permit applications, correspondence, engineering studies, and environmental studies or assessments.

2.19 Completeness of Disclosure. No representation or warranty by the Seller in this Agreement, and no statement made by the Seller in the Disclosure Schedule, or any certificate or other document furnished or to be furnished to the Purchaser pursuant hereto, or in connection with the negotiation, execution or performance of this Agreement, contains or will at the Closing contain any untrue statement of a material fact or omits or will omit to state a material fact required to be stated herein or therein or necessary to make any statement herein or therein not misleading. Except as specifically set forth in this Agreement or the Disclosure Schedule, there are no facts or circumstances of which the Seller is aware that could be expected to have, individually or in the aggregate, a Material Adverse Effect.

3. Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Seller that:

3.2 Ownership.

(a) Immediately prior to the Closing, the authorized and outstanding shares of capital stock of the Purchaser are as set forth on Schedule 3.2(a).

(c) Except as set forth on Schedule 3.2(c), (i) the Purchaser is not under any obligation, and has not granted any rights, to register any of its securities (whether presently outstanding or that may hereafter be issued), and (ii) the Purchaser has not entered into any agreement with respect to the voting or transfer of equity securities of the Purchaser.

(d) All issued and outstanding shares of Purchaser Stock (i) have been duly authorized and validly issued and (ii) were issued in accordance with all applicable Laws, including, without limitation, the registration requirements of the Acts, or pursuant to an exemption from such registration requirements.

(e) When issued in compliance with the provisions of this Agreement, the shares of Purchaser Stock to be issued to the Seller will be (i) validly issued, (ii) issued in compliance with applicable Laws and (iii) free of any Liens; provided, however, that the shares of Purchaser Stock may be subject to restrictions on transfer under state and/or federal securities Laws.

(f) The Purchaser does not have, and from and after the Closing will not have, any obligation (contingent or otherwise) to purchase or redeem any of its shares of capital stock.

3.3 Authorization. The Purchaser has the requisite power and authority to (a) execute and deliver the Transaction Documents to which it is or will be a party, (b) perform the transactions contemplated by this Agreement to be performed by it and (c) satisfy or perform, as the case may be, its obligations under those Transaction Documents to which it is or will be a party. Such execution, delivery and performance by the Purchaser have been duly authorized by all necessary corporate or other action. Each Transaction Document executed and delivered by the Purchaser has been duly executed and delivered by the Purchaser and constitutes a valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other laws of general application relating to or affecting the enforcement of creditors’ rights generally.

3.4 Accredited Investor. The Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

3.5 Litigation. There is no claim, action, suit, proceeding, arbitration, complaint, charge or investigation pending or to the Purchaser’s knowledge, currently threatened (i) against the Purchaser or against any officer, manager or employee of the Purchaser and affecting the Purchaser; (ii) that questions the validity of this Agreement or the right of the Purchaser to enter into it, or to consummate the transactions contemplated by this Agreement; or (iii) that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. Neither the Purchaser nor, to the Purchaser’s knowledge, any of its officers, managers or employees is a party or is named as subject to the provisions of any Governmental Order (in the case of officers, directors or employees, such as would affect the Purchaser). There is no action, suit, proceeding or investigation by the Purchaser pending or which the Purchaser intends to initiate. The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or threatened in writing (or any basis therefor known to the Purchaser) involving the prior employment of any of the Purchaser’s employees, their services provided in connection with the Purchaser’s business, or any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers.

3.6 Compliance with Laws and Other Instruments. The Purchaser is not in violation or default (a) of any provisions of its articles of incorporation, bylaws or equivalent governing documents, as applicable, (b) of any instrument, judgment, order, writ or decree, (c) under any note, indenture or mortgage, or (d) in any material respect under any lease, agreement or contract to which it is a party or by which it is bound. The Purchaser is not in material violation or default of any provision of any Laws applicable to the Purchaser. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either (i) a default under any such provision, instrument, judgment, order, writ, decree, contract or agreement or (ii) an event which results in the creation of any lien, charge or encumbrance upon any assets of the Purchaser or the suspension, revocation, forfeiture or nonrenewal of any material permit or license applicable to the Purchaser.

3.7 Financial Matters.

(a) The Purchaser has delivered to the Seller (i) the Purchaser’s audited financial statements (including balance sheet, income statement and statement of cash flows) for the fiscal years ended December 31, 2012, December 31, 2011 and December 31, 2010 and (ii) the Purchaser’s unaudited financial statements for the interim period from January 1, 2013 to September 30, 2013 (collectively, the “Purchaser Financial Statements”). The Purchaser Financial Statements have been prepared in accordance with United States generally accepted accounting principles, applied on a consistent basis throughout the periods indicated, except that the unaudited Purchaser Financial Statements may not contain all footnotes required by generally accepted accounting principles. The Purchaser Financial Statements fairly present in all material respects the financial condition and results of operations of the Purchaser as of the dates, and for the periods, indicated therein, subject in the case of the unaudited Purchaser Financial Statements to normal year-end audit adjustments which are not material. Except as set forth in the Purchaser Financial Statements, the Purchaser does not have material liabilities or obligations, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to January 31, 2013 and (ii) obligations under contracts and commitments incurred in the ordinary course of business, which, in all such cases, individually and in the aggregate are not material. The Purchaser maintains and will continue to maintain a standard system of accounting established and administered in accordance with United States generally accepted accounting principles.

(b) Except as set forth on Schedule 3.7(b), since December 31, 2012, the Purchaser has not made any distributions to any of its stockholders with respect to any shares of capital stock.

3.8 Changes. Except as set forth on Schedule 3.8, the Purchaser has been operating its business in the ordinary course consistent with past practice, and since December 31, 2012 there has not been (a) any change in the assets, liabilities, financial condition or operating results of the Purchaser from that reflected in the Purchaser Financial Statements, except changes in the ordinary course of business; (b) any damage, destruction or loss, whether or not covered by insurance, in excess of $25,000; (c) any waiver or compromise by the Purchaser of a valuable right or of a material debt owed to it; (d) any loans or guarantees made by the Purchaser to or for the benefit of its employees, officers, directors or managers, or any members of their immediate families, other than travel advances and other advances made in the ordinary course of its business; (e) any sale, assignment or transfer of any Intellectual Property other than in the ordinary course of business; (f) any sale, assignment or transfer of any assets of the Purchaser other than in the ordinary course of its business; (g) any receipt of notice that there has been a loss of, or material order cancellation by, any major customer of the Company; (h) to the Purchaser’s knowledge, any other event or condition of any character, that would reasonably be expected to result in a Material Adverse Effect; or (i) any arrangement or commitment by the Purchaser to do any of the things described in this Section 3.8.

3.9 Certain Regulatory Matters.

(a) The Purchaser holds all Permits which are required for the conduct of its business, and all periodic reports required to be filed with respect thereto are accurate and complete in all material respects. The Purchaser is not in default in any material respect under any Permit.

(b) Except as set forth in Schedule 3.9(b), no Governmental Entity has issued any notice, warning letter, regulatory letter, untitled letter or other communication or correspondence to the Purchaser, alleging that the Purchaser or any Affiliate of the Purchaser is or was in violation of any law, regulation, rule, ordinance, clearance, approval, permission, authorization, consent, exemption, guidance or guideline applicable to the activities conducted by the Purchaser, or alleging that the Purchaser or any Affiliate was or is the subject of any pending, threatened or anticipated administrative agency or Governmental Entity investigation, proceeding, review or inquiry related to such activities, or that there are circumstances currently existing which might reasonably be expected to lead to any loss of or refusal to renew any of the Permits.

(c) Except as set forth in Schedule 3.9(c), the Purchaser has timely filed all registrations, declarations, reports, notices, forms and other filings required to be filed by it with any Governmental Entity, and all amendments or supplements to any of the foregoing and has paid all fees and assessments due and payable in connection therewith. The information contained in such declarations, reports, notices, forms and other filings was at the time of filing and is complete and accurate in all material respects, and timely amendments were filed, as necessary, to correct or update any information reflected in such declarations, reports, notices, forms and other filings.

(d) All of the employees of the Purchaser who are required to be licensed or registered to conduct the business of the Purchaser are duly licensed or registered in each jurisdiction and with each Governmental Entity in which or with which such licensing or registration is so required and such registrations are in full force and effect.

(e) The Purchaser has not, and to the knowledge of the Purchaser, no officer, director, employee or representative of the Purchaser on behalf of the Purchaser, has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns; or (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any rules or regulations hereunder, or any comparable foreign law or statute.

3.10 Tax Returns and Payments. There are no federal, state, county, local or foreign Taxes due and payable by the Purchaser which have not been timely paid. There are no accrued and unpaid federal, state, county, local or foreign Taxes of the Purchaser which are due, whether or not assessed or disputed. There have been no examinations or audits of any Tax returns or reports by any applicable Governmental Entity. The Purchaser has duly and timely filed all federal, state, county, local and foreign Tax Returns required to have been filed by it and there are in effect no waivers of applicable statutes of limitations with respect to Taxes for any year, and each such Tax Return is complete and correct.

3.11 Insurance. Schedule 3.11 sets forth a true and complete list of all insurance policies owned or held by the Purchaser. Such policies afford coverage to the Purchaser in amounts and against all risks customarily insured against by Persons possessing similar assets or operating similar businesses in similar locations. All such policies are in full force and effect with extended coverage, all premiums with respect thereto have been paid to the extent due and

payable, and no notice of cancellation, termination, non-renewal or material increase in premiums with respect to any such policy has been received. Any claims made against any insurance policies of the Purchaser are described in Schedule 3.11.

3.12 Governmental Consents and Filings. Assuming the accuracy of the representations made by the Seller in Section 2 of this Agreement, except as set forth on Schedule 3.12, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any Governmental Entity is required in connection with the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated by this Agreement.

3.13 Environmental and Safety Laws. (a) The Purchaser is and has been in compliance with all Environmental Laws; (b) there has been no release or to the Purchaser’s knowledge threatened release of any Hazardous Substance on, upon, into or from any site currently or heretofore owned, leased or otherwise used by the Purchaser; (c) there have been no Hazardous Substances generated by the Purchaser that have been disposed of or come to rest at any site that has been included in any published U.S. federal, state or local “superfund” site list or any other similar list of hazardous or toxic waste sites published by any Governmental Entity in the United States; and (d) there are no underground storage tanks located on, no PCBs or PCB-containing equipment used or stored on, and no hazardous waste as defined by the Resource Conservation and Recovery Act, as amended, stored on, any site owned or operated by the Purchaser, except for the storage of hazardous waste in compliance with Environmental Laws. The Purchaser has made available to the Seller true and complete copies of all material environmental records, reports, notifications, certificates of need, permits, pending permit applications, correspondence, engineering studies, and environmental studies or assessments.

3.14 Completeness of Disclosure. No representation or warranty by the Purchaser in this Agreement, and no statement made by the Purchaser in any Schedule, or any certificate or other document furnished or to be furnished to the Seller pursuant hereto, or in connection with the negotiation, execution or performance of this Agreement, contains or will at the Closing contain any untrue statement of a material fact or omits or will omit to state a material fact required to be stated herein or therein or necessary to make any statement herein or therein not misleading. Except as specifically set forth in this Agreement or Schedule 3.14, there are no facts or circumstances of which the Purchaser is aware that could be expected to have, individually or in the aggregate, a Material Adverse Effect.

4. Certain Covenants.

4.1 Conduct of Business. Except (a) as set forth on Schedule 4.1, (b) as required by applicable Law, or (c) with the prior written consent of the Purchaser, during the period commencing on the date hereof and ending at the earlier of the Closing Date and the termination of this Agreement in accordance with its terms, the Seller will cause the Company to carry on its business in the ordinary course in a manner consistent with past practice, to pay its debts and Taxes when due and, to the extent consistent therewith, to use its reasonable best efforts to keep intact its business, keep available the services of its current employees and preserve its relationships with customers, suppliers, licensors, licensees, distributors and other Persons with which it has significant business relationships. The Seller shall promptly forward to the

Purchaser complete and accurate copies of all material notices received or sent by the Seller or the Company under any Material Contract. Without limiting the generality of the foregoing, during the period commencing on the date hereof and ending at the earlier of the Closing Date and the termination of this Agreement in accordance with its terms, the Seller will not, and will cause the Company not to, (i) amend its organizational documents, (ii) issue any equity securities or make any change in its capitalization, (iii) increase the compensation of or grant any severance, bonus or change of control payment to any employee, other than in connection with the distribution of “excess cash” as provided for below in this Section 4.1, (iv) establish or amend any Employee Benefit Plan, (v) undertake or enter into any extraordinary or material transaction outside the ordinary course of business, or (vi) take any actions inconsistent with any provision of this Agreement or which could reasonably be expected to prevent or delay with the Closing. Notwithstanding the foregoing or any term or provision in this Agreement or the other Transaction Documents that could be considered to be contrary, the Company may distribute the “excess cash” prior to the Closing to the Company’s employees, including the Seller, in the sole discretion of the Company. For the purposes of this Section 4.1 “excess cash” shall mean all cash and cash equivalents maintained or held by the Company in the Company’s various bank and financial accounts less such cash as is necessary to pay the Company’s debts, transaction expenses, Taxes and accounts payable when due in the ordinary course of business.

4.2 Access to Information; Notification.

(a) The Seller shall (and shall cause the Company to) afford to the Purchaser and its officers, directors, employees, accountants, counsel, consultants, advisors, agents and other representatives full access at all reasonable times to the offices, properties, facilities, books and records of the Company and the officers, directors, employees, accountants, counsel, consultants, advisors, agents and other representatives of the Company to discuss the business, financial condition or prospects of the Company, provided that such access does not unreasonably disrupt the normal operations of the Company and shall comply with all applicable Laws.

(b) The Seller shall provide the Purchaser with immediate written notice (i) in the event of the happening of (or the Seller becoming aware of) any fact, event or occurrence (taken together with all other facts, events and occurrences) which (A) does, or could reasonably be expected to, have a Material Adverse Effect, or cause a breach of, or an inaccuracy in, any of the representations and warranties set forth in Section 2 if such fact, event or occurrence existed on the date hereof or breach any of the Seller’s covenants set forth herein or (B) create, or could be reasonably likely to create, a reasonable basis for the Seller to believe that he will not be able to satisfy at the Closing the conditions set forth in Section 5, (ii) of any notice or other communication from any Person alleging that the consent of such Person is or could be required in connection with the transactions contemplated by this Agreement and (iii) of any notice or other communication from any Governmental Entity in connection with the transactions contemplated by this Agreement; provided, that the delivery of any notice pursuant to this Section 4.2(b) shall not (x) modify, diminish or in any other way affect the Purchaser’s remedies (including its right to indemnification), or prevent or cure any inaccuracies in, misrepresentations or breaches of representations or warranties, or breaches of covenants made by the Seller in this Agreement or (y) be deemed to amend, modify or supplement the Disclosure Schedule or constitute an exception to any representation or warranty made by the Seller in this Agreement.

(c) The Seller shall (and shall cause the Company to) deliver to the Purchaser as soon as practicable and in any event within ten business days after the end of each month following the date hereof, complete and correct copies of unaudited financial statements (including balance sheet, income statement and statement of cash flows) for the period beginning from the then current fiscal year to the end of such fiscal month. Such financial statements will be prepared in accordance with United States generally accepted accounting principles applied on a consistent basis throughout the periods indicated, subject to normal year-end audit adjustments which are not material and the absence of footnotes required by generally accepted accounting principles.

4.3 DEA Registration. Upon the issuance to the Purchaser of a temporary pharmacy permit by the Board of Pharmacy, the Purchaser shall as soon as reasonably practical, (i) apply for its own DEA registration, and (ii) take all necessary actions to revoke the Power of Attorney and cease acting as the Company’s attorney-in-fact for the purposes of using the Company’s existing DEA registration.

4.4 Further Assurances. The Seller and the Purchaser agree that, from time to time before and after the Closing Date, they will execute and deliver such further instruments, and take such other action as may be reasonably necessary or desirable to carry out the purposes and intents of this Agreement. Each Party shall cooperate as reasonably requested by the other Party to facilitate the transactions contemplated herein.

4.5 Tax Matters. Following the Closing, the Seller shall pay, or shall reimburse the Company for, any unpaid Tax imposed on or relating to the Company with respect to any Tax period or portion thereof ending on or prior to the Closing Date.

4.6 Exclusivity. Except with respect to this Agreement and the transactions contemplated hereby, the Seller agrees that he will not, and will cause the Company and its directors, officers, managers, employees, Affiliates and other agents and representatives (including any investment banking, legal or accounting firm retained by it or any of them and any individual member or employee of the foregoing) not to (a) encourage, initiate, solicit, seek or respond to, directly or indirectly, any inquiries or the making or implementation of any proposal or offer with respect to a merger, acquisition, consolidation, recapitalization, business combination, liquidation, dissolution, equity investment or similar transaction involving, or any purchase of all or any substantial portion of the assets or any equity or equity-linked securities of, the Company, or which could reasonably be expected to impair, prevent or delay or dilute the benefits to the Purchaser of the transactions contemplated by this Agreement (any such proposal or offer being hereinafter referred to as a “Proposal”); (b) continue, engage in, initiate or otherwise participate in, any negotiations concerning, or provide any information or data to, or have any substantive discussions with, any Person relating to a Proposal; (c) otherwise facilitate or cooperate in any effort or attempt to make, implement or accept a Proposal; or (d) enter into Contract with any Person relating to a Proposal. The Seller shall notify the Purchaser in writing immediately of (and in any event within one business day of the receipt of) any inquiries, proposals or offers related to a Proposal are received by, any information or data is requested from, or any negotiations or discussions related to a Proposal are sought to be initiated or continued with, the Seller, the Company or any of its directors, officers, managers, employees and Affiliates or, to its knowledge, any other agents and representatives (including any

investment banking, legal or accounting firm retained by it or any of them and any individual member or employee of the foregoing) and shall, in any such notice to the Purchaser, identify the Person involved with, and the terms of, any such Proposal and shall provide the Purchaser with copies of any written materials delivered in connection therewith.

4.7 Restrictive Covenants.

(b) The Seller acknowledges that the restrictions contained in this Section 4.7 are reasonable and necessary to protect the legitimate interests of the Purchaser and its Subsidiaries. The Seller acknowledges that any violation of this Section 4.7 will result in irreparable injury to the Purchaser and its Subsidiaries and agrees that the Purchaser shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of this Section 4.7 by the Seller, which rights shall be cumulative and in addition to any other rights or remedies to which the Purchaser may be entitled.

(c) In the event that any covenant contained in this Section 4.7 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 4.7 and each provision thereof 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.

5. Conditions to the Purchaser’s Obligations at Closing. The obligations of the Purchaser to purchase the Shares at the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

5.1 No Litigation. There shall be no suit, action, investigation or proceeding pending or threatened before any Governmental Entity by which it is sought to restrain, delay, prohibit, invalidate, set aside or impose any conditions upon the Closing, in whole or in part, and no injunction, judgment, order, decree or ruling with respect thereto shall be in effect.

5.2 Representations and Warranties; Covenants. (a) The representations and warranties of the Seller contained in Section 2 shall be true and correct in all material respects as or the Closing Date as if made as of the Closing Date (other than those representations and warranties made as of a specific date, which shall be true and correct as of such date); (b) the Seller shall have performed or caused to have been performed in all material respects all of the covenants and agreements required by this Agreement to be performed the Seller prior to the Closing; and (c) the Purchaser shall have received a certificate from the Seller stating that each of the conditions specified above in clauses (a) and (b) of this Section 5.2 has been satisfied.

5.3 Employment Agreements. Each of the Key Employees shall have executed and delivered the Employment Agreements.

5.4 No Material Adverse Change. There shall have been no event that has had, or would be reasonably expected to have, a Material Adverse Effect on the Company.

5.5 Indebtedness; Liens. The Purchaser shall have received evidence reasonably satisfactory to the Purchaser that (a) all Indebtedness of the Company shall have been satisfied prior to the Closing, and (b) all Liens except Permitted Liens in and upon any of the properties and assets of the Company shall have been released prior to the Closing.

5.6 Regulatory Approvals. All authorizations, approvals and permits, if any, of any Governmental Entity or regulatory body of the United States or of any state that are required to be obtained, in connection with the sale of the Shares pursuant to this Agreement shall have been duly obtained and shall be effective, including but not limited to the issuance by the Board of Pharmacy of a notice of its willingness to issue a temporary pharmacy permit to the Purchaser upon evidence that the Closing has occurred.

5.7 Closing Deliverables. The Purchaser shall have received the Closing deliverables described in Section 1.2(b).

6. Conditions of the Seller’s Obligations at Closing. The obligations of the Seller to sell the Shares to the Purchaser at the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

6.1 No Litigation. There shall be no suit, action, investigation or proceeding pending or threatened before any Governmental Entity by which it is sought to restrain, delay, prohibit, invalidate, set aside or impose any conditions upon the Closing, in whole or in part, and no injunction, judgment, order, decree or ruling with respect thereto shall be in effect.

6.2 Representations and Warranties; Covenants. (a) The representations and warranties of the Purchaser contained in Section 3 shall be true and correct in all material respects as or the Closing Date as if made as of the Closing Date (other than those representations and warranties made as of a specific date, which shall be true and correct as of such date); (b) the Purchaser shall have performed or caused to have been performed in all material respects all of the covenants and agreements required by this Agreement to be performed the Purchaser prior to the Closing; and (c) the Seller shall have received a certificate from the Purchaser stating that each of the conditions specified above in clauses (a) and (b) of this Section 6.2 has been satisfied.

6.3 Employment Agreements. Each of the Key Employees shall have received a duly executed copy of his or her respective Employment Agreement.

6.4 Good Standing. The Seller shall have received certificates confirming the good standing of the Purchaser in its jurisdiction of formation.

6.5 Regulatory Approvals. All authorizations, approvals and permits, if any, of any Governmental Entity or regulatory body of the United States or of any state that are required to be obtained, in connection with the sale of the Shares pursuant to this Agreement shall have been duly obtained and shall be effective, including but not limited to the issuance by the Board of Pharmacy of a notice of its willingness to issue a temporary pharmacy permit to Purchaser upon evidence that the Closing has occurred.

6.6 Closing Deliverables. The Seller shall have received the Closing deliverables described in Section 1.2(c).

7. Termination.

7.1 Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing:

(a) by mutual written consent of the Purchaser and the Seller;

(b) by the Purchaser or the Seller if the Closing does not occur on or before May 1, 2014; provided that the right to terminate this Agreement under this clause (b) shall not be available to any party whose breach of a representation, warranty, covenant or agreement under this Agreement has been the cause of, or resulted in the failure of, the Closing to occur on or before such date;

(c) by the Purchaser if (i) the Seller shall have breached any of the covenants or agreements contained in this Agreement to be complied with by the Seller such that the closing condition set forth in Section 5.2(b) would not be satisfied, (ii) there exists a breach of any representation or warranty of the Seller contained in this Agreement such that the closing condition set forth in Section 5.2(a) would not be satisfied or (iii) following the date hereof an event has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect on the Company; provided, (A) in the case of clauses (i) and (ii) of this Section 7.1(c), that such breach is not cured by the Seller within ten business days after the Seller receives written notice of such breach from the Purchaser and (B) the Purchaser shall not be entitled to terminate this Agreement pursuant to clauses (i) or (ii) of this Section 7.1(c) if, at the time of such termination the Purchaser is in breach of any representation, warranty, covenant or other agreement contained herein in a manner that the conditions to Closing set forth in Section 6.2(a) or Section 6.2(a), as applicable, would not been satisfied;

(d) by the Seller if (i) the Purchaser shall have breached any of the covenants or agreements contained in this Agreement to be complied with by the Purchaser such that the closing condition set forth in Section 6.2(b) would not be satisfied or (ii) there exists a breach of any representation or warranty of the Purchaser contained in this Agreement such that the closing condition set forth in Section 6.2(a) would not be satisfied; provided, (A) in the case of

clauses (i) and (ii) of this Section 7.1(d), that such breach is not cured by the Purchaser within ten business days after the Purchaser receives written notice of such breach from the Seller and (B) the Seller shall not be entitled to terminate this Agreement pursuant to this Section 7.1(d) if, at the time of such termination the Seller is in breach of any representation, warranty, covenant or other agreement contained herein in a manner that the conditions to Closing set forth in Section 5.2(a) or Section 5.2(b), as applicable, would not been satisfied; or

(e) by the Purchaser or the Seller if a Governmental Entity shall have issued a Governmental Order or taken any other action, in any case having the effect of restraining, enjoining or otherwise prohibiting, or attempting to restrain, enjoin or otherwise prohibit, the transactions contemplated by this Agreement and such Governmental Order or other action is final and non-appealable.

7.2 Notice. The party desiring to terminate this Agreement pursuant to Sections 7.1(b), 7.1(c), 7.1(d) or 7.1(e) shall give written notice of such termination to the other parties hereto.

7.3 Effect of Termination. In the event of termination of this Agreement in accordance with Section 7.1, this Agreement will forthwith become void and have no effect, without any liability (other than with respect to any claim for breach of any representation, warranty, covenant or agreement set forth in this Agreement); provided, that the provisions of Section 7.3 and Section 8 will survive any termination hereof pursuant to Section 7.1.

8. Miscellaneous.

8.1 Survival; Indemnification.

(a) The representations and warranties made in this Agreement, the Schedules and Exhibits hereto and in any other agreement, certificate, document or instrument furnished in connection with the Closing shall survive the Closing for a period of two years from the Closing Date and shall in no way be affected by any investigation or knowledge of the subject matter of any such investigation made by or on behalf of the Purchaser or the Seller; provided, however that the Fundamental Representations shall survive the Closing indefinitely. The covenants and agreements made in this Agreement, the Schedules and Exhibits hereto and in any other agreement, certificate, document or instrument furnished in connection with the Closing shall survive the Closing in accordance with their terms; provided that any such covenant or agreement which expires on a date certain shall survive until such date certain.

(b) From and after the Closing, the Purchaser agrees, to hold harmless, defend and indemnify the Seller and his successors and permitted assigns (all of the foregoing are collectively referred to as the “Seller Indemnitees”) against any and all damages, liabilities, losses, costs and expenses (including reasonable attorneys’ fees and expenses) (“Losses”), whether or not arising out of third-party claims, based upon, or arising out of, or relating to, (i) any inaccuracy in, or any breach by the Purchaser of any representation or warranty or other statement contained in this Agreement, the Schedules or Exhibits hereto or any other agreement, certificate, document or instrument furnished pursuant to this Agreement in connection with the Closing, or (ii) any WARN liabilities due, in whole or in part, to the Purchaser’s or the

Company’s actions or omissions on or after the Closing Date (clauses (i) and (ii) together, the “Purchaser Indemnifiable Claims”).

(c) From and after the Closing, the Seller hereby agrees to hold harmless, defend and indemnify the Purchaser, its Affiliates and each of their partners, executive officers, directors, employees, stockholders, members, agents and representatives (collectively, referred to as the “Purchaser Indemnitees”) against any and all Losses, whether or not arising out of third-party claims, based upon, or arising out of, or relating to, (i) any inaccuracy in, or any breach by the Seller of any representation or warranty or other statement contained in this Agreement, the Schedules or Exhibits hereto or any other agreement, certificate, document or instrument furnished pursuant to this Agreement in connection with the Closing, (ii) any breach by the Seller of any covenant set forth in this Agreement, the Schedules or Exhibits hereto or any other agreement, certificate, document or instrument delivered in connection with the Closing, or (iii) the items listed on Section 2.8 of the Disclosure Schedule (clauses (i), (ii) and (iii) together, the “Seller Indemnifiable Claims”).

(e) Except for claims of fraud, the provisions of this Section 8.1 constitute the sole and exclusive remedy available for an Indemnified Party for any Losses arising out of Indemnifiable Claims. Neither the Purchaser nor the Seller may avoid the limitations on liability set forth in this Section 8.1 by seeking damages for breach of contract, tort or pursuant to any other theory of liability, and the Purchaser and Seller hereby waive from and after the Closing, to the fullest extent permitted under applicable law, any and all rights, claims and causes of action they may have against an Indemnifying Party relating (directly or indirectly) to the subject matter of this Agreement arising under or based upon any federal, state, local or foreign statute, law or ordinance or otherwise, except for claims of fraud. Nothing in this Section 8.1 shall limit any Person’s right to seek and obtain any equitable relief to which any Person may be entitled.

(f) Except with respect to claims for breaches of Fundamental Representations or covenants, an Indemnifying Party will not have any liability with respect to the matters described in this Section 8.1 until the aggregate of all Losses with respect to such matters exceeds $25,000, at which time such Indemnifying Party shall be liable for the total amount of all recoverable Losses. The amount of any Losses available to an Indemnified Party shall not exceed, with respect to the Purchaser Indemnitees, Two Million Six Hundred Thousand Dollars ($2,600,000) (consisting of not more than Two Million Dollars ($2,000,000) in cash and Six Hundred Thousand Dollars ($600,000) of Purchaser Stock), and with respect to the Seller Indemnitees, One Million Three Hundred Thousand Dollars ($1,300,000) (consisting of not more than One Million Dollars ($1,000,000) in cash and Three Hundred Thousand Dollars ($300,000) of Purchaser Stock), and shall be calculated net of any insurance proceeds (net of direct out-of-pocket collection expenses) actually received by the Indemnified Party on account of such Losses. If an insurance recovery is made by an Indemnified Party with respect to any Losses for which any the Indemnified Party has been indemnified hereunder, then a refund equal to the

aggregate amount of the recovery shall be made promptly to the Indemnifying Party. Furthermore, no claim for indemnification may be made or pursued (and each party, as applicable, expressly waives any right to indemnification) for any indirect damage, consequential or special loss or damage, diminution in value, economic loss, loss of profits or punitive damages.

(g) If any Indemnified Party intends to seek indemnification pursuant to this Section 8.1, such Indemnified Party shall promptly notify the Indemnifying Party in writing of such claim. The Indemnified Party will provide the Indemnifying Party with prompt notice of any third party claim in respect of which indemnification is sought. The failure to provide either such notice will not affect any rights hereunder except to the extent the Indemnifying Party is materially prejudiced thereby.

(h) If such claim involves a claim by a third party against the Indemnified Party, the Indemnifying Party may, within thirty (30) calendar days after receipt of the notice provided pursuant to Section 8.1(g) and upon notice to the Indemnified Party, assume, through counsel of its own choosing and at its expense, the settlement or defense thereof, and the Indemnified Party shall reasonably cooperate with the Indemnifying Party in connection therewith; provided that the Indemnified Party may participate in such settlement or defense through counsel chosen by it. If the Indemnifying Party elects not to defend against, negotiate, settle or otherwise deal with a third party claim which relates to Losses suffered hereunder, the Indemnified Party may, at its own expense, defend against, negotiate, and with the consent of the Indemnifying Party, settle or otherwise deal with such third party claim. The failure of the Indemnifying Party to participate in, conduct or control the defense of a third party claim shall not relieve the Indemnifying Party of any obligation it may have hereunder. No settlement of any such claim shall limit the Indemnified Party’s indemnification rights for any other Losses which are not expressly covered by a settlement and the Indemnifying Party shall only be relieved from liability for Losses covered by a settlement to the extent the settlement provides an unqualified release from all liability in respect of the applicable indemnification claim.

(i) Each Indemnified Party entitled to indemnification hereunder shall take all commercially reasonable steps to mitigate any Losses after becoming aware of any event which could reasonably be expected to give rise to any Losses that are indemnifiable or recoverable hereunder or in connection herewith; provided, that (i) any costs or expenses incurred by an Indemnified Party in mitigating Losses shall also be included in the amount of Losses, and (ii) an Indemnified Party shall have no obligation to make a claim for recovery against any insurer of such Indemnified Party with respect to any such Losses.

(j) Any payment the Seller is obligated to make to the Purchaser Indemnitees pursuant to this Section 8.1 shall be paid first from the funds held in the Escrow Account in accordance with the terms of this Agreement and the terms of the Escrow Agreement. On the date that is the twenty-four (24) month anniversary of the Closing Date (the “Escrow Termination Date”), Escrow Agent shall release the Escrow Funds to the Seller except that Escrow Agent shall retain an amount of funds equal to the amount of claims for indemnification under this Section 8.1 asserted by the Purchaser Indemnitees in accordance with this Section 8.1 before the Escrow Termination Date but not yet resolved (“Unresolved Claims”). Any Escrow Funds retained for Unresolved Claims shall be released by Escrow Agent to the Seller or the

Purchaser, as applicable, upon resolution of the Unresolved Claims in accordance with this Section 8.1.

(k) The Purchaser shall have the right to set off any amounts to which it may be entitled in connection with an Indemnifiable Claim against any amounts otherwise payable to the Seller pursuant to Section 1.1 or this Section 8.1.

8.2 Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided, however, that no party hereto may assign its rights or delegate its obligations, in whole or in part, under this Agreement without the prior written consent of the other parties hereto except that the Purchaser may assign or delegate its rights and obligations under this Agreement, in whole or in part, to an Affiliate of the Purchaser or to any Person who acquires all or substantially all of the capital stock or assets of the Purchaser. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

8.3 Governing Law. This Agreement and any controversy arising out of or relating to this Agreement shall be governed by and construed in accordance with the internal laws of the State of California without regard to conflict of law principles that would result in the application of any law other than the law of the State of California.

8.4 Counterparts; Facsimile. This Agreement may be executed and delivered by facsimile or “.pdf” signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

8.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

8.6 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page, or to such e-mail address, facsimile number or address as subsequently modified by written notice given in accordance with this Section 8.6. If notice is given to the Seller, a copy shall also be sent to Stephen Phillips, Hooper, Lundy & Bookman, P.C., 575 Market Street, Suite 2300, San Francisco, CA 94105, Facsimile: 415.875.8519, and if notice is given to the Purchaser, a copy shall also be given to Stephen M. Goodman, Morgan, Lewis & Bockius LLP, 1701 Market Street, Philadelphia, PA 19103, Facsimile: 215.963.5001.

8.7 No Finder’s Fees. Each party represents that it neither is nor will be obligated for any finder’s or broker’s fee or commission in connection with this transaction. The Purchaser agrees to indemnify and to hold harmless the Seller from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser or any of its officers, employees or representatives is responsible. The Seller agrees to indemnify and hold harmless the Purchaser from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Seller or the Company is responsible.

8.8 Fees and Expenses. Except as provided above or as otherwise expressly provided herein, the Purchaser and the Seller shall pay their own fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement, including the fees, costs and expenses of its financial advisors, accountants and counsel; provided that prior to the Closing the Company shall pay the fees, costs and expenses incurred by the Seller in connection with this Agreement and the transactions contemplated by this Agreement, including the fees, costs and expenses of the Seller’s financial advisors, accountants and counsel.

8.9 Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Seller and the Purchaser. Any amendment or waiver effected in accordance with this Section 8.9 shall be binding upon the Purchaser and the Seller.

8.10 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

8.11 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

8.12 Entire Agreement. This Agreement (including the Exhibits and Schedules hereto) and the Transaction Documents constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled.

8.13 Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the federal and state courts located within the geographic boundaries of the United States District Court for the Northern District of California for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the federal and state courts located within the geographic boundaries of the United States District Court for the Northern District of California, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

8.14 Publicity. The Seller and the Purchaser shall jointly agree on the timing and content of any public disclosure by relating to the investment and other transaction contemplated hereby. In addition, the Seller shall not use the names of the Purchaser or any of the Purchaser’s Affiliates in any trade publication, in any marketing materials or otherwise to the general public without the prior written consent of the Purchaser, which consent may be withheld in its sole discretion. This Section 8.14 may not be amended, waived or modified without the prior written consent of the Purchaser, which may be withheld in its sole discretion.

IN WITNESS WHEREOF, the parties have executed this Stock Purchase Agreement as of the date first written above.

	PURCHASER:

	CAREKINESIS, INC.


	By:	/s/ Calvin Knowlton
	Name: Calvin Knowlton
	Title: Chief Executive Officer


	Address:

	110 Marter Ave, Suite 309
	Moorestown, NJ 08057
	Attention: Calvin Knowlton


	SELLER:


	/s/ Gary Tom
	GARY TOM


	Address:

	1037 Balboa Avenue
	Burlingame, CA 94010

Signature Page to Stock Purchase Agreement

FIRST AMENDMENT

STOCK PURCHASE AGREEMENT

This FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (this “First Amendment”), dated as of January 6, 2014, is made and entered into by and among CareKinesis, Inc., a Delaware corporation (“Purchaser”), and Gary Tom (“Seller), with reference to the following facts:

RECITALS

WHEREAS, Purchaser and Seller are parties to that certain Stock Purchase Agreement dated as of November 27, 2013 (the “Agreement”);

WHEREAS, Section 8.9 of the Agreement authorizes the amendment of the Agreement by a written instrument executed by the Parties; and

WHEREAS, the Parties hereto desire to amend the Agreement in accordance with the provisions of this First Amendment.

AGREEMENT

NOW THEREFORE, in consideration of the mutual conditions and agreements set forth in the Agreement and this First Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions. All capitalized terms not defined in this First Amendment shall have the meaning ascribed to them in the Agreement.

2. Addition to Section 4.1. Section 4.1 of the Agreement is hereby amended by adding the following sentence to the end of the Section: “In addition, and notwithstanding anything to the contrary in this Agreement, Purchaser shall remit and pay to Seller within 15 business days of the Closing any checks deposited by the Company on or prior to the Closing Date but not yet available for the account of the Company at the Closing.”

3. Survival. Except as expressly modified by this First Amendment, all of the provisions of the Agreement remain in full force and effect.

4. References. Any reference to the Agreement contained in any document, instrument or agreement executed in connection with the Agreement shall be deemed to be a reference to the Agreement as modified by this First Amendment.

5. Counterparts. This First Amendment may be executed in two (2) or more counterparts, each of which will be deemed an original, but all of which together will constitute one (1) and the same agreement, and will become binding when one or more counterparts have been signed

FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT

by each of the Parties and delivered to the other Parties. The Parties may rely on signatures delivered by facsimile or other electronic means.

[Remainder of page intentionally left blank; signature pages follow]

IN WITNESS WHEREOF, the parties have caused this First Amendment to Stock Purchase Agreement to be executed by their duly authorized officers as of the day and year first above written.

	PURCHASER

	CAREKINESIS, INC.,


	By:	/s/ Calvin Knowlton
	Name: Calvin Knowlton
	Title: Chief Executive Officer

	Address:

	110 Matter Ave., Suite 309
	Moorestown, NJ 08057


	SELLER
	GARY TOM,


	By:	/s/ Gary Tom
	Name: Gary Tom

	Address:

	1037 Balboa Avenue
	Burlingame, CA 94010

EX-3.1 5 a2226891zex-3_1.htm EX-3.1

Exhibit 3.1

CERTIFICATE OF INCORPORATION

TABULA RASA HEALTHCARE, INC.

The undersigned, for the purpose of forming a corporation pursuant to the provisions of the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify as follows:

ARTICLE I

The name of the corporation (the “Corporation”) is Tabula Rasa Healthcare, Inc.

ARTICLE II

The registered office of the Corporation in the State of Delaware is 203 NE Front Street, Suite 101, Milford, DE 19963, Kent County, State of Delaware. The name of the registered agent at that address is Registered Office Service Company.

ARTICLE III

The purpose of the Corporation is to engage in any lawful acts or activities for which corporations may be organized under the General Corporation Law of the State of Delaware (the “DGCL”).

ARTICLE IV

A. CLASSES OF STOCK; RANK.

1. Classes of Stock. The aggregate number of shares of stock that the Corporation shall have the authority to issue shall be 37,646,023 shares. The total number of shares of common stock authorized to be issued is 27,355,006, par value $0.0001 per share (the “Common Stock”), consisting of (a) 9,600,000 shares of Class A Non-Voting Common Stock (the “Non-Voting Common Stock”) and (b) 17,755,006 shares of Class B Voting Common Stock (the “Voting Common Stock”). The total number of shares of preferred stock authorized to be issued is 10,291,017, par value $0.0001 per share (the “Preferred Stock”), consisting of (x) 4,411,766 shares of Series A Preferred Stock, par value $0.0001 per share, all of which shall be designated as “Series A Convertible Preferred Stock” (the “Series A Preferred Stock”), (y) 2,812,500 shares of Series A-1 Preferred Stock, par value $0.0001 per share, all of which shall be designated as “Series A-1 Convertible Preferred Stock” (the “Series A-1 Preferred Stock”) and (z) 3,066,751 shares of Series B Preferred Stock, par value $0.0001 per share, all of which shall be designated as “Series B Convertible Preferred Stock” (the “Series B Preferred Stock”). The “Original Issue Price” shall mean $0.68 per share for each share of the Series A Preferred Stock, $0.80 per share for each share of the Series A-1 Preferred Stock and $1.52312 per share for each share of the Series B Preferred Stock (each as adjusted for any stock splits, stock dividends, reverse stock splits, stock combinations and other similar capitalization changes).

2. Rank. The Series A Preferred Stock and Series A-1 Preferred Stock shall rank on parity with each other as to dividends and upon a Liquidation Event and shall rank senior to the Common Stock as to dividends and upon a Liquidation Event. The Series B Preferred Stock shall rank senior to the Series A Preferred Stock and Series A-1 Preferred Stock as to dividends and upon a Liquidation Event.

The Voting Common Stock and the Non-Voting Common Stock shall rank on parity with each other as to dividends and upon a Liquidation Event.

B. RIGHTS, PREFERENCES, PRIVILEGES AND RESTRICTIONS OF PREFERRED STOCK.

The Preferred Stock shall have the following rights, preferences, privileges and restrictions.

1. Dividends.

(a) Preferred Stock Accruing Dividends. The holders of Preferred Stock shall be entitled to receive out of any assets legally available therefor, prior and in preference to any declaration or payment of any dividends on the Common Stock, cash dividends which shall accrue for each share of Series A Preferred Stock at the annual rate of $0.0408 per share (as adjusted for any stock splits, stock dividends, reverse stock splits, stock combinations and other similar capitalization changes) (the “Series A Accruing Dividends”) and which shall accrue for each share of Series A-1 Preferred Stock at the annual rate of $0.048 per share (as adjusted for any stock splits, stock dividends, reverse stock splits, stock combinations and other similar capitalization changes) (the “Series A-1 Accruing Dividends”), and which shall accrue for each share of Series B Preferred Stock at the annual rate of $0.0912738 per share (as adjusted for any stock splits, stock dividends, reverse stock splits, stock combinations and other similar capitalization changes) (the “Series B Accruing Dividends” and collectively with the Series A Accruing Dividends and the Series A-1 Accruing Dividends, the “Preferred Stock Accruing Dividends”). The Preferred Stock Accruing Dividends shall begin to accrue on each share of Preferred Stock starting on the date that the share of CareKinesis, Inc. which converted into such share was first issued by CareKinesis, Inc. Preferred Stock Accruing Dividends shall accrue from day to day, whether or not earned or declared, and shall be cumulative and shall compound annually, and shall be payable when, as and if declared by the Board of Directors of the Corporation (the “Board”) or upon the other events specified in this Third Amended and Restated Certificate of Incorporation (this “Certificate”).

(b) Participating Dividends. In addition to Preferred Stock Accruing Dividends, in the event that dividends are paid on any share of Common Stock (other than dividends paid in additional shares of Common Stock for which an adjustment to the Preferred Conversion Price (as defined in Article IVB.3(a) hereof) is made pursuant to Article IVB.3(h) hereof), an additional dividend shall be paid with respect to each outstanding share of Preferred Stock in an amount (on an as-if converted basis) equal to the amount paid or set aside for each share of Common Stock.

2. Liquidation.

(a) Preference of Preferred Stock. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary (each such event, including events described in Article IVB.2(c) hereof, a “Liquidation Event”), the holders of the Series B Preferred Stock shall be entitled to receive prior and in preference to any distribution of any of the assets of the Corporation to the holders of any other classes of Preferred Stock or Common Stock by reason of their ownership thereof, an amount per share equal to the sum of the Original Issue Price and any accrued but unpaid dividends on such share to which such holder is entitled (such sum, the “Preferred B Liquidation Amount”). In the event of any Liquidation Event, after the payment of the Preferred B Liquidation Amount, the holders of each series of Preferred Stock (excluding the holders of the Series B Preferred Stock) shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to the sum of the Original Issue Price and any accrued but unpaid dividends on such share to which

such holder is entitled (such sum, the “Preferred A Liquidation Amount”). If, upon the occurrence of a Liquidation Event, the assets and funds legally available for distribution to stockholders shall be insufficient to permit the payment to all holders of Series B Preferred Stock or Series A Preferred Stock and Series A-1 Preferred Stock, as the case may be, of the full aforesaid preferential amounts, then the entire assets and funds of the Corporation legally available for distribution to stockholders shall be distributed ratably among the holders of Preferred Stock based on the preferential amounts each such holder is otherwise entitled to receive and in the priority set forth above.

(b) Other Distributions. In the event of any Liquidation Event, after the payment of the Preferred B Liquidation Amount and the Preferred A Liquidation Amount (together, the “Preferred Liquidation Amount”), the assets and funds of the Corporation remaining available for distribution to stockholders, if any, shall be distributed ratably among the holders of the Common Stock and the Preferred Stock (on an as-converted basis) (the “Participation Distributions”). The Participation Distributions shall continue with respect to the Series A Preferred Stock and Series A-1 Preferred Stock only until such time as the holders of each such series have received for each share of Preferred Stock held, an aggregate amount per share of such series of Preferred Stock (pursuant to the Participation Distributions together with the Preferred Liquidation Amount) that equals three times the Original Issue Price of such series of Preferred Stock.

(c) Consolidation, Merger, Etc. Unless otherwise determined by the holders of at least 67% of the then outstanding shares of Series A Preferred Stock and Series A-1 Preferred Stock, voting together as a single class (the “Requisite A Holders”), and a majority of the then outstanding shares of Series B Preferred Stock, voting as a separate class (the “Requisite B Holders”), (i) any consolidation or merger of the Corporation with or into any other entity or person, or any other corporate reorganization, in which the stockholders of the Corporation immediately prior to such consolidation, merger or reorganization do not hold at least a majority of the resulting or surviving entity’s or other person’s voting power immediately after such consolidation, merger or reorganization (solely in respect of their equity interests in this Corporation), (ii) the sale, lease, exclusive license, or other disposition of all or substantially all of the assets of the Corporation or (iii) a Sale of Voting Control (each of the foregoing, a “Change of Control Transaction”) shall be deemed to be a “Liquidation Event.” As used herein, “Sale of Voting Control” means the transfer by the stockholders of the Corporation (in one or a series of related transactions) to one person or group of related persons of shares constituting not less than a majority of the outstanding voting capital stock of the Corporation. Notwithstanding the foregoing, any reorganization, merger or consolidation involving only a change in the state of incorporation of the Corporation and any merger of the Corporation with or into a wholly owned subsidiary of the Corporation that is incorporated in the United States of America shall not be deemed to be a Liquidation Event.

(d) Consideration. If any of the assets of the Corporation are to be distributed under this Article IVB.2 in a form other than cash, the fair market value of such assets shall be determined in good faith by the Board; provided, that the Board shall value securities as follows:

(i) Securities not subject to investment letter or other similar restrictions on free marketability covered by Article IVB.2(d)(ii) hereof:

(A) If traded on a securities exchange or through the Nasdaq Stock Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the 30-day period ending three days prior to the closing;

(B) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the 30-day period ending three days prior to the closing; and

(C) If there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board, including the Preferred Directors (as defined in Article IVD.2 hereof).

(ii) The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder’s status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in Article IVB.2(d)(i)(A), Article IVB.2(d)(i)(B) or Article IVB.2(d)(i)(C) to reflect the approximate fair market value thereof, as determined in good faith by the Board including the Preferred Directors.

(e) Notice of Transaction. The Corporation shall give each holder of record of Preferred Stock written notice of the transaction which, if effected, will constitute a Liquidation Event or Change of Control Transaction not later than 20 days prior to the stockholders’ meeting called to approve such transaction, or 20 days prior to the closing of such transaction, whichever is earlier, and shall also notify such holders in writing of the final approval of such transaction. The first notice shall describe the material terms and conditions of the pending transaction and the provisions of Article IVB.2(d) hereof. The Corporation shall thereafter give such holders prompt written notice of any material changes in the terms of the pending transaction. The transaction shall in no event take place sooner than 20 days after the Corporation has given the first notice or sooner than 10 days after the Corporation has given written notice of any material changes in the terms of such transaction. In the event the requirements of this Article IVB.2(e) are not complied with, the Corporation shall promptly either:

(i) cause such closing to be postponed until such time as the requirements of this Article IVB.2(e) have been complied with; or

(ii) cancel such transaction, in which event the rights, preferences and privileges of the Preferred Stock shall continue in effect in accordance with the terms of this Certificate.

(f) Allocation of Escrow, etc. In the event of a Change of Control Transaction that is deemed to be Liquidation Event, if any portion of the consideration payable to the stockholders of the Corporation is placed into escrow and/or is payable to the stockholders of the Corporation subject to contingencies, (i) the portion of such consideration that is not placed in escrow and not subject to any contingencies (the “Initial Consideration”) shall be allocated among the holders of capital stock of the Corporation in accordance with this Article IVB.2 as if the Initial Consideration were the only consideration payable in connection with such deemed Liquidation Event and (ii) any additional consideration that becomes payable to the stockholders of the Corporation upon release from escrow or satisfaction of contingencies shall be allocated among the holders of capital stock of the Corporation in accordance with Article IVB.2 hereof after taking into account the previous payment of the Initial Consideration as part of the same transaction.

3. Conversion. The holders of Preferred Stock shall have the following conversion rights (the “Conversion Rights”):

(a) Right to Convert. Subject to Article IVB.3(b) hereof, each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, into such number of fully paid and nonassessable shares of Voting Common Stock as is determined by dividing the Original Issue Price by the Preferred Conversion Price (as defined below) in effect for such series at the time of conversion. The conversion price of the Series A Preferred Stock, the Series A-1

Preferred Stock and the Series B Preferred Stock, as applicable (the “Preferred Conversion Price”) shall initially be the Original Issue Price for each such series.

(b) Automatic Conversion for Series A Preferred Stock and Series A-1 Preferred Stock. All shares of Series A Preferred Stock and Series A-1 Preferred Stock shall automatically be converted into shares of fully-paid and non-assessable Voting Common Stock, at the then effective applicable Preferred Conversion Price, upon the earlier to occur of: (i) the vote or consent in writing of the Requisite A Holders that all of the Series A Preferred Stock and Series A-1 Preferred Stock shall be converted into shares of Voting Common Stock, or (ii) upon the closing of the sale of shares of Common Stock in a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), in which (A) the public offering price per share is at least five times the Original Issue Price of the Series A Preferred Stock, and (B) the gross cash proceeds to the Corporation (before deduction of underwriting discount, commissions and expenses of sale) are at least $50,000,000 (a “Qualified A Public Offering”).

(c) Automatic Conversion for Series B Preferred Stock. All shares of Series B Preferred Stock shall automatically be converted into shares of fully-paid and non-assessable Voting Common Stock, at the then effective applicable Preferred Conversion Price, upon the earlier to occur of: (i) the vote or consent in writing of the Requisite B Holders that all of the Series B Preferred Stock shall be converted into shares of Voting Common Stock, or (ii) upon the closing of the sale of shares of Common Stock in a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act, in which (A) the public offering price per share is at least five times the Original Issue Price of the Series B Preferred Stock, and (B) the gross cash proceeds to the Corporation (before deduction of underwriting discount, commissions and expenses of sale) are at least $50,000,000 (a “Qualified B Public Offering”).

(d) Fractional Shares. No fractional shares of Voting Common Stock shall be issued upon conversion of the Preferred Stock. In lieu of any fractional shares to which a holder would otherwise be entitled, the Corporation shall pay such holder cash in an amount equal to the product (calculated to the nearest cent) of such fraction and the fair market value of one share of Voting Common Stock as determined in good faith by the Board. Whether or not fractional shares are issuable upon such conversion shall be determined on the basis of the total number of shares of Voting Common Stock issuable upon conversion of the total number of shares of Preferred Stock that the holder is then converting into Voting Common Stock.

(e) Mechanics of Conversion.

(i) Except as provided in Article IVB.3(e)(ii) below, in order for a holder of Preferred Stock to convert shares of Preferred Stock into shares of Voting Common Stock, such holder shall surrender the certificate or certificates representing such shares of Preferred Stock, at the office of the transfer agent for the Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent), together with written notice that such holder elects to convert all or any portion of the shares of the Preferred Stock represented by such certificate or certificates. Such notice shall state such holder’s name or the names of the nominees in which such holder wishes the certificate or certificates for shares of Voting Common Stock to be issued. If required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or such holder’s attorney duly authorized in writing. Except as provided in Article IVB.3(e)(ii) below, the date of receipt of such certificates and notice by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) shall be the conversion date (“Conversion Date”). If the conversion is in connection with an underwritten offering of securities registered pursuant

to the Securities Act that is not a Qualified A Public Offering or Qualified B Public Offering, as applicable, the conversion may at the option of any holder tendering Preferred Stock for conversion, be conditioned upon the closing with the underwriter of the sale of securities pursuant to such offering, in which event the person(s) entitled to receive the Voting Common Stock issuable upon such conversion of Preferred Stock shall not be deemed to have converted such Preferred Stock until immediately prior to the closing of the sale of securities. The Corporation shall, as soon as practicable after the Conversion Date, issue and deliver to the holder of the Preferred Stock to be converted, or to such holder’s nominees, a certificate or certificates representing the number of shares of Voting Common Stock to which such holder is entitled upon conversion of such Preferred Stock, together with cash in lieu of any fractional shares, as provided in Article IVB.3(d) above.

(ii) In the event of a conversion pursuant to Article IVB.3(b) or Article IVB.3(c) above, the outstanding shares of Preferred Stock shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent. Such automatic conversion shall be deemed to have been made on the effective date of the applicable vote or written consent (in the case of a conversion pursuant to Article IVB.3(b)(i) or Article IVB.3(c)(i)) or immediately prior to the first closing of the applicable Qualified A Public Offering or Qualified B Public Offering (in the case of a conversion pursuant to Article IV.B.3(b)(ii) or Article IVB.3(c)(ii)), and the person or persons entitled to receive the shares of Voting Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Voting Common Stock on such date which date shall be the “Automatic Conversion Date.” Immediately upon such automatic conversion, all shares of Preferred Stock converted shall no longer be deemed to be outstanding and all rights with respect to such shares, including the rights, if any, to receive notices and to vote, shall immediately cease and terminate, except only the right of the holders thereof, upon surrender of their certificate or certificates therefor, to receive certificates representing the number of shares of Voting Common Stock into which such Preferred Stock has been converted, together with cash in lieu of any fractional share, as provided in Article IVB.3(d) above. In the event that the automatic conversion of the Preferred Stock is pursuant to the vote or consent of the Requisite A Holders or the Requisite B Holders, then the Requisite A Holders or Requisite B Holders, as applicable, shall give written notice to the Corporation and to each other holder of Preferred Stock (each, a “Requisite Holder Conversion Notice”), promptly following the vote or consent, as applicable, that the shares of the applicable series of Preferred Stock shall be converted into Voting Common Stock. Promptly following the date on which a Requisite Holder Conversion Notice is given or at the closing of the Qualified A Public Offering or Qualified B Public Offering, as the case may be, each holder of Preferred Stock subject to conversion shall surrender to the Corporation or its transfer agent the certificate(s) representing such holder’s Preferred Stock together with a notice that states such holder’s name or the names of the nominees in which such holder wishes the certificate or certificates for shares of Voting Common Stock to be issued. If so required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or such holder’s attorney duly authorized in writing. The Corporation shall not be obligated to issue certificates representing the shares of Voting Common Stock issuable upon such automatic conversion unless and until either the certificates representing such shares of Preferred Stock are delivered to the Corporation or its transfer agent as provided above, or the holder notifies the Corporation or its transfer agent that such certificate or certificates have been lost, stolen or destroyed and executes an agreement reasonably satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates, including an indemnity bond in such amount as the Corporation reasonably deems appropriate in its discretion. As soon as practicable following the Automatic Conversion Date and the surrender by the holder of the certificate or certificates representing the Preferred Stock converted, the Corporation shall cause to be issued and delivered to such holder, or to such holder’s nominees, a certificate or certificates representing the number of shares of Voting Common Stock to which such

holder is entitled upon conversion of such Preferred Stock, together with cash in lieu of any fractional shares, as provided in Article IVB.3(d) above.

(iii) The Corporation shall at all times when shares of Preferred Stock are outstanding, reserve and keep available out of its authorized but unissued stock, for the purpose of effecting the conversion of Preferred Stock, such number of its duly authorized shares of Voting Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Preferred Stock. Before taking any action which would cause an adjustment reducing a Preferred Conversion Price below the then par value of the shares of Voting Common Stock issuable upon conversion of Preferred Stock, the Corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock at such adjusted Preferred Conversion Price.

(f) Adjustments to Preferred Conversion Price for Diluting Issuances.

(i) Special Definitions. For purposes of this Article IVB.3(f), the following definitions shall apply:

(A) “Option” shall mean any right, option or warrant to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.

(B) “Convertible Securities” shall mean any evidence of indebtedness, shares (other than Common Stock) or other securities directly or indirectly convertible into, or exercisable or exchangeable for, Common Stock.

(C) “Additional Shares of Common Stock” shall mean all shares of Common Stock issued (or, pursuant to Article IVB.3(f)(iii) below, deemed to be issued) by the Corporation after the first date shares of Series B Preferred Stock are issued and outstanding (the “Original Series B Issue Date”), other than shares of Common Stock issued (or, pursuant to Article IVB.3(f)(iii) below, deemed to be issued) by the Corporation (each of the following collectively, the “Excluded Securities”):

(I) upon the conversion of shares of Preferred Stock or as a dividend or other distribution on Preferred Stock;

(II) as consideration for an acquisition approved by the Board, including the Preferred Directors, of another business enterprise by merger, consolidation, purchase of substantially all of the assets or equity securities or other reorganization;

(III) to employees, officers or directors of, or consultants or advisors to, the Corporation pursuant to any equity compensation plan or arrangement approved by the Board in an aggregate amount of not more than 7,635,580 shares (subject to adjustment for any stock splits, stock dividends, reverse stock splits, stock combinations and other similar capitalization changes and without duplication of any securities issued or issuable pursuant to Article IVB.3(f)(i)(C)(VI) below), or such greater number as shall be approved by the Board, including the Preferred Directors;

(IV) pursuant to a Qualified A Public Offering or Qualified B Public Offering;

(V) as consideration for acquisitions, strategic vendor, leasing or lending transactions approved by the Board, including the Preferred Directors;

(VI) upon the conversion, exercise or exchange of all other Options and Convertible Securities outstanding on the Original Series B Issue Date; or

(VII) in a transaction described in Article IVB.3(g), Article IVB.3(h), Article IVB.3(i) or Article IVB.3(j) below.

(ii) No Adjustment of Preferred Conversion Price. No adjustment in the number of shares of Voting Common Stock into which the Preferred Stock is convertible shall be made by adjustment in the applicable Preferred Conversion Price unless the consideration per share (determined pursuant to Article IVB.3(f)(v) below) for an Additional Share of Common Stock issued or deemed to be issued by the Corporation is less than the applicable Preferred Conversion Price in effect on the date of, and immediately prior to, the issuance of such Additional Shares of Common Stock.

(iii) Deemed Issuance of Additional Shares of Common Stock. If the Corporation at any time, or from time to time, after the Original Series B Issue Date shall issue any Options or Convertible Securities (other than Excluded Securities), then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto without regard to any provision contained therein designed to protect against dilution) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issuance, provided that in any such case in which Additional Shares of Common Stock are deemed to be issued:

(A) except as provided in Article IVB.3(f)(iii)(B) below, no further adjustment in a Preferred Conversion Price shall be made upon the subsequent issuance of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities;

(B) if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any increase in the consideration payable to the Corporation, or decrease in the number of shares of Common Stock issuable upon the exercise, conversion or exchange thereof, the Preferred Conversion Price computed upon the original issuance thereof, and any subsequent adjustment based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities;

(C) upon the expiration of any such Options or any rights of conversion or exchange under such Convertible Securities which shall not have been exercised, the applicable Preferred Conversion Price computed upon the original issuance thereof, and any subsequent adjustments based thereon, shall, upon such expiration, be recomputed as if,

(I) in the case of Convertible Securities or Options for Common Stock, the only Additional Shares of Common Stock issued were the shares of Common Stock, if any, that were actually issued upon the exercise of such Options or the conversion or exchange of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issuance of all such Options, whether or not exercised, plus the consideration actually received by the Corporation upon such exercise, or for the issuance of all such

Convertible Securities which were actually converted or exchanged, plus the additional consideration, if any, actually received by the Corporation upon such conversion or exchange, and

(II) in the case of Options for Convertible Securities, only the Convertible Securities, if any, that were actually issued upon the exercise thereof were issued at the time of issuance of such Options, and the consideration received by the Corporation for the Additional Shares of Common Stock deemed to have been then issued was the consideration actually received by the Corporation for the issuance of all such Options, whether or not exercised, plus the consideration deemed to have been received by the Corporation upon the issuance of the Convertible Securities with respect to which such Options were actually exercised;

(D) no readjustment pursuant to Article IVB.3(f)(iii)(B) or Article IVB.3(f)(iii)(C) above shall have the effect of increasing a Preferred Conversion Price to an amount which exceeds the lower of (i) such Preferred Conversion Price on the original adjustment date, or (ii) the Preferred Conversion Price that would have resulted from any issuance of Additional Shares of Common Stock between the original adjustment date and such readjustment date;

(E) in the case of any Options which expire by their terms not more than 90 days after the date of issuance thereof or in the case of any Option or Convertible Securities with respect to which the maximum number of shares of Common Stock issuable upon exercise or conversion or exchange thereof is not determinable, no adjustments of a Preferred Conversion Price shall be made until the expiration or exercise of all such Options issued on the same date, whereupon such adjustment shall be made in the manner provided in Article IVB.3(f)(iii)(C) above, or until such number becomes determinable, as applicable; and

(F) in the event of any change in the number of shares of Common Stock deliverable, in the consideration payable to the Corporation upon exercise of such Options or Convertible Securities or in the conversion rate, including, but not limited to, any changes under or by reason of provisions designed to protect against dilution, each Preferred Conversion Price in effect at the time of such event shall be readjusted to a Preferred Conversion Price which would have been in effect at such time had such Options or Convertible Securities to the extent then outstanding provided for such changed number of shares, consideration or conversion rate, as the case may be, at the time initially granted, issued or sold; provided that no further adjustment shall be made for the actual issuance of Common Stock or any payment of such consideration upon the exercise of any such Options or Convertible Securities; provided further no readjustment pursuant to this Article IVB.3(f) shall have the effect of increasing the Preferred Conversion Price to an amount which exceeds the lower of (i) the Preferred Conversion Price immediately preceding the adjustment on the original adjustment date, or (ii) the Preferred Conversion Price that would have resulted from any issuance of Additional Shares of Common Stock between the original adjustment date and such readjustment date.

(iv) Adjustment of Preferred Conversion Price upon Issuance of Additional Shares of Common Stock. Subject to the provisions of Article IVB.3(f)(ii) above, in the event the Corporation shall issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Article IVB.3(f)(iii)), without consideration or for a consideration per share less than a Preferred Conversion Price in effect on the date of and immediately prior to such issuance then and in such event such Preferred Conversion Price shall be reduced, concurrently with such issuance, to a price (calculated to the nearest cent) determined by multiplying such Preferred Conversion Price by a fraction, (x) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issuance plus the number of shares of Common Stock which the aggregate consideration received by the Corporation for the total number of Additional Shares of Common Stock so issued would purchase at such Preferred Conversion Price, and (y) the

denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issuance plus the number of such Additional Shares of Common Stock so issued; provided that for the purposes of this Article IVB.3(f)(iv), all shares of Common Stock, issuable upon exercise, conversion or exchange of outstanding Options or Convertible Securities, as the case may be, including, without limitation, the Preferred Stock, shall be deemed to be outstanding, and immediately after any Additional Shares of Common Stock shall be deemed issued pursuant to Article IVB.3(f)(iii) above, such Additional Shares of Common Stock shall be deemed to be outstanding. Notwithstanding the foregoing, a Preferred Conversion Price shall not be so reduced at such time if the amount of such reduction would be an amount less than $.001, but any such amount shall be carried forward and reduction with respect thereto made at the time of and together with any subsequent reduction which, together with such amount and any other amount or amounts so carried forward, shall aggregate $.001 or more.

(v) Determination of Consideration. For purposes of this Article IVB.3(f), the consideration received by the Corporation for the issuance of any Additional Shares of Common Stock shall be computed as follows:

(A) Cash and Property. Such consideration shall:

(I) insofar as it consists of cash, be the amount of cash received by the Corporation after deducting any underwriting or similar concessions, commissions or compensation paid or allowed by the Corporation, excluding amounts paid or payable for accrued interest or accrued dividends;

(II) insofar as it consists of property other than cash, be the fair market value thereof at the time of such issuance, as determined in good faith by the Board; and

(III) in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (I) and (II) above, as determined in good faith by the Board.

(B) Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common Stock deemed to have been issued pursuant to Article IVB.3(f)(iii) above, relating to Options and Convertible Securities, shall be determined by dividing:

(x) the total amount, if any, received or receivable by the Corporation as consideration for the issuance of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein designed to protect against dilution) payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by

(y) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto without regard to any provision contained therein designed to protect against dilution) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities.

(g) Adjustment for Stock Splits and Combinations. If the Corporation shall at any time, or from time to time, after the Original Series B Issue Date effect a subdivision of the outstanding Common Stock and no equivalent subdivision is made with respect to the Preferred Stock, the Preferred Conversion Price then in effect immediately before that subdivision shall be proportionately decreased. If the Corporation shall at any time, or from time to time, after the Original Series B Issue Date combine the outstanding shares of Common Stock and no equivalent combination is made with respect to the Preferred Stock, the Preferred Conversion Price then in effect immediately before the combination shall be proportionately increased. Any adjustment under this Article IVB.3(g) shall become effective concurrently with the effectiveness of such subdivision or combination.

(h) Adjustment for Common Stock Dividends and Distributions. If the Corporation at any time, or from time to time, after the Original Series B Issue Date, shall make or issue a dividend or other distribution payable in additional shares of Common Stock, and no equivalent dividend or other distribution is declared or made to the Preferred Stock then, and in each such event, the Preferred Conversion Price then in effect shall be decreased concurrently with the issuance of such dividend or distribution, by multiplying such Preferred Conversion Price by a fraction: (x) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance, and (y) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

(i) Adjustments for Other Dividends and Distributions. In the event that the Corporation at any time, or from time to time, after the Original Series B Issue Date shall make or issue a dividend or other distribution payable in property or securities of the Corporation other than shares of Common Stock (and other than as otherwise adjusted in this Article IVB.3), and no equivalent dividend or other distribution is declared or issued on the Preferred Stock, then, and in each such event, provision shall be made so that the holders of the Preferred Stock shall receive upon conversion thereof in addition to the number of shares of Voting Common Stock receivable thereupon, the amount of property or securities of the Corporation that they would have received had such Preferred Stock been converted into Voting Common Stock immediately preceding the record date for the determination of stockholders entitled to receive such dividend or other distribution.

(j) Adjustment for Recapitalization, Reclassification, Exchange or Substitution. If the Common Stock shall be changed into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification, exchange, substitution or other similar event (other than pursuant to Article IVB.3(g), Article IVB.3(h) and Article IVB.3(i) above or a Change of Control Transaction), and no equivalent change is made with respect to the Series A Preferred Stock or Series B Preferred Stock, each holder of Preferred Stock shall thereafter receive upon conversion of such Preferred Stock, in lieu of the number of shares of Voting Common Stock which such holder would otherwise have been entitled to receive, the number of shares of such other class or classes of stock which a holder of the number of shares of Voting Common Stock deliverable upon conversion of the shares of the Preferred Stock held by such holder thereof would have been entitled to receive upon such recapitalization, reclassification, exchange, substitution or other similar event.

(k) No Impairment. The Corporation will not, by amendment of this Certificate or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Article IVB.3 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights against impairment.

(l) Certificate as to Adjustments. Upon the occurrence of each adjustment of the Preferred Conversion Price pursuant to this Article IVB.3, the Corporation at its expense shall promptly compute such adjustment in accordance with the terms hereof and furnish to each holder of Preferred Stock a certificate setting forth such adjustment and showing in reasonable detail the facts upon which such adjustment is based. The Corporation shall, upon the written request at any time of any holder of Preferred Stock, furnish or cause to be furnished to such holder a similar certificate setting forth (i) such adjustments, (ii) the applicable Preferred Conversion Price then in effect, and (iii) the number of shares of Voting Common Stock and the amount, if any, of any other property which would then be received upon the conversion of such Preferred Stock.

(m) Notices of Record Date. In the event of any taking by the Corporation of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, the Corporation shall mail to each holder of Preferred Stock at least 10 days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution.

(n) Notices. All notices under this Certificate shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the person to be notified; (ii) when sent by confirmed facsimile or return receipt e-mail if sent during normal business hours of the recipient, if not, then on the next business day; (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) the next business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the holder at its address, facsimile number and/or e-mail address appearing on the books of the Corporation.

4. Status of Converted Stock. In the event any shares of Preferred Stock shall be converted pursuant to Article IV.B.3 hereof, the shares so converted shall be cancelled and shall not be reissuable by the Corporation.

5. Voting Rights. Except as may be otherwise provided in this Certificate or as required by law, the Preferred Stock shall vote on all actions to be taken by the stockholders of the Corporation together with all other classes of stock of the Corporation entitled to vote thereon, as a single class. Each share of Preferred Stock shall entitle the holder thereof to such number of votes per share on each action as shall equal the number of shares of Voting Common Stock into which such share of Preferred Stock is convertible on the record date for determination of the stockholders entitled to vote. Except as may be otherwise provided in this Certificate or as required by law, the holders of Preferred Stock shall be entitled to vote, together with holders of Voting Common Stock, with respect to any question upon which holders of Voting Common Stock have the right to vote.

6. Protective Provisions. For so long as any shares of Series A Preferred Stock, Series A-1 Preferred Stock or Series B Preferred Stock are outstanding, the Corporation shall not, without the prior written consent or affirmative vote of the Requisite A Holders (if shares of Series A Preferred Stock or Series A-1 Preferred Stock are then outstanding) and the Requisite B Holders (if shares of Series B Preferred Stock are then outstanding) consenting or voting, as the case may be, each separately as a class, take any of the following actions (whether directly or indirectly and whether by amendment to this Certificate or the By-laws of the Corporation (the “By-laws”), by merger, consolidation, operation of law or otherwise):

(a) amend or repeal any provision of, or add any provision to, this Certificate or the By-laws;

(b) alter or change the rights, preferences or privileges of the Series A Preferred Stock, the Series A-1 Preferred Stock and/or the Series B Preferred Stock or increase or decrease the number of authorized shares of the Series A Preferred Stock, the Series A-1 Preferred Stock and/or the Series B Preferred Stock;

(c) create any new series or class of shares having a preference or priority as to dividends or other distribution of assets superior to or on a parity with the Series A Preferred Stock, the Series A-1 Preferred Stock and/or the Series B Preferred Stock or increase or decrease the number of authorized shares of Common Stock;

(d) create any bonds, notes or other obligations convertible into, exchangeable for or having option rights to purchase shares of stock with any preference or priority as to dividends or other distribution of assets superior to or on a parity with that of the Series A Preferred Stock, the Series A-1 Preferred Stock and/or the Series B Preferred Stock;

(e) reclassify or recapitalize the Common Stock into shares with a preference or priority as to dividends or other distribution of assets superior to or on a parity with that of the Series A Preferred Stock, the Series A-1 Preferred Stock and/or the Series B Preferred Stock;

(f) apply cash or other assets in excess of $100,000 to the redemption or acquisition of any shares of Common Stock, except from employees, advisors, officers, directors, consultants and service providers of the Corporation on terms approved by the Board, including the Preferred Directors;

(g) authorize or effect the payment of any dividend or other distribution to any holders of any capital stock of the Corporation (other than a dividend on the Voting Common Stock payable solely in Voting Common Stock or a dividend on the Non-Voting Common Stock payable solely in Non-Voting Common Stock);

(h) authorize or effect a Liquidation Event, a Change of Control Transaction or the transfer or exclusive license by the Corporation of any material portion of its assets or intellectual property (or rights thereto);

(i) effect a material change in the nature of the principal business activity of the Corporation as engaged in as of the Original Series B Issue Date, or take any action that would lead to any such change;

(j) authorize or incur any amount of indebtedness in excess of $1,250,000 or capital expenditures in excess of $2,000,000, unless approved by the Board, including the Preferred Directors;

(k) enter into any employment agreement, consulting agreement or other agreement for the provision of services to the Corporation with annual compensation that would exceed, or would be reasonably likely to exceed, $200,000, unless approved by the Board, including the Preferred Directors;

(l) effect any acquisition of the capital stock of another person or entity that results in the consolidation of that person or entity into the results of operations of the Corporation or the acquisition of all or a substantial portion of the assets of another person or entity;

(m) create any plan or arrangement for the issuance of capital stock of the Corporation or stock options or increase the number of shares available under any such plan or arrangement;

(n) permit a Subsidiary (defined below) to take any of the foregoing actions; or

(o) increase or decrease the authorized size of the Board from seven members.

Notwithstanding the foregoing, (i) the prior written consent of a Series A Director (as defined below) shall be deemed to constitute the written consent or affirmative vote of the Requisite A Holders and (ii) the prior written consent of the Series B Director (as defined below) shall be deemed to constitute the written consent or affirmative vote of the Requisite B Holders. As used herein, “Subsidiary” means (a) any corporation or other entity of which the shares of outstanding capital stock (or other equity interest) possessing the voting power (under ordinary circumstances) to elect the board of directors (or similar governing body) are, at the time as of which any determination is being made, owned by the Corporation either directly or indirectly through one or more Subsidiaries and/or (b) any corporation or other entity in which the Corporation, directly or through one or more Subsidiaries, owns a majority of the economic interest.

7. Protective Series B Provisions. For so long as any shares of Series B Preferred Stock are outstanding, the Corporation shall not, without the prior written consent or affirmative vote of (x) the Requisite B Holders, consenting or voting, as the case may be, separately as a class, or (y) the Series B Director (as defined below), take any of the following actions (whether directly or indirectly and whether by amendment to this Certificate or the By-laws, by merger, consolidation, operation of law or otherwise):

(a) become subject to, or permit any of its Subsidiaries to become subject to (including, without limitation, by way of amendment to or modification, extension or renewal of) any agreement or instrument which by its terms would (under any circumstances) restrict in any materially adverse manner (i) the right of any Subsidiary to make loans or advances or pay dividends or distributions to, transfer property to, or repay any indebtedness owed to, the Corporation or another Subsidiary; (ii) the Corporation’s right to perform the provisions of this Certificate; the By-laws (including, without limitation, provisions relating to the declaration and payment of dividends on and the making of redemptions of the Preferred Stock and conversions of the Series B Preferred Stock); the Amended and Restated Stockholders Agreement, among the Corporation’s stockholders, dated as of June 28, 2013; and the Amended and Restated Investor Rights Agreement, among the Corporation’s investors, dated June 28, 2013 and (iii) the ability of the Corporation or any of its Subsidiaries from freely engaging in the business anywhere in the world;

(b) enter into, amend, modify or supplement, or permit any Subsidiary to enter into, amend, modify or supplement, any agreement, transaction, commitment or arrangement with any of its or any Subsidiary’s officers, directors, employees, stockholders or affiliates or with any individual related by blood, marriage or adoption to any such individual or with any entity in which any such person or individual owns a direct or indirect beneficial interest, except for customary employment or consulting arrangements and benefit programs on reasonable terms, or any other arrangements on fair and reasonable terms made on an arms-length basis and approved by at least a majority of the disinterested members of the Board of Directors;

(c) establish or acquire (i) any Subsidiaries other than wholly-owned Subsidiaries or (ii) any Subsidiaries organized outside of the United States and its territorial possessions;

(d) effect any changes to the fiscal year;

(e) effect any other activities outside of the ordinary course of business of the Corporation; or

(f) effect any material actions or expenditures which deviate from the annual budget of the Corporation approved by the Board.

Notwithstanding the foregoing, the prior written consent of the Series B Director (as defined below) shall be deemed to constitute the written consent or affirmative vote of the Requisite B Holders.

8. Redemption.

(a) Redemption for Series A Preferred Stock and Series A-1 Preferred Stock. All shares of Series A Preferred Stock and Series A-1 Preferred Stock shall be redeemed by the Corporation out of funds lawfully available therefor at a price equal to the Original Issue Price of such shares plus any accrued but unpaid Preferred Stock Accruing Dividends and any other dividends declared but unpaid thereon of such shares (the “Series A Redemption Price”), in three equal annual installments commencing 180 days after receipt by the Corporation of a written notice requesting redemption (the “Series A Redemption Request”) provided by the Requisite A Holders to the Corporation at any time after June 28, 2018. Upon receipt of a Redemption Request pursuant to this Article IVB.8(a) or Article IVB.8(b) below, the Corporation shall apply all of its assets to any such redemption, and to no other corporate purpose, except to the extent prohibited by Delaware law governing distributions to stockholders. The date of each such installment shall be referred to herein as a “Series A Redemption Date.”

(b) Redemption for Series B Preferred Stock.

(i) At any time after June 28, 2018, upon the written request of the Requisite B Holders to the Corporation (the “Series B Redemption Request”), all shares of Series B Preferred Stock shall be redeemed by the Corporation out of funds lawfully available therefor at a price equal to the greater of (x) a price equal to the Original Issue Price of such shares plus any accrued but unpaid Preferred Stock Accruing Dividends thereon and any other dividends declared but unpaid thereon of such shares or (y) the Fair Market Value thereof (as defined below) determined as of the date of the Series B Redemption Request (the “Series B Redemption Price”). Such redemption shall be completed within 180 days following receipt by the Corporation of the Series B Redemption Request (the “Series B Redemption Date”).

(ii) The “Fair Market Value” of a single share of Series B Preferred Stock shall be as of the relevant date of determination, with respect to a single share of Series B Preferred Stock, (i) if the shares are publicly-traded, the average public trading price thereof during the thirty (30) day calendar period immediately preceding such determination or (ii) if the shares are not publicly-traded, the value of the particular share at issue as mutually determined in good faith by the Board and the Requisite B Holders, taking into consideration the distributions to which such share would be entitled assuming all of the assets of the Corporation were sold in an arm’s-length transaction between a willing buyer and a willing seller in a transaction designed to maximize proceeds therefrom and the net proceeds of such sale (disregarding, for purposes, hereof, any taxes in respect of such hypothetical sale) were distributed to the stockholders in accordance with the provisions of Article IVB.2 hereof. If the members

of the Board and the Requisite B Holders cannot agree on the value mentioned in the preceding sentence, the value shall be determined, by a third-party appraiser jointly selected by the Corporation and the Requisite B Holders. The third-party appraiser must be an independent bank of regional or national reputation that (x) is experienced in valuating businesses in the field of the Corporation and (y) has not rendered services for either the Corporation, its affiliates, the holders of Series B Preferred Stock in the three years prior to the third-party’s engagement for the Corporation. If the Corporation and the Requisite B Holders cannot agree on the third-party appraiser, each of the Corporation and the Requisite B Holders shall nominate three eligible third-party appraisers, each party shall be entitled to reject one such third-party appraiser and the third-party appraiser shall be determined by lot from the remaining pool of eligible third party-appraisers. The costs of the third-party appraiser shall be paid by the holders of the Series B Preferred Stock.

(c) Redemption Notice. Not less than 30 days prior to each Series A Redemption Date or the Series B Redemption Date, the Corporation shall give all holders of Preferred Stock written notice of the redemption (the “Redemption Notice”). Each Redemption Notice shall state:

(i) the number of shares of the applicable series of Preferred Stock held by the holder that the Corporation shall redeem on the Series A Redemption Date or the Series B Redemption Date, as applicable;

(ii) the Series A Redemption Date or the Series B Redemption Date and the Series A Redemption Price or the Series B Redemption Price, as applicable; and

(iii) that the holder is to surrender to the Corporation, in the manner and at the place designated, such holder’s certificate or certificates representing the shares of Preferred Stock to be redeemed.

For any Series A Redemption Request or Series B Redemption Request, the rank set forth in Article IVB.8(d)(iii) below shall apply.

(d) Redemption Mechanics.

(i) On each Series A Redemption Date, the Corporation shall redeem on a pro rata basis in accordance with the number of shares of Series A Preferred Stock or Series A-1 Preferred Stock owned by each holder, that number of outstanding shares of Series A Preferred Stock or Series A-1 Preferred Stock determined by dividing (x) the total number of shares of Series A Preferred Stock or Series A-1 Preferred Stock outstanding immediately prior to such Series A Redemption Date by (y) the number of remaining Series A Redemption Dates (including the Series A Redemption Date to which such calculation applies). If the Corporation does not have sufficient funds legally available to redeem on any Series A Redemption Date all shares of Series A Preferred Stock or Series A-1 Preferred Stock, the Corporation shall redeem a pro rata portion of each holder’s redeemable shares of Series A Preferred Stock or Series A-1 Preferred Stock out of funds legally available therefor, based on the respective amounts that would otherwise be payable in respect of such shares to be redeemed if the legally available funds were sufficient to redeem all such shares, and shall redeem the remaining shares to have been redeemed as soon as practicable after the Corporation has funds legally available therefor.

(ii) On the Series B Redemption Date, the Corporation shall redeem all shares of Series B Preferred Stock owned by each holder of shares of Series B Preferred Stock. If the Corporation does not have sufficient funds legally available to redeem on the Series B Redemption Date, the Corporation shall redeem a pro rata portion of each holder’s redeemable shares of Series B Preferred Stock out of funds legally available therefor, based on the respective amounts that would otherwise be

payable in respect of such shares to be redeemed if the legally available funds were sufficient to redeem all such shares, and shall redeem the remaining shares to have been redeemed as soon as practicable after the Corporation has funds legally available therefor (in which event the Series A Redemption Price or the Series B Redemption Price, as applicable, shall be subject to the proviso contained in Article IVB.8(f) hereof) provided that notwithstanding the foregoing if the Corporation is not legally permitted to redeem all of the Series B Preferred Stock on the Series B Redemption Date, the Requisite B Holders shall be entitled, by delivery of written notice to the Corporation, to either (x) rescind the Series B Redemption Request in its entirety or (y) rescind the Series B Redemption Request in respect of the shares of Series B Preferred that the Corporation is not legally permitted to redeem, and in either of which cases the right to deliver a Series B Redemption Request shall continue as to any such shares not redeemed.

(iii) The Series A Redemption Date shall not occur sooner than 30 days following delivery of the Redemption Notice in respect thereof to the holders of the Series B Preferred Stock; it being understood that the Requisite B Holders shall be entitled to deliver a Series B Redemption Request during such period. If both a Series A Redemption Request and a Series B Redemption Request shall have occurred, the Series B Preferred Stock shall be redeemed in full prior and in preference to any redemption for the Series A Preferred Stock or Series A-1 Preferred Stock.

(e) Surrender of Certificates; Payment. On or before the applicable Series A Redemption Date or the Series B Redemption Date, each holder of shares of Preferred Stock to be redeemed on such Series A Redemption Date or Series B Redemption Date shall surrender the certificate or certificates representing such shares to the Corporation, in the manner and at the place designated in the Redemption Notice, and thereupon the Series A Redemption Price or Series B Redemption Price, as applicable, for such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof, and each surrendered certificate shall be canceled and retired. In the event less than all of the shares of Preferred Stock represented by a certificate are redeemed, a new certificate representing the unredeemed shares of Preferred Stock shall promptly be issued to such holder.

(f) Rights Subsequent to Redemption. From and after the close of business on a Series A Redemption Date or the Series B Redemption Date, unless there shall have been a default in the payment of the Series A Redemption Price or the Series B Redemption Price payable on such date, all rights of holders of shares of Preferred Stock (except the right to receive the Series A Redemption Price or the Series B Redemption Price) shall cease with respect to such shares redeemed on such date, and such shares shall not thereafter be transferred on the books of the Corporation or be deemed to be outstanding for any purpose whatsoever. Any shares of Preferred Stock not redeemed when required shall remain outstanding and be entitled to all the rights and preferences provided herein; provided, however, that the Series A Redemption Price or the Series B Redemption Price shall increase at the rate of 10% per annum, accruing daily, until paid.

(g) Redeemed or Otherwise Acquired Shares. Any shares of Preferred Stock which are redeemed or otherwise acquired by the Corporation shall be automatically and immediately canceled and shall not be reissued, sold or transferred. The Corporation shall not exercise any voting or other rights granted to the holders of Preferred Stock following redemption.

9. Waiver. The rights, preferences, privileges and other terms of the Series A Preferred Stock and Series A-1 Preferred Stock may be waived as to all shares of Series A Preferred Stock and Series A-1 Preferred Stock in any instance (without the necessity of convening any meeting of stockholders) upon the written agreement of the Requisite A Holders. The rights, preferences, privileges and other terms of the Series B Preferred Stock may be waived as to all shares of Series B Preferred Stock

in any instance (without the necessity of convening any meeting of stockholders) upon the written agreement of the Requisite B Holders.

C. RIGHTS, PREFERENCES, PRIVILEGES AND RESTRICTIONS OF COMMON STOCK.

The Common Stock shall have the following rights, preferences, privileges and restrictions:

1. Dividend Provisions. The holders of the Common Stock shall be entitled to receive dividends, when, as and if declared by the Board, but only out of assets legally available therefor; provided, however, that no cash dividends shall be declared and/or paid with respect to the Common Stock until all Preferred Stock Accruing Dividends then accrued have been paid in full.

2. Liquidation Rights. Upon the liquidation, dissolution or winding up of the Corporation, the assets of the Corporation shall be distributed as provided in Article IVB.2 hereof.

3. Voting Rights. The holders of the Voting Common Stock are entitled to one vote for each share of Voting Common Stock held at all meetings of stockholders (and written actions in lieu of meetings); provided, however, that, except as otherwise required by law, holders of Voting Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate that relates solely to the terms of the Preferred Stock if the holders thereof are entitled to vote thereon pursuant to this Certificate or pursuant to the DGCL. There shall be no cumulative voting. The holders of Non-Voting Common Stock shall not be entitled to vote at any meeting of the holders of Voting Common Stock (or pursuant to any written actions in lieu of meeting).

4. Number of Shares. Subject to the limitations set forth in this Article IV, irrespective of the provisions of Section 242(b)(2) of the DGCL, the number of shares of Common Stock that may be authorized may be increased or decreased, at any time and from time to time, by the affirmative vote of the holders of a majority of the outstanding shares of capital stock of the Corporation entitled to vote, voting together as a single class on an as converted basis; provided that no decrease shall reduce the number of shares of Common Stock to a number less than the sum of (a) the number of such shares then outstanding and (b) the number of such shares into which any rights, options, warrants or other securities then outstanding may be converted.

D. BOARD OF DIRECTORS.

1. Size of Board. The maximum number of directors constituting the Board shall be fixed at seven (7) directors.

2. Election of Board. For so long as any shares of Series A Preferred Stock are outstanding, the holders of Series A Preferred Stock and Series A-1 Preferred Stock, voting as a separate class and on an as-converted basis, shall be entitled to elect two members of the Board (the “Series A Directors”) at each meeting or pursuant to a written consent of the Corporation’s stockholders for the election of directors, to remove from office with or without cause any such director and to fill any vacancy caused by the resignation, death or removal of any such director. For so long as any shares of Series B Preferred Stock are outstanding, the holders of Series B Preferred Stock, voting as a separate class and on an as-converted basis, shall be entitled to elect one member of the Board (the “Series B Director” and together with both of the Series A Directors, collectively the “Preferred Directors”) at each meeting or pursuant to a written consent of the Corporation’s stockholders for the election of directors, to remove from office with or without cause any such director and to fill any vacancy caused by the resignation, death or removal of any such director. All remaining directors of the Corporation to be

elected at any meeting or pursuant to any consent of the Corporation’s stockholders for the election of directors shall be elected by the holders of the Voting Common Stock, voting as a separate class, and such directors may be removed from office, and any vacancy caused by the resignation, death or removal of any such director shall be filled, by the holders of the Voting Common Stock, voting as a separate class.

ARTICLE V

The Corporation is to have perpetual existence.

ARTICLE VI

In furtherance and not in limitation of the powers conferred by statute, the Board is expressly authorized to make, alter or repeal the By-laws.

ARTICLE VII

Meetings of stockholders may be held within or without the State of Delaware, as the By-laws may provide. The books of the Corporation may be kept (subject to any provisions contained in applicable statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board or in the By-laws.

ARTICLE VIII

To the fullest extent permitted by law, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the DGCL or any other law of the State of Delaware is amended after approval by the stockholders of this Article VIII to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL or such other law of the State of Delaware, as so amended.

In the event that a director of the Corporation who is also a partner or employee of an entity that is a holder of Preferred Stock and that is in the business of investing and reinvesting in other entities, or an employee of an entity that manages such an entity (each, a “Fund”), acquires knowledge of a potential transaction or matter and that may be a corporate opportunity for both the Corporation and such Fund (a “Corporate Opportunity”), then (a) such Corporate Opportunity shall belong to such Fund, (b) such director shall, to the fullest extent permitted by law, have fully satisfied and fulfilled his fiduciary duty to the Corporation and its stockholders with respect to such Corporate Opportunity, and (c) the Corporation, to the fullest extent permitted by law, waives any claim that such Corporate Opportunity constituted a corporate opportunity that should have been presented to the Corporation or any of its affiliates; provided, however, that such corporate opportunity was not offered to such person expressly and solely in his or her capacity as a director of the Corporation; and provided, further, that nothing herein or otherwise shall limit the Corporation’s right to pursue or consummate any transaction related to any Corporate Opportunity even if originated by any director or any Fund.

Any repeal or modification of the foregoing provisions of this Article VIII by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of, or increase the liability of any director of the Corporation with respect to any acts or omissions of such director occurring prior to, such repeal or modification.

ARTICLE IX

A. RIGHT TO INDEMNIFICATION OF CERTAIN PERSONS.

1. Right to Indemnification of Officers and Directors. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (an “Indemnified Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that such Indemnified Person, or a person for whom such Indemnified Person is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation or of a partnership, joint venture, limited liability company, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Indemnified Person in such Proceeding. Notwithstanding the preceding sentence, except as otherwise provided in Article IXA.3 below, the Corporation shall be required to indemnify an Indemnified Person in connection with a Proceeding (or part thereof) commenced by such Indemnified Person only if the commencement of such Proceeding (or part thereof) by the Indemnified Person was authorized in advance by the Board.

2. Prepayment of Expenses of Directors and Officers. The Corporation shall pay the expenses (including attorneys’ fees) incurred by an Indemnified Person in defending any Proceeding in advance of its final disposition, provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the Indemnified Person to repay all amounts advanced if it should be ultimately determined that the Indemnified Person is not entitled to be indemnified under this Article IX or otherwise.

3. Claims by Directors and Officers. If a claim for indemnification or advancement of expenses pursuant to this Certificate is not paid in full within 30 days after a written claim therefor by the Indemnified Person has been received by the Corporation, the Indemnified Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action, the Corporation shall have the burden of proving that the Indemnified Person is not entitled to the requested indemnification or advancement of expenses under applicable law.

4. Indemnification of Employees and Agents. The Corporation may indemnify and advance expenses to any person who was or is made or is threatened to be made or is otherwise involved in any Proceeding by reason of the fact that such person, or a person for whom such person is the legal representative, is or was an employee or agent of the Corporation or, while an employee or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, limited liability company, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorney’s fees) reasonably incurred by such person in connection with such Proceeding. The ultimate determination of entitlement to indemnification of persons who are non-director or officer employees or agents shall be made in such manner as is determined by the Board in its sole discretion. Notwithstanding the foregoing sentence, the Corporation shall not be required to indemnify a person in connection with a Proceeding (or part thereof) initiated by such person if the Proceeding (or part thereof) was not authorized in advance by the Board.

5. Advancement of Expenses of Employees and Agents. The Corporation may pay the expenses (including attorneys’ fees) incurred by an employee or agent in defending any Proceeding in advance of its final disposition on such terms and conditions as may be determined by the Board.

6. Non-Exclusivity of Rights. The rights conferred on any person by this Article IX shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, this Certificate, the By-laws, any agreement, any vote of stockholders or disinterested directors or otherwise.

B. INSURANCE.

The Board may, to the full extent permitted by applicable law as it presently exists, or as it may hereafter be amended from time to time, authorize an appropriate officer or officers to purchase and maintain at the Corporation’s expense insurance: (a) to indemnify the Corporation for any obligation which it incurs as a result of the indemnification of directors, officers and employees under the provisions of this Article IX; and (b) to indemnify or insure directors, officers and employees of the Corporation against liability in instances in which they may not otherwise be indemnified by the Corporation under the provisions of this Article IX.

C. AMENDMENT OR REPEAL.

Any repeal or modification of the foregoing provisions of this Article IX shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification. The rights provided hereunder shall inure to the benefit of any Indemnified Person and such person’s heirs, executors and administrators.

ARTICLE X

Subject to any additional vote required by this Certificate, the Corporation reserves the right to amend, alter, change or repeal any provision contained herein, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

ARTICLE XI

The name and mailing address of the Corporation’s incorporator is David Speers, c/o Morgan, Lewis & Bockius LLP, 1701 Market Street, Philadelphia, Pennsylvania 19103.

I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the DGCL, do make this Certificate, hereby declaring and certifying that this is my act and deed, and accordingly I have hereunto set my hand and seal this 21st day of May, 2014.

	TABULA RASA HEALTHCARE, INC.


	By:	/s/ David Speers
		Name: David Speers
		Title: Incorporator

[Signature page to the Certificate of Incorporation of Tabula Rasa Healthcare, Inc.]

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF INCORPORATION OF

TABULA RASA HEALTHCARE, INC.

Pursuant to Section 242 of the

Delaware General Corporation Law

Tabula Rasa Healthcare, Inc., a Delaware corporation (the “Corporation”), hereby certifies as follows:

1. The Certificate of Incorporation of the Corporation (“Certificate”) was filed with the Secretary of State of Delaware on May 21, 2014.

2. Article Fourth, Division A, Section 1 of the Certificate is hereby amended and restated in its entirety to read as follows:

“Classes of Stock. The aggregate number of shares of stock that the Corporation shall have the authority to issue shall be 38,609,749 shares. The total number of shares of common stock authorized to be issued is 27,836,869, par value $0.0001 per share (the “Common Stock”), consisting of (a) 9,600,000 shares of Class A Non-Voting Common Stock (the “Non-Voting Common Stock”) and (b) 18,236,869 shares of Class B Voting Common Stock (the “Voting Common Stock”). The total number of shares of preferred stock authorized to be issued is 10,772,880, par value $0.0001 per share (the “Preferred Stock”), consisting of (x) 4,411,766 shares of Series A Preferred Stock, par value $0.0001 per share, all of which shall be designated as “Series A Convertible Preferred Stock” (the “Series A Preferred Stock”), (y) 2,812,500 shares of Series A-1 Preferred Stock, par value $0.0001 per share, all of which shall be designated as “Series A-1 Convertible Preferred Stock” (the “Series A-1 Preferred Stock”) and (z) 3,548,614 shares of Series B Preferred Stock, par value $0.0001 per share, all of which shall be designated as “Series B Convertible Preferred Stock” (the “Series B Preferred Stock”). The “Original Issue Price” shall mean $0.68 per share for each share of the Series A Preferred Stock, $0.80 per share for each share of the Series A-1 Preferred Stock and $1.52312 per share for each share of the Series B Preferred Stock (each as adjusted for any stock splits, stock dividends, reverse stock splits, stock combinations and other similar capitalization changes).”

3. This Certificate of Amendment to the Certificate of Incorporation of the Corporation has been approved in accordance with Sections 141, 228 and 242 of the General Corporation Law of the State of Delaware.

(signatures follow)

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to the Certificate of Incorporation to be executed by its duly authorized officer as of December 31, 2014.

Tabula Rasa Healthcare, Inc.

	By:	/s/ Brian Adams
		Name: Brian Adams
		Title: Chief Financial Officer

[Signature page to Certificate of Amendment]

EX-4.1 6 a2226891zex-4_1.htm EX-4.1

Exhibit 4.1

INVESTOR RIGHTS AGREEMENT

THIS INVESTOR RIGHTS AGREEMENT (“Agreement”) is entered into as of June 30, 2014, by and among Tabula Rasa Healthcare, Inc., a Delaware corporation (the “Company”), and the investors listed on Schedule A hereto (each, an “Investor” and collectively, the “Investors”).

Background:

WHEREAS, the Investors are receiving shares of the Company’s Series A-1 Convertible Preferred Stock, par value $0.0001 per share (“Series A-1 Convertible Preferred Stock”), Series A Convertible Preferred Stock, par value $0.0001 per share (“Series A Convertible Preferred Stock”, and together with the Series A-1 Convertible Preferred Stock, the “Series A Preferred Stock”), and Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”, and together with the Series A Preferred Stock, the “Preferred Stock”), in exchange for equivalent shares of capital stock in CareKinesis, Inc. (“CareKinesis”) pursuant to an Agreement and Plan of Merger of even date herewith (the “Merger”);

WHEREAS, CareKinesis and certain of the Investors have entered into that certain Amended and Restated Investors Rights Agreement, dated June 28, 2013 (the “Prior Agreement”); and

WHEREAS, the parties hereto desire to enter into this Agreement to reflect the exchange of exchange of shares pursuant to the Merger, which Agreement shall supersede and replace the Prior Agreement in its entirety, and which Prior Agreement shall hereafter be null and void.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises and covenants 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:

1. Covenants of the Company.

1.1 Information Rights.

(a) The Company shall furnish to each Investor:

(i) as soon as practicable but in any event within 15 days after the end of each of each calendar month, an unaudited consolidated balance sheet of the Company as at the end of such calendar month and unaudited consolidated statements of income and cash flows of the Company for such calendar month, including a comparison of actual results for such calendar month to budgeted results and to results for the same calendar month of the immediately preceding year;

(ii) as soon as practicable but in any event not later than 30 days prior to the start of each new fiscal year, a business plan for the next fiscal year, which business plan shall include an operating budget on a monthly basis forecasting the Company’s revenues, expenses and cash position (including consolidated balance sheets and income statements for such months), and promptly after preparation, any revisions to the forecasts contained therein; provided, that such budget and business plan and each such revision, shall have been approved by the Board of Directors, including (i) the directors nominated by the holders of the Series A Preferred (the “Series A Directors”), and (ii) the director nominated by the holders of the Series B Preferred Stock (the “Series B Director,” and together with the Series A Directors, the “Preferred Directors”); and

(iii) such other information relating to the financial condition, business, prospects or corporate affairs of the Company or RevolutionCare, Inc (“RevolutionCare”) as such Investor may from time to time reasonably request.

(b) Together with the financial statements called for in Section 1.1 (a)(i) and (ii), the Company shall deliver a certificate executed by the Chief Financial Officer of the Company that such financial statements were prepared in accordance with United States generally accepted accounting principles (“GAAP”) (with the exception of footnotes that may be required by GAAP) applied on a consistent basis with prior periods and fairly represent the financial condition of the Company as of the date they were prepared and the results of operations of the Company for the period indicated, subject to year-end audit adjustments.

(c) As soon as practicable but in any event within 120 days after the end of each fiscal year, the Company shall furnish to each Investor an audited consolidated balance sheet of the Company as at the end of such year and audited consolidated statements of income, stockholders’ equity, and changes in cash flow of the Company for such year, prepared in accordance with GAAP consistently applied and certified by independent public accountants of nationally or regionally recognized standing selected by the Board of Directors of the Company or a duly authorized committee thereof, in each case including the Preferred Directors, and including a comparison of actual results for such fiscal year to budgeted results and results for the prior fiscal year.

(d) As soon as practicable but in any event within 10 days following the end of each fiscal quarter, the Company shall furnish to each Investor a capitalization table of the Company as of the end of such fiscal quarter, certified by the Chief Executive Officer of the Company as being true and correct.

1.2 Inspection Rights. The Company shall permit each Investor and the Investor’s accountants, advisors and counsel to visit and inspect the properties of the Company and RevolutionCare, to examine each of their corporate and financial records and make copies thereof and to discuss their affairs, finances, and accounts with their respective executive officers, at such reasonable times and upon such reasonable notice as such Investor may reasonably request.

1.3 Confidentiality. Each Investor agrees that such Investor will keep confidential and will not disclose or divulge or use for any purpose (other than monitoring its investment or in connection with the exercise or enforcement of its rights under this Agreement) any confidential information obtained from the Company or RevolutionCare pursuant to the terms of this Agreement, unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 1.3 by such Investor), (b) is or has been independently developed or conceived by the Investor without use of the Company’s confidential information, or (c) is or has been made known or disclosed to the Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company and/or RevolutionCare, as applicable; provided, however, that an Investor may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company or in connection with the exercise or enforcement of its rights under this Agreement; (ii) to any prospective purchaser of any securities of the Company from such Investor, if such prospective purchaser agrees to be bound by the provisions of this Section 1.3; (iii) to any affiliate, partner, manager, member, officer, director, stockholder, parent, or wholly owned subsidiary of such Investor, or current or prospective investors in or lenders to such Investor or its affiliates, in each case in the ordinary course of business, provided that (A) such Investor informs such Person that such

information is confidential and directs such Person to maintain the confidentiality of such information and (B) such Person (in the case of any such current or prospective investors in or lenders to such Investor or its affiliates) agrees to be bound by the provisions of this Section 1.3; or (iv) as may otherwise be required by law, rule, regulation, or court order or other governmental authority, provided that the Investor promptly notifies the Company or RevolutionCare, as applicable, of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure. The Company acknowledges that certain of the Investors are in the business of venture capital investing and therefore review the business plans and related proprietary information of many enterprises, including enterprises that may have products or services that compete directly or indirectly with those of the Company. Nothing in this Agreement shall preclude or in any way restrict the Investors from investing or participating in any particular enterprise, regardless of whether such enterprise has products or services that compete with those of the Company.

1.4 First Offer Right.

(a) Definitions.

(i) “Common Stock issued or issuable on a fully diluted basis” means, as of any date, the total number of shares of Class A Non-Voting Common Stock (“Non-Voting Common Stock”) and Class B Voting Common Stock (“Voting Common Stock”, and collectively with Non-Voting Common Stock, “Common Stock”) that are issued and outstanding, plus the total number of shares of Common Stock that would be issued upon the conversion, exercise and/or exchange of all outstanding securities, options, rights, warrants or promissory notes of the Company which are as of such date, vested and in the money, as applicable, and convertible, exercisable and/or exchangeable, directly or indirectly, for shares of Common Stock.

(ii) “Excluded Securities” means any securities defined as “Excluded Securities” in the Company’s Certificate of Incorporation.

(iii) “New Securities” means (A) securities of any kind or class, whether or not now authorized, issued by the Company after the date hereof and (B) rights of any kind to acquire, directly or indirectly (including, without limitation, by conversion, exchange or exercise) any securities described in clause (A).

(iv) “Pro Rata Share” means, with respect to each Investor, a fraction, the numerator of which is the number of shares of Common Stock owned by such Investor (including shares of Common Stock issuable upon conversion, exercise and/or exchange of all other outstanding securities of the Company owned by such Investor) on the Notice Date (as defined below) and the denominator of which is the total number of shares of Common Stock issued or issuable on a fully diluted basis on the Notice Date.

(v) “Qualified A Public Offering” shall have the meaning given it the in the Company’s Certificate of Incorporation.

(vi) “Qualified B Public Offering” shall have the meaning given it the in the Company’s Certificate of Incorporation.

(b) Subject to the terms and conditions of this Section 1.3, the Company hereby grants to each Investor a right of first offer to purchase New Securities that the Company may, from time to time, propose to sell and issue after the date of this Agreement, other than Excluded Securities, and in such amount as is determined herein.

(c) If the Company proposes to issue any New Securities (other than Excluded Securities), it shall give the Investors written notice of its intention describing the New Securities and the price and the terms and conditions upon which the Company proposes to issue the same. The Company shall offer to sell to each Investor such New Securities in accordance with the procedure set forth below:

(i) The Company shall give each Investor a written notice (the “Offer Notice”). The date on which the Company gives the Offer Notice is hereinafter referred to as the “Notice Date.” The Offer Notice shall set forth: (A) the number of New Securities which the Company proposes to sell, (B) the price and a summary of the terms and conditions upon which the Company proposes to sell such New Securities, and (C) with respect to each Investor, such Investor’s Pro Rata Share of the New Securities.

(ii) For a period of 30 days following the Notice Date (the “Acceptance Period”), each Investor shall have the right to purchase New Securities (the “Purchase Right”), on the terms and conditions stated in the Offer Notice and as more fully described herein. Any Investor who desires to exercise such Investor’s Purchase Right shall give written notice (the “Acceptance Notice”) to the Company within the Acceptance Period. The Acceptance Notice shall state that such Investor desires to exercise such Investor’s Purchase Right and the maximum number of New Securities that such Investor is willing to purchase upon exercise of such Purchase Right. Failure by a Investor to give the Acceptance Notice within the Acceptance Period shall be deemed, without any further action by the Company or the Investor, the irrevocable waiver of such Investor’s Purchase Right with respect to the New Securities set forth in the applicable Offer Notice and any other securities issuable, directly or indirectly, upon conversion, exercise or exchange of such New Securities which are sufficiently described in such Offer Notice.

(iii) The New Securities shall be allocated among each Investor delivering an Acceptance Notice in an amount equal to the product obtained by multiplying the number of New Securities by a fraction, the numerator of which is the total number of shares of Common Stock owned by such Investor (including shares of Common Stock issuable upon conversion, exercise and/or exchange of all other outstanding securities of the Company owned by such Investor) on the Notice Date and the denominator of which is the total number of shares of Common Stock owned on the Notice Date by all Investors (including shares of Common Stock issuable upon conversion, exercise and/or exchange of all other outstanding securities of the Company owned by all such Investors) delivering an Acceptance Notice, with such allocation being repeated in respect of any remaining New Securities until either all Investors have been allocated the maximum number of New Securities which they have stated they are willing to purchase pursuant to their respective Acceptance Notices, or until all New Securities have been so allocated among them. Notwithstanding the foregoing, the Investors shall be entitled to allocate such New Securities in any other manner as may be agreeable to them; provided that no Investor shall be allocated (i) less than such Investor’s Pro-Rata Share of the New Securities unless such Investor elected to purchase less than such Pro-Rata Share, or (ii) otherwise fewer New Securities than such Investor would be entitled to purchase by operation of the preceding sentence, unless in each case such Investor has consented thereto in writing. Each Investor shall have the right, upon written notice to the Company, to assign such Investor’s Purchase Right to any person.

(d) The Company shall be entitled, during the period of 120 days following the expiration of the Acceptance Period (the “Unrestricted Period”), to sell up to the full amount of the New Securities set forth in the Offer Notice on the terms set forth in the Offer Notice, less the number of New Securities, if any, which the Investors have elected to purchase upon exercise of their Purchase

Rights in accordance with Section 1.4(c) (the “Remainder Securities”). The Company shall give five days’ prior written notice to each Investor that has elected to purchase New Securities of any such sale which sale shall be at the price and upon terms and conditions no more favorable to the purchaser than those described in the Offer Notice. If the Company does not complete the sale of the Remainder Securities to other purchasers within the Unrestricted Period, the Purchase Right provided hereunder shall be deemed to be revived and such Remainder Securities shall not be offered unless first reoffered to the Investors in accordance herewith.

1.5 Key-Man Life Insurance. The Company shall maintain key man life insurance on the life of Calvin H. Knowlton in an amount of not less than $3,000,000 with the proceeds payable to the Company.

1.6 D&O Insurance; Employment Practices Insurance. The Company shall maintain a directors’ and officers’ liability insurance policy and an employment practices insurance policy, both on terms reasonably satisfactory to the Requisite Investors.

1.7 Proprietary Agreements. The Company shall require all employees and consultants, upon commencement of their employment by or service to the Company, to enter into confidentiality, assignment of inventions and noncompetition agreements in form and substance reasonably acceptable to the Board of Directors of the Company, including the Preferred Directors.

1.8 Vesting. Unless otherwise approved by the Board of Directors, including the Preferred Directors, securities hereafter awarded to employees, directors, consultants and other service providers by the Company will not vest any more favorably than as follows (nor will there be any acceleration of vesting provisions): 25% of the shares subject to each award may vest on the one-year anniversary of the vesting commencement date for such award (but not earlier than the first anniversary of the date on which the employee, director, consultant or other service provider commenced employment (with respect to new hires) or the first anniversary of the date on which the award is granted (with respect to additional grants)), and thereafter 1/36th of the remaining shares comprising each award may vest on each subsequent monthly anniversary of the vesting commencement date for such award. Such awards shall provide that the Company, or its assignee, shall have the right to repurchase at cost all unvested shares owned by employees, directors, consultants and other service providers upon termination, with or without cause, of their employment or relationship with the Company.

1.9 Directors’ Liability and Indemnification. The Company’s certificate of incorporation and bylaws (as they may be amended from time to time) shall provide (a) for elimination of the liability of directors to the maximum extent permitted by law and (b) for indemnification of directors for acts on behalf of the Company to the maximum extent permitted by law. In addition, the Company shall indemnify all directors to the maximum extent permissible under Delaware law pursuant to an indemnification agreement in such form as may be requested from time to time by the directors.

1.10 Board Meetings. The Board of Directors of the Company shall meet at least once every calendar quarter on an agreed-upon schedule.

1.11 Non-Employee Director Expenses. The Company shall reimburse the reasonable out-of-pocket expenses (consistent with the Company’s reimbursement policy and with respect to travel, the Company’s travel policy) incurred by all non-employee directors in connection with such directors’ attendance at meetings of the Board of Directors, meetings of any committees of the Board of Directors and any other meetings or events attended by such directors on behalf of the Company at the Company’s

request or otherwise incurred in connection with the performance by such directors of their duties to the Company, promptly upon receipt of documentation of such expenses.

1.12 Intentionally omitted.

1.13 Committees of the Board. In the event that the Board of Directors establishes a Compensation Committee, an Audit Committee, or any other committee of the Board of Directors, each such committee shall have at least three members, at least one of whom shall be a Series A Director and one of whom shall be a Series B Director.

1.14 Reservation of Common Stock. The Company shall take any and all action necessary to reserve for issuance the number of shares of Voting Common Stock into which all of the shares of Preferred Stock are convertible, and shall take such further action from time to time thereafter to increase the number of shares of Voting Common Stock reserved for issuance as required by any increase in the number of shares of Voting Common Stock into which such shares of Preferred Stock may then be converted.

1.15 Termination. The Company’s obligations with respect to the Series A Investors (as defined below) who are not otherwise also a Series B Investor (as defined below), and the rights of each such Series A Investor, under this Section 1 shall terminate upon the occurrence of a Qualified A Public Offering, and the Company’s obligations with respect to the Series B Investors (as defined below), and the rights of each Series B Investor, under this Section 1 shall terminate upon the occurrence of a Qualified B Public Offering. Notwithstanding the foregoing, Sections 1.6., 1.9 and 1.11 shall continue in effect for so long as any Preferred Director serves on the Board of Directors of the Company.

2. Registration Rights.

2.1 Definitions. As used in this Section 2, the following terms shall have the following respective meanings:

(a) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(b) “Form S-3” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

(c) “Holder” means any person owning of record Registrable Securities or any assignee of record of such Registrable Securities in accordance with Section 2.10 hereof.

(d) “Initial Public Offering” means the closing of the Company’s first firm commitment underwritten public offering of its Common Stock registered under the Securities Act.

(e) “Register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document.

(f) “Registrable Securities” means the shares of Common Stock issued or issuable upon conversion of the Preferred Stock, or issued or issuable upon the conversion or exercise of

any warrant, right, or other security which is issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, such Preferred Stock. Notwithstanding the foregoing, Registrable Securities shall not include (i) any securities sold by a person to the public either pursuant to a registration statement or Rule 144, (ii) any securities sold in a private transaction in which the transferor’s rights under this Section 2 are not assigned, or (iii) with respect to each Holder, any shares of Common Stock described in the first sentence of this subparagraph (f), if all such shares of Common Stock could then be sold pursuant to Rule 144(k) under the Securities Act without any time limitation.

(g) “Registrable Securities then outstanding” shall be the number of shares of Common Stock determined by calculating the total number of shares of Common Stock that are Registrable Securities and which are either (i) then issued and outstanding or (ii) issuable upon conversion, exercise and/or exchange of any other outstanding securities.

(h) “Registration Expenses” shall mean all expenses incurred in effecting any registration pursuant to this Agreement, including without limitation, all registration and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company, reasonable fees and disbursements of a single special counsel for the Holders (as set forth in Section 2.5(a)), blue sky fees and expenses and the expense of any special audits incident to or required by any such registration.

(i) “SEC” or “Commission” means the Securities and Exchange Commission.

(j) “Securities Act” shall have the meaning set forth in Section 1.10.

(k) “Selling Expenses” shall mean all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel for any Holder, other than the fees and disbursements of one special counsel to the Holders included in the Registration Expenses.

(l) “Series A Investor” shall mean any Investor who at the time holds shares of Series A Preferred Stock, Common Stock issued upon conversion thereof, or Common Stock issued or issuable upon the conversion or exercise of any warrant, right, or other security which is issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, such Series A Preferred Stock.

(m) “Series A Registrable Securities” means the shares of Common Stock issued or issuable upon conversion of the Series A Preferred Stock, or issued or issuable upon the conversion or exercise of any warrant, right, or other security which is issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, such Series A Preferred Stock. Notwithstanding the foregoing, Series A Registrable Securities shall not include (i) any securities sold by a person to the public either pursuant to a registration statement or Rule 144, (ii) any securities sold in a private transaction in which the transferor’s rights under this Section 2 are not assigned, or (iii) with respect to each Holder, any shares of Common Stock described in the first sentence of this subparagraph (f), if all such shares of Common Stock could then be sold pursuant to Rule 144(k) under the Securities Act without any time limitation.

(n) “Series B Investor” shall mean any Investor who at the time holds shares of Series B Preferred Stock, Common Stock issued upon conversion thereof, or Common Stock issued or issuable upon the conversion or exercise of any warrant, right, or other security which is issued as a

dividend or other distribution with respect to, or in exchange for or in replacement of, such Series B Preferred Stock.

(o) “Series B Registrable Securities” means the shares of Common Stock issued or issuable upon conversion of the Series B Preferred Stock, or issued or issuable upon the conversion or exercise of any warrant, right, or other security which is issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, such Series B Preferred Stock. Notwithstanding the foregoing, Series B Registrable Securities shall not include (i) any securities sold by a person to the public either pursuant to a registration statement or Rule 144, (ii) any securities sold in a private transaction in which the transferor’s rights under this Section 2 are not assigned, or (iii) with respect to each Holder, any shares of Common Stock described in the first sentence of this subparagraph (f), if all such shares of Common Stock could then be sold pursuant to Rule 144(k) under the Securities Act without any time limitation.

(p) “Special Registration Statement” shall mean a registration statement relating to any employee benefit plan or with respect to any corporate reorganization or other transaction.

2.2 Demand Registration.

(a) Series A Demand Registration.

(i) Subject to the conditions of this Section 2.2, at any time after the earlier of (i) the fifth anniversary of this Agreement or (ii) the date that is 181 days after the Company’s Initial Public Offering, the Holders of at least twenty-five percent (25%) of the Series A Registrable Securities then outstanding (the “Series A Initiating Holders”) may request in writing (the “Series A Demand Request”) that the Company file a registration statement under the Securities Act covering the registration of Series A Registrable Securities to the extent that such Series A Registrable Securities would have an aggregate price to the public in excess of $5,000,000. The Series A Demand Request shall set forth the number of Series A Registrable Securities owned by the Series A Initiating Holders to be included in the registration statement. In such event, the Company shall:

(1) as promptly as practicable but in any event within five days following the receipt of the Demand Request, give written notice of such request to all Holders (the “Series A Demand Notice”);

(2) subject to the limitations set forth in this Section 2.2, file, as expeditiously as reasonably possible, and in any event within 75 days following the receipt of such request, a registration statement under the Securities Act covering the Series A Registrable Securities specified by the Series A Initiating Holders in the Series A Demand Request and such other Registrable Securities with respect to which the Company has received written requests for inclusion within such registration statement within 15 days after the Company has given the Series A Demand Notice; and

(3) use its reasonable diligent efforts to cause the registration statement to be declared effective.

(ii) If the Series A Initiating Holders intend to distribute the Series A Registrable Securities covered by their Series A Demand Request by means of an underwritten offering, they shall so advise the Company in the Series A Demand Request, and the Company shall include such information in the Series A Demand Notice. In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such

underwritten offering and the inclusion of such Holder’s Registrable Securities in the underwritten offering to the extent provided herein. All Holders proposing to distribute their securities by means of such underwritten offering shall enter into an underwriting agreement in customary form with an underwriter or underwriters selected for such underwriting by the Company and reasonably acceptable to the Series A Initiating Holders holding at least a majority of the Series A Registrable Securities requested to be included in the underwritten offering. Notwithstanding any other provision of this Section 2.2, if the underwriter advises the Company that marketing factors require a limitation of the number of securities to be underwritten (including Registrable Securities), then the Company shall so advise all Holders of Registrable Securities which would otherwise be underwritten pursuant hereto, and the number of securities that may be included in the underwriting shall be reduced and allocated to the Holders of such Registrable Securities as follows: first, to the Holders of Series A Registrable Securities, all Series A Registrable Securities requested to be included in such registration on a pro rata basis based on the total number of Series A Registrable Securities requested to be included in such registration by such Holders; second, to the Holders of Series B Registrable Securities, up to the full number of Series B Registrable Securities requested to be included in such registration on a pro rata basis based on the total number of Series B Registrable Securities requested to be included in such registration by the such Holders; and third, to any other holders, the number of securities requested to be included by any other holders, in proportion as nearly as practicable, to the respective amounts of securities of the Company owned by them. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration.

If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall be excluded therefrom by written notice from the Company, the underwriter or the Series A Initiating Holders. The securities so excluded shall also be withdrawn from registration. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall also be withdrawn from such registration. If shares are so withdrawn from the registration and if the number of shares to be included in such registration was previously reduced as a result of marketing factors pursuant to this Section 2.2(a)(ii), then the Company shall then offer to all Holders who have retained rights to include securities in the registration the right to include additional Registrable Securities in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be allocated among such Holders requesting additional inclusion, as set forth above.

(iii) The Company shall not be required to effect a registration pursuant to this Section 2.2(a):

(1) after the Company has effected two (2) registrations pursuant to this Section 2.2(a) whereby the Company has in each case registered at least 75% of the Series A Registrable Securities requested by the Holders thereof to be registered, and, subject to Section 2.5, each such registration has been declared or ordered effective and has remained effective until such Holder or Holders have completed the distribution related thereto;

(2) if the Company shall furnish to the Holders requesting a registration statement pursuant to this Section 2.2(a), a certificate signed by the Chief Executive Officer of the Company stating that in the good faith reasonable judgment of the Board of Directors of the Company, it would be materially detrimental to the Company and its stockholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than 60 days after receipt of the request of the Series A Initiating Holders; provided, however, that the Company may not utilize this right more than once in any 12 month period;

(3) during the 90-day period commencing with the date of the Company’s Initial Public Offering;

(4) if the Company delivers notice to the holders of the Series A Registrable Securities within 30 days following any registration request of its intent to file a registration statement for such initial public offering within 90 days thereof; or

(5) if the Series A Initiating Holders propose to dispose of Series A Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.4 below.

(b) Series B Demand Registration.

(i) Subject to the conditions of this Section 2.2, at any time after the earlier of (i) the fifth anniversary of this Agreement or (ii) the date that is 181 days after the Company’s Initial Public Offering, the Holders of at least twenty-five percent (25%) of the Series B Registrable Securities then outstanding (the “Series B Initiating Holders”) may request in writing (the “Series B Demand Request”) that the Company file a registration statement under the Securities Act covering the registration of Series B Registrable Securities to the extent that such Series B Registrable Securities would have an aggregate price to the public in excess of $5,000,000. The Series B Demand Request shall set forth the number of Series B Registrable Securities owned by the Series B Initiating Holders to be included in the registration statement. In such event, the Company shall:

(1) as promptly as practicable but in any event within five days following the receipt of the Demand Request, give written notice of such request to all Holders (the “Series B Demand Notice”);

(2) subject to the limitations set forth in this Section 2.2, file, as expeditiously as reasonably possible, and in any event within 75 days following the receipt of such request, a registration statement under the Securities Act covering the Series B Registrable Securities specified by the Series B Initiating Holders in the Series B Demand Request and such other Registrable Securities with respect to which the Company has received written requests for inclusion within such registration statement within 15 days after the Company has given the Series B Demand Notice; and

(3) use its reasonable diligent efforts to cause the registration statement to be declared effective.

(ii) If the Series B Initiating Holders intend to distribute the Series B Registrable Securities covered by their Series B Demand Request by means of an underwritten offering, they shall so advise the Company in the Series B Demand Request, and the Company shall include such information in the Series B Demand Notice. In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwritten offering and the inclusion of such Holder’s Registrable Securities in the underwritten offering to the extent provided herein. All Holders proposing to distribute their securities by means of such underwritten offering shall enter into an underwriting agreement in customary form with an underwriter or underwriters selected for such underwriting by the Company and reasonably acceptable to the Series B Initiating Holders holding at least a majority of the Series B Registrable Securities requested to be included in the underwritten offering. Notwithstanding any other provision of this Section 2.2, if the underwriter advises the Company that marketing factors require a limitation of the number of securities to be underwritten (including Registrable Securities), then the Company shall so advise all

Holders of Registrable Securities which would otherwise be underwritten pursuant hereto, and the number of securities that may be included in the underwriting shall be reduced and allocated to the Holders of such Registrable Securities as follows: first, to the Holders of Series B Registrable Securities, all Series B Registrable Securities requested to be included in such registration on a pro rata basis based on the total number of Series B Registrable Securities requested to be included in such registration by such Holders; second, to the Holders of Series A Registrable Securities, up to the full number of Series A Registrable Securities requested to be included in such registration on a pro rata basis based on the total number of Series A Registrable Securities requested to be included in such registration by the such Holders; and third, to any other holders, the number of securities requested to be included by any other holders, in proportion as nearly as practicable, to the respective amounts of securities of the Company owned by them. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration.

If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall be excluded therefrom by written notice from the Company, the underwriter or the Series B Initiating Holders. The securities so excluded shall also be withdrawn from registration. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall also be withdrawn from such registration. If shares are so withdrawn from the registration and if the number of shares to be included in such registration was previously reduced as a result of marketing factors pursuant to this Section 2.2(b)(ii), then the Company shall then offer to all Holders who have retained rights to include securities in the registration the right to include additional Registrable Securities in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be allocated among such Holders requesting additional inclusion, as set forth above.

(iii) The Company shall not be required to effect a registration pursuant to this Section 2.2(b):

(1) after the Company has effected two (2) registrations pursuant to this Section 2.2(b) whereby the Company has in each case registered at least 75% of the Series B Registrable Securities requested by the Holders thereof to be registered, and, subject to Section 2.5, each such registration has been declared or ordered effective and has remained effective until such Holder or Holders have completed the distribution related thereto;

(2) if the Company shall furnish to the Holders requesting a registration statement pursuant to this Section 2.2(b), a certificate signed by the Chief Executive Officer of the Company stating that in the good faith reasonable judgment of the Board of Directors of the Company, it would be materially detrimental to the Company and its stockholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than 60 days after receipt of the request of the Series B Initiating Holders; provided, however, that the Company may not utilize this right more than once in any 12 month period;

(3) during the 90-day period commencing with the date of the Company’s Initial Public Offering;

(4) if the Company delivers notice to the holders of the Series B Registrable Securities within 30 days following any registration request of its intent to file a registration statement for such initial public offering within 90 days thereof; or

(iv) if the Series B Initiating Holders propose to dispose of Series B Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.4 below.

2.3 Company Registration.

(a) If, at any time, the Company proposes to file a registration statement under the Securities Act for purposes of a public offering of securities of the Company (including for this purpose a registration statement covering shares owned by stockholders other than the Holders but excluding Special Registration Statements), it shall notify all Holders of Registrable Securities in writing (the “Company Notice”). Each Holder shall have the right (the “Piggyback Right”), subject to the limitations set forth in Section 2.3(b), to include in any such registration statement all or any part of the Registrable Securities then held by such Holder. In order to exercise the Piggyback Right, a Holder shall give written notice to the Company (the “Piggyback Notice”) no later than 20 days following the date on which the Company gives the Company Notice. The Piggyback Notice shall set forth the number of Registrable Securities that such Holder desires to include in the registration statement.

(b) If the registration statement under which the Company gives notice under this Section 2.3 is for an underwritten offering, the Company shall so advise the Holders of Registrable Securities in the Company Notice. In such event, the right of any such Holder to be included in a registration pursuant to this Section 2.3 shall be conditioned upon such Holder’s participation in such underwritten offering and the inclusion of such Holder’s Registrable Securities in the underwritten offering to the extent provided herein. All Holders proposing to distribute their Registrable Securities by means of such underwritten offering shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company. Notwithstanding any other provision of the Agreement, if the underwriter determines in good faith that marketing factors require a limitation of the number of shares to be underwritten, the number of shares that may be included in the underwriting shall be allocated in the following manner: first, to the Company, all securities proposed to be registered by the Company for its own account; second, to the Holders, up to the full number of Registrable Securities requested to be included in such registration on a pro rata basis based on the total number of Registrable Securities requested to be included in such registration by the Holders; and third, to any other holders, the number of securities requested to be included by any other holders, in proportion as nearly as practicable, to the respective amounts of securities of the Company owned by them; provided, however, in no event shall the number of Registrable Securities of the Holders be reduced to a number less than 35% of the total amount of securities in the offering, unless such offering is the Company’s Initial Public Offering in which case the number of Registrable Securities included may be reduced to below 35% of the total number of securities is in the offering if the underwriters make the determination above and no other stockholder’s securities are included. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter, delivered at least 10 business days prior to the effective date of the registration statement.

Holders who have retained rights to include securities in the registration the right to include additional Registrable Securities in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be allocated among such Holders requesting additional inclusion, as set forth above.

(c) The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The Registration Expenses of such withdrawn registration shall be borne by the Company in accordance with Section 2.5 hereof.

2.4 Form S-3 Registration.

(a) After its Initial Public Offering, the Company shall use its best efforts to qualify for registration on Form S-3, or any comparable or successor form or forms. Any Holder or Holders of at least 15% of the Registrable Securities (as adjusted for stock splits, stock dividends, reverse stock splits, stock combinations or other similar capitalization changes) then outstanding (the “Form S-3 Initiating Holder(s)”) may request in writing that the Company effect a registration on Form S-3 (or any successor to Form S-3) with respect to any Registrable Securities owned by such Holder or Holders (the “Form S-3 Request”); provided, however, that the Company shall not be required to effect more than two (2) registrations pursuant to this Section 2.4 within any 12-month period. The Form S-3 Request shall set forth the number of Registrable Securities owned by the Form S-3 Initiating Holders to be included in the Form S-3 registration statement. In such event, the Company will:

(i) as promptly as practicable but in any event within 10 days following the receipt of the Form S-3 Request, give written notice of the proposed registration (the “Form S-3 Notice”) to all other Holders of Registrable Securities; and

(ii) as expeditiously as reasonably possible, file and use commercially reasonable efforts to cause to be declared effective, a registration statement covering the Registrable Securities specified by the Form S-3 Initiating Holder(s) in the Form S-3 Request, together with the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request received by the Company within 10 days after the Company has given the Form S-3 Notice.

(b) The Company shall not be obligated to effect any registration pursuant to Section 2.4(a):

(i) if Form S-3 is not available for such offering by the Holder or Holders;

(ii) if the Holder or Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than $1,000,000;

(iii) if the Company shall furnish to the Holders a certificate signed by the Chief Executive Officer of the Company stating that in the reasonable judgment of the Board of Directors of the Company, it would be materially detrimental to the Company and its stockholders for such Form S-3 registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than 90 days after receipt

of the Form S-3 Request from the Holder or Holders under this Section 2.4; provided, however, that the Company may not utilize this right more than once in any 12 month period; or

(iv) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification, or compliance.

(c) If the Form S-3 Initiating Holder(s) intend to distribute the Registrable Securities covered by their Form S-3 Request by means of an underwritten offering, they shall so advise the Company in the Form S-3 Request, and the Company shall include such information in the Form S-3 Notice. In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwritten offering and the inclusion of such Holder’s Registrable Securities in the underwritten offering to the extent provided herein. All Holders proposing to distribute their securities by means of such underwritten offering shall enter into an underwriting agreement in customary form with an underwriter or underwriters selected for such underwriting by the Company and reasonably acceptably to a majority in interest of the Initiating Holders. Notwithstanding any other provision of this Section 2.4, if the underwriter advises the Company that marketing factors require a limitation of the number of securities to be underwritten (including Registrable Securities), then the Company shall so advise all Holders of Registrable Securities which would otherwise be underwritten pursuant hereto, and the number of securities that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities on a pro rata basis based on the total number of Registrable Securities requested to be included in such registration by the Holders; provided, however, that the number of Registrable Securities to be included in such underwriting and registration shall not be reduced unless all other securities of the Company are first entirely excluded from the underwriting and registration. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration.

If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall be excluded therefrom by written notice from the Company, the underwriter or the Form S-3 Initiating Holders. The securities so excluded shall also be withdrawn from registration. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall also be withdrawn from such registration. If shares are so withdrawn from the registration and if the number of shares to be included in such registration was previously reduced as a result of marketing factors pursuant to this Section 2.4(c), then the Company shall then offer to all Holders who have retained rights to include securities in the registration the right to include additional Registrable Securities in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be allocated among such Holders requesting additional inclusion, as set forth above.

2.5 Registration Expenses.

(a) Subject to Section 2.5(b), all Registration Expenses incurred in connection with any registration pursuant to Section 2.2, Section 2.3, or Section 2.4 shall be borne by the Company, including the expense of a single special counsel to the Holders for each registration not to exceed $25,000 per registration. All Selling Expenses incurred in connection with any such registration shall be borne by the Holders pro rata based on the number of Registrable Securities registered on behalf of each such Holder.

(b) The Company shall not be required to pay for expenses of any registration proceeding begun pursuant to Section 2.2 or Section 2.4, the request of which has been subsequently withdrawn by the Series A Initiating Holders, the Series B Initiating Holders or the Form S-3 Initiating Holders, as the case may be, unless (i) the withdrawal is based upon material adverse information concerning the Company which was not available to the Series A Initiating Holders, the Series B Initiating Holders or Form S-3 Initiating Holders, as applicable, at the time of such request, or (ii) with respect to a registration requested pursuant to Section 2.2(a), the Holders of at least 75% of the Series A Registrable Securities then outstanding agree to forfeit their right to one requested registration pursuant to Section 2.2(a) (in which event such right under Section 2.2(a) shall be forfeited by all Holders of Series A Registrable Securities), or (iii) with respect to a registration requested pursuant to Section 2.2(b), the Holders of at least 75% of the Series B Registrable Securities then outstanding agree to forfeit their right to one requested registration pursuant to Section 2.2(b) (in which event such right under Section 2.2(b) shall be forfeited by all Holders of Series B Registrable Securities), or (iv) with respect to a registration requested pursuant to Section 2.4, the Holders of at least 75% of the Registrable Securities then outstanding agree to forfeit their right to one requested registration pursuant to Section 2.4 (in which event such right under Section 2.4 shall be forfeited by all Holders of Registrable Securities). If the Holders are required to pay the Registration Expenses, such expenses shall be borne by the holders of securities (including Registrable Securities) requesting such registration in proportion to the number of securities for which registration was requested. If the Company is required to pay the Registration Expenses of a withdrawn offering pursuant to clause (i) above, then the applicable Holders of Series A Registrable Securities and or Series B Registrable Securities shall not forfeit their rights to a registration pursuant to Section 2.2 or Section 2.4, as applicable.

2.6 Obligations of the Company. Whenever required to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

(a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use commercially reasonable efforts to cause such registration statement to become effective, and keep such registration statement effective for up to 120 days or, if earlier, until the Holder or Holders have completed the distribution related thereto; provided, however, that:

(i) such 120 day period shall be extended for a period of time equal to the period the Holder agrees to refrain from selling any securities included in such registration at the request of the Company or an underwriter of Common Stock of the Company; and

(ii) in the case of any registration of Registrable Securities on Form S-3 which are intended to be offered on a continuous or delayed basis, such 120 day period shall be extended, if necessary, to keep the registration statement effective until all such Registrable Securities are sold, provided that Rule 415, or any successor rule under the Securities Act, permits an offering on a continuous or delayed basis, and provided further that applicable rules under the Securities Act governing the obligation to file a post-effective amendment permit, in lieu of filing a post-effective amendment which (I) includes any prospectus required by Section 10(a)(3) of the Securities Act or (II) reflects facts or events representing a material or fundamental change in the information set forth in the registration statement, the incorporation by reference in the registration statement of information required to be included in (I) and (II) above from periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act;

(b) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be

necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in paragraph (a) above;

(c) furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, and any amendments or supplements thereto in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them;

(d) register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;

(e) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement;

(f) notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. The Company will as expeditiously as reasonably possible amend or supplement such prospectus in order to cause such prospectus not to include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

(g) cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange or nationally recognized quotation system on which similar securities issued by the Company are then listed;

(h) provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration; and

(i) furnish, at the request of the Holders of at least a majority of the Registrable Securities (as adjusted for stock splits, stock dividends, reverse stock splits, stock combinations or other similar capitalization changes) requesting registration of Registrable Securities pursuant to this Section 2, on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Section 2, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities and (ii) if the securities are being sold through underwriters, a letter dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants

to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities.

2.7 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of at least 67% of the Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights the terms of which are pari passu with or senior to the registration rights granted to the Holders hereunder.

2.8 Obligations of Holders. Each selling Holder pursuant to a registration effected pursuant to this Agreement shall:

(a) use its reasonable efforts to provide all such information and material concerning such Holder as may reasonably be requested by the Company in writing in order to enable the Company to comply with applicable requirements of the SEC;

(b) not deliver any form of prospectus in connection with the sale of any Registrable Securities as to which the Company has advised the selling Holders in writing that it is preparing an amendment or supplement; and

(c) not have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

2.9 Indemnification. In the event any Registrable Securities are included in a registration statement under Sections 2.2, 2.3 or 2.4:

(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, each of its officers, directors and partners, legal counsel and accountants and each person controlling such Holder within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification or compliance has been effected pursuant to this Section 2, and each underwriter, if any, and each person who controls within the meaning of Section 15 of the Securities Act any underwriter, against all expenses, claims, losses, damages and liabilities (or actions, proceedings or settlements in respect thereof) arising out of or based on (each of the following, a “Violation”): (i) any untrue statement or alleged untrue statement of a material fact contained or incorporated by reference in any prospectus, offering circular or other document (including any related registration statement, notification or the like) incident to any such registration, qualification or compliance, (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act or the Exchange Act, any federal or state securities laws or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any offering covered by such registration, qualification or compliance, and the Company will reimburse each such Holder, each of its officers, directors, partners, legal counsel and accountants and each person controlling such Holder, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability or action; provided however, that the indemnity agreement contained in this Section 2.9(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it is based directly upon a

Violation which occurs in reliance upon and in conformity with written information expressly furnished for use in connection with such registration by such Holder.

(b) To the extent permitted by law, each Holder, severally and not jointly, will, if Registrable Securities held by such Holder are included in the securities which are being registered, indemnify and hold harmless the Company, each of its directors, officers, partners, legal counsel and accountants and each underwriter, if any, of the Company’s securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, each other such Holder, and each of their officers, directors and partners, and each person controlling each other such Holder, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on a Violation, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder and expressly stated to be specifically for use in the registration statement; provided, however, that the indemnity agreement contained in this Section 2.9(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided, further, in no event shall the indemnity by a particular Holder under this Section 2.9(b) exceed the net proceeds from the sale of Registrable Securities in the offering received by such Holder, except in the case of fraud or willful misconduct by such Holder.

(c) Promptly after receipt by an indemnified party under this Section 2.9 of notice of the commencement of any action (including any governmental action), for which such party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel of its choice; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.9 if, and solely to the extent that, such failure materially prejudices the ability of the indemnifying party to defend such action; provided that the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.9.

(d) If the indemnification provided for in this Section 2.9 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute, severally and not jointly, to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violation(s) that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to

state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. In no event shall any contribution by a Holder under this Section 2.9(d), when combined with any amounts paid by such Holder pursuant to Section 2.9(b), exceed the net proceeds from the sale of Registrable Securities in the offering received by such Holder, except in the case of fraud or willful misconduct by such Holder. Notwithstanding anything else herein to the contrary, no party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any party who was not guilty of such fraudulent misrepresentation.

The obligations of the Company and Holders under this Section 2.9 shall survive completion of any offering of Registrable Securities in a registration statement and the termination of this agreement. No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

2.10 Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned by a Holder to a transferee or assignee of Registrable Securities which (a) is a subsidiary, parent, general partner, limited partner, former partner, member or former member of a Holder, and in the case of a venture capital fund, other funds managed by the same investment manager and its affiliates, (b) is a Holder’s family member or trust for the benefit of an individual Holder or a family member of such Holder, or (c) acquires at least 5% of the Registrable Securities held by such Holder (as adjusted for stock splits, stock dividends, reverse stock splits, stock combinations or other similar capitalization changes); provided, however, the transferor shall furnish to the Company written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned and such transferee shall furnish to the Company its agreement in writing to be subject to all obligations of a Holder set forth in this Agreement.

2.11 “Market Standoff” Agreement.

(a) Each Holder hereby agrees that such Holder shall not sell or enter into any hedging or similar transaction with the same economic effect as a sale, transfer, make any short sale, or grant any option for the purchase, of any Common Stock (or other securities) of the Company held by such Holder immediately prior to the IPO Effective Date (defined below) (other than those included in the registration) for a period specified by the Company or representative of the underwriters of Common Stock (or other securities) of the Company not to exceed 180 days following the effective date of a registration statement of the Company filed under the Securities Act with respect to an Initial Public Offering (the “IPO Effective Date”); provided, however, that, if required by such underwriter, such 180-day period shall be extended to such longer period of time as is necessary to enable such underwriter to issue a research report or make a public appearance that relates to an earnings release or announcement by the Company within 15 days prior to or after the date that is 180 days after the effective date of the registration statement relating to such offering, but in any event not to exceed 210 days following the effective date of the registration statement relating to such offering. The foregoing agreement shall only be applicable if all officers, directors and 1% stockholders of the Company enter into similar agreements, and shall not apply to the sale of any securities to an underwriter pursuant to an underwriting agreement, or to securities acquired in or following the Initial Public Offering. In addition, if the Company or the underwriters shall release any Registrable Securities or any other securities (the “Released Securities”) from the requirements of this Section 2.11 before the end of the period set by the Company or the underwriters, then the Registrable Securities of each Holder shall be released from the provisions of this

Section 2.11 in the same proportion as the Released Securities bear to the total number of securities held by such Holder which were subject to this Section 2.11. Each Holder agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters which are consistent with the foregoing or which are necessary to give further effect thereto. The obligations described in this Section 2.11 shall not apply to a Special Registration Statement. The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) to enforce the foregoing restrictions.

(b) Each Holder agrees that any transferee of any shares of Registrable Securities shall be bound by this Section 2.11.

(c) The Company shall cause each person to whom it issues shares of its capital stock after the date hereof to be bound by a market standoff obligation equivalent to the obligation contained in Section 2.11(a) above.

2.12 Reports Under the Exchange Act. With a view to making available to the Holders the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to:

(a) make and keep public information available, as those terms are understood and defined in Rule 144, at all times after the effective date of the Initial Public Offering;

(b) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and

(c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after the effective date of the first registration statement filed by the Company), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to avail any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to such form.

3. Miscellaneous.

3.1 Governing Law. This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, without giving effect to principles of conflicts of law or choice of law that would cause the laws of any other jurisdiction to apply.

3.2 Amendment and Waiver. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only upon the written consent of the Company and the Requisite Investors. Any amendment or waiver effected in accordance with this Section 3.2 shall be binding upon each Investor who did not consent in writing thereto. Nothing contained herein shall be construed to prohibit the effectiveness of a waiver not complying with this Section 3.2 as to any Investor actually giving the waiver. “Requisite Investors” shall mean collectively, (i) the holders of at least 67% of the then issued and outstanding shares of Series A Preferred Stock, voting together as a separate class (the “Requisite

Series A Investors”), on an as-converted to Common Stock basis, and (ii) the holders of at least a majority of the then issued and outstanding shares of Series B Preferred Stock, voting together as a separate class (the “Requisite Series B Investors”).

3.3 Entire Agreement. This Agreement constitutes the entire agreement between the parties relative to the specific subject matter hereof. Any previous agreement among the parties relative to the specific subject matter hereof is superseded by this Agreement.

3.4 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) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, (c) the next business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt, or (d) if sent via facsimile, upon confirmation of facsimile transfer or, if sent via electronic mail, upon confirmation of delivery when directed to the relevant electronic mail address, if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the recipient’s next business day. All communications shall be sent to the Company at the address, facsimile number or electronic mail address set forth on the signature page hereof, and to each Investor at the address, facsimile number or electronic mail address set forth on Schedule A hereto, or at such other address, facsimile number or electronic mail address as the Company or each Investor may designate by 10 days’ advance written notice to the other parties hereto.

Subject to the limitations set forth in Delaware General Corporation Law §232(e), each Holder consents to the delivery of any notice to stockholders given by the Company under the Delaware General Corporation Law or the Company’s Restated Certificate or bylaws by (i) confirmed facsimile telecommunication to the facsimile number set forth in the exhibits to this Agreement (or to any other facsimile number for the Holder in the Company’s records), (ii) confirmed electronic mail to the electronic mail address set forth in the exhibits to this Agreement (or to any other electronic mail address for the Holder in the Company’s records),or (iii) any other form of confirmed electronic transmission (as defined in the Delaware General Corporation Law) directed to the Holder. This consent may be revoked by a Holder by written notice to the Company and may be deemed revoked in the circumstances specified in Delaware General Corporation Law §232.

3.5 Severability. In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

3.6 Additional Investors. Notwithstanding anything to the contrary contained herein, if the Company shall issue additional shares of Preferred Stock or if any person shall otherwise receive any shares of Preferred Stock, such recipient of such shares of Preferred Stock may become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement and shall be deemed an “Investor” hereunder. The addition of any such party shall not be deemed an amendment to this Agreement and shall not require the consent of any party hereto.

3.7 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A facsimile, telecopy or other reproduction of this Agreement executed by one or more parties hereto and delivered by such party by facsimile or any similar electronic transmission device

pursuant to which the signature of or on behalf of such party can be seen shall be considered valid, binding and effective for all purposes.

3.8 Successors and Assigns. The provisions hereof shall inure to the benefit of, and be binding upon, the successors and assigns of the parties hereto.

3.9 Specific Performance. The parties hereto hereby declare that it is impossible to measure in money the damages that will accrue to a party hereto, or to their heirs, personal representatives, successors or assigns, by reason of a failure to perform any of the obligations under this Agreement and agree that the terms of this Agreement shall be specifically enforceable. If any party hereto, or his heirs, personal representatives, or successors or assigns, institutes any action or proceeding to specifically enforce the provisions hereof, any person against whom such action or proceeding is brought hereby waives the claim or defense therein that such party or such personal representative has an adequate remedy at law, and such person shall not offer in any such action or proceeding the claim or defense that such remedy at law exists.

3.10 Interpretation. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement.

3.11 Delays or Omissions. Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.

3.12 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

3.13 Right to Conduct Activities. The Company and each Holder hereby acknowledge that some or all of the Investors are professional investment funds and, as such, invest in numerous portfolio companies, some of which may be competitive with the Company’s business. No Investor shall be liable to the Company or to any Holder for any claim arising out of, or based upon, (a) the investment by the Investor in any entity competitive with the Company, or (b) actions taken by any partner, officer or other representative of any Investor to assist any such competitive company, whether or not such action was taken as a board member of such competitive company or otherwise, and whether or not such action has a detrimental effect on the Company, so long as (a) no representative of any Investor participating as a member of the Board or as an observer shall also participate on the board of directors or as an observer or officer, employee or consultant of any company involved in a business directly competitive with the Company; and (b) no confidential information of the Company is used or disclosed by such Investor in connection with any such competitive activities.

3.14 Prior Agreement. The Prior Agreement is hereby terminated and superseded in its entirety by this Agreement. All provisions of, rights granted and covenants made in the Prior Agreement are hereby waived, released and superseded in their entirety and shall have no further force or

effect, and the Company and the Investors hereby agree to be bound by the provisions hereof as the sole agreement among the Company and the Investors with respect to the matters set forth herein.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights Agreement as of the date first set forth above.

	TABULA RASA HEALTHCARE, INC.


	By:	/s/ Calvin Knowlton
	Name:	Calvin Knowlton
	Title:	Chief Executive Officer


	Address: 110 Marter Ave., Suites 304/309/310
	Moorestown, NJ 08057
	Attn: Calvin Knowlton
	Facsimile: 866-629-9245

[SIGNATURE PAGE TO TABULA RASA HEALTHCARE, INC.

INVESTOR RIGHTS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights Agreement as of the date first set forth above.

RADIUS VENTURE PARTNERS III, L.P.

By:	RADIUS VENTURE PARTNERS III, LLC,
	its General Partner


	By:	/s/ Daniel C. Lubin
		Name: Daniel C. Lubin
		Title: Managing Member


RADIUS VENTURE PARTNERS III QP, LP

By:	RADIUS VENTURE PARTNERS III, LLC,
	its General Partner


	By:	/s/ Daniel C. Lubin
		Name: Daniel C. Lubin
		Title: Managing Member


RADIUS VENTURE PARTNERS III (OHIO), LP

By:	RADIUS VENTURE PARTNERS III
	(OHIO), LLC, its General Partner

	By:	RADIUS VENTURE PARTNERS III,
		LLC, its Manager


		By:	/s/ Daniel C. Lubin
			Name:	Daniel C. Lubin
			Title:	Managing Member

[SIGNATURE PAGE TO TABULA RASA HEALTHCARE, INC.

INVESTOR RIGHTS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights Agreement as of the date first set forth above.

ORIGINATE GROWTH FUND #1 A, L.P.

By:	Originate Growth GP, LLC
	its General Partner


	By:	/s/ Glen R. Bressner
		Name: Glen R. Bressner
		Title: Managing Partner


ORIGINATE GROWTH FUND #1 Q, L.P.

By:	Originate Growth GP, LLC
	its General Partner


	By:	/s/ Glen R. Bressner
		Name: Glen R. Bressner
		Title: Managing Partner

[SIGNATURE PAGE TO TABULA RASA HEALTHCARE, INC.

INVESTOR RIGHTS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights Agreement as of the date first set forth above.

EMERALD STAGE2 VENTURES, L.P.

By:	Stage 2 Capital Venture Associates, L.P.,
	Its General Partner


	By:	/s/ Bruce Luehrs
		Name:	Bruce Luehrs
		Title:	General Partner

[SIGNATURE PAGE TO TABULA RASA HEALTHCARE, INC.

INVESTOR RIGHTS AGREEMENT]

SCHEDULE A

SCHEDULE OF INVESTORS

NAME

Emerald Stage2 Ventures, L.P.
Suite 400, 4800 South 13th Street
Philadelphia, PA 19112
Attn: Bruce H. Luehrs

Originate Growth Fund #1 Q, L.P.
205 Webster Street
Bethlehem, PA 18015
Attn: Glen R. Bressner

Originate Growth Fund #1 A, L.P.
205 Webster Street
Bethlehem, PA 18015
Attn: Glen R. Bressner

Radius Venture Partners III, L.P.
400 Madison Avenue, 8th Floor
New York, NY 10017
Attn: Daniel C. Lubin

Radius Venture Partners III QP, L.P.
400 Madison Avenue, 8th Floor
New York, NY 10017
Attn: Daniel C. Lubin

Radius Venture Partners III (Ohio), L.P.
400 Madison Avenue, 8th Floor
New York, NY 10017
Attn: Daniel C. Lubin

A-1

EX-4.2 7 a2226891zex-4_2.htm EX-4.2

Exhibit 4.2

STOCKHOLDERS AGREEMENT

THIS STOCKHOLDERS AGREEMENT (“Agreement”) is entered into as of June 30, 2014, by and among Tabula Rasa Healthcare, Inc., a Delaware corporation (the “Company”), the persons signatories hereto opposite the “Common Holders” and “Additional Common Holders” headings on such signature pages (each, a “Common Holder” and collectively, the “Common Holders”), and the persons and entities listed on Schedule A hereto (each, an “Investor” and collectively, the “Investors”).

Background:

WHEREAS, the Investors are receiving shares of the Company’s Series A-1 Convertible Preferred Stock, par value $0.0001 per share (“Series A-1 Convertible Preferred Stock”), Series A Convertible Preferred Stock, par value $0.0001 per share (“Series A Convertible Preferred Stock”, and together with the Series A-1 Convertible Preferred Stock, the “Series A Preferred Stock”), and Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”, and together with the Series A Preferred Stock, the “Preferred Stock”), and the Common Holders are receiving shares of the Company’s Common Stock, in exchange for equivalent shares of capital stock in CareKinesis, Inc. (“CareKinesis”) pursuant to an Agreement and Plan of Merger of even date herewith (the “Merger”);

WHEREAS, CareKinesis and the Investors and the Common Holders have entered into that certain Amended and Restated Stockholders Agreement, dated June 28, 2013 (the “Prior Agreement”); and

1. Definitions.

1.1 “Common Stock” shall mean the Voting Common Stock and Non-Voting Common Stock, together.

1.2 “Holder” shall mean each Common Holder and each Investor and “Holders” shall mean, collectively, the Common Holders and the Investors.

1.3 “Investor Shares” shall mean Shares of Preferred Stock now owned or hereafter acquired by the Investors and Shares of Common Stock issued upon the conversion thereof.

1.4 “Non-Voting Common Stock” shall mean the Company’s Class A Non-Voting Common Stock, par value $0.0001 per share.

1.5 “Series B Investor” shall mean any Investor who at the time holds shares of Series B Preferred Stock or Common Stock issued upon conversion thereof.

1.6 “Shares” shall mean shares of Common Stock, Series A Convertible Preferred Stock, Series A-1 Convertible Preferred Stock and Series B Preferred Stock, and any securities convertible or exercisable into such shares.

1.7 “Transfer” shall mean any direct or indirect sale, assignment, encumbrance, hypothecation, pledge, conveyance in trust, gift, transfer pursuant to the laws of descent and distribution, or any other transfer or disposition of any kind, including, but not limited to, transfers to receivers, levying creditors, trustees or receivers in bankruptcy proceedings or general assignees for the benefit of creditors, whether voluntary or by operation of law.

1.8 “Voting Common Stock” shall mean the Company’s Class B Voting Common Stock, par value $0.0001 per share.

1.9 “Preferred Stock” shall mean the Company’s Series A Preferred Stock and Series B Preferred Stock.

2. Transfers.

2.1 Prohibited Transfers. Subject to Section 2.2, no Holder shall Transfer any Shares owned by such Holder without first complying with all applicable federal and state securities laws and the other terms of this Agreement. Any Transfer or attempted Transfer in violation of this Agreement shall not be recognized by the Company in any way and shall be void and of no force or effect whatsoever.

2.2 Permitted Transfers.

(a) Except as set forth in Section 3.5 (i) the rights of first refusal and co-sale set forth in Section 3 of this Agreement shall not apply to any Permitted Transfer of Shares by a Holder, and (ii) the rights of co-sale set forth in Section 3 of this Agreement shall not apply to any Transfer of Investor Shares by an Investor.

(b) “Permitted Transfer” means: (i) any Transfer of Shares by any Holder (whether a Common Holder or an Investor) to (A) the spouse, children, spouse’s children, parents or siblings of such Holder (collectively, “Family Members”), (B) the estate of such Holder, (C) any trust solely for the benefit of such Holder and/or any Family Member(s) and of which such Holder and/or any such Family Member(s) is the trustee or are the trustees, or for which another party serves as a trustee and such party agrees to be bound by this Agreement (“Family Trust”), (D) any partnership, corporation or limited liability company which is wholly owned and controlled by such Holder and/or any such Family Member(s) (“Family Wealth Planning Entity”) or (E) any Transfer that is otherwise approved by the Board of Directors of the Company, including the Series A Preferred Directors and the Series B Preferred Director (all collectively, the “Preferred Directors”); provided that any change in the beneficiaries of a Family Trust or the equityholders of a Family Wealth Planning Entity that results in such Family Trust not being solely for the benefit of a Holder and/or the Family Members of such Holder or the Family Wealth Planning Entity not being wholly owned and controlled by such Holder and/or the Family Members of such Holder shall be a Transfer of Shares not permitted by this Section 2.2(b); (ii) any Transfer of Shares by any Investor to (1) any subsidiary, parent, general partner, limited partner, retired partner, member or retired member, or other Affiliate of such Investor, or (2) any other funds managed by the same investment manager of an Investor or any other affiliate of an Investor (collectively with such parties described in the immediately preceding Subsection 2.2(b)(ii)(1), the “Investor Affiliates”); and (iii) any Transfer of Shares to any other third party by any Series B Investor.

2.3 Public Offering. The provisions of Section 3 shall not apply to the sale of Shares by a Holder in a firm commitment underwritten public offering pursuant to a registration statement filed with, and declared effective by, the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”).

3. Transfers by a Holder.

3.1 Notice of Transfer. Subject to Section 2.2, if a Holder proposes to Transfer any Shares (the “Transferring Holder”), then the Transferring Holder shall promptly give written notice (the “Transfer Notice”) of such proposed Transfer simultaneously to the Company and to each Investor. The Transfer Notice shall describe in reasonable detail the proposed Transfer including, without limitation, the number and class of Shares to be transferred (the “Transfer Shares”), the nature of such Transfer, the cash consideration to be paid per share (or, in the event that the consideration is other than cash, the value of the consideration shall be determined in good faith by the Board of Directors of the Company, including the Preferred Directors) (the “Purchase Price Per Share”), and the name and address of each prospective purchaser or transferee (each, a “Proposed Transferee”). The Transferring Holder shall enclose with the Transfer Notice a copy of a written offer, letter of intent or other written document signed by the Proposed Transferee(s) setting forth the proposed terms and conditions of the Transfer.

3.2 Company Right of First Refusal. For a period of 20 days following the date (the “Transfer Notice Date”) on which the Transfer Notice is given by the Transferring Holder (the “Company Acceptance Period”), the Company shall have the right to purchase all or any portion of the Transfer Shares on the same terms and conditions as set forth in the Transfer Notice. If the Company wishes to exercise its right to purchase all or any portion of the Transfer Shares, it shall give written notice (the “Company Notice”) to the Transferring Holder no later than the expiration of the Company Acceptance Period. The Company Notice shall state that the Company wishes to purchase all of the Transfer Shares or, if the Company wishes to purchase less than all of the Transfer Shares, the number of Transfer Shares the Company wishes to purchase. If the Company wishes to purchase all of the Transfer Shares, the Company shall specify in the Company Notice a date of closing, which date shall not be earlier than 10 days and not later than 20 days following the date on which the Company Notice is given. At the closing, the Company shall pay the total purchase price of the Transfer Shares (which shall be equal to the product of (a) the number of Transfer Shares and (b) the Purchase Price Per Share), and at the option of the Company, paid by (i) wire transfer of immediately available funds to an account designated by the Transferring Holder, (ii) cancellation of all or a portion of any outstanding indebtedness of the Transferring Holder to the Company, or (iii) any combination of the foregoing, against delivery of a certificate or certificates representing the Transfer Shares, each certificate to be properly endorsed for transfer or accompanied by duly executed stock powers. The Company may request waivers of any liens, evidence of good title to the Transfer Shares and such other documents and agreements as it may reasonably deem necessary in connection with the Transfer. If the Company desires to purchase less than all of the Transfer Shares, the remaining Transfer Shares shall be subject to the Investors’ rights set forth under Section 3.3 and Section 3.4 below. The Transferring Holder shall not be entitled to vote, either as a stockholder or director, in connection with the decision of the Company whether to exercise its option to purchase the Transfer Shares, provided, that if the vote of the Transferring Holder is required for valid corporate action, the Transferring Holder shall vote in accordance with the decision of the majority of the other directors or the stockholders holding a majority of the voting power of the Shares, as the case may be.

3.3 Investor Right of First Refusal.

(a) If (i) the Company does not give the Company Notice within the Company Acceptance Period or (ii) the Company gives the Company Notice within the Company Acceptance Period but the Company Notice provides that the Company wishes to purchase less than all of the Transfer Shares, the Transferring Holder shall, promptly following expiration of the Company Acceptance Period, give written notice (the “Second Notice”) to each Investor. The Second Notice shall set forth the number of Transfer Shares that the Company has not elected to purchase (the “Remainder Shares”) and shall include the terms required in a Transfer Notice as set forth in Section 3.1. For a period

of 20 days following receipt of the Second Notice (the “Investor Acceptance Period”), each Investor shall have the right to purchase Remainder Shares on the same terms and conditions as set forth in the Second Notice as more fully described herein. If an Investor wishes to exercise its right to purchase all or any portion of the Remainder Shares, it shall give written notice (the “Investor Notice”) to the Transferring Holder, with a copy to the Company, no later than the expiration of the Investor Acceptance Period, stating the maximum number of Remainder Shares it is willing to purchase.

(b) The Remainder Shares shall be allocated among each Investor delivering an Investor Notice in an amount equal to the product obtained by multiplying the number of Remainder Shares by a fraction, the numerator of which is the number of Shares on an as-converted to Common Stock basis owned on the Transfer Notice Date by each Investor delivering an Investor Notice and the denominator of which is the total number of Shares on an as-converted to Common Stock basis owned on the Transfer Date by all of the Investors delivering an Investor Notice, with such allocation being repeated in respect of any remaining Remainder Shares until either all Investors have been allocated the maximum number of Shares which they have stated they are willing to purchase pursuant to their respective Investor Notices, or until all Remainder Shares have been so allocated among them. Notwithstanding the foregoing, the Investors shall be entitled to allocate such Remainder Shares in any other manner as may be agreeable to them; provided that no Investor shall be allocated fewer Remainder Shares than such Investor would be entitled to purchase by operation of the preceding sentence unless such Investor has consented thereto in writing.

(c) If the Investors elect to purchase any or all of the Remainder Shares, the Holder shall, promptly following the expiration of the Investor Acceptance Period, give written notice (the “Closing Notice”) to the Company and each Investor who has elected to purchase Remainder Shares (such Investors, together with the Company (to the extent that the Company exercised its right pursuant to Section 2.2 to purchase a portion of the Transfer Shares), the “Purchasers”). The Closing Notice shall set forth (i) a date of closing, which date shall not be earlier than 10 days and not later than 20 days following the date on which the Closing Notice is given, (ii) the number of Transfer Shares to be purchased by each Purchaser, and (iii) the total purchase price payable by each Purchaser (which, with respect to each Purchaser, shall be equal to product of the number of Transfer Shares that such Purchaser has elected to purchase and the Purchase Price Per Share). At the closing, each Purchaser shall purchase the Transfer Shares that such Purchaser has elected to purchase by, at the option of such Purchaser, (i) wire transfer of immediately available funds to an account designated by the Transferring Holder, (ii) cancellation of all or a portion of any outstanding indebtedness of the Transferring Holder to such Purchaser, or (iii) any combination of the foregoing, against delivery of a certificate or certificates representing the Transfer Shares, each certificate to be properly endorsed for transfer or accompanied by duly executed stock powers; provided, however, no Purchaser shall have any liability to purchase or pay for more than the number of Transfer Shares it has elected to purchase pursuant to Section 3.3. The Purchasers may request waivers of any liens, evidence of good title to the Shares, and such other documents and agreements as they may reasonably deem necessary in connection with the Transfer.

(d) Any Investor may transfer its rights set forth in this Section 3.3 to one or more Investor Affiliates, irrespective of whether an Investor Affiliate is also an Investor at or prior to such time, provided that such Investor Affiliate, and its exercise of such rights under this Section 3.3, otherwise comply with the terms of this Agreement.

3.4 Right of Co-Sale.

(a) If the Company and/or the Investors do not purchase all of the Transfer Shares pursuant to the rights contained in Section 3.2 and Section 3.3, and the Transferring Holder is a Common Holder, the additional restrictions contained in this Section 3.4 shall apply with respect to the Transfer

Shares. Promptly following the expiration of the Investor Acceptance Period, the Transferring Holder shall deliver to each Investor who did not purchase any Transfer Shares pursuant to Section 3.3, with a copy to the Company, a written notice (the “Co-Sale Notice”) that each such Investor shall have the right (the “Co-Sale Right”), in accordance with the terms and conditions set forth in this Section 3.4, to participate with the Transferring Holder in the Transfer of the Transfer Shares not purchased by the Company and/or the Investors pursuant to Section 3.2 and Section 3.3 (the “Available Shares”) on the terms and conditions, other than the Purchase Price Per Share, set forth in the Transfer Notice described in Section 3.1, and at a purchase price per share calculated pursuant to Section 3.4(e). The Co-Sale Notice shall set forth the date of closing of the proposed sale of the Available Shares by the Transferring Holder to the Proposed Transferee, which date shall not be earlier than 10 days and not later than 20 days following the date on which the Co-Sale Notice is given. To the extent one or more of the Investors exercise their Co-Sale Right, the number of Available Shares that the Transferring Holder may sell to the Proposed Transferee shall be correspondingly reduced.

(b) If an Investor wishes to exercise its Co-Sale Right, such Investor shall give written notice (the “Inclusion Notice”) to the Transferring Holder, with a copy to the Company, within five days after the Co-Sale Notice is given (the “Co-Sale Election Period”). The Inclusion Notice shall indicate the number of Shares such Investor wishes to sell under its Co-Sale Right. The maximum number of Shares that each Investor may sell under its Co-Sale Right shall be equal to the product obtained by multiplying (i) the aggregate number of Available Shares by (ii) a fraction, the numerator of which is the number of Shares owned by such Investor on an as-converted to Common Stock basis on the Transfer Notice Date and the denominator of which is the total number of Shares owned by the Transferring Holder and all Investors then exercising their Co-Sale Rights on an as-converted to Common Stock basis on the Transfer Notice Date (such shares with respect to each Investor, the “Co-Sale Right Shares”). Any Investor who delivers an Inclusion Notice to the Transferring Holder, with a copy to the Company, within the Co-Sale Election Period is referred to hereinafter as a “Co-Sale Participant.”

(c) At the closing of the sale to the Proposed Transferee of (i) the Available Shares, less any Co-Sale Right Shares to be included in such sale, by the Transferring Holder (the “Transferring Holder Co-Sale Shares”) and (ii) the Co-Sale Rights Shares to be sold pursuant to the terms hereof, each Co-Sale Participant shall deliver to the Proposed Transferee one or more certificates, properly endorsed for transfer or accompanied by duly executed stock powers, which represent:

(i) the type and number of Co-Sale Right Shares which such Co-Sale Participant elects to sell; or

(ii) that number of Co-Sale Right Shares that are at such time convertible into the number and class of shares of Common Stock that such Co-Sale Participant elects to sell; provided, however, that if the Proposed Transferee objects to the delivery of such Shares in lieu of shares of Common Stock, such Co-Sale Participant shall convert such Shares into Voting Common Stock and deliver shares of Voting Common Stock as provided in this Section 3.4(c). The Company agrees to make any such conversion concurrent with the actual Transfer of such Co-Sale Right Shares to the Proposed Transferee and contingent on such Transfer, and in the event the Company notifies the Co-Sale Participant in writing that the Company requests the Co-Sale Participant to execute and deliver a formal written request for such conversion, in such reasonable form as provided by the Company, the Co-Sale Participant shall timely execute and deliver the same to the Company.

(d) With respect to any Transfer by a Transferring Holder of Non-Voting Common Stock as to which a Co-Sale Participant elects to sell Shares pursuant to the terms of this Section 3.4, the Proposed Transferee shall be required to accept shares of Voting Common Stock in lieu of Non-Voting Common Stock to the extent that Non-Voting Common Stock is not owned by the Co-Sale Participant.

(e) Upon receipt of the certificate or certificates representing such Co-Sale Right Shares as provided above and concurrently with the purchase of Available Shares from the Transferring Holder, the Proposed Transferee shall remit to the Transferring Holder and each Co-Sale Participant, by wire transfer of immediately available funds, the aggregate purchase price of such seller’s Transferring Holder Co-Sale Shares or Co-Sale Right Shares, as applicable, to be sold to the Proposed Transferee, which purchase price shall in each case be equal to, subject to Section 3.9, the product of (i) such number of Transferring Holder Co-Sale Shares or Co-Sale Right Shares, in each case on an as converted to Common Stock basis, and (ii) the Purchase Price Per Share. To the extent that any Proposed Transferee refuses to purchase Co-Sale Right Shares from a Co-Sale Participant, the Transferring Holder shall not sell to such Proposed Transferee any Available Shares unless and until, simultaneously with such sale, such Transferring Holder purchases the Co-Sale Right Shares from the Co-Sale Participant on the same terms and conditions specified in the Transfer Notice.

(f) In the event that no Investor exercises its Co-Sale Right, then the Transferring Holder may Transfer all of the Available Shares to the Proposed Transferee on the terms and conditions set forth in the Transfer Notice; provided, that such Transfer shall be completed not later than 90 days after the date that the Transfer Notice is given. Any proposed Transfer on terms and conditions more favorable to the Proposed Transferee than those described in the Transfer Notice or after such 90-day period referred to in the immediately preceding sentence shall again be subject to the rights of first refusal and co-sale described in this Section 3 and shall require compliance by a Transferring Holder with the applicable procedures described in Section 3.1 through Section 3.4.

(g) Put Right. If a Transferring Holder Transfers any Shares in contravention of the Co-Sale Right under this Agreement (a “Prohibited Transfer”), or if the Proposed Transferee of Available Shares desires to purchase a class, series or type of stock offered by Transferring Holder but not held by a Co-Sale Participant, or the Proposed Transferee is unwilling to purchase any securities from the Co-Sale Participant, such Co-Sale Participant may, by delivery of written notice to such Transferring Holder (a “Put Notice”) within ten (10) days after the later of (i) the closing of the sale to the Proposed Transferee and (ii) the date on which such Co-Sale Participant becomes aware of the Prohibited Transfer or the terms thereof, require such Proposed Transferee to purchase from such Co-Sale Participant that number of Shares (subject to Section 3.4(g)(ii)) that is equal to the number of Co-Sale Right Shares such Co-Sale Participant would have been entitled to Transfer to the Proposed Transferee (the “Put Shares”). Such sale shall be made on the following terms and conditions:

(i) The price per share at which the Put Shares are to be sold to the Transferring Holder shall be equal to the price per share that the Co-Sale Participant would have received if such Co-Sale Participant had sold such Put Shares at the closing of the sale to the Proposed Transferee. Such purchase price of the Put Shares shall be paid in cash or such other consideration as the Proposed Transferee received in the Prohibited Transfer. Seller shall also reimburse the Co-Sale Participant for any and all fees and expenses, including, but not limited to, legal fees and expenses, incurred pursuant to the exercise or attempted exercise of such Co-Sale Participant’s Co-Sale Right pursuant to Sections 3.4(a) through (f), inclusive, or in the exercise of its rights under this Section 3.4(g) with respect to the Put Shares.

(ii) The Put Shares to be sold to the Proposed Transferee shall be of the same class or type as Transferred in the Prohibited Transfer if such Co-Sale Participant then owns securities of such class or type. If such Co-Sale Participant does not own any of such class or type, the Put Shares shall be shares of Common Stock (or Preferred Stock convertible into Common Stock at the option of the holder thereof).

(iii) The closing of such sale to the Transferring Holder will occur within ten (10) days after the date of such Co-Sale Participant’s Put Notice to such Transferring Holder. At such closing, the Co-Sale Participant shall deliver to the Transferring Holder the certificate or certificates representing the Put Shares to be sold, each certificate to be properly endorsed for transfer, and immediately upon receipt thereof, such Transferring Holder shall pay the aggregate purchase price therefor, and the amount of reimbursable fees and expenses, as specified in Section 3.4(g)(i).

3.5 Right of Co-Sale as to Series B Preferred Stock. Notwithstanding anything herein to the contrary, in the event of a proposed Transfer of shares of Series B Preferred Stock other than a Permitted Transfer described under Sections 2.2(b)(i) and 2.2(b)(ii) (a “Series B Transfer”), the other holders of shares of Series B Preferred Stock, or Common Stock issued upon the conversion thereof, shall have a Co-Sale Right in such instance and the ability to participate in such Series B Transfer on the terms and conditions contained in Section 3.4 as if such terms and conditions were incorporated into this Section 3.5 and made applicable to a Series B Transfer for holders of shares of Series B Preferred stock or Common Stock issued upon conversion thereof, except that each such participating holder’s number of Co-Sale Right Shares thereunder shall be equal to the product of (i) the number of shares of Series B Preferred Stock proposed to be sold in the Series B Transfer by the initiating transferee, and (ii) a fraction, the numerator of which is the number of shares of Series B Preferred Stock, and Common Stock issued upon the conversion thereof, owned by such participating holder at such time, and the denominator of which is the total number of shares of Series B Preferred Stock, and Common Stock issued upon the conversion thereof, owned by the initiating transferee and all other participating holders exercising their Co-Sale Right.

3.6 Joinder. No Transfer of Shares (including Permitted Transfers) shall be effective unless, contemporaneously with such Transfer, the proposed transferee executes and delivers a counterpart to this Agreement to the Company, thereby agreeing to be bound all the terms and conditions of this Agreement as (i) an Investor hereunder, in the event the proposed transferee is transferred Shares from an Investor in such Transfer and is not otherwise a party to this Agreement as a Common Holder at such time, or (ii) a Common Holder hereunder, in the event the proposed transferee is transferred Shares from an Common Holder or Investor in such Transfer and is not otherwise a party to this Agreement as an Investor at such time. Upon satisfaction of the immediately foregoing condition, the proposed transferee shall be deemed an “Investor” or “Common Holder”, as applicable, hereunder.

3.7 No Adverse Effect. The exercise or non-exercise of the rights of the Investors hereunder to participate in one or more Transfers of Shares made by a Common Holder shall not adversely affect the Investors’ rights to participate in any subsequent Transfers.

3.8 Exclusion from Right of First Refusal. The Company’s and Investor’s rights of first refusal pursuant to Section 3.2 and Section 3.3 hereof shall not apply with respect to any Shares sold, and to be sold, by an Investor pursuant to the Investor’s Co-Sale Right under Section 3.4.

3.9 Allocation of Consideration. Notwithstanding anything else to the contrary in this Section 3, in the event that a Transfer constitutes a Change of Control Transaction (as defined in Company’s Certificate of Incorporation (the “Certificate”)), the terms of the purchase and sale agreement for such Transfer (the “Purchase and Sale Agreement”) shall provide that the aggregate consideration from such Transfer shall be allocated to the Transferring Holder(s) and the Co-Sale Participants in accordance with Section 2 of Article IV(B) of the Certificate, including without limitation with respect to any consideration placed in an escrow or otherwise subject to contingencies, as if (A) such Transfer were a Liquidation Event (as defined in the Certificate) and (B) the Shares sold in accordance with the Purchase and Sale Agreement were the only capital stock of the Company issued and outstanding.

4. Board of Directors.

4.1 Agreement to Vote. Each Holder shall vote or cause to be voted all Shares and other voting securities of the Company, now or hereinafter owned by such Holder, beneficially or otherwise, or as to which such Holder has voting control, and take all other actions necessary and within such Holder’s control (including, without limitation, attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of a written consent), and the Company shall take all actions within its control (including, without limitation, calling special board meetings and stockholder meetings), in each case in accordance with this Section 4 and to ensure the terms of this Section 4 are complied with.

4.2 Number of Directors. For as long as shares of Series A Preferred Stock or Series B Preferred Stock are outstanding, each Holder agrees to vote all Shares beneficially owned by such Holder at any regular or special meeting of stockholders (or consent pursuant to a written consent in lieu of such meeting) to ensure that the total number of authorized directors of the Company shall be set and remain at seven directors.

4.3 Election of Directors. In any and all elections of directors of the Company, each Holder shall vote or cause to be voted all Shares owned by such Holder or over which such Holder has voting control, and take all other actions necessary and within such Holder’s reasonable control (including, without limitation, attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of a written consent), and the Company shall take all actions within its reasonable control (including, without limitation, calling special board meetings and stockholder meetings or soliciting written consents from such parties) so that the following provisions regarding the election of directors shall be effected, beginning as of the date hereof:

(a) At each election of directors in which the holders of the Series B Preferred Stock, voting together as a separate class, are entitled to elect a director (the “Series B Preferred Director”), as long as Radius Venture Partners III, L.P. (“Radius”) owns any shares of Series B Preferred Stock, each Holder shall vote or otherwise act to elect one individual nominated by Radius (the “Radius Nominee”); the initial Radius Nominee shall be Daniel C. Lubin.

(b) At each election of directors in which the holders of the Series A Convertible Preferred Stock and Series A-1 Preferred Stock, voting together as a separate class, are entitled to elect directors (the “Series A Preferred Directors”), as long as Emerald Stage2 Ventures, L.P. (“Emerald”) owns any shares of Series A Convertible Preferred Stock or Series A-1 Preferred Stock, each Holder shall vote or otherwise act to elect one individual nominated by Emerald (the “Emerald Nominee”) and, as long as Originate Growth Fund #1 Q, L.P. and/or Originate Growth Fund #1 A, L.P. (together, “Originate”) own(s) any shares of Series A Convertible Preferred Stock or Series A-1 Preferred Stock, each Holder shall vote or otherwise act to elect one individual nominated by Originate (the “Originate Nominee”); the initial Emerald Nominee shall be Bruce Luehrs and the initial Originate Nominee shall be Glen Bressner;

(c) At each election of directors in which the holders of Voting Common Stock, voting as a separate class, are entitled to elect directors, each Holder shall vote or otherwise act to elect two individuals nominated by the holders of at least a majority of the voting power of the Voting Common Stock, voting as a separate class (excluding any Voting Common Stock issued upon conversion of Preferred Stock) (the “Common Directors”); the initial Common Directors shall be Calvin H. Knowlton and Orsula Knowlton; and

(d) At each election of directors in which the holders of Voting Common Stock, voting as a separate class, are entitled to elect directors, each Holder shall vote or otherwise act to elect two individuals nominated by the holders of at least a majority of the voting power of the Voting

Common Stock, voting as a separate class (excluding any Voting Common Stock issued upon conversion of Preferred Stock) who are not otherwise an Affiliate (defined below) of the Company or of any Holder and who is reasonably acceptable to the Preferred Directors currently in office (the “Independent Directors”); the initial Independent Directors shall be Gordon Tunstall and Al Zezulinski.

(e) For purposes of this Agreement, an individual, firm, corporation, partnership, association, limited liability company, trust or any other entity (collectively, a “Person”) shall be deemed an “Affiliate” of another Person who, directly or indirectly, controls, is controlled by or is under common control with such Person, including, without limitation, any general partner, managing member, officer or director of such Person or any venture capital fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company with, such Person.

4.4 Removal of Directors; Vacancies.

(a) Removal.

(i) Any Series B Preferred Director shall be removed from the Board of Directors (with or without cause) only upon the request of the holders of at least a majority of the voting power of the Series B Preferred Stock, voting together as a separate class; provided that, the removal of the Radius Nominee shall be effected only at the request of Radius for as long as Radius has the right to nominate the Radius Nominee.

(ii) Any Series A Preferred Director shall be removed from the Board of Directors (with or without cause) only upon at the request of the holders of at least a majority of the voting power of the Series A Preferred Stock on an as converted to Common Stock basis; provided that, the removal of the Emerald Nominee shall be effected only at the request of Emerald for as long as Emerald has the right to nominate the Emerald Nominee and the removal of the Originate Nominee shall be effected only at the written request of Originate for as long as Originate has the right to nominate the Originate Nominee.

(iii) Any Common Director or Independent Director shall be removed from the Board of Directors (with or without cause) only upon the request of the holders of a majority of the voting power of the Voting Common Stock, voting as a separate class (including any Voting Common Stock outstanding having been issued upon a conversion of shares of Preferred Stock, but excluding any Voting Common Stock issuable upon a conversion of shares of Preferred Stock but not then outstanding).

(b) Vacancies. In the event that any Preferred Director for any reason ceases to serve as a member of the Board of Directors during such individual’s term of office, including without limitation, by reason of such director’s resignation, death, removal or disqualification, the resulting vacancy on the Board of Directors shall be filled by a representative nominated by the Investor(s) who have the right to nominate the Preferred Director pursuant to this Section 4. In the event that any Common Director for any reason ceases to serve as a member of the Board of Directors during such individual’s term of office, including without limitation, by reason of such director’s resignation, death, removal or disqualification, the resulting vacancy on the Board of Directors shall be filled by an individual nominated by the holders of a majority of the voting power of the Voting Common Stock, voting as a separate class (including any Voting Common Stock outstanding having been issued upon a conversion of shares of Preferred Stock, but excluding any Voting Common Stock issuable upon a conversion of shares of Preferred Stock but not then outstanding) pursuant to this Section 4. In the event that any Independent Director for any reason ceases to serve as a member of the Board of Directors during such individual’s term of office, including without limitation, by reason of such director’s

resignation, death, removal or disqualification, the resulting vacancy on the Board of Directors shall be filled by an individual nominated by the holders of a majority of the voting power of the Voting Common Stock, voting as a separate class (including any Voting Common Stock outstanding having been issued upon a conversion of shares of Preferred Stock, but excluding any Voting Common Stock issuable upon a conversion of shares of Preferred Stock but not then outstanding), and pursuant to this Section 4.

4.5 Proxy; Attorney-in-Fact. As security for the performance of each Holder’s obligations pursuant to Section 4, each Holder hereby grants to the Board of Directors of the Company, with full power of substitution and resubstitution, an irrevocable proxy to vote all Shares, at all meetings of the shareholders of the Company held or taken after the date of this Agreement with respect to an Approved Sale, or to execute any written consent in lieu thereof, and hereby irrevocably appoints the Board of Directors, with full power of substitution and resubstitution, as the Holder’s attorney-in-fact with authority to sign any documents with respect to any such vote or any actions by written consent of the shareholders taken after the date of this Agreement. Such foregoing proxy shall be exercisable on behalf of a Holder if and only if such Holder fails to vote such Holder’s Shares or other Company voting securities in accordance with the terms hereof within 5 days of the Company’s or any other party’s written request for such Holder’s vote, consent or signature. Such proxy shall be deemed to be coupled with an interest and shall be irrevocable. This proxy shall terminate upon the termination of this Agreement pursuant to Section 8 unless earlier removed pursuant to Section 10.2.

4.6 Board Observer. For so long as any shares of Series B Preferred Stock are outstanding, the holders of at least a majority of the voting power of the Series B Preferred Stock shall also be entitled to appoint one non-voting observer of the Board of Directors at each meeting (the “Series B Observer”). The Series B Observer shall be sent notice of the time and place of each meeting of the Board of Directors of the Company or any subsidiary of the Company or any audit, compensation or executive committee thereof in the same manner and at the same time as notice is sent to members of the relevant board and any such committees thereof and shall be sent copies of all notices, reports, minutes, consents and other documents (including all monthly, quarterly and annual financial statements) at the time and in the manner as they are provided to the other members of the relevant board and/or any audit, compensation or executive committees thereof. Notwithstanding the foregoing, the Series B Observer may be excluded from any meeting (or portion thereof) of the Board of Directors or any audit, compensation or executive committees thereof and materials provided to the participants in such meetings may be withheld from the Series B Observer or redacted before being provided to the Series B Observer if: (a) the reason for such exclusion, withholding or redaction is primarily (i) to preserve an attorney-client privilege available to the Company that would be lost absent such exclusion, withholding or redaction, (ii) to prevent the disclosure of a trade secret or (iii) that the Series B Observer represents a competitor of the Company, in each case as is determined in good faith by such board or committee thereof. The Series B Observer agrees to hold in confidence and trust and to act in a fiduciary duty with respect to all information provided to it pursuant to its rights under this Agreement or in its capacity as a Series B Observer.

5. Sale of the Company.

5.1 Approved Sale. In the event of an Approved Sale (as defined below), each Holder agrees (a) to vote all Shares at any regular or special meeting of stockholders (or consent pursuant to a written consent in lieu of such meeting) in favor of such Approved Sale, and to raise no objections against the Approved Sale or the process pursuant to which the Approved Sale was arranged, (b) to waive any and all dissenters’, appraisal or similar rights with respect to such Approved Sale, and (c) if the Approved Sale is structured as a sale of equity securities by the stockholders of the Company, to sell the Shares then owned by such Holder on the terms and conditions of such Approved Sale. “Approved Sale” means a transaction or series of transactions that constitutes a Change of Control Transaction (as defined in the Certificate) (a “Sale Transaction”), and which, in each case, has been approved by (x) the Board of Directors of the

Company, including the Preferred Directors, and (y) the holders of at least 67% of the issued and outstanding shares of Series A Preferred Stock, voting together as a separate class (the “Requisite Series A Investors”), on an as-converted to Common Stock basis, and the holders of at least a majority of the issued and outstanding shares of Series B Preferred Stock, voting together as a separate class (the “Requisite Series B Investors,” and together with the Requisite Series A Investors, collectively, the “Requisite Investors”) and (z) the holders of at least a majority of the issued and outstanding Voting Common Stock (including any Voting Common Stock outstanding having been issued upon a conversion of shares of Preferred Stock, but excluding any Voting Common Stock issuable upon a conversion of shares of Preferred Stock but not then outstanding)((y) and (z) together, the “Approving Stockholders”). Each Holder shall take all necessary and desirable actions in connection with the consummation of the Sale Transaction, including, without limitation, entering into an agreement reflecting the terms of the Approved Sale, surrendering stock certificates, giving customary and reasonable representations and warranties, and executing and delivering customary certificates or other documents.

5.2 Proxy; Attorney-in-Fact. As security for the performance of each Holder’s obligations pursuant to Section 5.1, each Holder hereby grants to the Board of Directors of the Company, with full power of substitution and resubstitution, an irrevocable proxy to vote all Shares, at all meetings of the shareholders of the Company held or taken after the date of this Agreement with respect to an Approved Sale, or to execute any written consent in lieu thereof, and hereby irrevocably appoints the Board of Directors, with full power of substitution and resubstitution, as the Holder’s attorney-in-fact with authority to sign any documents with respect to any such vote or any actions by written consent of the shareholders taken after the date of this Agreement. Such foregoing proxy shall be exercisable on behalf of a Holder if and only if such Holder fails to vote such Holder’s Shares or other Company voting securities in accordance with the terms hereof within 5 days of the Company’s or any other party’s written request for such Holder’s vote, consent or signature. Such proxy shall be deemed to be coupled with an interest and shall be irrevocable. This proxy shall terminate upon the termination of this Agreement pursuant to Section 8 unless earlier removed pursuant to Section 10.2.

5.3 Procedure. In the event of an Approved Sale, the Company shall give written notice to each Holder (the “Approved Sale Notice”). The Approved Sale Notice shall set forth (a) the name and address of the proposed acquirer in the Approved Sale (the “Proposed Acquirer”), (b) the terms and conditions of the Approved Sale, including the price and consideration to be paid by the Proposed Acquirer and the terms and conditions of payment, and (c) any other material facts relating to the Approved Sale, and (iv) the date and location of the closing of the Approved Sale. Subject to the conditions and limitations set forth in Section 5.4, each Holder will take all actions deemed necessary or appropriate by the Board of Directors, including the Preferred Directors, and the Approving Stockholders in connection with the Approved Sale.

5.4 Conditions and Limitations. The obligations of each Holder under this Section 5 are subject to the following conditions and limitations:

(a) any representations and warranties to be made by such Holder in connection with the Approved Sale are limited to representations and warranties related to authority, ownership and the ability to convey title to such Shares, free of liens, claims and encumbrances;

(b) the Holder shall not be liable for the inaccuracy of any representation or warranty made by any other Person in connection with the Approved Sale, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of identical representations, warranties and covenants provided by all stockholders);

(c) the liability for indemnification, if any, of such Holder in the Approved Sale and for the inaccuracy of any representations and warranties made by the Company or its Holders in connection with such Approved Sale, is several and not joint with any other Person (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of identical representations, warranties and covenants provided by all stockholders), and subject to the provisions of the Certificate related to the allocation of the escrow, is pro rata in proportion to, and does not exceed, the amount of consideration actually paid to such Holder in connection with such Approved Sale;

(d) liability shall be limited to such Holder’s applicable share (determined based on the respective proceeds payable to each Holder in connection with such Approved Sale in accordance with the provisions of the Certificate) of a negotiated aggregate indemnification amount that applies equally to all Holders but that in no event exceeds the amount of consideration otherwise payable to such Holder in connection with such Approved Sale, except with respect to claims related to fraud by such Holder, the liability for which need not be limited as to such Holder; and

(e) upon the consummation of the Approved Sale, (i) each holder of each class or series of the Company’s capital stock will either receive the same form of consideration for their shares of such class or series as is received by other holders in respect of their shares of such same class or series of stock or, if any holders of any class or series of capital stock of the Company are given an option as to the form and amount of consideration to be received as a result of the Approved Sale, all holders of such class or series of capital stock will be given the same option; provided, however, that nothing in this Section 5.4(e)(i) shall entitle any Holder to receive any form of consideration that such Holder would be ineligible to receive as a result of such Holder’s failure to satisfy any condition, requirement or limitation that is generally applicable to the Company’s stockholders, (ii) each holder of a series of Preferred Stock will receive the same amount of consideration per share of such series of Preferred Stock as is received by other holders in respect of their shares of such same series, (iii) each holder of Common Stock will receive the same amount of consideration per share of Common Stock as is received by other holders in respect of their shares of Common Stock, and (iv) unless, with respect to (I) the Series A Preferred Stock, the Requisite Series A Investors, (II) the Series B Preferred Stock, the Requisite Series B Investors, or (III) the Common Stock, the holders of at least a majority of the then issued and outstanding shares of Voting Common Stock, voting together as a separate class, in each case in respect of such series or class, elect to receive a lesser amount by written notice given to the Company at least 10 days prior to the effective date of any such Approved Sale, the aggregate consideration receivable per outstanding share of Series A Preferred Stock, Series B Preferred Stock, or Common Stock, as applicable, shall be allocated among all holders of such respective shares on the basis of the relative liquidation preferences to which the holders of each respective series of Preferred Stock and the holders of Common Stock are entitled in a Liquidation Event in accordance with the Company’s Certificate of Incorporation in effect immediately prior to the Approved Sale; provided, however, that, notwithstanding the foregoing, if the consideration to be paid in exchange for shares of capital stock pursuant to this Section 5.4(e) includes any securities and due receipt thereof by any Holder would require under applicable law (x) the registration or qualification of such securities or of any person as a broker or dealer or agent with respect to such securities or (y) the provision to any Holder of any information other than such information as a prudent issuer would generally furnish in an offering made solely to “accredited investors” as defined in Regulation D promulgated under the Securities Act, the Company may cause to be paid to any such Holder in lieu thereof, against surrender of such shares of capital stock, which would have otherwise been sold by such Holder, an amount in cash equal to the fair value (as determined in good faith by the Company and the Board of Directors, including the Preferred Directors) of the securities which Holder would otherwise receive as of the date of the issuance of such securities in exchange for such shares of capital stock.

For the avoidance of doubt, this Section 5.4 shall not limit in any manner the ability of the Company to enter into an agreement with respect to, or consummate, a Sale Transaction on terms that do not satisfy the conditions set forth in this Section 5.4; provided, however, in the event of any such Sale Transaction, the Holders shall have no obligation pursuant to this Section 5 to take any action with respect to such Sale Transaction.

5.5 Purchaser Representative. In connection with an Approved Sale, the Holders who are not accredited investors (as that term is defined in Rule 501 of the Securities Act) will, at the request of the Company, appoint a purchaser representative (as such term is defined in Rule 501 of the Securities Act) reasonably acceptable to the Company. If any such Holder appoints a purchaser representative designated by the Company, the Company will pay the reasonable fees of such purchaser representative, but if any such Holder declines to appoint the purchaser representative designated by the Company such Holder will appoint another purchaser representative (reasonably acceptable to the Company), and such Holder will be responsible for the fees of the purchaser representative so appointed.

6. Sale of Series B Preferred Stock. Notwithstanding anything herein to the contrary, in the event the holders of at least a majority of the issued and outstanding shares of Series B Preferred Stock, voting together as a separate class, approve in writing the terms of a sale of all of their shares of Series B Preferred Stock to a third party that is not an Investor Affiliate or otherwise affiliated with any other holder of Series B Preferred Stock at the time of such approval (a “Series B Approved Sale”), then each holder of shares of Series B Preferred Stock agrees (a) to vote all Shares at any regular or special meeting of stockholders (or consent pursuant to a written consent in lieu of such meeting), as applicable, in favor of such Series B Approved Sale, and to raise no objections against the Series B Approved Sale or the process pursuant to which the Series B Approved Sale was arranged, (b) to waive any and all applicable dissenters’, appraisal or similar rights with respect to such Series B Approved Sale, (c) to sell the shares of Series B Preferred Stock then owned by such Holder on the terms and conditions of such Series B Approved Sale, and (d) to take all necessary and desirable actions in connection with the consummation of the Series B Approved Sale, including, without limitation, entering into an agreement reflecting the terms of the Series B Approved Sale, surrendering stock certificates, giving customary and reasonable representations and warranties, and executing and delivering customary certificates or other documents. In addition, each holder of Series B Preferred Stock hereby agrees that the terms and conditions of Sections 5.2 through 5.5, inclusive, shall apply to a Series B Approved Sale as if such terms and conditions were incorporated into this Section 6 and made applicable to a Series B Approved Sale.

7. Legend. Each certificate representing Shares now owned or hereafter acquired by a Holder or issued to any person in connection with a transfer pursuant to Section 2 or Section 3 hereof shall be endorsed with the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A STOCKHOLDERS AGREEMENT BY AND AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY THAT PLACES CERTAIN RESTRICTIONS ON THE TRANSFER AND VOTING OF THE SHARES. ANY PERSON TO WHOM SHARES REPRESENTED BY THIS CERTIFICATE, OR ANY INTEREST THEREIN, ARE TRANSFERRED SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY SUCH AGREEMENT. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.

The Holders agree that the Company may instruct its transfer agent to impose transfer restrictions on the Shares represented by certificates bearing the legend referred to above to enforce the provisions of

this Agreement, and the Company agrees to promptly do so. The legend shall be removed upon termination of this Agreement.

8. Termination. Except as provided below, this Agreement shall terminate upon the earlier to occur of (i) a Liquidation Event (as defined in the Certificate), or (ii) occurrence of the sale of shares of Common Stock in a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act in which all then outstanding shares of Preferred Stock are converted to Common Stock (a “Qualified IPO”); provided however, that in the event of a Qualified IPO, Sections 1, 8 and 9 shall survive.

9. “Market Standoff” Agreement.

9.1 Obligation. Each Common Holder hereby agrees that such Common Holder shall not sell or enter into any hedging or similar transaction with the same economic effect as a sale, transfer, make any short sale, or grant any option for the purchase, of any Common Stock (or other securities) of the Company held by such Common Holder (other than those included in the registration) for a period specified by the Company or representative of the underwriters of Common Stock (or other securities) of the Company not to exceed 180 days following the effective date of a registration statement of the Company filed under the Securities Act with respect to an initial public offering; provided, however, that, if required by such underwriter, such 180-day period shall be extended to such longer period of time as is necessary to enable such underwriter to issue a research report or make a public appearance that relates to an earnings release or announcement by the Company within 15 days prior to or after the date that is 180 days after the effective date of the registration statement relating to such offering, but in any event not to exceed 210 days following the effective date of the registration statement relating to such offering. The foregoing agreement shall only be applicable if all officers, directors and 1% stockholders of the Company enter into similar agreements. In addition, if the Company or the underwriters shall release any Common Stock or any other securities (the “Released Securities”) from the requirements of this Section 9.1 before the end of the period set by the Company or the underwriters, then the Common Stock of each Common Holder shall be released from the provisions of this Section 9.1 in the same proportion as the Released Securities bear to the total number of securities held by such Common Holder which were subject to this Section 9.1. Each Common Holder agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters which are consistent with the foregoing or which are necessary to give further effect thereto. The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) to enforce the foregoing restrictions.

9.2 Transferees to be Bound. Each Common Holder agrees that any transferee of any shares of Common Stock shall be bound by this Section 9.

10. Miscellaneous.

10.1 Governing Law. This Agreement shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law and choice of law that would cause the laws of any other jurisdiction to apply.

10.2 Amendment and Waiver. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only by the written consent of (a) the Company, (b) the Requisite Investors and (c) the Common Holders holding not less than a majority of the Common Stock then held by the Common Holders, and (d) with respect to Sections 4.3(a) and 4.4(a)(i), Radius, so long as Radius owns any Series B Preferred Stock. Any amendment or waiver effected in accordance this Section 10.2 shall be binding upon the Company, each Common Holder and each Investor, and their respective successors and assigns.

10.3 Entire Agreement. With respect to each Common Holder, the restrictions on the transfer of Shares set forth in this Agreement are in addition to, and do not limit, the restrictions on transfer and the vesting provisions set forth in any other agreement between the Company and such Common Holder. Furthermore, with respect to each Common Holder, any representations, warranties and covenants by each Common Holder provided under his, her or its agreement(s) with the Company pursuant to which he, she or it acquired any Shares or other securities of the Company shall be in addition to any representations, warranties and covenants made in this Agreement. In the event there is an actual conflict between the provisions of this Agreement and the provisions of any other agreements referenced in this Section 10.3, the provisions of this Agreement shall apply. Subject to the foregoing, this Agreement constitutes the entire agreement between the parties relative to the specific subject matter hereof. Any previous agreement among the parties relative to the specific subject matter hereof is superseded by this Agreement.

10.4 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) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, (c) the next business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt, or (d) if sent via facsimile, upon confirmation of facsimile transfer or, if sent via electronic mail, upon confirmation of delivery when directed to the relevant electronic mail address, if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the recipient’s next business day. All communications shall be sent to the Company at the address, facsimile number or electronic mail address set forth on the signature page hereof, to each Common Holder at the address, facsimile number or electronic mail address number set forth on the signature page hereto for such Common Holder and to each Investor at the address, facsimile number or electronic mail address set forth on Schedule A hereto, or at such other address, facsimile number or electronic mail address as the Company or each Common Holder or Investor may designate by 10 days’ advance written notice to the other parties hereto.

Subject to the limitations set forth in Delaware General Corporation Law §232(e), each Holder consents to the delivery of any notice to stockholders given by the Company under the Delaware General Corporation Law or the Company’s Certificate or bylaws by (i) confirmed facsimile telecommunication to the facsimile number set forth in the exhibits to this Agreement (or to any other facsimile number for the Holder in the Company’s records), (ii) confirmed electronic mail to the electronic mail address set forth in the exhibits to this Agreement (or to any other electronic mail address for the Holder in the Company’s records),or (iii) any other form of confirmed electronic transmission (as defined in the Delaware General Corporation Law) directed to the Holder. This consent may be revoked by a Holder by written notice to the Company and may be deemed revoked in the circumstances specified in Delaware General Corporation Law §232.

10.5 Severability. In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

10.6 Additional Investors; Additional Common Holders. Notwithstanding anything to the contrary contained herein, if the Company shall issue additional shares of its Preferred Stock, any purchaser of such shares of Preferred Stock shall become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement and shall be deemed an “Investor” hereunder. Notwithstanding anything to the contrary contained herein, if the Company shall issue additional shares of its Common Stock to any party, the Company shall cause such employee to become a party to this Agreement by executing and delivering an additional counterpart signature page to this

Agreement as a “Common Holder” and such party shall be deemed a “Common Holder” hereunder. The addition of any party to this Agreement (pursuant to this Section 10.6 or pursuant to Section 2.2(c) or Section 3.6) shall not be deemed an amendment to this Agreement and shall not require the consent of any party hereto.

10.7 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A facsimile, telecopy or other reproduction of this Agreement executed by one or more parties hereto and delivered by such party by facsimile or any similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen shall be considered valid, binding and effective for all purposes.

10.8 Successors and Assigns. The provisions hereof shall inure to the benefit of, and be binding upon, the successors and assigns of the parties hereto.

10.9 Specific Performance. The parties hereto hereby declare that it is impossible to measure in money the damages that will accrue to a party hereto, or to their heirs, personal representatives, successors or assigns, by reason of a failure to perform any of the obligations under this Agreement and agree that the terms of this Agreement shall be specifically enforceable. If any party hereto, or his heirs, personal representatives, or successors or assigns, institutes any action or proceeding to specifically enforce the provisions hereof, any person against whom such action or proceeding is brought hereby waives the claim or defense therein that such party or such personal representative has an adequate remedy at law, and such person shall not offer in any such action or proceeding the claim or defense that such remedy at law exists.

10.10 Voting Trust. This Agreement is not a voting trust governed by Section 218 of the Delaware General Corporation Law and should not be interpreted as such.

10.11 Interpretation. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement.

10.12 Delays or Omissions. Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.

10.13 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

10.14 Ownership. As of the date of each Common Holder’s execution and delivery of this Agreement that occurs as of the date of this Agreement or within 90 days hereafter, such Common Holder acknowledges to the Company that (i) such Common Holder is the sole legal, beneficial and record owner of that number of shares and other securities of the Company set forth on Schedule B hereto opposite such Common Holder’s name and, subject to any restrictions set forth in the Company’s Certificate or bylaws, no other Person has any other interest (other than community property interest) in

such Shares, (ii) except as set forth on such Schedule B, such Common Holder does not own of record or beneficially, any other shares or securities of the Company or rights to purchase securities of the Company, and (iii) such Common Holder does not have any knowledge that (i) there are outstanding any other shares of capital stock or securities or rights to purchase securities of the Company, except as set forth on Schedule B, or (ii) that the information set forth on Schedule B hereto is incorrect or incomplete.

10.15 Prior Agreement. The Prior Agreement is hereby terminated and superseded in its entirety by this Agreement. All provisions of, rights granted and covenants made in the Prior Agreement are hereby waived, released and superseded in their entirety and shall have no further force or effect, and the Company, the Investors and the Common Holders hereby agree to be bound by the provisions hereof as the sole agreement among the Company, the Investors and the Common Holders with respect to the matters set forth herein.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have executed this Stockholders Agreement as of the date first set forth above.

	TABULA RASA HEALTHCARE, INC.


	By:	/s/ Calvin Knowlton
	Name:	Calvin Knowlton
	Title:	Chief Executive Officer


	Address: 110 Marter Ave., Suites 304/309/310
	Moorestown, NJ 08057
	Attn: Calvin Knowlton
	Facsimile: 866-629-9245

[SIGNATURE PAGE TO TABULA RASA HEALTHCARE, INC.

STOCKHOLDERS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have executed this Stockholders Agreement as of the date first set forth above.

INVESTORS:

RADIUS VENTURE PARTNERS III, L.P.

By:	RADIUS VENTURE PARTNERS III, LLC,
	its General Partner


	By:	/s/ Daniel C. Lubin
		Name: Daniel C. Lubin
		Title: Managing Member


RADIUS VENTURE PARTNERS III QP, LP

By:	RADIUS VENTURE PARTNERS III, LLC,
	its General Partner


	By:	/s/ Daniel C. Lubin
		Name: Daniel C. Lubin
		Title: Managing Member


RADIUS VENTURE PARTNERS III (OHIO), LP

By:	RADIUS VENTURE PARTNERS III
	(OHIO), LLC, its General Partner

	By:	RADIUS VENTURE PARTNERS III,
		LLC, its Manager


		By:	/s/ Daniel C. Lubin
			Name: Daniel C. Lubin
			Title: Managing Member

[SIGNATURE PAGE TO TABULA RASA HEALTHCARE, INC.

STOCKHOLDERS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have executed this Stockholders Agreement as of the date first set forth above.

INVESTORS:

ORIGINATE GROWTH FUND #1 A, L.P.

By:	Originate Growth GP, LLC
	its General Partner


	By:	/s/ Glen R. Bressner
		Name:	Glen R. Bressner
		Title:	Managing Partner


ORIGINATE GROWTH FUND #1 Q, L.P.

By:	Originate Growth GP, LLC
	its General Partner


	By:	/s/ Glen R. Bressner
		Name:	Glen R. Bressner
		Title:	Managing Partner

[SIGNATURE PAGE TO TABULA RASA HEALTHCARE, INC.

STOCKHOLDERS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have executed this Stockholders Agreement as of the date first set forth above.

INVESTORS:

EMERALD STAGE2 VENTURES, L.P.

By:	Stage 2 Capital Venture Associates, L.P.,
	Its General Partner


	By:	/s/ Bruce H. Luehrs
		Name:	Bruce H. Luehrs
		Title:	General Partner

[SIGNATURE PAGE TO TABULA RASA HEALTHCARE, INC.

STOCKHOLDERS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have executed this Stockholders Agreement as of the date first set forth above.

	COMMON HOLDERS:

	/s/ Calvin Knowlton
	Calvin Knowlton

	Address:






	/s/ Orsual V. Knowlton
	Orsula Knowlton

	Address:

[SIGNATURE PAGE TO TABULA RASA HEALTHCARE, INC.

STOCKHOLDERS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have executed this Stockholders Agreement as of the date first set forth above.

	ADDITIONAL COMMON HOLDERS:


	Harry G. Hayman III and Nancy W. Hayman
	Joint Tenants with Right of Survivorship
	Print Name of Entity or Individual


	By:	/s/ Harry G. Hayman III
	(Signature)



	(If entity, please print name of officer)



	(If entity, please print title of officer)

	Address:

[SIGNATURE PAGE TO TABULA RASA HEALTHCARE, INC.

STOCKHOLDERS AGREEMENT]

SCHEDULE A

SCHEDULE OF INVESTORS

Emerald Stage2 Ventures, L.P.
Suite 400, 4800 South 13th Street
Philadelphia, PA 19112
Attn: Bruce H. Luehrs

Originate Growth Fund #1 Q, L.P.
205 Webster Street
Bethlehem, PA 18015
Attn: Glen R. Bressner

Originate Growth Fund #1 A, L.P.
205 Webster Street
Bethlehem, PA 18015
Attn: Glen R. Bressner

Radius Venture Partners III, L.P.
400 Madison Avenue
8th Floor
New York, NY 10017
Attn: Daniel C. Lubin

Radius Venture Partners III QP, L.P.
400 Madison Avenue
8th Floor
New York, NY 10017
Attn: Daniel C. Lubin

Radius Venture Partners III (Ohio), L.P.
400 Madison Avenue
8th Floor
New York, NY 10017
Attn: Daniel C. Lubin

SCHEDULE B

CAPITALIZATION

(see attached capitalization table)

EX-4.3 8 a2226891zex-4_3.htm EX-4.3

Exhibit 4.3

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY BE TRANSFERRED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR (B) IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS.

Warrant No.:

Issue Date: , 20

Void Date: , 20 [10 years from Issue Date]

CLASS A COMMON STOCK PURCHASE WARRANT

This Warrant to purchase Class A Common Stock of Tabula Rasa Healthcare, Inc., a Delaware corporation, (as successor by merger to CareKinesis, Inc.) (the “Company”) was previously issued to the Holder (as defined below) on the terms set forth in this Warrant (the “Prior Issuance”).

While the Board of Directors of the Company formally approved the Prior Issuance on or prior to as of the Issue Date, including all such material terms and conditions, the Company and the Holder did not formally memorialize the terms and conditions of the Prior Issuance in a warrant agreement.

The Company desires to memorialize the terms of the Prior Issuance in this Warrant in full satisfaction of the Company’s obligation with respect to the Prior Issuance subject to the Holder’s acknowledgement that the Holder has no right, title, interest or claim to the Prior Issuance, except as set forth in this Warrant, and the Holder desires to accept this Warrant as full satisfaction of the Company’s obligation with respect to the Prior Issuance and agrees and acknowledges that the Holder has no right, title, interest or claim to the Prior Issuance, except as set forth in this Warrant.

NOW THEREFORE, in consideration of the premises and mutual covenants set forth about and herein contained and for value received, the Company hereby certifies that (the “Holder”) or its permitted assign(s) is entitled to purchase from the Company, at any time or from time to time during the Exercise Period (as defined below), in whole or in part, at a price per share equal to the Exercise Price (as defined below), ( ) shares of Class A Common Stock, par value $0.0001, of the Company (the “Common Stock”).

This Warrant is is subject the following terms and conditions.

1. Certain Definitions.

(a) “Change in Control” means the consummation of (i) a reorganization, merger, consolidation or recapitalization of the Company not entered into primarily in connection with capital raising purposes (a “Business Combination”), other than a Business Combination in which more than 50% of the combined voting power of the outstanding voting securities of the surviving or resulting entity immediately following the Business Combination is held by the persons who, immediately prior to the Business Combination, were the holders of the voting securities of the Company, (ii) a complete liquidation or dissolution of the Company, or (iii) a sale of all or substantially all of the Company’s assets.

(b) “Exercise Period” means the period commencing on the date that the Exercise Price first becomes determinable and ending on the date that is the earliest to occur of (x) 5:00 p.m. (prevailing local time at the principal executive office of the Company) on , 20 [10 years from Issue Date], (y) a Change of Control, or (z) the closing of an initial public offering of the Company’s Common Stock pursuant to a registration statement under the Securities Act of 1933, as amended.

(c) “Exercise Price” means $[exercise price] per share (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like). The shares of Common Stock issuable upon the exercise of this Warrant and the purchase price of such shares of Common Stock issuable upon the exercise of this Warrant shall be subject to adjustment pursuant to Section 6 hereof. Such purchase price, as adjusted from time to time, is herein referred to as the “Exercise Price.”

2. Exercise of Warrant.

(a) The purchase rights represented by this Warrant are exercisable by the Holder, in whole or in part, during the Exercise Period by the surrender of this Warrant, with the form of Subscription attached hereto as Annex A duly completed and executed by the Holder, to the Company at its principal executive office, upon payment in cash (subject to subsection (b)), by certified or official bank check or by wire transfer, of an amount equal to the Exercise Price multiplied by the number of shares of Common Stock being purchased pursuant to such exercise of the Warrant.

(b) If the fair market value of one share of Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), then in lieu of exercising this Warrant for cash, the Holder may elect to receive shares of Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly completed Subscription and notice of such election in which event the Company shall issue to the Holder a number of shares of Common Stock computed using

the following formula:

X = Y (A-B)

Where X = the number of shares of Common Stock to be issued to the Holder

Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation)

A = The fair market value of one share of the Company’s Common Stock (at the date of such calculation)

B = Exercise Price (as adjusted to the date of such calculation)For purposes of the above calculation, the fair market value of one share of Common Stock shall be the fair value as reasonably determined by the Company’s Board of Directors or a duly appointed committee of the Board (which determination shall be reasonably described in the written notice delivered to the Holder together with the certificate for Common Stock); provided, however, that in the event that the Warrant is being exercised in connection with the Company’s initial public offering, the fair market value per share shall be the per share offering price of the Company’s initial public offering.

(c) This Warrant may be exercised for less than the full number of shares of Common Stock first shown above, provided that this Warrant may not be exercised in part for less than a whole number of shares of Common Stock. Upon any such partial exercise, the Company at its expense will forthwith issue to the Holder a new Warrant or Warrants of like tenor exercisable for the number of shares of Common Stock as to which rights have not been exercised (subject to adjustment as herein provided), such Warrant or Warrants to be issued in the name of the Holder or its nominee.

(d) As soon as practicable after the exercise of this Warrant and payment of the Exercise Price, and in any event within 10 business days thereafter, the Company, at its expense, will cause to be issued in the name of and delivered to the Holder a certificate or certificates for the number of duly authorized, validly issued, fully paid and non-assessable shares or other securities or property to which the Holder shall be entitled upon such exercise, plus, in lieu of any fractional share to which the Holder would otherwise be entitled, cash in an amount determined in accordance with Section 4(e) hereof. The Company agrees that the shares so purchased shall be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on

which this Warrant shall have been surrendered and payment made for such shares as aforesaid.

4. Adjustments.

(a) Adjustments Generally. In order to prevent dilution of the rights granted hereunder in the specific circumstances contemplated by this Section 4, the Exercise Price shall be subject to adjustment from time to time in accordance with this Section 4. Upon each adjustment of the Exercise Price pursuant to this Section 4, the Holder shall thereafter be entitled to acquire upon exercise, at the Exercise Price resulting from such adjustment, the number of shares of Common Stock determined by (a) multiplying (i) the Exercise Price in effect immediately prior to such adjustment by (ii) the number of shares of Common Stock issuable upon exercise hereof immediately prior to such adjustment, and (b) dividing the product thereof by the Exercise Price resulting from such adjustment.

(b) Subdivisions, Stock Dividends, Stock Combinations and Recapitalizations. In case the Company shall at any time subdivide its outstanding shares of Common Stock into a greater number of shares (including, without limitation, through any stock split effected by means of a dividend on the Common Stock which is payable in Common Stock), the Exercise Price in effect immediately prior to such subdivision shall be proportionately reduced, and, conversely, in case the outstanding shares of Common Stock of the Company shall be combined into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased.

(c) Reorganization, Reclassification, Consolidation, Merger or Sale of Assets. Subject to the earlier expiration of the Warrant upon a Change in Control, if any capital reorganization or reclassification of the capital stock of the Company, or consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets to another corporation shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities, cash or other property with respect to or in exchange for Common Stock, then, as a condition of such reorganization, reclassification, consolidation, merger or sale, lawful and adequate provision shall be made whereby the Holder shall have the right to acquire and receive upon exercise of this Warrant such shares of stock, securities, cash or other property of the successor corporation that a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such reorganization, reclassification, consolidation, merger or sale if this Warrant had been exercised immediately before such reorganization, reclassification, consolidation, merger or sale. The foregoing provisions shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers or sales and to the stock or securities of any other corporation that are at the time receivable upon the exercise of this Warrant. In all events, appropriate adjustments (as determined by the Board of Directors of the Company) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after the transaction, to the end that the provisions of this Warrant shall be applicable after that event, as near as

reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant.

(d) Fractional Shares. The Company shall not issue fractions of shares of Common Stock upon exercise of this Warrant or scrip in lieu thereof. If any fraction of a share of Common Stock would, except for the provisions of this Section 4(d), be issuable upon exercise of this Warrant, then the Company shall in lieu thereof pay to the person entitled thereto an amount in cash equal to the current value of such fraction, calculated to the nearest one-hundredth (1/100) of a share, to be computed on the basis of the fair market value per share as determined by the Board of Directors of the Company in accordance with the provisions of Section 2(b).

(e) Certificate as to Adjustments. Whenever the Exercise Price shall be adjusted as provided in Section 4 hereof, the Company shall promptly compute such adjustment and furnish to the Holder a certificate setting forth such adjustment and showing in reasonable detail the facts requiring such adjustment, the Exercise Price that will be effective after such adjustment and the number of shares and the amount, if any, of other property that at the time would be received upon the exercise of this Warrant.

5. Reservation of Stock Issuable on Exercise of Warrants. The Company shall at all times reserve and keep available out of its authorized but unissued stock, solely for the issuance and delivery upon the exercise of this Warrant and other similar Warrants, such number of its duly authorized shares of Common Stock as from time to time shall be issuable upon the exercise of this Warrant. All of the shares of Common Stock issuable upon exercise of this Warrant, when issued and delivered in accordance with the terms hereof, will be duly authorized, validly issued, fully paid and non-assessable, subject to no lien or other encumbrance other than restrictions on transfer arising under applicable securities laws and restrictions imposed by Section 7(a) hereof and the Agreements to which reference is made in Section 7(b) hereof.

6. Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement reasonably satisfactory to the Company (with surety if reasonably required), or (in the case of mutilation) upon surrender and cancellation thereof, the Company will issue, in lieu thereof, a new Warrant of like tenor and amount.

7. Negotiability. This Warrant is issued upon the following terms, to all of which each taker or owner hereof consents and agrees:

(a) Transfer.

(i) Restricted Securities. The Holder understands that this Warrant and shares of Common Stock issuable upon exercise of this Warrant it is purchasing are characterized as “restricted securities” under the Federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act of 1933, as amended (the “Securities Act”), only in certain limited circumstances. In this connection the Holder represents that the Holder is familiar with Securities and Exchange Commission (“SEC”) Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

(ii) Further Limitations on Disposition. Without in any way limiting the representations set forth above, the Holder further agrees not to make any disposition of all or any portion of this Warrant and the shares of Common Stock issuable upon exercise of this Warrant unless and until:

(A) There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or

(B) (i) The Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition and (ii) if reasonably requested by the Company, the Holder shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company and its counsel, that such disposition will not require registration of this Warrant or shares of Common Stock issuable upon exercise of this Warrant under the Securities Act.

Notwithstanding the provisions of subsections 7(a)(ii)(A) and 7(a)(ii)(B) above, no such registration statement or opinion of counsel shall be necessary for a transfer by the Holder to an affiliate, partner, member, stockholder or to the estate of any such affiliate, partner, member or stockholder or the transfer by gift, will or intestate succession of any affiliate, partner, member or stockholders to its spouse or to the siblings, lineal descendants or ancestors of such affiliate, partner, member or stockholder or its spouse, if the transferee agrees in writing to be subject to the terms hereof to the same extent as if it were an original Holder hereunder.

(iii) Further Limitations on Disposition. Without in any way limiting the representations set forth herein, the Holder further agrees not to make any disposition of all or any portion of this Warrant unless and until the Board of Directors of the Company has approved any such disposition.

(b) Agreements. As a condition to the Company’s obligation to issue shares of Common Stock upon exercise hereof, the Holder shall execute such stockholder agreements, stock transfer restriction and voting agreements as may be requested by the Company.

(c) No Rights as Stockholder. Prior to the exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder of the Company with respect to shares for which this Warrant shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company.

(d) Transfer Taxes. The Company shall not be required to pay any federal or state transfer tax or charge that may be payable in respect of any transfer involved in the transfer or delivery of this Warrant or the issuance or delivery of certificates for Common Stock in a name other than that of the Holder or to issue or deliver any certificates for Common Stock upon the exercise of this Warrant until any and all such taxes and charges shall have been paid by the Holder or until it has been established to the Company’s reasonable satisfaction that no such tax or charge is due.

(e) Compliance with Securities Laws. The Holder, by acceptance hereof, acknowledges that this Warrant, the shares of Common Stock to be issued upon exercise hereof are being acquired solely for the Holder’s own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant, any shares of Common Stock to be issued upon exercise hereof except under circumstances that will not result in a violation of applicable federal and state securities laws.

8. Subdivision of Rights. This Warrant (as well as any new Warrants issued pursuant to the provisions of this Section 8) is exchangeable, upon the surrender hereof by the Holder, at the principal executive office of the Company for any number of new Warrants of like tenor and date representing in the aggregate the right to subscribe for and purchase the number of shares of Common Stock of the Company which may be subscribed for and purchased hereunder.

9. Miscellaneous.

(a) Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given, made and received only when delivered (personally, by courier service such as Federal Express or by other messenger) or when deposited in the United States mails, certified or registered mail, return receipt requested, postage prepaid, addressed to the Holder at the address provided to the Company by such Holder or to the Company at 2000 Lincoln Drive East, Marlton, NJ 08053, or such other address as shall have been furnished in writing to the party giving or making such notice, demand or delivery.

(b) Books of the Company. The Company may treat the holder hereof as appearing on the Company’s books at any time as the holder for all purposes.

(c) Headings. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect the meaning hereof.

(d) Amendment; Waiver. This Warrant and any term hereof may be amended, waived, discharged or terminated only by an instrument in writing signed by the party against whom enforcement of such amendment, waiver, discharge or termination is sought. No waivers of any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

10. Acknowledgment. The Holder agrees and acknowledges that this Warrant is in full satisfaction of the Company’s obligations with respect to the Prior Issuance. The Holder further agrees and acknowledges that the Holder has no right, title, interest or claim to the Prior Issuance, except as set forth in this Warrant.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the Company has executed and issued this Warrant on the date first written above.

	TABULA RASA HEALTHCARE, INC.


	By:
	Name:
	Title:

Acknowledged by:


Print Name of Entity or Individual


By:
(Signature)


(If entity, please print name of officer)


(If entity, please print title of officer)


Date

ANNEX A

SUBSCRIPTION

Date:

To:

The undersigned (the “Purchaser”), pursuant to the provisions set forth in the attached Warrant, hereby irrevocably elects to purchase shares of Class A Common Stock (the “Shares”) covered by such Warrant and (a) herewith makes payment of $ , representing the full purchase price for such shares at the price per share provided for in such Warrant or (b) elects to exercise the Warrant for the purchase of shares of Class A Common Stock, pursuant to Section 2(c) of the Warrant [STRIKE (a) OR (b) AS APPLICABLE].

Purchaser represents and warrants to the Company as follows:

1. Investment Representations. Purchaser understands that the Shares have not been registered under the Securities Act. Purchaser also understands that the Shares are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Purchaser’s representations contained in the Agreement.

2. Experience; Risk. Purchaser has such knowledge and experience in financial and business matters that Purchaser is capable of evaluating the merits and risks of the purchase of the Shares and of protecting Purchaser’s interests in connection therewith. Purchaser is able to fend for itself in the transactions contemplated by this Agreement and has the ability to bear the economic risk of the investment, including complete loss of the investment.

3. Investment. Purchaser is acquiring the Shares for investment for its own account, not as a nominee or agent, and not with a view to, or for resale in connection with, any distribution thereof, and Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. Purchaser understands that the Shares have not been registered under the Securities Act and applicable state securities laws (collectively, the “Acts”) by reason of a specific exemption from the registration provisions of the Acts which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Purchaser’s representations as expressed herein.

4. Information. Purchaser has been furnished with all information which it deems necessary to evaluate the merits and risks of purchasing the Shares and has had the opportunity to ask questions concerning the Shares and the Company and all questions posed have been answered to its satisfaction. Purchaser has been given the opportunity to

obtain any additional information it deems necessary to verify the accuracy of any information obtained concerning the Shares and the Company. Purchaser has such knowledge and experience in financial and business matters that it is able to evaluate the merits and risks of purchasing the Shares and to make an informed decision relating thereto.

5. Restricted Securities; Restrictions on Transfer. Purchaser understands that the Shares will be “restricted securities” under applicable securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations the Shares may be resold without registration under the Acts only in certain limited circumstances. Purchaser acknowledges that Shares must be held indefinitely unless subsequently registered under the Acts or an exemption from such registration is available.

6. No Public Market. Purchaser understands that no public market now exists for any of the securities issued by the Company and that there is no assurance that a public market will ever exist for such securities.

7. Accredited Investor. Purchaser is an “accredited investor” within the meaning of Rule 501 promulgated under the Securities Act. The Purchaser has considered the Federal and state income tax implications of the exercise of the Warrant and the purchase and subsequent sale of the Shares.

8. Residence. If Purchaser is an individual, then Purchaser resides in the state or province identified in the address of Purchaser set forth on Schedule A; if Purchaser is a partnership, corporation, limited liability company or other entity, then the office or offices of Purchaser in which its investment decision was made is located at the address or addresses of Purchaser set forth on Schedule A.



	Signature

	Print name:

	Date:

NOTICE OF TRANSFER

[To be signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the Assignee named below the rights and obligations represented by the within Warrant with respect to the number of shares of Class A Common Stock of set forth below:

Name of Assignee Address No. of Shares

and appoints attorney to transfer said right on the warrant register of with full power of substitution in the premises.

Dated:
			(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)

			Address:

EX-4.4 9 a2226891zex-4_4.htm EX-4.4

Exhibit 4.4

Warrant No.:

Issue Date: , 20

Void Date: , 20 [10 years from Issue Date]

CLASS B COMMON STOCK PURCHASE WARRANT

This Warrant to purchase Class B Common Stock of Tabula Rasa Healthcare, Inc., a Delaware corporation, (as successor by merger to CareKinesis, Inc.) (the “Company”) was previously issued to the Holder (as defined below) on the terms set forth in this Warrant (the “Prior Issuance”).

NOW THEREFORE, in consideration of the premises and mutual covenants set forth about and herein contained and for value received, the Company hereby certifies that (the “Holder”) or its permitted assign(s) is entitled to purchase from the Company, at any time or from time to time during the Exercise Period (as defined below), in whole or in part, at a price per share equal to the Exercise Price (as defined below), ( ) shares of Class B Common Stock, par value $0.0001, of the Company (the “Common Stock”).

This Warrant is is subject the following terms and conditions.

1. Certain Definitions.

(c) “Exercise Price” means $0. per share (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like). The shares of Common Stock issuable upon the exercise of this Warrant and the purchase price of such shares of Common Stock issuable upon the exercise of this Warrant shall be subject to adjustment pursuant to Section 6 hereof. Such purchase price, as adjusted from time to time, is herein referred to as the “Exercise Price.”

2. Exercise of Warrant.

the following formula:

X = Y (A-B)

Where X = the number of shares of Common Stock to be issued to the Holder

A = The fair market value of one share of the Company’s Common Stock (at the date of such calculation)

which this Warrant shall have been surrendered and payment made for such shares as aforesaid.

4. Adjustments.

reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant.

7. Negotiability. This Warrant is issued upon the following terms, to all of which each taker or owner hereof consents and agrees:

(a) Transfer.

(A) There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or

9. Miscellaneous.

(b) Books of the Company. The Company may treat the holder hereof as appearing on the Company’s books at any time as the holder for all purposes.

(c) Headings. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect the meaning hereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the Company has executed and issued this Warrant on the date first written above.

			TABULA RASA HEALTHCARE, INC.


			By:
			Name:
			Title:

Acknowledged by:


Print Name of Entity or Individual


By:
(Signature)


(If entity, please print name of officer)


(If entity, please print title of officer)


Date

ANNEX A

SUBSCRIPTION

Date:

To:

The undersigned (the “Purchaser”), pursuant to the provisions set forth in the attached Warrant, hereby irrevocably elects to purchase shares of Class B Common Stock (the “Shares”) covered by such Warrant and (a) herewith makes payment of $ , representing the full purchase price for such shares at the price per share provided for in such Warrant or (b) elects to exercise the Warrant for the purchase of shares of Class B Common Stock, pursuant to Section 2(c) of the Warrant [STRIKE (a) OR (b) AS APPLICABLE].

Purchaser represents and warrants to the Company as follows:


	Signature

	Print name:

	Date:

NOTICE OF TRANSFER

[To be signed only upon transfer of Warrant]

Name of Assignee

Address

No. of Shares

and appoints attorney to transfer said right on the warrant register of with full power of substitution in the premises.

Dated:
			(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)

			Address:

EX-4.5 10 a2226891zex-4_5.htm EX-4.5

Exhibit 4.5

THE WARRANT EVIDENCED HEREBY, AND THE SECURITIES ISSUABLE HEREUNDER, HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 AS AMENDED, OR THE APPLICABLE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES HAVE BEEN ACQUIRED NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND SHALL NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS THE PROPOSED DISPOSITION IS THE SUBJECT OF A CURRENTLY EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. SEE SECTION 6.

Tabula Rasa Healthcare, Inc.

Warrant for Purchase of Preferred Shares

For value received, Tabula Rasa Healthcare, Inc. (as successor by merger to CareKinesis, Inc.) (the “Company”), a Delaware corporation, hereby certifies that Eastward Capital Partners V, L.P. or the permitted assign(s) of such entity (collectively, “Holder”) is entitled to purchase from the Company, shares of the Series A-1 Convertible Preferred Stock of the Company, fully-paid and nonassessable, with a par value of U.S. $0.0001 per share (the “Preferred Shares”), at any time or from time to time, but prior to 5:00 p.m. East Coast time on the earlier of (i) ten (10) years from the date this Warrant is executed (the “Original Issue Date”), or (ii) three (3) years from the date of closing of any initial public offering of the Company’s common stock (the “Company’s IPO” and such earlier date, the “Expiration Date”). The price per share for each such share purchased pursuant to an exercise of this Warrant shall be calculated as follows:

(A) The “Aggregate Exercise Price” of the Preferred Shares hereunder is $200,000.00.

(B) The Holder may purchase Preferred Shares at an exercise price of $0.80 per share, subject to adjustment as hereinafter provided (the “Per Share Exercise Price”).

(Hereinafter: the term “Common Stock” shall refer to all shares of the capital common stock of the Company issued and outstanding at any time during the term of this Warrant, together with any other equity securities that the Company may issue in substitution for such shares other than Warrants; the term “Preferred Shares” shall refer to all shares of the Series A-1 Convertible Preferred Stock of the Company issued and outstanding at any time during the term of this Warrant, together with any other equity securities that the Company may issue in substitution for such shares other than Warrants; the term “Warrants” shall refer to this Warrant and all warrants issued in exchange or substitution for this Warrant; the term “Warrant Shares” shall refer to the Preferred Shares purchasable under Warrants.)

1. Exercise of Warrant.

(A) Exercise of Warrant in Whole. The Holder may exercise this Warrant in full at any time prior to 5:00 p.m. on the Expiration Date by surrendering it (with the subscription form at the end of this Warrant duly executed and indicating the whole number of Warrant Shares with respect to which the Holder shall then be exercising the Warrant) at the principal office of the Company at the time of exercise (currently 110 Marter Avenue, Suite 309, Moorestown, NJ 08057), together with a certified, registered or bank cashier’s check drawn upon Boston clearinghouse funds in the amount of the Aggregate Exercise Price payable to the order of the Company (hereinafter, the term “Payment” shall mean payment in this manner). Upon such exercise of this Warrant in full, the Holder shall receive: (i) a certificate or certificates in the name of the Holder for the largest number of whole Warrant Shares to which the Holder shall then be entitled; (ii) cash equal in value to any fractional share to which the Holder shall then be entitled (with the amount of such cash to be calculated in such reasonable manner as the board of directors

of the Company shall determine); and (iii) the other securities and properties, if any, receivable pursuant to the provisions of this Warrant. No fractional shares shall be issued to the Holder in respect of exercise of this Warrant.

(B) Exercise of Warrant in Part. The Holder may exercise this Warrant in part at any time and from time to time prior to 5:00 p.m. on the Expiration Date, by surrendering it (with the subscription form at the end of this Warrant duly executed and indicating the whole number of Warrant Shares with respect to which the Holder shall then be exercising the Warrant) at the principal office of the Company at the time of exercise, together with Payment of that portion of the Aggregate Exercise Price that shall bear the same ratio to the total Aggregate Exercise Price as the number of Warrant Shares in respect of which this Warrant is then being exercised shall bear to the total number of Warrant Shares subject to this Warrant. If this Warrant shall be exercised in part, it must be exercised for a whole number of Warrant Shares; and, upon such partial exercise, the Holder shall receive: (i) a new Warrant for the number of Warrant Shares in respect of which this Warrant has not been exercised (“Remaining Shares”), which new Warrant shall be identical in all other respects to this Warrant and which Warrant shall set forth the Aggregate Exercise Price applicable to the Remaining Shares; and (ii) the applicable proportion of the other securities and properties, if any, receivable pursuant to the provisions of this Warrant.

2. Conversion Right.

(A) In lieu of Payment of the Aggregate Exercise Price or any portion thereof, the Holder shall have the right (but not the obligation), to require the Company to convert this Warrant, in whole or in part, into shares of Preferred Shares (the “Conversion Right”) as provided for in this Section 2. Upon exercise of the Conversion Right, the Company shall deliver to the Holder (without Payment by the Holder; provided, however, that the Holder shall be required to pay the par value for any shares of Preferred Shares so delivered) that number of shares of Preferred Shares equal to the quotient obtained by dividing (x) the value of the Warrant at the time the Conversion Right is exercised, by (y) the Fair Market Value of one share of Preferred Shares immediately prior to the exercise of the Conversion Right. For purposes of this Section, the “value” of the Warrant shall be determined by subtracting the Aggregate Exercise Price in effect immediately prior to the exercise of the Conversion Right from the Aggregate Fair Market Value of the Warrant immediately prior to the exercise of the Conversion Right.

(B) The Conversion Right may be exercised by the Holder on any business day prior to 5:00 p.m. on the Expiration Date by delivering the Warrant, with the subscription form at the end of this Warrant to the Company duly executed and indicating that the Holder is exercising the Conversion Right and specifying the total number of shares of Preferred Shares the Holder will be issued pursuant to such conversion.

(i) If the Preferred Shares are listed on a national securities exchange, then the Fair Market Value shall be the average of the last ten “daily sales prices” of the Preferred Shares on the national securities exchange on which the Preferred Shares are listed or admitted for trading on the last ten business days prior to the Determination Date, or if not listed or traded on any such exchange, then the Fair Market Value shall be the average of the last ten “daily sales prices” of the Preferred Shares on the National Market or Small Cap Market of the National Association of Securities Dealers Automated Quotations System (“NASDAQ”) on the last ten business days prior to the Determination Date. The “daily sales price” shall be the closing price of the Preferred Shares at the end of each day; or

(ii) If the Preferred Shares are not so listed or admitted to unlisted trading privileges or if no such sale is made on at least nine of such days, then the Fair Market Value shall be the higher of (x) the book value per share, and (y) the fair value as reasonably determined in good faith by the Company’s Board of Directors or a duly appointed committee of the Board (which determination shall be reasonably described in the written notice delivered to the Holder together with the certificates for the Preferred Shares).

(D) As used herein, “Aggregate Fair Market Value of the Warrant” shall mean the Fair Market Value of one share of Preferred Shares multiplied by the Warrant Shares, all determined immediately prior to the exercise of the Conversion Right.

3. Reservation of Warrant Shares. The Company agrees that the Company shall, at all times during the term of this Warrant, have the Warrant Shares and other securities and properties, if any, as from time to time shall be receivable upon the exercise of this Warrant authorized, in reserve, and available solely for issuance or delivery upon exercise of this Warrant, free and clear of all restrictions upon sale or transfer, except (a) such as may exist under the Company’s Second Amended and Restated Certificate of Incorporation, as amended (the “Charter”) and By-Laws as constituted on the Original Issue Date; or (b) such as may exist or arise under agreements between the Holder, on the one hand, and the Company or others, on the other hand, with respect to the securities of the Company; and (c) such as may be imposed by applicable securities laws of any state, nation or political subdivision.

4. Adjustments. The rights of the Holder shall be subject to the following terms and conditions:

(A) Adjustments to Exercise Price for Diluting Issues. The Holder shall be entitled to the benefit of all anti-dilution protections contained in the Company’s Charter with respect to, and adjustments in the price and number of shares of Common Stock of the Company issuable upon conversion of, the Preferred Shares of the Company which occur prior to the exercise of this Warrant. Such antidilution protections shall not be restated, amended or modified in any manner which affects the Holder differently than the holders of Preferred Shares without such Holder’s prior written consent.

(B) Adjustment to Per Share Exercise Price for Subdivision or Combination. If the Company at any time or from time to time after the Original Issue Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) the outstanding shares of the class of securities issuable upon exercise hereof into a greater number of shares, the Per Share Exercise Price in effect immediately before that subdivision shall be proportionately decreased. If the Company at any time or from time to time after the Original Issue Date combines (by reverse stock split or otherwise) the outstanding shares of the class of securities issuable upon exercise hereof, the Per Share Exercise Price in effect immediately before the combination shall be proportionately increased. Any adjustment under this paragraph shall become effective at the close of business on the date the subdivision or combination becomes effective.

(C) Adjustment in the Number of Shares for Diluting Issues, Subdivisions or Combinations. Whenever the Per Share Exercise Price is adjusted pursuant to Section 4, the number of shares of the class of securities issuable upon exercise hereof also shall be adjusted.

(D) Adjustments for Certain Dividends and Distributions. In the event that at any time or from time to time after the Original Issue Date the Company shall make or issue, or fix a record date for the determination of holders of the class of securities issuable upon exercise hereof who are entitled to receive a dividend or other distribution payable in securities of the Company, then and in each such event, unless such dividend or distribution results in an adjustment of the Per Share Exercise Price pursuant to

Subsections 4(A) or 4(B), provision shall be made so that the Holder shall receive upon exercise hereof in addition to the securities receivable hereupon, the amount of securities of the Company that it would have received had this Warrant been exercised on the date of such event and had it thereafter, during the period from the date of such event to and including the exercise date, retained such securities receivable by it as aforesaid during such period, giving application during such period to all adjustments called for herein.

(E) Adjustment for Reclassification, Exchange, Conversion or Substitution. In the event that at any time or from time to time after the Original Issue Date, (i) the class of securities issuable upon the exercise of this Warrant or (ii) the then outstanding shares of the class of securities issuable upon exercise of this Warrant shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification, conversion or otherwise (other than a subdivision or combination of shares or stock dividend provided for above, or a merger, consolidation, or sale of assets provided for below), then and in each such event the Holder shall have the right thereafter to exercise this Warrant for the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification, conversion or other change, by holders of the number of shares of the class of securities into which such Warrant might have been exercisable for immediately prior to such reorganization, reclassification, conversion or change, all subject to further adjustment as provided herein.

(F) Adjustment for Merger, Consolidation or Sale of Assets. In the event that at any time or from time to time after the Original Issue Date, the Company shall merge or consolidate with or into another entity or sell all or substantially all of its assets, this Warrant shall thereafter be exercisable for the kind and amount of shares of stock or other securities or property to which a holder of the number of shares of the class of securities of the Company deliverable upon exercise of this Warrant would have been entitled upon such consolidation, merger or sale; and, in such case, appropriate adjustment (as determined in good faith by the Company’s Board of Directors) shall be made in the application of the provisions set forth in this Section 4 with respect to the rights and interest thereafter of the Holder, to the end that the provisions set forth in this Section 4 (including provisions with respect to changes in and other adjustments of the Per Share Exercise Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other property thereafter deliverable upon the exercise of this Warrant.

(G) No Impairment. The Company shall not, by amendment of its Charter, as in effect on the date hereof, or By-Laws or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but shall at all times in good faith assist in the carrying out of all the provisions of this Section 4 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment.

(H) Notice of Adjustment of Number of Shares. Upon any adjustment, readjustment or other change relating to the number of shares purchasable upon exercise of this Warrant or to the Per Share Exercise Price or the conversion rate between the Preferred Shares and the Common Stock, then, and in each such case, the Company shall give written notice thereof, which notice shall state the Per Share Exercise Price resulting from such adjustment and the increase or decrease in the number of shares (or other denominations of securities) purchasable at the Per Share Exercise Price upon the exercise of this Warrant setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.

(I) Notice. In case at any time: (1) the Company shall pay any dividend or make any distribution (other than regular cash dividends from earnings or earned surplus paid at an established rate)

to the holders of the class of securities issuable upon exercise of this Warrant; (2) the Company shall offer for subscription pro rata to the holders of the class of securities issuable upon exercise of this Warrant any additional shares of stock of any class or other rights; (3) there shall be any capital reorganization or reclassification of the capital stock of the Company, or consolidation or merger of the Company with or sale of all or substantially all of its assets to another corporation; or (4) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in any one or more of such cases, the Company shall give written notice of the date on which (a) the books of the Company shall close or a record date shall be fixed for determining the shareholders entitled to such dividend, distribution or subscription right, or (b) such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up shall take place, as the case may be. Such notice shall also provide reasonable details of the proposed transaction and specify the date as of which the holders of record of the class of securities issuable upon exercise of this Warrant shall participate in such dividend, distribution or subscription right, or shall be entitled to exchange their securities for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, as the case may be. Such written notice shall be given at least 10 days prior to the action in question and not less than 10 days prior to the record date or the date on which the Company’s transfer books are closed in respect thereto.

(J) No Change Necessary. The form of this Warrant need not be changed because of any adjustment in the Per Share Exercise Price or in the number of shares issuable upon its exercise. A Warrant issued after any adjustment on any partial exercise or upon replacement may continue to express the same Per Share Exercise Price and the same number of shares (appropriately reduced in the case of partial exercise) as are stated on this Warrant as initially issued, and that Per Share Exercise Price and that number of shares shall be considered to have been so changed as of the close of business on the date of adjustment.

5. Fully-Paid Shares; Taxes. The Company covenants that the Preferred Shares represented by each and every certificate for Warrant Shares delivered upon exercise of this Warrant shall, at the time of such delivery, be duly authorized, validly-issued and outstanding, and fully-paid and nonassessable, and that the Company shall take any and all such actions as may be necessary to ensure that the par value or stated value, if any, of each Warrant Share is at all times equal to or less than the then Per Share Exercise Price; and that it will pay when due and payable any and all stamp, original issue or similar taxes that may be payable in respect of issuance of any Warrant Shares or certificates for Warrant Shares.

6. Restrictions upon Transfer. Each holder of this Warrant acknowledges that this Warrant and the Warrant Shares have not been registered under the Securities Act of 1933, as now in force or hereafter amended, or any successor legislation (the “Act”), and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Warrant or any Warrant Shares issued upon its exercise in the absence of (a) an effective registration statement under the Act as to this Warrant or such Warrant Shares and registration or qualification of this Warrant or such Warrant Shares under any applicable Blue Sky or state securities law then in effect, or (b) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not required. Any transfer of this Warrant or the Warrant Shares will be made at no cost to the Holder.

Without limiting the generality of the foregoing, unless the offering and sale of the Warrant Shares to be issued upon the particular exercise of the Warrant shall have been effectively registered under the Act, the Company shall be under no obligation to issue the shares covered by such exercise unless and until the Holder shall have executed an investment letter in form and substance satisfactory to the Company, including a warranty at the time of such exercise that it is acquiring such shares for its own account, for investment and not with a view to, or for sale in connection with, the distribution of any such

shares, in which event the Holder shall be bound by the provisions of the following legend or a legend in substantially similar form, and any other legends set forth in the Shareholder Agreements (as defined below), which shall be endorsed upon the certificate(s) evidencing the Warrant Shares issued pursuant to such exercise:

The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”), or any state securities laws, have been acquired for investment, and may not be sold, pledged, hypothecated or otherwise transferred unless a registration statement under the Act and applicable state law is in effect with regard thereto or unless an exemption from such registration is available.

In addition, without limiting the generality of the foregoing, the Company may delay issuance of the Warrant Shares until completion of any action or obtaining of any consent, which the Company deems necessary under any applicable law (including without limitation state securities or “blue sky” laws).

7. No Distribution. The Holder, by acceptance hereof, represents and warrants that it is acquiring this Warrant without a view to, or for sale in connection with, a distribution thereof and not with a view to its resale, and that this Warrant has been acquired for the Holder’s own account and not with a view to its division among others, and that no other person has any direct or indirect beneficial interest in this Warrant. Notwithstanding the foregoing, the Company agrees that the Holder shall have the right to grant participation interests in the Warrant.

8. Registration Rights. The Holder shall be entitled, with respect to (i) its Warrant Shares and other securities issued or issuable upon exercise of this Warrant and (ii) any securities issued or issuable with respect to any Preferred Shares or other securities referred to in subdivision (i) by way of a stock dividend or stock split or in connection with a combination or other reorganization or otherwise, to the registration rights afforded to the holders of Preferred Shares, all as set forth in that certain Investor Rights Agreement dated as of August 16, 2010 and as amended by the Omnibus Agreement dated as of March 2, 3011 (the “Registration Rights Agreement”), as such agreement may be amended or restated. Except as may be otherwise provided in the Registration Rights Agreement, and subject to the terms thereof, including but not limited to the Lockup period following the Company’s IPO set forth therein, the right to have the Company register such securities pursuant to such agreement shall be automatically assigned to transferees or assignees of this Warrant or such securities, provided that immediately following such transfer or assignment, the further disposition of such securities by the transferee or assignee would be subject to restrictions under the Act.

9. Reports and Information Rights. The Company shall furnish Holder (as to itself and its subsidiaries) (i) within one hundred fifty (150) days after the end of each fiscal year of the Company, a balance sheet as at the end of such year, and the related statements of income and retained earnings and cash flows for such fiscal year, prepared in accordance with GAAP, all in reasonable detail and audited by independent certified public accountants of recognized standing selected by the Company; (ii) within thirty (30) days after the end of each quarter of the fiscal year a balance sheet as at the end of such quarter, and the related statement of income and retained earnings and cash flows for such quarter, prepared in accordance with GAAP (subject to the absence of footnotes and year-end adjustments); (iii) as soon as available, but no later than forty-five (45) days after completion, any 409A valuation report prepared by or at the direction of the Company, and (iv) within thirty (30) days after the end of each month of the fiscal year, monthly financial information, consisting of a balance sheet as at the end of such month, and the related statement of income and retained earnings and cash flows.

10. Books of the Company. The Company may treat the Holder of this Warrant as appearing on the Company’s books at any time as the Holder for all purposes. Upon written request, the Company shall permit the Holder or the Holder’s duly authorized attorney, during ordinary business hours, to inspect and copy or make extracts from the books showing the registered holders of Warrants.

11. Loss, Theft, Destruction or Mutilation of Warrant. If this Warrant shall be lost, stolen, destroyed, or mutilated, the Company shall execute and deliver to the Holder a replacement warrant of like date, tenor, and denomination upon receipt by the Company of (a) evidence satisfactory to the Company of the occurrence of such event, (b) reimbursement of the Company’s reasonable incidental expenses, and (c) (i) in the event of mutilation, upon surrender and cancellation of this Warrant, or (ii) in the event of loss, theft, or destruction of this Warrant, of indemnity reasonably satisfactory to the Company.

12. Holder Not Shareholder. Except as may otherwise be expressly provided in this Warrant, this Warrant does not, prior to its exercise, confer upon the Holder any right to vote, or to consent, or to receive notice, or otherwise to act, as a shareholder of the Company in respect of any matters whatsoever, or confer or impose upon the Holder any other rights or liabilities of a shareholder of the Company. Upon presentation of this Warrant with the subscription form annexed duly executed and the tender of Payment of the Exercise Price at the office of the Company pursuant to the provisions of this Warrant, the Holder shall forthwith be deemed a shareholder of the Company in respect of the securities so subscribed and paid for, the Warrant Shares, when issued, shall be subject to the terms and conditions of the Second Amended and Restated Certificate of Incorporation of the Company, as such may be amended from time to time, and the Holder hereby agrees to become a party to, and be bound by, the terms and conditions of the Stockholders’ Agreement and the Investor Rights Agreement of the Company, as each may be amended from time to time, including without limitation certain restrictions on transfers contained therein (the “Shareholder Agreements”).

13. Notices and Other Communications. Any notice or other communication under this Warrant shall be effective and shall be deemed to have been given if, and only if, the same shall have been given in writing and mailed by first-class mail, postage prepaid, addressed to:

(A) the Company at the address set forth in Section 1(A) above, or such other address as the Company may designate in writing to the Holder, or

(B) the Holder at 432 Cherry Street, West Newton, MA 02465, or such other address as the Holder may designate in writing to the Company.

14. Headings. The headings contained in this Warrant have been inserted as a matter of convenience, do not form part, and shall not affect construction of, this Warrant.

15. Applicable Law. This Warrant shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts applicable to contracts wholly made, accepted and performed within that jurisdiction, without application of principles of conflict of laws.

The Company has caused this Warrant to be executed by its President and attested by its Secretary or Assistant Secretary this 23rd day of March, 2012.

ATTEST:	Tabula Rasa Healthcare, Inc.


/s/ Brian Adams	By:	/s/ Orsula V. Knowlton
Secretary or Assistant Secretary		President


[Corporate Seal]

SUBSCRIPTION

Date:

To: Tabula Rasa Healthcare, Inc.

110 Marter Avenue, Suite 309

Moorestown, NJ 08057

The undersigned, pursuant to the provisions set forth in the attached Warrant hereby irrevocably elects to purchase shares of the Series A-1 Convertible Preferred Stock (the “Preferred Shares”) covered by such Warrant and herewith makes payment of $ , representing the [full/partial] purchase price for such shares at the price per share provided for in such Warrant.

The undersigned is aware that the Preferred Shares have not been registered under the Securities Act of 1933, as amended (the “1933 Act”) or any state securities laws. The undersigned understands that the reliance by the Company on exemptions under the 1933 Act is predicated in part upon the truth and accuracy of the statements of the undersigned in this Subscription.

The undersigned represents and warrants that (1) it has been furnished with all information which it deems necessary to evaluate the merits and risks of the purchase of the Preferred Shares; (2) it has had the opportunity to ask questions concerning the Preferred Shares and the Company and all questions posed have been answered to its satisfaction; (3) it has been given the opportunity to obtain any additional information it deems necessary to verify the accuracy of any information obtained concerning the Preferred Shares and the Company; and (4) it has such knowledge and experience in financial and business matters that it is able to evaluate the merits and risks of purchasing the Preferred Shares and to make an informed investment decision relating thereto.

The undersigned hereby represents and warrants that it is purchasing the Preferred Shares for its own account and not with a view to the sale or distribution of all or any part of the Preferred Shares.

The undersigned understands that because the Preferred Shares have not been registered under the 1933 Act, it must continue to bear the economic risk of the investment for an indefinite time and the Preferred Shares cannot be sold unless the Preferred Shares are subsequently registered under applicable federal and state securities laws or an exemption from such registration is available.

The undersigned agrees that it will in no event sell or distribute or otherwise dispose of all or any part of the Preferred Shares unless (1) there is an effective registration statement under the 1933 Act and applicable state securities laws covering any such transaction involving the Preferred Shares or (2) the Company receives an opinion of legal counsel to the undersigned (concurred in by legal counsel for the Company) stating that such transaction is exempt from registration or the Company otherwise satisfies itself that such transaction is exempt from registration.

The undersigned consents to the placing of a legend on its certificate for the Preferred Shares stating that the Preferred Shares have not been registered and setting forth the restriction on transfer contemplated hereby and to the placing of a stop transfer order on the books of the Company and with any transfer agents against the Preferred Shares until the Preferred Shares may be legally resold or distributed without restriction.

The undersigned has considered the Federal and state income tax implications of the exercise of the Warrant and the purchase and subsequent sale of the Preferred Shares.

Eastward Capital Partners V, L.P.

By:	Eastward Capital Partners V GP, L.P.,
	its General Partner


	By:	ECP V GP, LLC, its General Partner


	By:
		Managing Member

	Date:

EX-4.6 11 a2226891zex-4_6.htm EX-4.6

Exhibit 4.6

Tabula Rasa Healthcare, Inc.

Warrant for Purchase of Preferred Shares

For value received, Tabula Rasa Healthcare, Inc. (as successor by merger to CareKinesis, Inc.) (the “Company”), a Delaware corporation, hereby certifies that Eastward Fund Management, LLC or the permitted assign(s) of such entity (collectively, “Holder”) is entitled to purchase from the Company, shares of the Series B Convertible Preferred Stock of the Company, fully-paid and nonassessable, with a par value of U.S. $0.0001 per share (the “Preferred Shares”), at any time or from time to time, but prior to 5:00 p.m. East Coast time on the earlier of (i) ten (10) years from the date this Warrant is executed (the “Original Issue Date”), or (ii) three (3) years from the date of closing of any initial public offering of the Company’s common stock (the “Company’s IPO” and such earlier date, the “Expiration Date”). The price per share for each such share purchased pursuant to an exercise of this Warrant shall be calculated as follows:

(A) The “Aggregate Exercise Price” of the Preferred Shares hereunder is $300,000.00.

(B) The Holder may purchase Preferred Shares at an exercise price of $2.857 per share, subject to adjustment as hereinafter provided (the “Per Share Exercise Price”).

(Hereinafter: the term “Common Stock” shall refer to all shares of the capital common stock of the Company issued and outstanding at any time during the term of this Warrant, together with any other equity securities that the Company may issue in substitution for such shares other than Warrants; the term “Preferred Shares” shall refer to all shares of the Series B Convertible Preferred Stock of the Company issued and outstanding at any time during the term of this Warrant, together with any other equity securities that the Company may issue in substitution for such shares other than Warrants; the term “Warrants” shall refer to this Warrant and all warrants issued in exchange or substitution for this Warrant; the term “Warrant Shares” shall refer to the Preferred Shares purchasable under Warrants.)

1. Exercise of Warrant.

the provisions of this Warrant. No fractional shares shall be issued to the Holder in respect of exercise of this Warrant.

2. Conversion Right.

3. Reservation of Warrant Shares. The Company agrees that the Company shall, at all times during the term of this Warrant, have the Warrant Shares and other securities and properties, if any, as from time to time shall be receivable upon the exercise of this Warrant authorized, in reserve, and available solely for issuance or delivery upon exercise of this Warrant, free and clear of all restrictions upon sale or transfer, except (a) such as may exist under the Company’s Third Amended and Restated Certificate of Incorporation, as amended (the “Charter”) and By-Laws as constituted on the Original Issue Date; or (b) such as may exist or arise under agreements between the Holder, on the one hand, and the Company or others, on the other hand, with respect to the securities of the Company; and (c) such as may be imposed by applicable securities laws of any state, nation or political subdivision.

4. Adjustments. The rights of the Holder shall be subject to the following terms and conditions:

(I) Notice. In case at any time: (1) the Company shall pay any dividend or make any distribution (other than regular cash dividends from earnings or earned surplus paid at an established rate)

8. Registration Rights. The Holder shall be entitled, with respect to (i) its Warrant Shares and other securities issued or issuable upon exercise of this Warrant and (ii) any securities issued or issuable with respect to any Preferred Shares or other securities referred to in subdivision (i) by way of a stock dividend or stock split or in connection with a combination or other reorganization or otherwise, to the registration rights afforded to the holders of Preferred Shares, all as set forth in that certain Amended and Restated Investor Rights Agreement dated as of June 28, 2013 (the “Registration Rights Agreement”), as such agreement may be amended or restated. Except as may be otherwise provided in the Registration Rights Agreement, and subject to the terms thereof, including but not limited to the Lockup period following the Company’s IPO set forth therein, the right to have the Company register such securities pursuant to such agreement shall be automatically assigned to transferees or assignees of this Warrant or such securities, provided that immediately following such transfer or assignment, the further disposition of such securities by the transferee or assignee would be subject to restrictions under the Act.

12. Holder Not Shareholder. Except as may otherwise be expressly provided in this Warrant, this Warrant does not, prior to its exercise, confer upon the Holder any right to vote, or to consent, or to receive notice, or otherwise to act, as a shareholder of the Company in respect of any matters whatsoever, or confer or impose upon the Holder any other rights or liabilities of a shareholder of the Company. Upon presentation of this Warrant with the subscription form annexed duly executed and the tender of Payment of the Exercise Price at the office of the Company pursuant to the provisions of this Warrant, the Holder shall forthwith be deemed a shareholder of the Company in respect of the securities so subscribed and paid for, the Warrant Shares, when issued, shall be subject to the terms and conditions of the Third Amended and Restated Certificate of Incorporation of the Company, as such may be amended from time to time, and the Holder hereby agrees to become a party to, and be bound by, the terms and conditions of the Stockholders’ Agreement and the Investor Rights Agreement of the Company, as each may be amended from time to time, including without limitation certain restrictions on transfers contained therein (the “Shareholder Agreements”).

(A) the Company at the address set forth in Section 1(A) above, or such other address as the Company may designate in writing to the Holder, or

(B) the Holder at 432 Cherry Street, West Newton, MA 02465, or such other address as the Holder may designate in writing to the Company.

14. Headings. The headings contained in this Warrant have been inserted as a matter of convenience, do not form part, and shall not affect construction of, this Warrant.

The Company has caused this Warrant to be executed by its President and attested by its Secretary or Assistant Secretary this 22 day of April, 2014.

ATTEST:	Tabula Rasa Healthcare, Inc.


/s/ Brian Adams	By:	/s/ Orsula V. Knowlton
Secretary or Assistant Secretary		President


[Corporate Seal]

SUBSCRIPTION

Date:

To: Tabula Rasa Healthcare, Inc.

110 Marter Avenue, Suite 309

Moorestown, NJ 08057

The undersigned, pursuant to the provisions set forth in the attached Warrant hereby irrevocably elects to purchase shares of the Series B Convertible Preferred Stock (the “Preferred Shares”) covered by such Warrant and herewith makes payment of $ , representing the [full/partial] purchase price for such shares at the price per share provided for in such Warrant.

The undersigned has considered the Federal and state income tax implications of the exercise of the Warrant and the purchase and subsequent sale of the Preferred Shares.

	Eastward Fund Management, LLC


	By:
		Authorized Person

	Date:

EX-4.7 12 a2226891zex-4_7.htm EX-4.7

Exhibit 4.7

Tabula Rasa Healthcare, Inc.

Warrant for Purchase of Preferred Shares

For value received, Tabula Rasa Healthcare, Inc. (the “Company”), a Delaware corporation, hereby certifies that Eastward Fund Management, LLC or the permitted assign(s) of such entity (collectively, “Holder”) is entitled to purchase from the Company, shares of the Series B Convertible Preferred Stock of the Company, fully-paid and nonassessable, with a par value of U.S. $0.0001 per share (the “Preferred Shares”), at any time or from time to time, but prior to 5:00 p.m. East Coast time on the earlier of (i) ten (10) years from the date this Warrant is executed (the “Original Issue Date”), or (ii) three (3) years from the date of closing of any initial public offering of the Company’s common stock (the “Company’s IPO” and such earlier date, the “Expiration Date”). The total Preferred Shares purchasable under this Warrant pursuant to an exercise of this Warrant shall be calculated as follows: the Aggregate Exercise price divided by the Per Share Exercise Price.

(A) The “Aggregate Exercise Price” of the Preferred Shares hereunder is $1,440,000.00.

(B) The Holder may purchase Preferred Shares at an exercise price of $2.9884 per share, subject to adjustment as hereinafter provided (the “Per Share Exercise Price”).

(Hereinafter: the term “Common Stock” shall refer to all shares of the capital common stock of the Company issued and outstanding at any time during the term of this Warrant, together with any other equity securities that the Company may issue in substitution for such shares other than Warrants; the term “Preferred Shares” shall refer to all shares of the Series B Convertible Preferred Stock of the Company issued and outstanding at any time during the term of this Warrant, together with any other equity securities that the Company may issue in substitution for such shares other than Warrants; the term “Warrants” shall refer to this Warrant and all warrants issued in exchange or substitution for this Warrant; the term “Warrant Shares” shall refer to the Preferred Shares purchasable under Warrants.)

1. Exercise of Warrant.

2. Conversion Right.

3. Reservation of Warrant Shares. The Company agrees that the Company shall, at all times during the term of this Warrant, have the Warrant Shares and other securities and properties, if any, as from time to time shall be receivable upon the exercise of this Warrant authorized, in reserve, and available solely for issuance or delivery upon exercise of this Warrant, free and clear of all restrictions upon sale or transfer, except (a) such as may exist under the Company’s Third Amended and Restated Certificate of Incorporation, as amended (the “Charter”) and By-Laws as constituted on the Original Issue Date; or (b) such as may exist or arise under agreements between the Holder, on the one hand, and the Company or others, on the other hand, with respect to the securities of the Company; and (c) such as may be imposed by applicable securities laws of any state, nation or political subdivision.

4. Adjustments. The rights of the Holder shall be subject to the following terms and conditions:

(I) Notice. In case at any time: (1) the Company shall pay any dividend or make any distribution (other than regular cash dividends from earnings or earned surplus paid at an established rate)

until the Holder shall have executed an investment letter in form and substance satisfactory to the Company, including a warranty at the time of such exercise that it is acquiring such shares for its own account, for investment and not with a view to, or for sale in connection with, the distribution of any such shares, in which event the Holder shall be bound by the provisions of the following legend or a legend in substantially similar form, and any other legends set forth in the Shareholder Agreements (as defined below), which shall be endorsed upon the certificate(s) evidencing the Warrant Shares issued pursuant to such exercise:

8. Registration Rights. The Holder shall be entitled, with respect to (i) its Warrant Shares and other securities issued or issuable upon exercise of this Warrant and (ii) any securities issued or issuable with respect to any Preferred Shares or other securities referred to in subdivision (i) by way of a stock dividend or stock split or in connection with a combination or other reorganization or otherwise, to the registration rights afforded to the holders of Preferred Shares, all as set forth in that certain Amended and Restated Investor Rights Agreement dated as of June 28, 2013 (the “Registration Rights Agreement”), as such agreement may be amended or restated. Except as may be otherwise provided in the Registration Rights Agreement, and subject to the terms thereof, including but not limited to the Lockup period following the Company’s IPO set forth therein, the right to have the Company register such securities pursuant to such agreement shall be automatically assigned to transferees or assignees of this Warrant or such securities, provided that immediately following such transfer or assignment, the further disposition of such securities by the transferee or assignee would be subject to restrictions under the Act.

year, monthly financial information, consisting of a balance sheet as at the end of such month, and the related statement of income and retained earnings and cash flows.

12. Holder Not Shareholder. Except as may otherwise be expressly provided in this Warrant, this Warrant does not, prior to its exercise, confer upon the Holder any right to vote, or to consent, or to receive notice, or otherwise to act, as a shareholder of the Company in respect of any matters whatsoever, or confer or impose upon the Holder any other rights or liabilities of a shareholder of the Company. Upon presentation of this Warrant with the subscription form annexed duly executed and the tender of Payment of the Exercise Price at the office of the Company pursuant to the provisions of this Warrant, the Holder shall forthwith be deemed a shareholder of the Company in respect of the securities so subscribed and paid for, the Warrant Shares, when issued, shall be subject to the terms and conditions of the Third Amended and Restated Certificate of Incorporation of the Company, as such may be amended from time to time, and the Holder hereby agrees to become a party to, and be bound by, the terms and conditions of the Stockholders’ Agreement and the Investor Rights Agreement of the Company, as each may be amended from time to time, including without limitation certain restrictions on transfers contained therein (the “Shareholder Agreements”).

13. Amendment to Prior Warrants. Reference is hereby made to each of the Warrants for Purchase of Preferred Shares dated as of March 23, 2012 and April 22, 2014 (collectively, the “Prior Warrants”). The Parties hereby agree that notwithstanding the last sentence of the first paragraph of each such Prior Warrant, the total number of Warrant Shares subject to each such Prior Warrant shall be calculated by dividing the Aggregate Exercise Price set forth in Section (A) of each such Prior Warrant, as applicable, by the Per Share Exercise Price set forth in Section (B) of each such Prior Warrant, as applicable, as may be further adjusted by the terms of each such Prior Warrant, as applicable. Except as set forth herein, the Prior Warrants remain unchanged and are in full force and effect.

14. Notices and Other Communications. Any notice or other communication under this Warrant shall be effective and shall be deemed to have been given if, and only if, the same shall have been given in writing and mailed by first-class mail, postage prepaid, addressed to:

(A) the Company at the address set forth in Section 1(A) above, or such other address as the Company may designate in writing to the Holder, or

(B) the Holder at 432 Cherry Street, West Newton, MA 02465, or such other address as the Holder may designate in writing to the Company.

15. Headings. The headings contained in this Warrant have been inserted as a matter of convenience, do not form part, and shall not affect construction of, this Warrant.

16. Applicable Law. This Warrant shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts applicable to contracts wholly made, accepted and performed within that jurisdiction, without application of principles of conflict of laws.

The Company has caused this Warrant to be executed by its President and attested by its Secretary or Assistant Secretary this 31st day of December, 2014.

ATTEST:	Tabula Rasa Healthcare, Inc.


/s/ Brian Adams	By:	/s/ Orsula V. Knowlton
Secretary or Assistant Secretary		President


[Corporate Seal]

SUBSCRIPTION

Date:

To: Tabula Rasa Healthcare, Inc.

110 Marter Avenue, Suite 309

Moorestown, NJ 08057

The undersigned has considered the Federal and state income tax implications of the exercise of the Warrant and the purchase and subsequent sale of the Preferred Shares.

Eastward Fund Management, LLC


	By:
		Authorized Person

	Date:

EX-4.9 13 a2226891zex-4_9.htm EX-4.9

Exhibit 4.9

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE. NEITHER THIS NOTE, NOR ANY PORTION THEREOF, NOR ANY INTEREST THEREIN, MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH STATE LAWS.

THIS NOTE IS SUBORDINATED IN ALL RESPECTS TO ANY AND ALL OF TABULA RASA HEALTHCARE, INC.’S CREDITORS AS SET FORTH HEREIN, WHETHER NOW EXISTING OR HEREAFTER INCURRED.

TABULA RASA HEALTHCARE, INC.
SUBORDINATED CONVERTIBLE PROMISSORY NOTE

U.S. $[ ]

December 31, 2014

For value received, and intending to be legally bound, Tabula Rasa Healthcare, Inc., a Delaware corporation (“Maker”), on this 31st day of December, 2014 hereby promises to pay, in lawful money of the United States of America to [ ] (“Payee”), the principal amount of [ ] in accordance with the terms contained in this note (this “Note”). Each holder of this Note, by its acceptance hereof, irrevocably agrees to be bound by the terms set forth herein. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Membership Interest Purchase Agreement, dated as of December 31, 2014 (the “Purchase Agreement”), by and among Maker, Payee and each of the seller parties thereto. The principal amount of this Note shall be adjusted, up or down, by the product of (i) [ ]% multiplied by (ii) the difference of (A) $300,000 minus (B) the total aggregate amount distributed by Maker or its Affiliates to the Sellers for the 2014 fourth quarter tax distributions of Medliance, LLC. For example, if Maker distributes an aggregate amount of $310,000 to the Sellers as the 2014 fourth quarter tax distributions, the Note shall be reduced by $[ ] ([ ]% of the $10,000 difference).

1. Maturity Date. All unpaid principal, together with the balance of unpaid and accrued interest hereunder, unless earlier converted pursuant to Section 4, shall be due and payable on June 30, 2016, or such later date as may be agreed to in writing by Maker and Payee (the “Maturity Date”).

2. Interest. Interest shall accrue on the unpaid principal amount at the rate of eight percent (8%) per annum, compounding annually, and shall be computed on the basis of the actual number of days elapsed and a year of 365 days from the date of this Note until the amount outstanding under this Note is paid (or converted, as provided in Section 4 hereof). Notwithstanding any provision in this Note, it is the parties’ intent not to contract for, charge or receive interest at a rate that is greater than the maximum rate permissible by law that a court of competent jurisdiction shall deem applicable hereto (which under applicable law shall be deemed to be the laws relating to permissible rates of interest on commercial loans). If any interest payment due hereunder is determined to be in excess of the legal maximum rate, then that portion of each interest payment representing an amount in excess of the then legal maximum rate shall instead be deemed a payment of principal and shall be applied against principal.

3. Prepayment. Maker may prepay the outstanding principal balance under this Note in whole or in part at any time and from time to time without premium or penalty, but only with the prior written consent of Payee; provided that, when making any such prepayment, Maker pays all interest accrued to such date on the amount prepaid.

4. Conversion.

(a) If an Initial Public Offering (as defined below) occurs prior to the Maturity Date, all principal and interest under this Note shall immediately become due and payable upon the closing of the Initial Public Offering and Payee shall have the option, in its sole discretion, to elect that Maker pay to Payee one of the following amounts:

(i) all outstanding principal and accrued interest on the Note as of the closing of the Initial Public Offering; or

(ii) a number of shares of Maker’s Common Stock, par value $0.0001 per share (the “Common Stock”), as of immediately prior to the closing of such Initial Public Offering, equal to the quotient obtained by dividing (i) the outstanding principal amount under this Note as of the closing of the Initial Public Offering, by (ii) ninety-two percent (92%) of the price per share of the public offering price of Maker’s Common Stock in the Initial Public Offering, rounded to the nearest whole share. For the avoidance of doubt, any accrued interest under this Note shall be forfeited if the Maker elects to receive Common Stock pursuant to this Section 4(a)(ii).

(b) Maker shall give Payee five (5) Business Days’ prior written notice of the consummation of the Initial Public Offering. Payee shall have two (2) Business after the receipt of such notice to make an election as provided in Section 4(a). If Payee fails to timely make such election, Payee shall be deemed to have elected to receive all outstanding principal and accrued interest on the Note as of the closing of the Initial Public Offering. “Initial Public Offering” means an underwritten public offering on a firm commitment basis pursuant to an effective registration statement (other than on Form S-4 or S-8 on any successor forms thereto) filed pursuant to the Securities Act of 1933, as amended, covering the offer and sale of Maker’s Common Stock for the account of Maker.

(c) If the Note is converted pursuant to Section 4(a)(ii), Payee hereby agrees to execute and deliver to Maker such transaction documents and agreements as may be requested by Maker, including a purchase agreement and other ancillary agreements, with customary representations and warranties and transfer restrictions (including a 180-day lock-up agreement in connection with an Initial Public Offering), and having the same terms as those agreements entered into by the other purchasers of Maker’s Common Stock. Payee agrees to deliver the original of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement reasonably acceptable to Maker whereby Payee agrees to indemnify Maker from any loss incurred by it in connection with Payee’s loss of this Note) upon such conversion or full satisfaction for cancellation. Upon the Maturity Date or Initial Public Offering, as the case may be, this Note shall be deemed converted into the right to receive payment (either in cash or shares of Common Stock) and be of no further force and effect, whether or not it is delivered for cancellation as set forth in this sentence. Maker shall, as soon as practicable after such conversion into shares of Common Stock, if Payee elects such conversion, issue and deliver to Payee a certificate or certificates for the number of shares of Common Stock, if applicable, to which Payee shall be entitled upon conversion (bearing such legends as are required by the agreements related to the Common Stock, the purchase or conversion agreement and applicable state and federal securities laws in the opinion of counsel to Maker), and any other securities and property to which Payee is entitled upon such conversion under the terms of this Note, including a check payable to Payee for any cash amounts payable as described in Section 4(d).

(d) No fractional shares shall be issued upon conversion of this Note into shares of Common Stock. In lieu of Maker issuing any fractional shares to Payee upon the conversion of this Note into shares of Common Stock, Maker shall pay to Payee an amount equal to the product obtained by multiplying the conversion price by the fraction of a share not issued pursuant to the previous sentence.

Upon conversion of this Note in full and the payment of any amounts specified in this Section 4(d), Maker shall be forever released from all its obligations and liabilities under this Note.

5. Default. Maker shall be in default hereunder upon the occurrence of any of the following events (each, an “Event of Default”):

(a) the Maker fails to pay the principal and interest on the date when due, other than as a result of Maker contesting any amounts due under this Note in good faith, and solely to the extent of such contested amounts, and such failure continues unremedied for more than fifteen days after written notice of default is provided to Maker;

(b) if Maker shall (i) apply for or consent to the appointment of a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the United States Bankruptcy Code (11 U.S.C. § 101 et seq.), as amended (the “Federal Bankruptcy Code”), or any successor statute, (iv) file a petition seeking to take advantage of any other law providing for the relief of debtors, or (v) fail to controvert in a timely or appropriate manner, or acquiesce in writing to, any petition filed against Maker in any involuntary case under such Federal Bankruptcy Code; or

(c) if a proceeding or case shall be commenced against Maker in any court of competent jurisdiction for (i) the winding up, or composition or readjustment of debts, of Maker, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of Maker or of all or any substantial part of its assets, or (iii) similar relief in respect of Maker under any law providing for the relief of debtors, and such proceeding or case shall continue undismissed, or unstayed and in effect, for a period of 60 days, or an order for relief against Maker shall be entered in an involuntary case under such Federal Bankruptcy Code.

6. Remedies. Upon the occurrence and continuation of an Event of Default, and so long as the Event of Default shall continue unwaived by Payee, subject to the provisions of Section 7, all amounts evidenced by this Note shall become due and payable automatically and immediately, with an increase in the interest rate to an aggregate amount of 12 percent (12%) per annum.

7. Subordination.

(a) The payment of the principal of and interest on this Note is hereby expressly subordinated in right of payment, to the extent and in the manner hereinafter set forth:

(i) No payment on account of principal or interest on this Note shall be made if, at the time of such payment or immediately after giving effect thereto, there shall exist a default under one or more credit agreements, loan agreements or similar agreements evidencing indebtedness for borrowed money of Maker (collectively, the “Credit Agreement”). No acceleration of the amounts evidenced by and due on this Note shall be permitted or effected unless the principal amount due the Credit Agreement shall have first been accelerated.

(ii) Upon any acceleration of the principal amount due on the Credit Agreement or upon any distribution of all or substantially all of the assets of Maker or any payment or distribution of assets of Maker of any kind or character, whether in cash, property or securities, to creditors in connection with any dissolution, winding-up, total or partial liquidation or reorganization of Maker whether voluntary or involuntary and whether in bankruptcy, insolvency, receivership, arrangement or other proceedings, or upon an assignment for the benefit of creditors, or upon any other marshaling of the assets and liabilities of Maker, all principal, premium, if any, and interest due or to

become due with respect to the Credit Agreement shall first be paid in full in cash before Payee shall be entitled to receive any payments for unpaid principal or unpaid interest on this Note; and upon any such acceleration, payment or distribution of assets, dissolution, winding up, total or partial liquidation, reorganization, assignment for the benefit of creditors, marshaling of assets or liabilities, or similar proceedings, any payment or distribution of assets of Maker of any kind or character, whether in cash, property or securities, to which Payee would, except for the provisions hereof, be entitled, shall be paid or delivered by Maker, or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, directly to the financial institutions that are a party to the Credit Agreement.

(iii) Upon any such acceleration, payment or distribution of assets, dissolution, winding-up, total or partial liquidation or reorganization of Maker, whether voluntary or involuntary and whether in bankruptcy, insolvency, receivership, arrangement or other proceedings, or upon an assignment for the benefit of creditors, or upon any other marshaling of the assets and liabilities of Maker, any payment or distribution of assets of Maker of any kind or character, whether in cash, property or securities, which shall be received by Payee before the entire principal, premium, if any, and interest on the Credit Agreement shall have been paid in full in cash, shall be held in trust for the benefit of and promptly paid over to the financial institutions that are a party to the Credit Agreement as set forth in subsection (a)(ii) of this Section 7, for application to the payment of the remaining unpaid principal, premium, if any, and interest due or to become due upon the Credit Agreement until all principal, premium, if any, and interest due or to become due upon all Credit Agreement shall have been paid in full in cash, after giving effect to any concurrent payment or distribution to or for the financial institutions that are a party to the Credit Agreement.

(b) The foregoing provisions are solely for the purpose of defining the relative rights of the financial institutions that are a party to the Credit Agreement on the one hand and Payee on the other hand, and nothing herein shall impair, as between Maker and Payee, the obligation of Maker, to pay to Payee the principal hereof and interest hereon in accordance with its terms.

(c) Payee shall execute and deliver such documentation, as may be reasonably requested by Maker or the financial institutions that are a party to the Credit Agreement, to evidence the subordination of such financial institution’s rights of payment pursuant to the Credit Agreement to which such financial institution is a party. Maker shall pay for all reasonable attorney fees incurred in the negotiation and execution of any subordination agreement other than the subordination agreement entered into in connection with the issuance of this Note.

8. Waivers; Amendments. No delay on the part of Payee in exercising any of its options, powers or rights, and no partial or single exercise thereof, shall constitute a waiver thereof or of any other option, power or right. Payee shall not be deemed by any act or omission to have waived any such right or remedy or any default by Maker hereunder unless such waiver is in writing and signed by Payee, and then only to the extent specifically set forth in the writing. Any such waiver shall not be construed as a continuing waiver or as a bar to or waiver of any right or remedy with respect to any other default by Maker. None of the terms and conditions of this Note may be amended, modified or waived, except in a writing signed by Payee and Maker.

9. Notices. Unless expressly specified otherwise herein, all notices or other communications required or permitted to be given under this Note shall be in writing and shall be considered sufficiently given in all respects (a) when personally delivered, (b) when sent by telecopier or e-mail, with confirmation of receipt, (c) the day after being sent by reputable overnight courier service or (d) three days after being deposited in the United States Certified Mail, Postage Prepaid, Return Receipt

Requested, addressed as follows or in each case to such other address or facsimile number as shall be designated by notice duly given:

If to Payee:

[	]
[	]
[	]
Email: [	]

With a required copy (that shall not constitute notice) to:

Kevin E. Monson, Esq.

18430 Brookhurst Street, Suite 202N

Fountain Valley, CA 92708

Email: Kevinemonson@hotmail.com

If to Maker:

Tabula Rasa Healthcare, Inc.

110 Marter Ave, Suite 309

Moorestown NJ 08057

Attention: Calvin Knowlton

Email: CKnowlton@CareKinesis.com

With a required copy (that shall not constitute notice) to:

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103-2921

Attention: Stephen M. Goodman

Email: sgoodman@morganlewis.com

10. Set-Off. Maker shall be entitled, at its option, to set-off against amounts owing to Payee hereunder any amounts for which Maker, its Affiliates or the Purchaser Indemnitees shall be entitled to be indemnified by Payee under the Purchaser Agreement.

11. Governing Law; Consent to Jurisdiction, etc. This Note shall be construed and interpreted in accordance with the laws of the State of Delaware without regard to its provisions concerning choice of laws or choice of forum. Each of Maker and Payee hereby irrevocably submit themselves to the non-exclusive jurisdiction of the state and federal courts sitting in the State of Delaware and agree and consent that service of process may be made upon them in any legal proceedings relating hereto by any means allowed under state or federal law. In the event of any breach of this Note by Maker, Maker shall pay all costs, including reasonable attorney fees, incurred by Payee in the collection of this Note.

12. Integration. This instrument states the entire agreement of the parties concerning the subject matter hereof, and it is acknowledged that there are no customs, usages, representations, or assurances referring to the subject matter, and no inducements leading to the execution or delivery hereof, other than those expressed herein.

13. Miscellaneous. This Note shall bind and inure to the benefit of Maker and Payee and

their respective heirs, executors, administrators, personal representatives, successors and assigns. No persons other than Maker and Payee and the respective assignees of Payee are intended to be benefited hereby or shall have any rights hereunder, as third-party beneficiaries or otherwise. Any provision of this Note that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without affecting the validity or enforceability of the remainder of this Note or the validity or enforceability of such provision in any other jurisdiction. The term “Payee” shall apply equally to the initial Payee specified above and to any holder to which this Note may be assigned. The term “including” shall have the inclusive meaning frequently identified with the phrase “including without limitation.”

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, Maker has executed this Note, or has caused the same to be executed in its name, intending to be legally bound as of the day and year first written above.

	MAKER:

	TABULA RASA HEALTHCARE, INC.

	By:
	Name:
	Title:

[Signature Page to [ ] Subordinated Convertible Promissory Note]

EX-4.10 14 a2226891zex-4_10.htm EX-4.10

Exhibit 4.10

PROMISSORY NOTE

$250,000		May 20, 2013
		Moorestown N.J.

FOR VALUE RECEIVED, the undersigned, CareKinesis Inc., a Delaware Corporation, on demand, promises to pay to the order of John R. Durham and Joann M. Durham, or the survivor among them, at [ ] the sum of Two Hundred and Fifty Thousand Dollars ($250,000.00) with interest computed at six percent (6%) per annum from May 20th, 2013. All interest payments shall be computed based upon the number of days/month times 0.000164 times the then outstanding principal at month’s end. Interest is payable monthly on the fifteenth (15th) day of each consecutive month with the first payment June 15, 2013.

The principal of this Promissory Note may be paid in part or in full at any time without penalty.

If any payment hereon be not paid within thirty (30) days of the due date all of the indebtedness evidenced by this Promissory Note shall, at the option of the Holder, be immediately due and payable.

If this note is placed in the hands of an attorney for collection, the undersigned makers agree to pay an additional amount equal to reasonable attorney fees.

As additional consideration for the loan, it is agreed that CareKinesis, Inc. will, simultaneously with the execution of this Amended Promissory Note, grant to John R. Durham and Joann M. Durham, or the survivor among them, warrants to purchase Class B Common Stock of CareKinesis, Inc., with the number of shares of Class B Common Stock and the Exercise Prices as set forth in the Warrant.

STATE OF NEW JERSEY

COUNTY OF BURLINGTON

I certify that on the 20th day of May 2013 Brian Adams personally came before me and stated to my satisfaction that:

(1) he is the Secretary of CareKinesis, Inc.

(2) that Orsula Knowlton is the President of CareKinesis, Inc.

(3) that CareKinesis, Inc., was the maker of the Amended Promissory Note; and

(4) executed the Amended Promissory Note as its act and deed.

/s/ Maureen E. Vurgason

EX-10.1 15 a2226891zex-10_1.htm EX-10.1

Exhibit 10.1

TABULA RASA HEALTHCARE, INC.

2014 EQUITY COMPENSATION PLAN

(As Amended and Restated, Effective As Of June 30, 2014)

TABULA RASA HEALTHCARE, INC.

2014 EQUITY COMPENSATION PLAN

(As amended and restated, effective as of June 30, 2014)

The purpose of the Tabula Rasa HealthCare, Inc. 2014 Equity Compensation Plan (previously known as the CareKinesis, Inc. 2013 Equity Compensation Plan) (the “Plan”) is to provide (i) designated employees of Tabula Rasa HealthCare, Inc. (the “Company”) and its subsidiaries, (ii) certain consultants and advisors who perform services for the Company or its subsidiaries, and (iii) non-employee members of the Board of Directors of the Company (the “Board”) with the opportunity to receive grants of incentive stock options, nonqualified stock options, stock awards, stock units, stock appreciation rights and other equity-based awards. The Company believes that the Plan will encourage the participants to contribute materially to the growth of the Company, thereby benefiting the Company’s stockholders, and will align the economic interests of the participants with those of the stockholders.

SECTION 1 Administration

(a) Committee. The Plan shall be administered and interpreted by the Board or by a committee consisting of members of the Board, which shall be appointed by the Board. However, the Board shall approve and administer all grants made to non-employee directors. To the extent the Board or committee administers the Plan, references in the Plan to the “Committee” shall be deemed to refer to such Board or committee.

(b) Committee Authority. The Committee shall have the sole authority to (i) determine the individuals to whom grants shall be made under the Plan, (ii) determine the type, size and terms of the grants to be made to each such individual, (iii) determine the time when the grants will be made and the duration of any applicable exercise or restriction period, including the criteria for exercisability and the acceleration of exercisability, (iv) amend the terms of any previously issued grant, and (v) deal with any other matters arising under the Plan.

(c) Committee Determinations. The Committee shall have full power and authority to administer and interpret the Plan, to make factual determinations and to adopt or amend such rules, regulations, agreements and instruments for implementing the Plan and for the conduct of its business as it deems necessary or advisable, in its sole discretion. The Committee’s interpretations of the Plan and all determinations made by the Committee pursuant to the powers vested in it hereunder shall be conclusive and binding on all persons having any interest in the Plan or in any awards granted hereunder. All powers of the Committee shall be executed in its sole discretion, in the best interest of the Company and in keeping with the objectives of the Plan and need not be uniform as to similarly situated individuals.

SECTION 2 Grants

Awards under the Plan may consist of grants of incentive stock options as described in Section 5 (“Incentive Stock Options”), nonqualified stock options as described in Section 5 (“Nonqualified Stock Options”) (Incentive Stock Options and Nonqualified Stock Options are collectively referred to as “Options”), stock awards as described in Section 6 (“Stock Awards”), stock units as described in Section 7 (“Stock Units”), stock appreciation rights (“SARs”) as described in Section 8, and other equity-based awards as described in Section 9 (“Other Equity

Awards”) (collectively referred to herein as “Grants”). All Grants shall be subject to the terms and conditions set forth herein and to such other terms and conditions consistent with this Plan as the Committee deems appropriate and as are specified in writing by the Committee to the individual in a grant instrument or an amendment to the grant instrument (the “Grant Instrument”). All Grants shall be made conditional upon the Grantee’s (as defined below in Section 4(b)) acknowledgement, in writing or by acceptance of the Grant, that all decisions and determinations of the Committee shall be final and binding on the Grantee, his beneficiaries and any other person having or claiming an interest under such Grant. Grants under a particular Section of the Plan need not be uniform as among the Grantees.

SECTION 3 Shares Subject to the Plan

(a) Shares Authorized. Subject to adjustment as described below, the aggregate number of shares of Common Stock of the Company that may be issued or transferred under the Plan is 7,635,580 shares (the “Company Stock”). Of this pool, the aggregate number of shares of Class A Non-Voting Common Stock of the Company (“Class A Common Stock”) that may be issued or transferred under the Plan is 5,044,636 shares and the aggregate number of shares of Class B Voting Common Stock of the Company (“Class B Common Stock”) that may be issued or transferred under the Plan is 2,590,944 shares (collectively, Class A Common Stock and Class B Common Stock shall be referred to herein as “Company Stock”). Prior to August 16, 2010, the Plan authorized 1,287,801 shares of Class A Common Stock. Effective August 16, 2010, 1,070,000 additional shares of Class A Common Stock were authorized. Effective March 2, 2011, the pool of available shares of Class A Common Stock authorized under the Plan was reduced by 300,000 shares for a total of 2,057,801 shares of Class A Common Stock authorized under the Plan. In conjunction with the reduction in the pool of Class A Common Stock authorized under the Plan, 300,000 shares of Class B Common Stock were authorized for issuance under the Plan. Effective November 14, 2012, the pool of shares of Class A Common Stock authorized under the Plan was increased by 160,515 for a total of 2,218,316 shares of Class A Common Stock authorized under the Plan and the pool of shares of Class B Common Stock authorized under the Plan was increased by 1,151,063 for a total of 1,451,063 shares of Class B Common Stock authorized under the Plan. Effective June 28, 2013, the pool of shares of Class A Common Stock authorized under the Plan was increased by 2,826,320 for a total of 5,044,636 shares of Class A Common Stock authorized under the Plan and the pool of shares of Class B Common Stock authorized under the Plan was increased by 1,139,881 for a total of 2,590,944 shares of Class B Common Stock authorized under the Plan.

(b) Determination of Authorized Shares. The shares may be authorized but unissued shares of Company Stock or reacquired shares of Company Stock. If and to the extent Options or SARs granted under the Plan terminate, expire, or are canceled, forfeited, exchanged or surrendered without having been exercised or if any Stock Awards, Stock Units, or Other Equity Awards are forfeited, the shares subject to such Grants shall again be available for purposes of the Plan.

(c) Adjustments. If there is any change in the number or kind of shares of Company Stock outstanding (i) by reason of a stock dividend, spinoff, recapitalization, stock split, or combination or exchange of shares, (ii) by reason of a merger, reorganization or consolidation, (iii) by reason of a reclassification or change in par value, or (iv) by reason of any other

extraordinary or unusual event affecting the outstanding Company Stock as a class without the Company’s receipt of consideration, or if the value of outstanding shares of Company Stock is substantially reduced as a result of a spinoff or the Company’s payment of an extraordinary dividend or distribution, the maximum number of shares of Company Stock available for issuance under the Plan, the maximum number of shares of Company Stock for which any individual may receive Grants in any year, the kind and number of shares covered by outstanding Grants, the kind and number of shares issued and to be issued under the Plan, and the price per share or the applicable market value of such Grants shall be equitably adjusted by the Committee, in such a manner as the Committee deems appropriate, to reflect any increase or decrease in the number of, or change in the kind or value of, the issued shares of Company Stock to preclude, to the extent practicable, the enlargement or dilution of rights and benefits under the Plan and such outstanding Grants; provided, however, that any fractional shares resulting from such adjustment shall be eliminated. In addition, in the event of a Change of Control of the Company, the provisions of Section 13 of the Plan shall apply. Any adjustments to outstanding Grants shall be consistent with section 409A or 424 of the Internal Revenue Code of 1986, as amended (the “Code”), to the extent applicable. Any adjustments determined by the Committee shall be final, binding and conclusive.

SECTION 4 Eligibility for Participation

(a) Eligible Persons. All employees of the Company and its subsidiaries (“Employees”), including Employees who are officers or members of the Board, and members of the Board who are not Employees (“Non-Employee Directors”) shall be eligible to participate in the Plan. Consultants and advisors who perform services for the Company or any of its subsidiaries (“Key Advisors”) shall be eligible to participate in the Plan if the Key Advisors render bona fide services to the Company or its subsidiaries, the services are not in connection with the offer and sale of securities in a capital-raising transaction and the Key Advisors do not directly or indirectly promote or maintain a market for the Company’s securities.

(b) Selection of Grantees. The Committee shall select the Employees, Non- Employee Directors and Key Advisors to receive Grants and shall determine the number of shares of Company Stock subject to a particular Grant in such manner as the Committee determines. Employees, Key Advisors and Non-Employee Directors who receive Grants under this Plan shall be referred to herein as “Grantees.”

SECTION 5 Options

The Committee may grant Options to an Employee, Non-Employee Director or Key Advisor, upon such terms as the Committee deems appropriate. The following provisions are applicable to Options:

(a) Number of Shares. The Committee shall determine the number of shares of Company Stock that will be subject to each Grant of Options to Employees, Non-Employee Directors and Key Advisors.

(b) Type of Option and Price.

(i) The Committee may grant Incentive Stock Options that are intended to qualify as “incentive stock options” within the meaning of section 422 of the Code or Nonqualified Stock Options that are not intended so to qualify or any combination of Incentive Stock Options and Nonqualified Stock Options, all in accordance with the terms and conditions set forth herein. Incentive Stock Options may be granted only to Employees. Nonqualified Stock Options may be granted to Employees, Non-Employee Directors and Key Advisors.

(ii) The purchase price (the “Exercise Price”) of Company Stock subject to an Option shall be determined by the Committee and may be equal to or greater than the Fair Market Value (as defined below in Section 5(b)(iii)) of a share of Company Stock on the date the Option is granted. However, an Incentive Stock Option may not be granted to an Employee who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any subsidiary of the Company, unless the Exercise Price per share is not less than 110% of the Fair Market Value of Company Stock on the date of grant.

(iii) “Fair Market Value” of Company Stock means, unless the Committee determines otherwise with respect to a particular Grant, (i) if the principal trading market for the Company Stock is a national securities exchange, the last reported sales price during regular trading hours of Company Stock on the relevant date or (if there were no trades on that date) the last reported sales price during regular trading hours on the latest preceding date upon which a sale was reported, (ii) if the Company Stock is not principally traded on such exchange, the mean between the last reported “bid” and “asked” prices of Company Stock during regular trading hours on the relevant date, as reported on the OTC Bulletin Board, or (iii) if the Company Stock is not publicly traded or, if publicly traded, is not so reported, the Fair Market Value per share of the Company Stock shall be as determined by the Committee through any reasonable valuation method authorized under the Code.

(c) Option Term. The Committee shall determine the term of each Option. The term of any Option shall not exceed ten years from the date of grant. However, an Incentive Stock Option that is granted to an Employee who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, or any subsidiary of the Company, may not have a term that exceeds five years from the date of grant.

(d) Exercisability of Options.

(i) Options shall become exercisable in accordance with such terms and conditions, consistent with the Plan, as may be determined by the Committee and specified in the Grant Instrument. The Committee may accelerate the exercisability of any or all outstanding Options at any time for any reason.

(ii) The Committee may provide in a Grant Instrument that the Grantee may elect to exercise part or all of an Option before it otherwise has become exercisable. Any shares so purchased shall be restricted shares and shall be subject to a repurchase right in favor of the Company during a specified restriction period, with the repurchase price equal to the lesser of (A) the Exercise Price or (B) the Fair Market Value of such shares at the time of repurchase, or such other restrictions as the Committee deems appropriate.

(e) Grants to Non-Exempt Employees. Notwithstanding the foregoing, Options granted to persons who are non-exempt employees under the Fair Labor Standards Act of 1938, as amended, may not be exercisable for at least six months after the date of grant (except that such Options may become exercisable, as determined by the Committee, upon the Grantee’s death, Disability (as defined below in Section 5(f)(vi)(C)) or retirement, or upon a Change of Control or other circumstances permitted by applicable regulations).

(f) Termination of Employment, Disability or Death.

(i) Except as provided below, an Option may only be exercised while the Grantee is employed by, or providing service to, the Employer (as defined below in Section 5(f)(vi)(A)) as an Employee, Key Advisor or member of the Board.

(ii) In the event that a Grantee ceases to be employed by, or provide service to, the Employer for any reason other than Disability, death, or termination for Cause (as defined below in Section 5(f)(vi)(D)), any Option which is otherwise exercisable by the Grantee shall terminate unless exercised within 90 days after the date on which the Grantee ceases to be employed by, or provide service to, the Employer (or within such other period of time as may be specified by the Committee), but in any event no later than the date of expiration of the Option term. Except as otherwise provided by the Committee, any of the Grantee’s Options that are not otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide service to, the Employer shall terminate as of such date.

(iii) In the event the Grantee ceases to be employed by, or provide service to, the Employer on account of a termination for Cause by the Employer, any Option held by the Grantee shall terminate as of the date the Grantee ceases to be employed by, or provide service to, the Employer. In addition, notwithstanding any other provisions of this Section 5, if the Committee determines that the Grantee has engaged in conduct that constitutes Cause at any time while the Grantee is employed by, or providing service to, the Employer or after the Grantee’s termination of employment or service, any Option held by the Grantee shall immediately terminate and the Grantee shall automatically forfeit all shares underlying any exercised portion of an Option for which the Company has not yet delivered the share certificates, upon refund by the Company of the Exercise Price paid by the Grantee for such shares. Upon any exercise of an Option, the Company may withhold delivery of share certificates pending resolution of an inquiry that could lead to a finding resulting in a forfeiture.

(iv) In the event the Grantee ceases to be employed by, or provide service to, the Employer on account of the Grantee’s Disability, any Option which is otherwise exercisable by the Grantee shall terminate unless exercised within one year after the date on which the Grantee ceases to be employed by, or provide service to, the Employer (or within such other period of time as may be specified by the Committee), but in any event no later than the date of expiration of the Option term. Except as otherwise provided by the Committee, any of the Grantee’s Options which are not otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide service to, the Employer shall terminate as of such date.

(v) If the Grantee dies while employed by, or providing service to, the Employer or within 90 days after the date on which the Grantee ceases to be employed or

provide service on account of a termination specified in Section 5(f)(ii) above (or within such other period of time as may be specified by the Committee), any Option that is otherwise exercisable by the Grantee shall terminate unless exercised within one year after the date on which the Grantee ceases to be employed by, or provide service to, the Employer (or within such other period of time as may be specified by the Committee), but in any event no later than the date of expiration of the Option term. Except as otherwise provided by the Committee, any of the Grantee’s Options that are not otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide service to, the Employer shall terminate as of such date.

(vi) For purposes of the Plan:

(A) The term “Employer” shall mean the Company and its subsidiaries, as determined by the Committee.

(B) “Employed by, or provide service to, the Employer” shall mean employment or service as an Employee, Key Advisor or member of the Board (so that, for purposes of exercising Options and satisfying conditions with respect to other Grants, a Grantee shall not be considered to have terminated employment or service until the Grantee ceases to be an Employee, Key Advisor and member of the Board), unless the Committee determines otherwise.

(C) “Disability” shall mean a Grantee’s becoming disabled within the meaning of section 22(e)(3) of the Code, within the meaning of the Employer’s long-term disability plan applicable to the Grantee, or as otherwise determined by the Committee.

(D) “Cause” shall mean, except to the extent otherwise specified by the Committee, a finding by the Committee that the Grantee (i) has materially breached his or her employment or service contract with the Employer, which breach has not been remedied by the Grantee after written notice has been provided to the Grantee of such breach, (ii) has engaged in disloyalty to the Employer, including, without limitation, fraud, embezzlement, theft, commission of a felony or proven dishonesty, (iii) has disclosed trade secrets or confidential information of the Employer to persons not entitled to receive such information, (iv) has breached any written non-competition or non- solicitation agreement between the Grantee and the Employer, or (v) has engaged in such other behavior detrimental to the interests of the Employer as the Committee determines.

(g) Exercise of Options. A Grantee may exercise an Option that has become exercisable, in whole or in part, by delivering a notice of exercise to the Company. The Grantee shall pay the Exercise Price for an Option as specified by the Committee (i) in cash, (ii) with the approval of the Committee, by delivering shares of Company Stock owned by the Grantee (including Company Stock acquired in connection with the exercise of an Option, subject to such restrictions as the Committee deems appropriate) and having a Fair Market Value on the date of exercise equal to the Exercise Price or by attestation (on a form prescribed by the Committee) to ownership of shares of Company Stock having a Fair Market Value on the date of exercise equal to the Exercise Price, (iii) after a Public Offering (as defined below in Section 20) of the Company’s stock, payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board, or (iv) by such other method as the Committee may

approve. Shares of Company Stock used to exercise an Option shall have been held by the Grantee for the requisite period of time to avoid adverse accounting consequences to the Company with respect to the Option. The Grantee shall pay the Exercise Price and the amount of any withholding tax due (pursuant to Section 10) at such time as may be specified by the Committee. In addition, to the extent an Option is at the time exercisable for vested shares of Company Stock, all or any part of that vested portion may be surrendered to the Company for an appreciation distribution payable in shares of Company Stock with a Fair Market Value at the time of the Option surrender equal to the dollar amount by which the then Fair Market Value of the shares of Company Stock subject to the surrendered portion exceeds the aggregate Exercise Price payable for those shares.

(h) Limits on Incentive Stock Options. Each Incentive Stock Option shall provide that, if the aggregate Fair Market Value of the stock on the date of the grant with respect to which Incentive Stock Options are exercisable for the first time by a Grantee during any calendar year, under the Plan or any other stock option plan of the Company or a subsidiary, exceeds $100,000, then the Option, as to the excess, shall be treated as a Nonqualified Stock Option. An Incentive Stock Option shall not be granted to any person who is not an Employee of the Company.

SECTION 6 Stock Awards

The Committee may issue or transfer shares of Company Stock to an Employee, Non-Employee Director or Key Advisor under a Stock Award, upon such terms as the Committee deems appropriate. The following provisions are applicable to Stock Awards:

(a) General Requirements. Shares of Company Stock issued or transferred pursuant to Stock Awards may be issued or transferred for cash consideration or for no cash consideration, and subject to restrictions or no restrictions, as determined by the Committee. The Committee may, but shall not be required to, establish conditions under which restrictions on Stock Awards shall lapse over a period of time or according to such other criteria as the Committee deems appropriate, including, without limitation, restrictions based upon the achievement of specific performance goals. The period of time during which the Stock Awards will remain subject to restrictions will be designated in the Grant Instrument as the “Restriction Period.”

(b) Number of Shares. The Committee shall determine the number of shares of Company Stock to be issued or transferred pursuant to a Stock Award and the restrictions applicable to such shares.

(c) Requirement of Employment or Service. Unless the Committee determines otherwise, if the Grantee ceases to be employed by, or provide service to, the Employer during a period designated in the Grant Instrument as the Restriction Period, or if other specified conditions are not met, the Stock Award shall terminate as to all shares covered by the Grant as to which the restrictions have not lapsed, and those shares of Company Stock must be immediately returned to the Company. The Committee may, however, provide for complete or partial exceptions to this requirement as it deems appropriate.

(d) Restrictions on Transfer and Legend on Stock Certificate. During the Restriction Period, a Grantee may not sell, assign, transfer, pledge or otherwise dispose of the shares of a

Stock Award except to a successor under Section 11(a). Each certificate for a share of a Stock Award shall contain a legend giving appropriate notice of the restrictions in the Grant. The Grantee shall be entitled to have the legend removed from the stock certificate covering the shares subject to restrictions when all restrictions on such shares have lapsed. The Committee may determine that the Company will not issue certificates for Stock Awards until all restrictions on such shares have lapsed, or that the Company will retain possession of certificates for shares of Stock Awards until all restrictions on such shares have lapsed.

(e) Right to Vote and to Receive Dividends. Unless the Committee determines otherwise and to the extent permitted by the terms applicable to Company Stock, during the Restriction Period, the Grantee shall have the right to vote shares of Stock Awards and to receive any dividends or other distributions paid on such shares, subject to any restrictions deemed appropriate by the Committee, including, without limitation, the achievement of specific performance goals.

(f) Lapse of Restrictions. All restrictions imposed on Stock Awards shall lapse upon the expiration of the applicable Restriction Period and the satisfaction of all conditions imposed by the Committee. The Committee may determine, as to any or all Stock Awards, that the restrictions shall lapse without regard to any Restriction Period.

SECTION 7 Stock Units

The Committee may grant Stock Units representing one or more shares of Company Stock to an Employee, Non-Employee Director or Key Advisor, upon such terms and conditions as the Committee deems appropriate. The following provisions are applicable to Stock Units:

(a) Crediting of Units. Each Stock Unit shall represent the right of the Grantee to receive an amount based on the value of a share of Company Stock, if specified conditions are met. All Stock Units shall be credited to bookkeeping accounts established on the Company’s records for purposes of the Plan.

(b) Terms of Stock Units. The Committee may grant Stock Units that are payable if specified performance goals or other conditions are met, or under other circumstances. Stock Units may be paid at the end of a specified performance period or other period, or payment may be deferred to a date authorized by the Committee. The Committee shall determine the number of Stock Units to be granted and the requirements applicable to such Stock Units.

(c) Requirement of Employment or Service. Unless the Committee determines otherwise, if the Grantee ceases to be employed by, or provide service to, the Employer during a specified period, or if other conditions established by the Committee are not met, the Grantee’s Stock Units shall be forfeited. The Committee may, however, provide for complete or partial exceptions to this requirement as it deems appropriate.

(d) Payment With Respect to Stock Units. Payments with respect to Stock Units may be made in cash, in Company Stock, or in a combination of the two, as determined by the Committee.

SECTION 8 Stock Appreciation Rights

The Committee may grant SARs to an Employee, Non-Employee Director or Key Advisor separately or in tandem with any Option. The following provisions are applicable to SARs:

(a) Base Amount. The Committee shall establish the base amount of the SAR at the time the SAR is granted. The base amount of each SAR shall not be less than the Fair Market Value of a share of Company Stock on the date of Grant of the SAR.

(b) Tandem SARs. In the case of tandem SARs, the number of SARs granted to a Grantee that shall be exercisable during a specified period shall not exceed the number of shares of Company Stock that the Grantee may purchase upon the exercise of the related Option during such period. Upon the exercise of an Option, the SARs relating to the Company Stock covered by such Option shall terminate. Upon the exercise of SARs, the related Option shall terminate to the extent of an equal number of shares of Company Stock.

(c) Exercisability. An SAR shall be exercisable during the period specified by the Committee in the Grant Instrument and shall be subject to such vesting and other restrictions as may be specified in the Grant Instrument. The Committee may accelerate the exercisability of any or all outstanding SARs at any time for any reason. SARs may only be exercised while the Grantee is employed by, or providing service to, the Employer or during the applicable period after termination of employment or service as described in Section 5(e) above. A tandem SAR shall be exercisable only during the period when the Option to which it is related is also exercisable.

(d) Grants to Non-Exempt Employees. Notwithstanding the foregoing, SARs granted to persons who are non-exempt employees under the Fair Labor Standards Act of 1938, as amended, may not be exercisable for at least six months after the date of grant (except that such SARs may become exercisable, as determined by the Committee, upon the Grantee’s death, Disability or retirement, or upon a Change of Control or other circumstances permitted by applicable regulations).

(e) Value of SARs. When a Grantee exercises SARs, the Grantee shall receive in settlement of such SARs an amount equal to the value of the stock appreciation for the number of SARs exercised. The stock appreciation for an SAR is the amount by which the Fair Market Value of the underlying Company Stock on the date of exercise of the SAR exceeds the base amount of the SAR as described in subsection (a).

(f) Form of Payment. The appreciation in an SAR shall be paid in shares of Company Stock, cash or any combination of the foregoing, as the Committee shall determine. For purposes of calculating the number of shares of Company Stock to be received, shares of Company Stock shall be valued at their Fair Market Value on the date of exercise of the SAR.

SECTION 9 Other Equity Awards

The Committee may grant Other Equity Awards, which are awards (other than those described in Sections 5, 6, 7 and 8 of the Plan) that are based on, measured by or payable in Company Stock, including, without limitation, stock appreciation rights, to any Employee, Non- Employee Director or Key Advisor, on such terms and conditions as the Committee shall

determine. Other Equity Awards may be awarded subject to the achievement of performance goals or other conditions and may be payable in cash, Company Stock or any combination of the foregoing, as the Committee shall determine.

SECTION 10 Withholding of Taxes

(a) Required Withholding. All Grants under the Plan shall be subject to applicable federal (including FICA), state and local tax withholding requirements. The Employer may require that the Grantee or other person receiving or exercising Grants pay to the Employer the amount of any federal, state or local taxes that the Employer is required to withhold with respect to such Grants, or the Employer may deduct from other wages paid by the Employer the amount of any withholding taxes due with respect to such Grants.

(b) Election to Withhold Shares. If the Committee so permits, a Grantee may elect to satisfy the Employer’s tax withholding obligation with respect to Grants paid in Company Stock by having shares withheld up to an amount that does not exceed the minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities. The election must be in a form and manner prescribed by the Committee and may be subject to the prior approval of the Committee.

SECTION 11 Transferability of Grants

(a) Nontransferability of Grants. Except as provided below, only the Grantee may exercise rights under a Grant during the Grantee’s lifetime. A Grantee may not transfer those rights except (i) by will or by the laws of descent and distribution or (ii) with respect to Grants other than Incentive Stock Options, if permitted in any specific case by the Committee, pursuant to a domestic relations order or otherwise as permitted by the Committee. When a Grantee dies, the personal representative or other person entitled to succeed to the rights of the Grantee may exercise such rights. Any such successor must furnish proof satisfactory to the Company of his or her right to receive the Grant under the Grantee’s will or under the applicable laws of descent and distribution.

(b) Transfer of Nonqualified Stock Options. Notwithstanding the foregoing, the Committee may provide, in a Grant Instrument, that a Grantee may transfer Nonqualified Stock Options to family members, or one or more trusts or other entities for the benefit of or owned by family members, consistent with the applicable securities laws, according to such terms as the Committee may determine; provided that the Grantee receives no consideration for the transfer of an Option and the transferred Option shall continue to be subject to the same terms and conditions as were applicable to the Option immediately before the transfer.

SECTION 12 Right of First Refusal; Repurchase Right

(a) Offer. Prior to a Public Offering, if at any time an individual desires to sell, encumber, or otherwise dispose of shares of Company Stock that were distributed to him or her under this Plan and that are transferable, the individual may do so only pursuant to a bona fide written offer, and the individual shall first offer the shares to the Company by giving the Company written notice disclosing: (i) the name of the proposed transferee of the Company Stock, (ii) the certificate number and number of shares of Company Stock proposed to be

transferred or encumbered, (iii) the proposed price, (iv) all other terms of the proposed transfer, and (v) a written copy of the proposed offer. Within 60 days after receipt of such notice, the Company shall have the option to purchase all or part of such Company Stock at the price and on the terms described in the written notice; provided that the Company may pay such price in installments over a period not to exceed four years, at the discretion of the Committee.

(b) Sale. In the event the Company (or a stockholder, as described below) does not exercise the option to purchase Company Stock, as provided above, the individual shall have the right to sell, encumber, or otherwise dispose of the shares of Company Stock described in subsection (a) at the price and on the terms of the transfer set forth in the written notice to the Company, provided such transfer is effected within 15 days after the expiration of the option period. If the transfer is not effected within such period, the Company must again be given an option to purchase, as provided above.

(c) Assignment of Rights. The Board, in its sole discretion, may waive the Company’s right of first refusal and repurchase right under this Section 12. If the Company’s right of first refusal or repurchase right is so waived, the Board may, in its sole discretion, assign such right to the remaining stockholders of the Company in the same proportion that each stockholder’s stock ownership bears to the stock ownership of all the stockholders of the Company, as determined by the Board. To the extent that a stockholder has been given such right and does not purchase his or her allotment, the other stockholders shall have the right to purchase such allotment on the same basis.

(d) Purchase by the Company. Prior to a Public Offering, if a Grantee ceases to be employed by, or provide service to, the Employer, the Company shall have the right to purchase all or part of any Company Stock distributed to the Grantee under this Plan at its then current Fair Market Value or at such other price as may be established in the Grant Instrument; provided, however, that such repurchase shall be made in accordance with applicable accounting rules to avoid adverse accounting treatment.

(e) Public Offering. On and after a Public Offering, the Company shall have no further right to purchase shares of Company Stock under this Section 12. The requirements of this Section 12 shall lapse and cease to be effective upon a Public Offering.

(f) Stockholder’s Agreement. Notwithstanding the provisions of this Section 12, if the Committee requires that a Grantee execute a stockholder’s agreement with respect to any Company Stock distributed pursuant to this Plan, which contains a right of first refusal or repurchase right, the provisions of this Section 12 shall not apply to such Company Stock, unless the Committee determines otherwise.

SECTION 13 Change of Control of the Company

(a) Change of Control. As used herein, a “Change of Control” shall be deemed to have occurred if:

(i) Any “person,” as such term is used in sections 13(d) and 14(d) of Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than a person who is a stockholder of the Company on the effective date of the Plan) becomes a “beneficial owner”

(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the voting power of the then outstanding securities of the Company; provided that a Change of Control shall not be deemed to occur as a result of a transaction in which the Company becomes a subsidiary of another corporation and in which the stockholders of the Company, immediately prior to the transaction, will beneficially own, immediately after the transaction, shares entitling such stockholders to more than 50% of all votes to which all stockholders of the parent corporation would be entitled in the election of directors; or

(ii) The consummation of (A) a merger or consolidation of the Company with another corporation where the stockholders of the Company, immediately prior to the merger or consolidation, will not beneficially own, immediately after the merger or consolidation, shares entitling such stockholders to more than 50% of all votes to which all stockholders of the surviving corporation would be entitled in the election of directors, (B) a sale or other disposition of all or substantially all of the assets of the Company, or (C) a liquidation or dissolution of the Company.

(b) Other Definition. The Committee may modify the definition of Change of Control for a particular Grant as the Committee deems appropriate to comply with section 409A of the Code or otherwise.

SECTION 14 Consequences of a Change of Control

(a) Assumption of Grants. Upon a Change of Control where the Company is not the surviving corporation (or survives only as a subsidiary of another corporation), unless the Committee determines otherwise, all outstanding Options and SARs that are not exercised shall be assumed by, or replaced with comparable options or rights by the surviving corporation (or a parent or subsidiary of the surviving corporation), and other outstanding Grants that remain in effect after the Change of Control shall be converted to similar grants of the surviving corporation (or a parent or subsidiary of the surviving corporation).

(b) Other Alternatives. Notwithstanding the foregoing, in the event of a Change of Control, the Committee may take any of the following actions with respect to any or all outstanding Grants: the Committee may (i) determine that outstanding Options shall accelerate and become exercisable, in whole or in part, upon the Change of Control or upon such other event as the Board determines, (ii) determine that the restrictions and conditions on outstanding Stock Awards, Stock Units and Other Equity Awards shall lapse and/or be paid, in whole or in part, upon the Change of Control or upon such other event as the Board determines, (iii) require that Grantees surrender their outstanding Options and SARs in exchange for one or more payments, in cash or Company Stock as determined by the Committee, in an amount, if any, equal to the amount by which the then Fair Market Value of the shares of Company Stock subject to the Grantee’s unexercised Options and SARs exceeds the Exercise Price or base amount of the Options and SARs, on such terms as the Committee determines, or (iv) after giving Grantees an opportunity to exercise their outstanding Options and SARs, terminate any or all unexercised Options and SARs at such time as the Committee deems appropriate. Such assumption, surrender or termination shall take place as of the date of the Change of Control or such other date as the Committee may specify. The Committee shall have no obligation to take

any of the foregoing actions, and, in the absence of any such actions, outstanding Grants shall continue in effect according to their terms (subject to any assumption pursuant to subsection (a)).

SECTION 15 Limitations on Issuance or Transfer of Shares

(a) Stockholder’s Agreement. The Committee may require that a Grantee execute a stockholder’s agreement, with such terms as the Committee deems appropriate, with respect to any Company Stock issued or distributed pursuant to this Plan.

(b) Limitations on Issuance or Transfer of Shares. No Company Stock shall be issued or transferred in connection with any Grant hereunder unless and until all legal requirements applicable to the issuance or transfer of such Company Stock have been complied with to the satisfaction of the Committee. The Committee shall have the right to condition any Grant made to any Grantee hereunder on such Grantee’s undertaking in writing to comply with such restrictions on his or her subsequent disposition of such shares of Company Stock as the Committee shall deem necessary or advisable, and certificates representing such shares may be legended to reflect any such restrictions. Certificates representing shares of Company Stock issued or transferred under the Plan will be subject to such stop-transfer orders and other restrictions as may be required by applicable laws, regulations and interpretations, including any requirement that a legend be placed thereon.

(c) Lock-Up Period. If so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any underwritten offering of securities of the Company, a Grantee (including any successor or assigns) shall not sell or otherwise transfer any shares or other securities of the Company during the 30 day period preceding, and during such period as may be requested by the Managing Underwriter or the Company following, the effective date of a registration statement filed by the Company for such underwriting (the “Market Standoff Period”). In no event, however, shall such Market Standoff Period exceed 180 days following the effective date of such registrations statement plus such additional period as may be requested by the Company or the Managing Underwriter to accommodate regulatory restrictions on (i) the publication or other distribution of research reports or (ii) analyst recommendations and opinions, including (without limitation) the restrictions set forth in Rule 2711(f)(4) of the Financial Industry Regulatory Authority and Rule 472(f)(4) of the New York Stock Exchange, as amended, or any similar successor rules. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period. Each Grantee (including any successor assigns) further agrees to execute such agreements as may be requested by the Company or the Managing Underwriter in connection with such underwritten offering as are consistent with this Section 15(c) or that are necessary to give further effect thereto.

SECTION 16 Amendment and Termination of the Plan

(a) Amendment. The Board may amend or terminate the Plan at any time; provided, however, that the Board shall not amend the Plan without stockholder approval if such approval is required in order to comply with the Code or to other applicable law.

(b) Termination of Plan. The Plan shall terminate on the day immediately preceding the tenth anniversary of its original effective date, unless the Plan is terminated earlier by the Board or is extended by the Board with the approval of the stockholders.

(c) Termination and Amendment of Outstanding Grants. A termination or amendment of the Plan that occurs after a Grant is made shall not materially impair the rights of a Grantee unless the Grantee consents or unless the Committee acts under Section 21(c). The termination of the Plan shall not impair the power and authority of the Committee with respect to an outstanding Grant. Whether or not the Plan has terminated, an outstanding Grant may be terminated or amended under Section 21(c) or may be amended by agreement of the Company and the Grantee consistent with the Plan.

(d) Governing Document. The Plan shall be the controlling document. No other statements, representations, explanatory materials or examples, oral or written, may amend the Plan in any manner. The Plan shall be binding upon and enforceable against the Company and its successors and assigns.

SECTION 17 Funding of the Plan

This Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Grants under this Plan.

SECTION 18 Rights of Participants

Nothing in this Plan shall entitle any Employee, Key Advisor, Non-Employee Director or other person to any claim or right to be granted a Grant under this Plan. Neither this Plan nor any action taken hereunder shall be construed as giving any individual any rights to be retained by or in the employ of the Employer or any other employment rights.

SECTION 19 No Fractional Shares

No fractional shares of Company Stock shall be issued or delivered pursuant to the Plan or any Grant. The Committee shall determine whether cash, other awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

SECTION 20 Effective Date of the Plan

(a) Effective Date. The Plan was originally effective on May 1, 2009 and was subsequently amended and restated, effective as of August 16, 2010 and March 2, 2011 and subsequently amended, effective as of November 14, 2012. The Plan is hereby amended and restated, effective as of June 28, 2013 (the “Effective Date”), subject to stockholder approval of the Plan, within 12 months before or after its adoption by the Board.

(b) Public Offering. The provisions of the Plan that refer to a Public Offering shall be effective, if at all, upon the initial registration of the Company Stock under section 12(g) of the Exchange Act, and shall remain effective thereafter for so long as such stock is so registered.

SECTION 21 Miscellaneous

(a) Grants in Connection with Corporate Transactions and Otherwise. Nothing contained in this Plan shall be construed to (i) limit the right of the Committee to make Grants under this Plan in connection with the acquisition, by purchase, lease, merger, consolidation or otherwise, of the business or assets of any corporation, firm or association, including Grants to employees thereof who become Employees, or for other proper corporate purposes, or (ii) limit the right of the Company to grant stock options or make other awards outside of this Plan. Without limiting the foregoing, the Committee may make a Grant to an employee, director or advisor of another corporation who becomes an Employee, Non-Employee Director or Key Advisor by reason of a corporate merger, consolidation, acquisition of stock or property, reorganization or liquidation involving the Company, the parent or any of their subsidiaries in substitution for a stock option or stock awards grant made by such corporation. The terms and conditions of the substitute grants may vary from the terms and conditions required by the Plan and from those of the substituted stock incentives. The Committee shall prescribe the provisions of the substitute grants.

(b) Financial Statements. In the event there are at any time five hundred (500) or more holders of outstanding Options under the Plan, the Company shall provide to each such Option holder, at the time the outstanding Options first become held by five hundred (500) holders and at successive six (6) month intervals thereafter, financial statements that meet the requirements of Rule 701(e)(4) under the Securities Act of 1933, as amended and that are at the time of distribution not more than one hundred and eighty (180) days old. Such obligation shall continue until such time as the Company becomes subject to the reporting requirements of section 13 or 15(d) of the Exchange Act or (if earlier) no longer relies on the exemption from such reporting requirements provided by Rule 12h-1(g) under the Exchange Act.

(i) The Plan, the exercise of Options and the obligations of the Company to issue or transfer shares of Company Stock under Grants shall be subject to all applicable laws and to approvals by any governmental or regulatory agency as may be required. After a Public Offering of the Company, with respect to persons subject to section 16 of the Exchange Act, it is the intent of the Company that the Plan and all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its successors under the Exchange Act and section 162(m) of the Code. It is the intent of the Company that the Plan and Incentive Stock Options granted under the Plan comply with the applicable provisions of section 422 of the Code and that, to the extent applicable, Grants made under the Plan comply with the requirements of section 409A of the Code and the regulations thereunder. To the extent that any legal requirement as set forth in the Plan ceases to be required under applicable law, the Committee may determine that such Plan provision shall cease to apply. The Committee may revoke any Grant if it is contrary to law or modify a Grant or the Plan to bring a Grant or the Plan into compliance with any applicable law or regulation.

(ii) The Plan is intended to comply with the requirements of section 409A of the Code, to the extent applicable. Each Grant shall be construed and administered such that the Grant either (A) qualifies for an exemption from the requirements of section 409A of the Code or

(B) satisfies the requirements of section 409A of the Code. If a Grant is subject to section 409A of the Code, (I) distributions shall only be made in a manner and upon an event permitted under section 409A of the Code, (II) payments to be made upon a termination of employment shall only be made upon a “separation from service” under section 409A of the Code, (III) unless the Grant specifies otherwise, each installment payment shall be treated as a separate payment for purposes of section 409A of the Code, and (IV) in no event shall a Grantee, directly or indirectly, designate the calendar year in which a distribution is made except in accordance with section 409A of the Code.

(iii) Notwithstanding anything in the Plan or any Grant agreement to the contrary, each Grantee shall be solely responsible for the tax consequences of Grants under the Plan, and in no event shall the Company have any responsibility or liability if a Grant does not meet any applicable requirements of section 409A of the Code. Although the Company intends to administer the Plan to prevent taxation under section 409A of the Code, the Company does not represent or warrant that the Plan or any Grant complies with any provision of federal, state, local or other tax law.

(d) Employees Subject to Taxation Outside the United States. With respect to Grantees who are subject to taxation in countries other than the United States, the Committee may make Grants on such terms and conditions as the Committee deems appropriate to comply with the laws of the applicable countries, and the Committee may create such procedures, addenda and subplans and make such modifications as may be necessary or advisable to comply with such laws.

(e) Governing Law. The validity, construction, interpretation and effect of the Plan and Grant Instruments issued under the Plan shall be governed and construed by and determined in accordance with the laws of the State of Delaware without giving effect to the conflict of laws provisions thereof.

Form of Restricted Stock Grant

TABULA RASA HEALTHCARE, INC.

2014 EQUITY COMPENSATION PLAN

RESTRICTED STOCK GRANT

This RESTRICTED STOCK GRANT AGREEMENT (this “Agreement”), dated as of [·] (the “Date of Grant”), is delivered by Tabula Rasa HealthCare, Inc. (the “Company”), to [·] (the “Grantee”).

RECITALS

A. The Tabula Rasa HealthCare, Inc. 2014 Equity Compensation Plan (the “Plan”) provides for the grant of restricted stock in accordance with the terms and conditions of the Plan. The Board of Directors of the Company (the “Board”) has decided to make a restricted stock grant as an inducement for the Grantee to promote the best interests of the Company and its stockholders. All capitalized terms used but not defined herein shall have the meaning ascribed to them in the Plan. A copy of the Plan is attached.

B. The Board is authorized to appoint a committee to administer the Plan. If a committee is appointed, all references in this Agreement to the “Board” shall be deemed to refer to the committee.

NOW, THEREFORE, the parties to this restricted stock grant agreement (this “Agreement”), intending to be legally bound hereby, agree as follows:

1. Restricted Stock Grant. Subject to the terms and conditions set forth in this Agreement and the Plan, the Company hereby grants the Grantee [·] shares of Company Stock, subject to the restrictions set forth below and in the Plan (“Restricted Stock”). Shares of Restricted Stock may not be transferred by the Grantee or subjected to any security interest until the shares have become vested pursuant to this Agreement and the Plan.

2. Vesting and Nonassignability of Restricted Stock.

(a) The shares of Restricted Stock shall become vested, and the restrictions described in Sections 2(c) and 2(d) shall lapse, according to the following vesting schedule, if the Grantee continues to be employed by, or provide service to, the Employer from the Date of Grant until the applicable vesting date: [·]

The vesting of the shares of Restricted Stock shall be cumulative, but shall not exceed 100% of the shares. If the foregoing schedule would produce fractional shares, the number of shares that vest shall be rounded down to the nearest whole share.

(b) Notwithstanding the foregoing, in the event a Change of Control occurs while the Grantee is employed by, or providing service to, the Company, the shares of Restricted Stock shall be subject to such accelerated vesting as set forth in the Plan.

(c) Except as set forth in Paragraph 2(b) above and Section 14 of the Plan, if the Grantee’s employment or service with the Employer terminates for any reason before the

Restricted Stock is fully vested, the shares of Restricted Stock that are not then vested shall be forfeited and must be immediately returned to the Company.

(d) During the period before the shares of Restricted Stock vest (the “Restriction Period”), the non-vested shares of Restricted Stock may not be assigned, transferred, pledged or otherwise disposed of by the Grantee. Any attempt to assign, transfer, pledge or otherwise dispose of the shares contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon the shares, shall be null, void and without effect.

3. Issuance of Certificates.

(a) Stock certificates representing the shares of Restricted Stock may be issued by the Company and held in escrow by the Company until the Restricted Stock vests, or the Company may hold non-certificated shares until the Restricted Stock vests. During the Restriction Period, the Grantee shall receive any cash dividends with respect to the shares of Restricted Stock, may vote the shares of Restricted Stock and may participate in any distribution pursuant to a plan of dissolution or complete liquidation of the Company. In the event of a dividend or distribution payable in stock or other property or a reclassification, split up or similar event during the Restriction Period, the shares or other property issued or declared with respect to the non-vested shares of Restricted Stock shall be subject to the same terms and conditions relating to vesting as the shares to which they relate.

(b) When the Grantee obtains a vested right to shares of Restricted Stock, a certificate representing the vested shares shall be issued to the Grantee, free of the restrictions under Section 2 of this Agreement.

(c) The obligation of the Company to deliver a certificate representing the vested shares upon the vesting of the Restricted Stock shall be subject to all applicable laws, rules, and regulations and such approvals by governmental agencies as may be deemed appropriately to comply with relevant securities laws and regulations.

4. Change of Control. The provisions of the Plan applicable to a Change of Control shall apply to the Restricted Stock, and, in the event of a Change of Control, the Board may take such actions as it deems appropriate pursuant to the Plan.

5. Right of First Refusal; Repurchase Right; Stockholder’s Agreement. As a condition of receiving this grant, the Grantee hereby agrees that (a) after the restrictions described in Paragraph 2 of this Agreement lapse with respect to all or part of the shares, the shares that are no longer subject to such restrictions shall be subject to a right of first refusal and repurchase right as described in the Plan, and (b) the Board may require that the Grantee execute a stockholder’s agreement, in such form as the Board determines, with respect to the shares issued under the Plan.

6. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan. This grant is subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Board in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights and obligations with respect to withholding taxes, (b) the registration, qualification or listing of Company Stock, (c) changes in capitalization of the Company, and (d) other requirements of applicable law. The Board shall

have the authority to interpret and construe the grant pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.

7. Withholding. The Grantee shall be required to pay to the Company, or make other arrangements satisfactory to the Company to provide for the payment of, any federal, state, local or other taxes that the Employer is required to withhold with respect to the grant or vesting of the shares of Restricted Stock. Subject to Board approval, the Grantee may elect to satisfy any tax withholding obligation of the Employer with respect to the shares of Restricted Stock by having shares withheld up to an amount that does not exceed the minimum applicable withholding tax rate for federal (including FICA), state, local and other tax liabilities.

8. Other Restrictions on Sale or Transfer of Shares.

(a) The Grantee is acquiring the shares underlying this grant solely for investment purposes, with no present intention of distributing or reselling any of the shares or any interest therein. The Grantee acknowledges that the shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”).

(b) The Grantee is aware of the applicable limitations under the Securities Act and under the Plan relating to a subsequent sale, transfer, pledge or other assignment or encumbrance of the shares. The Grantee further acknowledges that the shares must be held indefinitely unless they are subsequently registered under the Securities Act and applicable state securities laws or an exemption from such registration is available.

(c) The Grantee will not sell, transfer, pledge, donate, assign, mortgage, hypothecate or otherwise encumber the shares underlying this grant unless the shares are registered under the Securities Act or the Company is given an opinion of counsel reasonably acceptable to the Company that such registration is not required under the Securities Act.

(d) The Grantee realizes that there is no public market for the shares underlying this grant, that no market may ever develop for them, and that they have not been approved or disapproved by the Securities and Exchange Commission or any governmental agency.

9. Tax Consequences. The Grantee has reviewed with the Grantee’s own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. The Grantee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Grantee understands that the Grantee (and not the Company) shall be responsible for the Grantee’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. The Grantee understands that section 83 of the Internal Revenue Code of 1986, as amended (the “Code”) taxes as ordinary income the difference between the amount paid for the shares of Restricted Stock and the Fair Market Value of the such shares as of the date any restrictions on the shares lapse pursuant to Paragraph 2 of this Agreement. The Grantee understands that the Grantee may elect to be taxed at the time the shares of Restricted Stock are granted rather than as and when the Restriction Period expires by filing an election under section 83(b) of the Code with the Internal Revenue Service within 30 days from the Date of Grant. The form for making this election is attached as Exhibit A hereto.

THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO TIMELY FILE THE ELECTION UNDER SECTION 83(b), EVEN IF THE GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE GRANTEE’S BEHALF.

10. No Employment or Other Rights. This grant shall not confer upon the Grantee any right to be retained by or in the employ or service of the Employer and shall not interfere in any way with the right of the Employer to terminate the Grantee’s employment or service at any time. The right of the Employer to terminate at will the Grantee’s employment or service at any time for any reason is specifically reserved.

11. Assignment by Company. The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries, and affiliates. This Agreement may be assigned by the Company without the Grantee’s consent.

12. Applicable Law. The validity, construction, interpretation and effect of this instrument shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflicts of laws provisions thereof.

13. Notice. Any notice to the Company provided for in this Agreement shall be addressed to the Company in care of the President at the corporate headquarters of the Company, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll of the Employer, or to such other address as the Grantee may designate to the Employer in writing. Any notice shall be delivered by hand, sent by telecopy or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service.

IN WITNESS WHEREOF, the Company has caused its duly authorized officers to execute and attest this instrument, and the Grantee has placed his or her signature hereon, effective as of the Date of Grant.

		TABULA RASA HEALTHCARE, INC.
Attest:

		By:
		Name:
		Title:

I hereby accept the grant of Restricted Stock described in this Agreement, and I agree to be bound by the terms of the Plan and this Agreement. I hereby further agree that all the decisions and determinations of the Board shall be final and binding.


	Grantee


	Date

Exhibit A

Section 83(b) Election Form

This election is being made under section 83(b) of the Internal Revenue Code of 1986, as amended, pursuant to Treasury Regulation Section 1.83-2.

(1)

Name of taxpayer making election:
Address:

Social Security Number:
Tax Year for which election is being made:

(2) The property with respect to which the election is being made: shares of common stock of (“Shares”).

(3) Date the property was transferred: , .

(4) Forfeiture provision: The Shares are subject to forfeiture to the Company if the taxpayer ceases to provide service to the Company during the restriction period. The restriction period lapses according to the following schedule, if the taxpayer is employed by, or providing service to, the Employer (as defined in the Company’s Equity Compensation Plan”) on the applicable vesting date:

Vesting Date		Percentage of Shares of Restricted Stock that Will Vest

(5) The fair market value at the time of the transfer of the Shares (determined without regard to any restriction other than a restriction that by its terms will never lapse) is $ per Share x Shares = $ .

(6) The amount paid for the Shares is $ per Share x Shares = $ aggregate consideration.

(7) The amount to include in gross income is $ .

The undersigned taxpayer will file this election with the Internal Revenue Service office with which taxpayer files his or her annual income tax return not later than 30 days after the date of transfer of the property. A copy of the election also will be furnished to the Company. Additionally, the undersigned will include a copy of the election with his or her income tax return for the taxable year in which the property is transferred. The undersigned is the person performing the services in connection with which the property was transferred.


Taxpayer

Form of ISO Grant

TABULA RASA HEALTHCARE, INC.

2014 EQUITY COMPENSATION PLAN

INCENTIVE STOCK OPTION GRANT

This INCENTIVE STOCK OPTION GRANT (this “Agreement”), dated as of [·], (the “Date of Grant”), is delivered by Tabula Rasa Healthcare, Inc. (the “Company”) to [·] (the “Grantee”).

RECITALS

A. The Tabula Rasa Healthcare, Inc. 2014 Equity Compensation Plan (the “Plan”) provides for the grant of stock options to purchase shares of Company Stock (as defined in the Plan). The Board of Directors of the Company (the “Board”) has decided to make this incentive stock option grant as an inducement for the Grantee to promote the best interests of the Company and its stockholders. The Grantee acknowledges that a copy of the Plan has been provided or made available to the Grantee.

B. The Board is authorized to appoint a committee to administer the Plan. If a committee is appointed, all references in this Agreement to the “Board” shall be deemed to refer to the committee.

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby, agree as follows:

1. Grant of Option.

(a) Subject to the terms and conditions set forth in this Agreement and in the Plan, the Company hereby grants to the Grantee an incentive stock option (the “Option”) to purchase [·] shares of Company Stock (the “Shares”) at an exercise price of $[·] per Share. The Option shall become exercisable according to Paragraph 2 below.

(b) The Option is designated as an incentive stock option, as described in Paragraph 5 below. However, if and to the extent the Option exceeds the limits for an incentive stock option, as described in Paragraph 5, the Option shall be a nonqualified stock option.

2. Exercisability of Option. The Option shall become exercisable according to the following vesting schedule, if the Grantee continues to be employed by, or provide service to, the Company from the Date of Grant until the applicable vesting date:

Vesting Date		Percentage of Units Vesting
[·]		[·]

The exercisability of the Option is cumulative, but shall not exceed 100% of the Shares. If the foregoing schedule would produce fractional Shares, the number of Shares for which the Option becomes exercisable shall be rounded down to the nearest whole Share.

3. Term of Option.

(a) The Option shall have a term of ten years from the Date of Grant and shall terminate at the expiration of that period, unless it is terminated at an earlier date pursuant to the provisions of this Agreement or the Plan.

(b) The Option shall automatically terminate upon the happening of the first of the following events:

(i) The expiration of the 90-day period following the date on which the Grantee ceases to be employed by, or provide service to, the Employer, if the termination is for any reason other than Disability (as defined in the Plan), death or Cause (as defined in the Plan).

(ii) The expiration of the one-year period following the date on which the Grantee ceases to be employed by, or provide service to, the Employer on account of the Grantee’s Disability.

(iii) The expiration of the one-year period following the date on which the Grantee ceases to be employed by, or provide service to, the Employer, if the Grantee dies while employed by, or providing service to, the Employer or within 90 days following the date on which the Grantee ceases to be so employed or provide such services on account of a termination described in subparagraph (i) above.

(iv) The date on which the Grantee ceases to be employed by, or provide service to, the Employer for Cause. In addition, notwithstanding the prior provisions of this Paragraph 3, if the Grantee engages in conduct that constitutes Cause following the date on which the Grantee ceases to be employed by, or provide service to, the Employer, the Option shall immediately terminate, and the Grantee shall automatically forfeit all Shares underlying any exercised portion of the Option for which the Company has not yet delivered the Share certificates, upon refund by the Company of the exercise price paid by the Grantee for such Shares.

Notwithstanding the foregoing, in no event may the Option be exercised after the date that is immediately before the tenth anniversary of the Date of Grant. Any portion of the Option that is not exercisable at the time the Grantee ceases to be employed by, or provide service to, the Employer shall immediately terminate.

4. Exercise Procedures.

(a) Subject to the provisions of Paragraphs 2 and 3 above, the Grantee may exercise part or all of the exercisable Option by giving the Company written notice of intent to exercise in the manner provided in this Agreement, specifying the number of Shares as to which the Option is to be exercised and the method of payment. Payment of the exercise price shall be made in accordance with procedures established by the Board from time to time based on type of payment

being made but, in any event, prior to issuance of the Shares. The Grantee shall pay the exercise price (i) in cash, (ii) with the approval of the Board, by delivering shares of the Company Stock, which shall be valued at their Fair Market Value (as defined in the Plan) on the date of delivery, or by attestation (on a form prescribed by the Board) to ownership of shares of Company Stock having a Fair Market Value on the date of exercise equal to the exercise price, (iii) after a Public Offering (as defined in the Plan), by payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board, (iv) by surrender of all or any part of the vested shares for which the Option is exercisable to the Company for an appreciation distribution payable in Shares with a Fair Market Value at the time of the Option surrender equal to the dollar amount by which the then Fair Market Value of the Shares subject to the surrendered portion exceeds the aggregate Exercise Price payable for those Shares, or (v) by such other method as the Board may approve. The Board may impose from time to time such limitations as it deems appropriate on the use of shares of Company Stock to exercise the Option.

(b) The obligation of the Company to deliver shares of Company Stock upon exercise of the Option shall be subject to all applicable laws, rules, and regulations and such approvals by governmental agencies as may be deemed appropriate by the Board, including such actions as Company counsel shall deem necessary or appropriate to comply with relevant securities laws and regulations. The Company may require that the Grantee (or other person exercising the Option after the Grantee’s death) represent that the Grantee is purchasing Shares for the Grantee’s own account and not with a view to or for sale in connection with any distribution of the Shares, or such other representation as the Board deems appropriate.

(c) All obligations of the Company under this Agreement shall be subject to the rights of the Company as set forth in the Plan to withhold amounts required to be withheld for any taxes, if applicable. Subject to Board approval, the Grantee may elect to satisfy any tax withholding obligation of the Employer with respect to the Option by having Shares withheld up to an amount that does not exceed the minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities.

5. Designation as Incentive Stock Option.

(a) This Option is designated an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). If the aggregate Fair Market Value of the stock on the date of the grant with respect to which incentive stock options are exercisable for the first time by the Grantee during any calendar year, under the Plan or any other stock option plan of the Company or a parent or subsidiary, exceeds $100,000, then the Option, as to the excess, shall be treated as a nonqualified stock option that does not meet the requirements of Section 422 of the Code. If and to the extent that the Option fails to qualify as an incentive stock option under the Code, the Option shall remain outstanding according to its terms as a nonqualified stock option.

(b) The Grantee understands that favorable incentive stock option tax treatment is available only if the Option is exercised while the Grantee is an employee of the Company or a parent or subsidiary of the Company or within a period of time specified in the Code after the Grantee ceases to be an employee. The Grantee understands that the Grantee is responsible for the income tax consequences of the Option, and, among other tax consequences, the Grantee understands that he or she may be subject to the alternative minimum tax under the Code in the

year in which the Option is exercised. The Grantee will consult with his or her tax adviser regarding the tax consequences of the Option.

(c) The Grantee agrees that the Grantee shall immediately notify the Company in writing if the Grantee sells or otherwise disposes of any Shares acquired upon the exercise of the Option and such sale or other disposition occurs on or before the later of (i) two years after the Date of Grant or (ii) one year after the exercise of the Option. The Grantee also agrees to provide the Company with any information requested by the Company with respect to such sale or other disposition.

6. Change of Control. The provisions of the Plan applicable to a Change of Control (as defined in the Plan) shall apply to the Option, and, in the event of a Change of Control, the Board may take such actions as it deems appropriate pursuant to the Plan.

7. Right of First Refusal; Repurchase Right; Stockholder’s Agreement. As a condition of receiving this Option, the Grantee hereby agrees that all shares of Company Stock issued under the Plan shall be subject to a right of first refusal and repurchase right as described in the Plan, and the Board may require that the Grantee (or other person exercising the Option) execute a stockholder’s agreement, in such form as the Board determines, with respect to all Shares issued upon the exercise of the Option before a Public Offering.

8. Restrictions on Exercise. Only the Grantee may exercise the Option during the Grantee’s lifetime. After the Grantee’s death, the Option shall be exercisable (subject to the limitations specified in the Plan) solely by the legal representatives of the Grantee, or by the person who acquires the right to exercise the Option by will or by the laws of descent and distribution, to the extent that the Option is exercisable pursuant to this Agreement.

9. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan. This grant and the exercise of the Option are subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Board in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights and obligations with respect to withholding taxes, (b) the registration, qualification or listing of the Shares or Company Stock, (c) changes in capitalization of the Company and (d) other requirements of applicable law. The Board shall have the authority to interpret and construe the Option pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.

10. No Employment or Other Rights. The grant of the Option shall not confer upon the Grantee any right to be retained by or in the employ or service of the Employer and shall not interfere in any way with the right of the Employer to terminate the Grantee’s employment or service at any time. The right of the Employer to terminate at will the Grantee’s employment or service at any time for any reason is specifically reserved.

11. No Stockholder Rights. Neither the Grantee, nor any person entitled to exercise the Grantee’s rights in the event of the Grantee’s death, shall have any of the rights and privileges of a stockholder with respect to the Shares subject to the Option, until certificates for Shares have been issued upon the exercise of the Option.

12. Assignment and Transfers. The rights and interests of the Grantee under this Agreement may not be sold, assigned, encumbered or otherwise transferred except, in the event of the death of the Grantee, by will or by the laws of descent and distribution. In the event of any attempt by the Grantee to alienate, assign, pledge, hypothecate, or otherwise dispose of the Option or any right hereunder, except as provided for in this Agreement, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may terminate the Option by notice to the Grantee, and the Option and all rights hereunder shall thereupon become null and void. The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries, and affiliates. This Agreement may be assigned by the Company without the Grantee’s consent.

13. Applicable Law. The validity, construction, interpretation and effect of this instrument shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflicts of laws provisions thereof.

14. Notice. Any notice to the Company provided for in this instrument shall be addressed to the Company in care of the President at the corporate headquarters of the Company, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll of the Employer, or to such other address as the Grantee may designate to the Employer in writing. Any notice shall be delivered by hand, sent by telecopy, delivered by courier or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Company has caused its duly authorized officers to execute and attest this Agreement, and the Grantee has executed this Agreement, effective as of the Date of Grant.

	TABULA RASA HEALTHCARE, INC.


	By:

I hereby accept the Option described in this Agreement, and I agree to be bound by the terms of the Plan and this Agreement. I hereby further agree that all the decisions and determinations of the Board shall be final and binding.

	Grantee:

	Date:

Form of NQSO Grant

TABULA RASA HEALTHCARE, INC.

2014 EQUITY COMPENSATION PLAN

NONQUALIFIED STOCK OPTION GRANT

This NONQUALIFIED STOCK OPTION GRANT (this “Agreement”), dated as of [·] (the “Date of Grant”), is delivered by Tabula Rasa Healthcare, Inc. (the “Company”) to [·] (the “Grantee”).

RECITALS

A. The Tabula Rasa Healthcare, Inc. 2014 Equity Compensation Plan (the “Plan”) provides for the grant of stock options to purchase shares of Company Stock (as defined in the Plan). The Board of Directors of the Company (the “Board”) has decided to make this nonqualified stock option grant as an inducement for the Grantee to promote the best interests of the Company and its stockholders. The Grantee acknowledges that a copy of the Plan has been provided or made available to the Grantee.

B. The Board is authorized to appoint a committee to administer the Plan. If a committee is appointed, all references in this Agreement to the “Board” shall be deemed to refer to the committee.

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby, agree as follows:

1. Grant of Option. Subject to the terms and conditions set forth in this Agreement and in the Plan, the Company hereby grants to the Grantee a nonqualified stock option (the “Option”) to purchase [·] shares of Company Stock (the “Shares”) at an exercise price of $[·] per Share. The Option shall become exercisable according to Paragraph 2 below.

Vesting Date		Percentage of Units Vesting
[·]		[·]

3. Term of Option.

(b) The Option shall automatically terminate upon the happening of the first of the following events:

(ii) The expiration of the one-year period following the date on which the Grantee ceases to be employed by, or provide service to, the Employer on account of the Grantee’s Disability.

(iv) The date on which the Grantee ceases to be employed by, or provide service to, the Employer for Cause. In addition, notwithstanding the prior provisions of this Paragraph 3, if the Grantee engages in conduct that constitutes Cause following the date on which the Grantee ceases to be employed by, or provide service to the Employer, the Option shall immediately terminate, and the Grantee shall automatically forfeit all Shares underlying any exercised portion of the Option for which the Company has not yet delivered the Share certificates, upon refund by the Company of the exercise price paid by the Grantee for such Shares.

4. Exercise Procedures.

Company Stock, which shall be valued at their Fair Market Value (as defined in the Plan) on the date of delivery, or by attestation (on a form prescribed by the Board) to ownership of shares of Company Stock having a Fair Market Value on the date of exercise equal to the exercise price, (iii) after a Public Offering (as defined in the Plan), by payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board, (iv) by surrender of all or any part of the vested shares for which the Option is exercisable to the Company for an appreciation distribution payable in Shares with a Fair Market Value at the time of the Option surrender equal to the dollar amount by which the then Fair Market Value of the Shares subject to the surrendered portion exceeds the aggregate Exercise Price payable for those Shares, or (v) by such other method as the Board may approve. The Board may impose from time to time such limitations as it deems appropriate on the use of shares of Company Stock to exercise the Option.

5. Change of Control. The provisions of the Plan applicable to a Change of Control (as defined in the Plan) shall apply to the Option, and, in the event of a Change of Control, the Board may take such actions as it deems appropriate pursuant to the Plan.

6. Right of First Refusal; Repurchase Right; Stockholder’s Agreement. As a condition of receiving this Option, the Grantee hereby agrees that all shares of Company Stock issued under the Plan shall be subject to a right of first refusal and repurchase right as described in the Plan, and the Board may require that the Grantee (or other person exercising the Option) execute a stockholder’s agreement, in such form as the Board determines, with respect to all Shares issued upon the exercise of the Option before a Public Offering,

7. Restrictions on Exercise. Except as the Board may otherwise permit pursuant to the Plan, only the Grantee may exercise the Option during the Grantee’s lifetime and, after the Grantee’s death, the Option shall be exercisable (subject to the limitations specified in the Plan) solely by the legal representatives of the Grantee, or by the person who acquires the right to exercise the Option by will or by the laws of descent and distribution, to the extent that the Option is exercisable pursuant to this Agreement.

8. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan. This grant and the exercise of the Option are subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Board in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights and obligations with respect to withholding taxes, (b) the registration, qualification or listing of the Shares or Company Stock, (c) changes in capitalization of the Company and (d) other requirements of applicable law. The Board shall have the authority to interpret and construe the Option pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.

9. No Employment or Other Rights. The grant of the Option shall not confer upon the Grantee any right to be retained by or in the employ or service of the Employer and shall not interfere in any way with the right of the Employer to terminate the Grantee’s employment or service at any time. The right of the Employer to terminate at will the Grantee’s employment or service at any time for any reason is specifically reserved.

10. No Stockholder Rights. Neither the Grantee, nor any person entitled to exercise the Grantee’s rights in the event of the Grantee’s death, shall have any of the rights and privileges of a stockholder with respect to the Shares subject to the Option, until certificates for Shares have been issued upon the exercise of the Option.

11. Assignment and Transfers. Except as the Board may otherwise permit pursuant to the Plan, the rights and interests of the Grantee under this Agreement may not be sold, assigned, encumbered or otherwise transferred except, in the event of the death of the Grantee, by will or by the laws of descent and distribution. In the event of any attempt by the Grantee to alienate, assign, pledge, hypothecate, or otherwise dispose of the Option or any right hereunder, except as provided for in this Agreement, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may terminate the Option by notice to the Grantee, and the Option and all rights hereunder shall thereupon become null and void. The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries, and affiliates. This Agreement may be assigned by the Company without the Grantee’s consent.

13. Notice. Any notice to the Company provided for in this instrument shall be addressed to the Company in care of the President at the corporate headquarters of the Company, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll of the Employer, or to such other address as the Grantee may designate to the Employer in writing. Any notice shall be delivered by hand, sent by telecopy, delivered by courier or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Company has caused its duly authorized officers to execute and attest this Agreement, and the Grantee has executed this Agreement, effective as of the Date of Grant.

	TABULA RASA HEALTHCARE, INC.


	By:

	Grantee:

	Date:

EX-10.2 16 a2226891zex-10_2.htm EX-10.2

Exhibit 10.2

TABULA RASA HEALTHCARE, INC.

LEADERSHIP EXIT BONUS PLAN

As adopted on June 30, 2014

1. Purpose; Definitions.

(a) On or about the date hereof, Tabula Rasa Healthcare, Inc. (the “Company”) entered into an Agreement and Plan of Merger with CareKinesis, Inc., a Delaware corporation (“CareKinesis”), and CK Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which Merger Sub was merged with and into CareKinesis (the “Merger”) and each issued and outstanding share of capital stock of CareKinesis was cancelled and converted into the right to receive one equivalent share of capital stock of the Company, and CareKinesis became a wholly-owned subsidiary of the Company. This Tabula Rasa Healthcare, Inc. Leadership Exit Bonus Plan (the “Plan”) is being established in connection with the Merger to supersede and replace in its entirety the CareKinesis, Inc. Leadership Exit Bonus Plan (the “Prior Plan”) and to promote the interests of the Company by enabling employees to participate in a future Change of Control Transaction (as defined herein) or Initial Public Offering (as defined herein) through the establishment of a bonus pool based upon the Radius Proceeds (as defined herein) in connection with the Change of Control Transaction (as defined below) or Initial Public Offering, subject to the terms hereof. The Plan is intended to be the Management Plan defined in the Radius Letter Agreement (as defined herein). The Prior Plan is hereby terminated and superseded in its entirety by this Plan. Capitalized terms not otherwise defined herein shall have the meanings given them under the Radius Letter Agreement.

(b) The following terms shall have the meanings set forth below for purposes of the Plan:

“Board” means the Board of Directors of the Company or the Compensation Committee or other committee of the Board delegated the duty to administer this Plan.

“Change of Control Transaction” has the meaning set forth in the Company’s Certificate of Incorporation.

“Eligible Employee” means each executive of the Employer who the Board has determined to be eligible to participate in the Plan, and who is listed on Schedule A hereto. The Eligible Employees may be modified from time to time as determined by the Board in its sole discretion.

“Employer” means the Company, CareKinesis and their affiliates, as applicable.

“Exit Bonus” has the meaning set forth in Section 2(b).

“Exit Bonus Pool” has the meaning set forth in Section 2(a).

“Initial Public Offering” has the meaning set forth in the Radius Letter Agreement.

“IPO Value” has the meaning set forth in the Radius Letter Agreement.

“Participant” means an Eligible Employee who is paid a bonus hereunder.

“Radius” means Radius Venture Partners III, L.P., Radius Venture Partners III QP, L.P. and Radius Venture Partners III (Ohio) L.P.

“Radius Letter Agreement” means that certain letter agreement, dated June 30, 2014, by and among Radius and the Company, the terms of which are incorporated herein by reference.

“Radius Proceeds” has the meaning set forth in the Radius Letter Agreement, including an Excluded Amounts as set forth in the Radius Letter Agreement.

2. Exit Bonus.

(a) Establishment of Exit Bonus Pool. In the event of a Change of Control Transaction or Initial Public Offering, Radius may contribute to an exit bonus pool hereunder in an amount based on the Radius Proceeds or IPO Value from such Change of Control Transaction or Initial Public Offering, in each case pursuant to the terms and conditions of the Radius Letter Agreement (the “Exit Bonus Pool”). In no event shall an Exit Bonus Pool be established with respect to any transaction that does not constitute a Change of Control Transaction or Initial Public Offering.

(b) Grants under the Exit Bonus Pool. Eligible Employees shall be eligible to receive a percentage of the Exit Bonus Pool or specified dollar amount in the event of a Change of Control Transaction or Initial Public Offering in such amount as determined in accordance with Section 2(c) below (the “Exit Bonus”), subject in all respects to the terms of the Plan.

(c) Allocation of Exit Bonus Pool. Each Eligible Employee employed by the Employer on the date of the Change of Control Transaction or Initial Public Offering shall be entitled to receive an Exit Bonus, equal to a percentage of the Exit Bonus Pool or specified dollar amount. The percentage or specified dollar amount shall be determined by the Chief Executive Officer of the Company, in his sole discretion.

(d) Condition of Eligibility. Eligibility for an Exit Bonus under the Plan shall be made conditional upon the Eligible Employee’s acknowledgement, in writing or by acceptance of an Exit Bonus, that all decisions and determinations of the Board shall be final and binding on

the Eligible Employee, his or her beneficiaries and any other person having or claiming an interest under the Plan. Exit Bonuses need not be uniform as among the Eligible Employees.

3. Payment of Awards.

(a) Notwithstanding an Eligible Employee’s designation as such, in order to receive an Exit Bonus, an Eligible Employee must be employed by the Employer on the date of the Change of Control Transaction or Initial Public Offering.

(b) Upon consummation of a Change of Control Transaction or Initial Public Offering, the Exit Bonuses shall be paid by the Employer in a lump sum payment in cash, securities and/or some other form of consideration to the Participants within 5 days following the date the Change of Control Transaction or Initial Public Offering is consummated, subject in all respects to the terms of the Plan and the contribution timing as set forth in the Radius Letter Agreement.

4. Administration.

The Plan shall be administered by the Board. The interpretation and construction by the Board of any provisions of the Plan or of any awards granted under it shall be final and conclusive. No member of the Board shall be liable for any action taken or determination made with respect to the Plan or any awards granted under it. No stockholder of the Company nor any employee or former employee of the Employer, or any beneficiary, shall have any claim or cause of action against the Employer, an officer of the Employer, the Board, Radius or any Radius affiliate on account of, by reason of, or arising out of the Board’s exercise of the discretionary power granted hereunder.

5. Non-Transferability.

No award granted under this Plan may be transferred or disposed of in any way by an Eligible Employee, except by will or by the laws of descent and distribution.

6. No Rights as Stockholder or Employee; No Right to Future Awards.

No Eligible Employee or Participant shall have any privileges of a stockholder of the Company with respect to an Exit Bonus, nor shall the Company have any obligation to issue any stock, pay any dividends or otherwise afford any rights to which holders of stock are entitled with respect to any such award. The granting of an award under the Plan shall not confer upon an Eligible Employee or Participant any right to continue as an employee, to receive future awards under the Plan, or to interfere in any way with the Employer’s right to terminate such Eligible Employee’s or Participant’s employment. For purposes of clarification, eligibility to participate in the Plan shall not guarantee employment through the date of a Change of Control Transaction or Initial Public Offering.

7. Withholding.

All Exit Bonus payments under the Plan shall be subject to applicable federal (including FICA), state and local tax withholding requirements. The Employer may require that the

Participant pay to the Employer the amount of any federal, state or local taxes that the Employer is required to withhold with respect to such Exit Bonus, or the Employer may deduct from other wages paid by the Employer the amount of any withholding taxes due with respect to the Exit Bonus.

8. Amendment or Discontinuance of the Plan.

(a) Prior to a Change of Control Transaction or Initial Public Offering, the Board may amend or terminate this Plan at any time and from time to time with the consent of a majority of the Eligible Employees hereunder; provided that consent shall not be required for any amendment that does not materially impair the rights or interests of an Eligible Employee under this Plan. On or after a Change of Control Transaction or Initial Public Offering, the Board may not amend the Plan in a manner that materially impairs a Participant’s rights to or interest in an Exit Bonus without the Participant’s written consent.

(b) Notwithstanding the foregoing, unless a Change of Control Transaction or Initial Public Offering has occurred, this Plan shall terminate on the date immediately preceding the 5th anniversary of its effective date, unless the Plan is terminated earlier by the Board in accordance with Section 8(a) above.

(c) Notwithstanding anything herein to the contrary, each Eligible Employee hereby acknowledges and agrees that the Employer and Radius may amend, waive and/or terminate all or part of the Radius Letter Agreement at any time hereafter in their sole discretion.

9. Section 409A.

The benefits provided under this Plan are intended to be subject to a “substantial risk of forfeiture” under Section 409A of the Internal Revenue Code, as amended and the regulations promulgated thereunder (the “Code”), and to be payable within the “short term deferral period” under Section 409A of the Code following lapse of the applicable forfeiture conditions.

10. Governing Law.

The Plan shall be governed by the laws of the State of Delaware without regard to the conflicts of law principles thereof.

SCHEDULE A

Eligible Employees

Calvin Knowlton

Orsula Knowlton

Brian Adams

Joseph Filippoli

Robert Alesiani

Michael Greenhalgh

A-1

EX-10.3 17 a2226891zex-10_3.htm EX-10.3

Exhibit 10.3

June 30, 2014

Tabula Rasa Healthcare, Inc.

110 Marter Ave., Suites 304/309/310

Moorestown, NJ 08057

Re: Company Management Plan

Ladies and Gentlemen:

This letter agreement (this “Agreement”) by and among Radius Venture Partners III, L.P., Radius Venture Partners III QP, L.P. and Radius Venture Partners III (Ohio) L.P. (collectively “Radius”), and Tabula Rasa Healthcare, Inc., a Delaware Company (the “Company”) is made as of the date first written above and in connection with the conversion of the 2,626,188 shares of Series B Convertible Preferred Stock of CareKinesis, Inc. (“CareKinesis”) acquired by Radius pursuant to the terms and conditions of that certain Series B Preferred Stock Purchase Agreement dated June 28, 2013 (the “Purchase Agreement”) into equivalent shares of the Company (as adjusted for stock splits, combinations, and similar recapitalization events, the “Shares”) pursuant to that certain Agreement and Plan of Merger of even date herewith (the “Merger”), and shall supersede and replace in its entirety that certain letter agreement by and among Radius and CareKinesis dated as of June 28, 2013. Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Purchase Agreement, or the Company’s Investors Rights Agreement by and among the Company, Radius and certain other stockholders of the Company and dated of even date herewith (the “Investors Rights Agreement”), as applicable.

In further consideration for the Shares, the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Radius and the Company hereby agree as follows:

1. Company Management Plan. Subject to the Company first (i) obtaining any consent, vote or other approval required by applicable law now or hereafter, including any necessary consent or approval by the Board of Directors and or stockholders of the Company of the establishment of a Management Plan and full amounts payable thereunder, and (ii) providing written notice to Radius of the pending first to occur of a Change of Control Transaction and Initial Public Offering at least 20 days before the effective date of such first to occur event, and notwithstanding anything to the contrary in the Company’s Certificate of Incorporation, Radius hereby agrees to contribute the Change of Control Contribution Amount or Applicable Contribution Shares (each as defined below) to a Management Plan, and the Company hereby agrees to apply such contribution in full, or the full value thereof, to such Management Plan, in each case in accordance with this Agreement. Notwithstanding anything else herein to the contrary, in the event that Radius is required to make a contribution to the Management Plan hereunder and determines in its reasonable good faith discretion that such contribution may be made in a more tax advantageous manner to Radius than as is set forth herein, the Company agrees to diligently work with Radius in good faith to amend the terms of this Agreement to accommodate such alternative structure, provided that such amendment shall in no event decrease the amount of Radius’ required contribution unless otherwise agreed to in writing by the Company.

a. Change of Control Transaction. In the event that a Change of Control Transaction occurs prior to the Company’s Initial Public Offering, Radius shall contribute to the Company, on, before or promptly after the effective date of such Change of Control Transaction, an amount equal to as follows (as applicable, the “Change of Control Contribution Amount”):

i. in the event that the Radius Proceeds is equal to or less than $16,000,000, an amount equal to Zero Dollars ($0);

ii. in the event that the Radius Proceeds exceeds $16,000,000 but is equal to or less than $20,000,000, an amount equal to the lesser of (A) $1,000,000 and (B) the amount by which the Radius Proceeds exceeds $16,000,000;

iii. in the event that the Radius Proceeds exceeds $20,000,000 but is equal to or less than a $24,000,000, an amount equal to the sum of (A) $1,000,000, plus (B) the lesser of (i) $1,000,000 and (ii) the amount by which the Radius Proceeds exceeds $20,000,000; and

iv. in the event that the Radius Proceeds exceeds $24,000,000, an amount equal to the sum of (A) $2,000,000, plus (B) the lesser of (i) $2,000,000 and (ii) the amount by which the Radius Proceeds exceeds $24,000,000;

v. provided that notwithstanding anything herein to the contrary, but subject to the first paragraph of Section 1, in the event that Excluded Amounts are actually received by Radius after a Change of Control Transaction, such Excluded Amounts shall be included in Radius Proceeds for purposes of calculating any additional Change of Control Contribution Amount required to be contributed by Radius hereunder; and

vi. provided further, that notwithstanding anything herein to the contrary, in the event that the Company makes any Bonus Payments in connection a Change of Control Transaction, then the Change of Control Contribution Amount payable hereunder, as applicable, shall be reduced by Radius’ Pro-Rata Amount, and in addition, in the event that such aggregate amount Bonus Payments exceeds such Change of Control Contribution Amount, then the Company shall pay Radius on the effective date of the Change of Control Transaction an amount which, together with the proceeds which Radius otherwise receives in connection with such Change of Control Transaction results in Radius receiving an aggregate amount equal to what Radius would have received in the Change of Control Transaction had the Bonus Payments not existed (the “Company Payment”).

vii. Notwithstanding the foregoing, Radius may contribute the Change of Control Contribution Amount in cash, shares of capital stock of the Company owned by Radius (such shares having a deemed value hereunder equal to their fair market value as determined in good faith between the Company and Radius, with due regard to the value assigned to such shares in the Change of Control Transaction, without any discount for minority interest, lack of marketability, lack of liquidity, lack of voting power or any transfer restrictions applicable to such shares), a promissory note payable no later than promptly after a Change of Control Transaction, or any combination of the foregoing. In addition, in the event that Radius receives a combination of cash and non-cash consideration in connection with such Change of Control Transaction, then Radius’ contribution of the Change of Control Contribution Amount may consist of such combination of cash and or such other form of non-cash consideration as is determined by Radius in its reasonable good faith discretion (with such non-cash consideration to be valued with due regard to the value assigned to it in the Change of Control Transaction, and to the extent such consists of securities, without any discount for minority interest, lack of marketability, lack of liquidity, lack of voting power or any transfer restrictions applicable to such securities).

b. Initial Public Offering. In the event that the Initial Public Offering occurs prior to a Change of Control Transaction, and Radius is permitted to include and sell in the Initial Public Offering shares of its capital stock of the Company with an aggregate sales price of at least $8,000,000, then:

i. in the event that the IPO Value is equal to or less than $16,000,000, Radius shall have no obligation to contribute to the Management Plan;

ii. in the event that the IPO Value exceeds $16,000,000 but is equal to or less than $20,000,000, then on the effective date of the Initial Public Offering, Radius shall contribute to the Company all of its right, title and interest in and to, such aggregate number of shares of Series B Preferred Stock, and or Common Stock issued upon the conversion thereof, which have an aggregate fair market value, calculated based upon the IPO Price Per Share or, in the case of the Series B Preferred Stock, based on the number of shares of Common Stock issuable on conversion thereof, the IPO Price Per Share, and other relevant factors including all rights and preferences of the Series B Preferred Stock, equal to the lesser of (1) $1,000,000, and (2) the amount by which the IPO Value exceeds $16,000,000 (with the lesser share amount, the “4x Contribution Shares”);

iii. in the event that the IPO Value exceeds $20,000,000 but is equal to or less than $24,000,000, then on the effective date of the Initial Public Offering, Radius shall contribute to the Company all of its right, title and interest in and to, such aggregate number of shares of Series B Preferred Stock, and or Common Stock issued upon the conversion thereof, which have an aggregate fair market value, calculated based upon the IPO Price Per Share or, in the case of the Series B Preferred Stock, based on account the number of shares of Common Stock issuable on conversion thereof, the IPO Price Per Share, and other relevant factors including all rights and preferences of the Series B Preferred Stock, equal to the sum of (1) $1,000,000, plus (2) the lesser of (A) $1,000,000, and (B) the amount by which the IPO Value exceeds $20,000,000 (with the lesser share amount, the “5x Contribution Shares”); and

iv. in the event that the IPO Value exceeds $24,000,000, then on the effective date of the Initial Public Offering, Radius shall contribute to the Company all of its right, title and interest in and to, such aggregate number of shares of Series B Preferred Stock, and or Common Stock issued upon the conversion thereof, which have an aggregate fair market value, calculated based upon the IPO Price Per Share or, in the case of the Series B Preferred Stock, based on the number of shares of Common Stock issuable on conversion thereof, the IPO Price Per Share, and other relevant factors including all rights and preferences of the Series B Preferred Stock, equal to the sum of (1) $2,000,000, plus (2) the lesser of (A) $2,000,000, and (B) the amount by which the IPO Value exceeds $24,000,000 (with the lesser share amount, the “6x Contribution Shares”).

c. Notwithstanding anything herein to the contrary, the share contributions described above in Section 1(c) shall be subject to the following conditions:

i. in the event that the 4x Contribution Shares, 5x Contribution Shares, or 6x Contribution Shares, as applicable (the “Applicable Contribution Shares”), exceeds the number of then issued and outstanding shares of Series B Preferred Stock owned by Radius at the time of the Initial Public Offering, then unless otherwise determined by Radius in its reasonable good faith discretion and by written notice to the Company prior to the effective date of the Initial Public Offering, Radius’ then issued and outstanding shares of Common Stock shall be included first in the Applicable Contribution Shares, Radius’ then issued and outstanding shares of Series B Preferred Stock shall be included second in the Applicable Contribution Shares, and any other capital stock of the Company then held by Radius (as with the Series B Preferred Stock, assuming an aggregate fair market value thereof that is calculated based upon the IPO Price Per Share or, in the case of Preferred Stock, based on the number of shares of Common Stock issuable on conversion thereof on an as converted to Common Stock basis, the IPO Price Per Share, and other relevant factors such as priority of dividends and payment on a sale of the Company) of the Company shall be included last, to reach the Applicable Contribution Shares, provided that if such capital stock consists of different classes or series of stock, such stock shall be included in such priority as

determined by Radius in its reasonable good faith discretion and upon written notice to the Company prior to the effective date of the Initial Public Offering;

ii. in the event that at the time of the Initial Public Offering, Radius does not own enough shares of capital stock of the Company to reach the Applicable Contribution Shares, Radius shall contribute the remaining un-contributed Applicable Contribution Shares to the Company in cash promptly after the Initial Public Offering; and

iii. in lieu, and in full satisfaction, of contributing the Applicable Contribution Shares on the effective date of the Initial Public Offering, Radius shall be permitted, in its reasonable good faith discretion and upon written notice to the Company prior to the date of the Initial Public Offering, to contribute the Applicable Contribution Shares to the Company in cash promptly after the Initial Public Offering.

2. Section 409A. It is the intention of the Company and Radius that the benefits and rights to which the Company and participants of the Management Plan could be entitled pursuant to this Agreement comply with, or fall within an exception to, Section 409A of the IRS Code of 1986, as amended, and the Treasury Regulations and other guidance promulgated or issued thereunder (“Section 409A”), to the extent that the requirements of Section 409A are applicable thereto, and the provisions of this Agreement shall be construed in a manner consistent with that intention. If the Company believes, at any time, that any such benefit or right that is subject to Section 409A does not so comply, it shall promptly advise Radius and shall negotiate reasonably and in good faith to amend the terms of such benefits and rights such that they comply with Section 409A (with the most limited possible economic effect on the Company, the participants of the Management Bonus Plan and Radius).

3. Effectiveness. Notwithstanding anything herein to the contrary, unless otherwise separately agreed to in writing by the Company and Radius after the date hereof, Radius’ obligation to make any contribution to the Management Plan hereunder shall be contingent upon the consummation of a Change of Control Transaction or Initial Public Offering, as applicable, and any contribution made prior to such consummation shall be fully revocable by Radius in its sole discretion and upon written notice to the Company, but such revocation shall not relieve Radius of its obligations pursuant to this Agreement to make such contribution as of the consummation of a Change of Control Transaction or Initial Public Offering, as applicable.

4. Miscellaneous. This Agreement (i) shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws, (ii) shall be binding upon and inure to the benefit of the parties and their respective successors, personal or legal representatives, executors, administrators, heirs, devisees, legatees and permitted assigns, (iii) shall not be amended or any term herein waived, without the prior written consent of the Company and Radius, (iv) shall automatically terminate and be of no further force or effect upon the parties’ fulfillment of their respective obligations hereunder following the first to occur of a Change of Control Transaction and the Initial Public Offering, and (v) may be executed and delivered by facsimile or electronic signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied to the construction or interpretation of this Agreement.

5. Definitions.

a. “Bonus Payment” means any payment made by the Company under the Bonus Plan.

b. “Bonus Plan” means only the Company’s Valuation Incentive Award Plan, adopted on June 30, 2014, as it may be amended.

c. “Change of Control Transaction” shall have the meaning as set forth in the Company’s Certificate of Incorporation.

d. “IPO Price Per Share” means the initial public offering price per share of the Company’s capital stock sold in the Initial Public Offering.

e. “IPO Value” means the sum, calculated as of the effective date of the Initial Public Offering, of (1) the Radius Proceeds, plus (2) the product of (A) the IPO Price Per Share, multiplied by (B) the number of Shares, and shares of Common Stock issued on the conversion thereof, owned by Radius on an as converted to Common Stock basis as of immediately prior to the effective date of the Initial Public Offering.

f. “Management Plan” means the Company’s Leadership Exit Bonus Plan adopted by the Company on June 30, 2014, to be funded as set forth in this Section 1 and distributable in such amounts, to such Company officers and employees, and on such other terms, as is in each case approved by the Board of Directors of the Company.

g. “Participation Distributions” shall have the meaning as set forth in the Company’s Certificate of Incorporation.

h. “Preferred Liquidation Amount” shall have the meaning as set forth in the Company’s Certificate of Incorporation.

i. “Radius Proceeds” means an amount equal to all proceeds received by Radius in respect of the Shares, and shares of Common Stock issued on the conversion thereof, after the date hereof and as of the first to occur of a Change of Control Transaction and an Initial Public Offering, including without limitation all dividends, redemption proceeds, the Preferred Liquidation Amount (as applicable), and the Participation Distributions (as applicable), but, except as otherwise set forth in Section 1(a)(v), excluding (i) any amounts thereof that are not actually received, but instead only receivable, by Radius in a Change of Control Transaction (the “Excluded Amounts”), including without limitation, amounts that are (1) held in escrow or subject to any holdback, (2) subject to any earn-out, and (3) otherwise subject to any contingencies in an a Change of Control Transaction, (ii) any amounts thereof that are received in connection with a transfer, sale or other disposition by Radius to an affiliate of Radius provided that such affiliate agrees to be bound by the terms hereof, and (iii) the Company Payment.

j. “Radius Pro-Rata Amount” means an amount equal to the portion of all Bonus Payments that would otherwise be received by Radius as Radius Proceeds in respect of the shares of capital stock of the Company held by Radius at the time of the Change of Control Transaction if all Bonus Payments were distributed to the Company’s stockholders as part of all the assets of the Company to be distributed to the stockholders of the Company in connection with the Change of Control Transaction and pursuant to Article IV, Section 2 of the Company’s Certificate of Incorporation.

[Remainder of Page Intentionally Blank]

Very truly yours,

RADIUS VENTURE PARTNERS III, L.P.

By:	RADIUS VENTURE PARTNERS III, LLC, its General Partner


	By:	/s/ Daniel C. Lubin
	Name: Daniel C. Lubin
	Title: Managing Member


RADIUS VENTURE PARTNERS III QP, L.P.

By:	RADIUS VENTURE PARTNERS III, LLC, its General Partner


	By:	/s/ Daniel C. Lubin
	Name: Daniel C. Lubin
	Title: Managing Member


RADIUS VENTURE PARTNERS III (OHIO), L.P.

By:	RADIUS VENTURE PARTNERS III (OHIO), LLC, its General Partner

	By:	RADIUS VENTURE PARTNERS III,
		LLC, ITS MANAGER


	By:	/s/ Daniel C. Lubin
	Name: Daniel C. Lubin
	Title: Managing Member

ACKNOWLEDGED AND AGREED:

TABULA RASA HEALTHCARE, INC.


By:	/s/ Calvin Knowlton
Name: Calvin Knowlton
Title: Chief Executive Officer

[Signature Page to Letter Agreement]

EX-10.4 18 a2226891zex-10_4.htm EX-10.4

Exhibit 10.4

TABULA RASA HEALTHCARE, INC.

VALUATION INCENTIVE AWARD PLAN

As adopted on June 30, 2014

1. Purpose; Definitions.

(a) On or about the date hereof, Tabula Rasa Healthcare, Inc. (the “Company”) entered into an Agreement and Plan of Merger with CareKinesis, Inc., a Delaware corporation (“CareKinesis”), and CK Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which Merger Sub was merged with and into CareKinesis (the “Merger”) and each issued and outstanding share of capital stock of CareKinesis was cancelled and converted into the right to receive one equivalent share of capital stock of the Company, and CareKinesis became a wholly-owned subsidiary of the Company. This Tabula Rasa Healthcare, Inc. Valuation Incentive Award Plan (the “Plan”) is being established in connection with the Merger to supersede and replace in its entirety the CareKinesis, Inc. Valuation Incentive Award Plan (the “Prior Plan”) and to promote the interests of the Company by enabling employees to participate in a future Acquisition Event (as defined herein) through the establishment of a bonus pool based upon the Proceeds (as defined herein) received by the Company or the Company’s stockholders, as applicable, in connection with the Acquisition Event, subject to the terms hereof. The Prior Plan is hereby terminated and superseded in its entirety by this Plan.

(b) The following terms shall have the meanings set forth below for purposes of the Plan:

“Acquisition Event” As used herein, an “Acquisition Event” shall be deemed to have occurred:

(i) If any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) (other than persons who are stockholders on the effective date of the Plan) becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the voting power of the then outstanding securities of the Company; provided that an Acquisition Event shall not be deemed to occur as a result of a transaction in which the Company becomes a subsidiary of another corporation and in which the stockholders of the Company, immediately prior to the transaction, shall beneficially own, immediately after the transaction, shares entitling such stockholders to more than 50% of all votes to which all stockholders of the parent corporation would be entitled in the election of directors (without consideration of the rights of any class of stock to elect directors by a separate class vote);

(ii) Upon the consummation of a merger of the Company with another entity where the stockholders of the Company, immediately prior to the merger, shall not beneficially own, immediately after the merger, shares entitling such stockholders to more than 50% of all votes to which all stockholders of the surviving entity would be entitled in the election of directors (without consideration of the rights of any class of stock to elect directors by a separate class vote) or (ii) a sale or other disposition of all or substantially all of the assets of the Company; or

(iii) Upon such other transaction as the Board determines to be an Acquisition Event.

Notwithstanding the foregoing, in no event shall an Acquisition Event be deemed to have occurred for purposes of the Plan unless the event described in subclauses (i), (ii) or (iii) above result in $250,000,000 in Proceeds for the Company.

“Board” means the Board of Directors of the Company or the Compensation Committee or other committee of the Board delegated the duty to administer this Plan.

“Cause” means a finding by the Board that the employee (i) has engaged in willful misconduct in the course of his or her employment or service, (ii) has engaged in disloyalty to the Employer, including, without limitation, fraud, embezzlement, theft, commission of a felony or proven dishonesty in the course of his or her employment or service, (iii) has disclosed trade secrets or confidential information of the Employer to persons not entitled to receive such information, or (iv) has breached any written non-competition, non-solicitation, confidentiality or invention assignment agreement between the Employer and the employee.

“Eligible Employee” means each executive of the Employer who the Board has determined to be eligible to participate in the Plan, and who is listed on Schedule A hereto.

“Employer” means the Company, CareKinesis and their affiliates, as applicable.

“Participant” means an Eligible Employee who is paid a bonus hereunder.

“Proceeds” means the gross amount of any and all cash and/or Securities of Buyer paid and/or distributed to the Company or the Company’s stockholders, as applicable, in connection with an Acquisition Event.

“Release” means an agreement whereby a Participant releases and discharges of the Employer and all affiliated persons and entities from any and all claims, demands and causes of action, other than as to any vested benefits to which the Participant may be entitled under any Company benefit plan (other than this Plan), which shall be in such form as may be prescribed by the Employer from time to time and with such modifications as the Employer deems appropriate.

“Securities of Buyer” means shares of capital stock of the buyer of the Company issued to the Company’s stockholders upon an Acquisition Event.

“Valuation Incentive Award” has the meaning set forth in Section 2(b).

“Valuation Incentive Award Pool” has the meaning set forth in Section 2(a).

2. Valuation Incentive Award.

(a) Establishment of Valuation Incentive Award Pool. In the event of an Acquisition Event, the Company shall establish a Valuation Incentive Award Pool of $9,000,000 of the Proceeds from such Acquisition Event. In no event shall a Valuation Incentive Award Pool be established with respect to any transaction that does not constitute an Acquisition Event.

(b) Grants under the Valuation Incentive Award Pool. Eligible Employees shall be eligible to receive a percentage of the Valuation Incentive Award Pool or specified dollar amount in the event of an Acquisition Event in such amount as described in Section 2(c) below (the “Valuation Incentive Award”), subject in all respects to the terms of the Plan.

(c) Allocation of Valuation Incentive Award Pool. Each Eligible Employee employed by the Employer on the date of the Acquisition Event shall be entitled to receive a Valuation Incentive Award, equal to a percentage of the Valuation Incentive Award Pool or specified dollar amount. The percentage or specified dollar amount shall be determined by the Chief Executive Officer of the Company, in his sole discretion.

(d) Condition of Eligibility. Eligibility for a Valuation Incentive Award under the Plan shall be made conditional upon the Eligible Employee’s acknowledgement, in writing or by acceptance of Valuation Incentive Award, that all decisions and determinations of the Board shall be final and binding on the Eligible Employee, his beneficiaries and any other person having or claiming an interest under the Plan. Valuation Incentive Awards need not be uniform as among the Eligible Employees.

3. Payment of Awards.

(a) Notwithstanding an Eligible Employee’s designation as such, in order to receive a Valuation Incentive Award, an Eligible Employee must be employed by the Employer on the date of the Acquisition Event as described in Section 3(b) below.

(b) Upon consummation of an Acquisition Event, the Valuation Incentive Awards shall be paid in a lump sum payment to the Participants within 5 days following the date the Acquisition Event is consummated. To the extent that any or all of the Proceeds are paid in Securities of Buyer, the Board shall have the discretion to pay the Valuation Incentive Award in Securities of Buyer, in such an amount not to exceed the pro-rata portion of the Proceeds that are Securities of Buyer. Notwithstanding the foregoing, if an escrow account is established in connection with the Acquisition Event and a portion of the Valuation Incentive Awards are required to be contributed to such escrow account or if a portion of the Proceeds are subject to any earn out restrictions, each Participant’s Valuation Incentive Award held in the escrow account or subject to the earn out shall be paid on the same schedule and at the same time as the amounts held in the escrow account or subject to the earn out are paid to the stockholders of the

Company generally; but in no event later than five years from the date of the consummation of the Acquisition Event.

(c) Payment of a Valuation Incentive Award shall be conditioned upon an Eligible Employee’s execution and non-revocation of a Release. Notwithstanding any provision of this Plan to the contrary, in no event shall the timing of the Eligible Employee’s execution of the Release, directly or indirectly, result in the Eligible Employee designating the calendar year of payment, and if a payment that is subject to execution of the Release could be made in more than one taxable year, payment shall be made in the later taxable year.

(d) If an Eligible Employee’s employment with the Employer is terminated for any reason prior to the Acquisition Event, he or she shall not be entitled to receive an Acquisition Event Bonus. In addition, notwithstanding any provision of the Plan to the contrary, if an Eligible Employee engages in conduct that constitutes Cause after the date an Acquisition Event occurs and prior to the date on which all payments due to the Eligible Employee under the Plan are made to the Eligible Employee, the Eligible Employee shall forfeit his or her right to any remaining payments that may become payable under the Plan to the Eligible Employee and the Eligible Employee shall be obligated to repay the amount of any Acquisition Event Bonus already paid. The repayment shall be made in such manner and on such terms and conditions as may be required by the Employer. The Employer shall be entitled to set off against the amount of any such payment any amounts otherwise owed to the Eligible Employee by the Employer.

4. Administration.

The Plan shall be administered by the Board. The interpretation and construction by the Board of any provisions of the Plan or of any awards granted under it shall be final and conclusive. No member of the Board shall be liable for any action taken or determination made with respect to the Plan or any awards granted under it. No stockholder of the Company nor any employee or former employee of the Employer, or any beneficiary, shall have any claim or cause of action against the Employer, an officer of the Employer, or the Board on account of, by reason of, or arising out of the exercise of the discretionary power granted hereunder.

5. Non-Transferability.

No award granted under this Plan may be transferred or disposed of in any way by an Eligible Employee, except by will or by the laws of descent and distribution.

6. No Rights as Stockholder or Employee; No Right to Future Awards.

No Eligible Employee or Participant shall have any privileges of a stockholder of the Company with respect to a Valuation Incentive Award, nor shall the Company have any obligation to issue any stock, pay any dividends or otherwise afford any rights to which holders of stock are entitled with respect to any such award. The granting of an award under the Plan shall not confer upon an Eligible Employee or Participant any right to continue as an employee, to receive future awards under the Plan, or to interfere in any way with the Employer’s right to terminate such Eligible Employee’s or Participant’s employment. For purposes of clarification, eligibility to participate in the Plan shall not guarantee employment through the date of an Acquisition Event.

7. Withholding.

All Valuation Incentive Award payments under the Plan shall be subject to applicable federal (including FICA), state and local tax withholding requirements. The Employer may require that the Participant pay to the Employer the amount of any federal, state or local taxes that the Employer is required to withhold with respect to such Valuation Incentive Award, or the Employer may deduct from other wages paid by the Employer the amount of any withholding taxes due with respect to the Valuation Incentive Award.

8. Amendment or Discontinuance of the Plan.

(a) Prior to an Acquisition Event, the Board may amend or terminate this Plan at any time and from time to time with the consent of a majority of the Eligible Employees hereunder; provided that consent shall not be required for any amendment that does not materially impair the rights or interests of an Eligible Employee under this Plan. On or after an Acquisition Event, the Board may not amend the Plan in a manner that materially impairs a Participant’s rights to or interest in a Valuation Incentive Award without the Participant’s written consent.

(b) Notwithstanding the foregoing, unless an Acquisition Event has occurred, this Plan shall terminate on the date immediately preceding the 5th anniversary of its effective date, unless the Plan is terminated earlier by the Board in accordance with Section 8(a) above.

9. Section 409A.

10. Governing Law.

The Plan shall be governed by the laws of the State of Delaware without regard to the conflicts of law principles thereof.

SCHEDULE A

Eligible Employees

Calvin Knowlton

Orsula Knowlton

Brian Adams

Joseph Filippoli

Robert Alesiani

Michael Greenhalgh

A-1

EX-10.6 19 a2226891zex-10_6.htm EX-10.6

Exhibit 10.6

TABULA RASA HEALTHCARE, INC.,
CAREKINESIS, INC.,
CAREVENTIONS, INC.,
CAPSTONE PERFORMANCE SYSTEMS, LLC,
J. A. ROBERTSON, INC.,
AND
MEDLIANCE LLC

BRIDGE BANK, NATIONAL ASSOCIATION

LOAN AND SECURITY AGREEMENT

This LOAN AND SECURITY AGREEMENT is entered into as of April 29, 2015, by and between BRIDGE BANK, NATIONAL ASSOCIATION (“Bank”) and CAREKINESIS, INC., a Delaware corporation (“CareKinesis”), TABULA RASA HEALTHCARE, INC., a Delaware corporation (“Parent”), CAREVENTIONS, INC., a Delaware corporation (“Careventions”), CAPSTONE PERFORMANCE SYSTEMS, LLC, a Delaware limited liability company (“Capstone”), J. A. ROBERTSON, INC., a California corporation (“Robertson”) and MEDLIANCE LLC, an Arizona limited liability company (“Medliance”). Parent, CareKinesis, Careventions, Capstone, Robertson and Medliance are each referred to herein as a “Borrower”, and collectively, as the “Borrowers”.

RECITALS

Borrowers wish to obtain credit from time to time from Bank, and Bank desires to extend credit to Borrowers. This Agreement sets forth the terms on which Bank will advance credit to Borrowers, and Borrowers will repay the amounts owing to Bank.

AGREEMENT

The parties agree as follows:

1. DEFINITIONS AND CONSTRUCTION.

1.1 Definitions. As used in this Agreement, the following terms shall have the following definitions:

“Accounts” means all presently existing and hereafter arising accounts, contract rights, payment intangibles, and all other forms of obligations owing to a Borrower arising out of the sale or lease of goods (including, without limitation, the licensing of software and other technology) or the rendering of services by a Borrower, whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by a Borrower and such Borrower’s Books relating to any of the foregoing.

“Advance” or “Advances” means a cash advance or cash advances under the Revolving Facility.

“Affiliate” means, with respect to any Person, any Person that owns or controls directly or indirectly such Person, any Person that controls or is controlled by or is under common control with such Person, and each of such Person’s senior executive officers, directors, and partners.

“Bank Expenses” means all: reasonable costs or expenses (including reasonable attorneys’ fees and expenses) incurred in connection with the preparation, negotiation, administration, and enforcement of the Loan Documents; Collateral audit fees; and Bank’s reasonable attorneys’ fees and expenses incurred in amending, enforcing or defending the Loan Documents (including fees and expenses of appeal), incurred before, during and after an Insolvency Proceeding, whether or not suit is brought.

“Borrower’s Books” means all of a Borrower’s books and records including: ledgers; records concerning a Borrower’s assets or liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment, containing such information.

“Borrowing Base” means as of any date an amount equal to (a) Borrowers’ trailing three (3) months of Monthly Recurring Revenue from Eligible Recurring Revenue Contracts as of the last day of the most recently completed month multiplied by (b) the lesser of (i) one hundred percent (100%) or (ii) the MRR Retention Rate, as determined by Bank with reference to the most recent Borrowing Base Certificate delivered by Borrowers; provided however that (x) clause (a) of the Borrowing Base definition may include rebate accrual receivables from Medliance’s Contracts, provided that such receivables are aged less than 180 days and aggregate amount to be included in the Borrowing Base from such Contracts does not exceed $1,500,000; and (y) that the aggregate amount of Monthly Recurring Revenue included in the Borrowing Base from Eligible Recurring Revenue Contracts with customers outside the United States shall not exceed 10% without Bank’s prior written consent; and provided further that the

Borrowing Base may be revised from time to time by Bank following each Collateral audit or as Bank deems necessary in Bank’s reasonable judgment and upon notification thereof to Borrowers.

“Business Day” means any day that is not a Saturday, Sunday, or other day on which banks in the State of California are authorized or required to close.

“Cash Management Sublimit” means a sublimit for cash management transactions under the Revolving Line pursuant to Section 2.1(b).

“Change in Control” shall mean a transaction in which (i) any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all classes of stock then outstanding of a Borrower ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to elect a majority of the Board of Directors of a Borrower, who did not have such power before such transaction, or (ii) Parent ceases to directly or indirectly own all of the outstanding capital stock of any other Borrower.

“Closing Date” means the date of this Agreement.

“Code” means the California Uniform Commercial Code.

“Collateral” means the property described on Exhibit A attached hereto.

“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation of another; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards, or merchant services issued or provided for the account of that Person; and (iii) all obligations arising under any agreement or arrangement designed to protect such Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by Bank in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.

“Contracts” means subscription license contracts, maintenance contracts and support contracts of a Borrower.

“Copyrights” means any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof.

“Credit Extension” means each Advance, use of the Cash Management Sublimit, the International Sublimit, or any other extension of credit by Bank for the benefit of Borrowers hereunder.

“Daily Balance” means the amount of the Obligations owed at the end of a given day.

“EBITDA” means Borrowers’ earnings before interest, taxes, depreciation expense, amortization expense, and non-cash stock-compensation based expenses, determined in accordance with GAAP.

“Eligible Recurring Revenue Contracts” means Contracts yielding monthly recurring revenue in accordance with GAAP, provided that standards of eligibility may be fixed and revised from time to time by Bank in Bank’s reasonable judgment and upon notification thereof to Borrowers in accordance with the provisions hereof. Unless otherwise agreed to by Bank, Eligible Recurring Revenue Contracts shall not include the following:

(a) Contracts for which the customer thereunder has failed to pay to the Borrowers any amounts due to Borrowers under any of such Contracts within ninety (90) days from the invoice date;

(b) Contracts which the customer thereunder has elected to cancel or has failed to renew within the time period prescribed in such Contracts;

(c) Contracts with respect to which the customer is subject to any Insolvency Proceeding, or becomes insolvent or goes out of business; or

(d) Contracts with respect to which the customer is outside of the United States (unless otherwise approved in writing by Bank on a case by case basis).

“Equipment” means all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments in which a Borrower has any interest.

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

“Event of Default” has the meaning assigned in Article 8.

“Foreign Exchange Reserve Percentage” is defined in Section 2.1(c)(ii) hereof.

“Founder Notes” means (i) unsecured Indebtedness in the aggregate principal amount of $800,000 owing to Calvin and Orsula Knowlton evidenced by that certain Amended Promissory Note dated as of May 9, 2013 and (ii) unsecured Indebtedness in the aggregate principal amount of $250,000 owing to John and Joanne Durham evidenced by that certain Promissory Note dated as of May 20, 2013.

“FX Amount” is defined in Section 2.1(c)(ii) hereof.

“FX Contracts” are defined in Section 2.1(c)(ii) hereof.

“GAAP” means generally accepted accounting principles as in effect from time to time.

“Indebtedness” means (a) all indebtedness for borrowed money or the deferred purchase price of property or services, including without limitation reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations and (d) all Contingent Obligations.

“Insolvency Proceeding” means any proceeding commenced by or against any person or entity under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

“Intellectual Property Collateral” means all of a Borrower’s right, title, and interest in and to the following: Copyrights, Trademarks and Patents; all trade secrets, all design rights, claims for damages by way of past, present and future infringement of any of the rights included above, all licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all license fees and royalties payable to a Borrower arising from such use to the extent permitted by such license or rights; all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents; and all proceeds and products of the foregoing, including without limitation all payments under insurance or any indemnity or warranty payable in respect of any of the foregoing.

“International Sublimit” means a sublimit for foreign exchange services and export, import, and standby letters of credit under the Revolving Line pursuant to Section 2.1(c).

“Inventory” means all inventory in which a Borrower has or acquires any interest, including work in process and finished products intended for sale or lease or to be furnished under a contract of service, of every kind and description now or at any time hereafter owned by or in the custody or possession, actual or constructive, of a Borrower, including such inventory as is temporarily out of its custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and a Borrower’s Books relating to any of the foregoing.

“Investment” means any beneficial ownership of (including stock, partnership interest or other securities) any Person, or any loan, advance or capital contribution to any Person.

“Letter of Credit” or “Letters of Credit” is defined in Section 2.1(c)(ii) hereof.

“Lien” means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.

“Loan Documents” means, collectively, this Agreement, any note or notes, and any other documents, instruments or agreements entered into by a Borrower or any guarantor or other third party in connection with this Agreement, all as amended or extended from time to time.

“Material Adverse Effect” means a material adverse effect on (i) the business operations or condition (financial or otherwise) of Parent and its Subsidiaries taken as a whole or (ii) the ability of Borrowers to repay the Obligations or otherwise perform their obligations under the Loan Documents or (iii) the value or priority of Bank’s security interests in the Collateral.

“Monthly Recurring Revenue” means with respect to any measurement period GAAP revenue recognized during such period from Contracts.

“MRR Retention Rate” means as of the last day of each month, the ratio, expressed as a percentage, of (a) (i) Monthly Recurring Revenue for the three (3) months ending on such date (the “Measurement Period”) minus (ii) Monthly Recurring Revenue for the Measurement Period derived from customers to Contracts that do not constitute an Eligible Recurring Revenue Contract to (b) Monthly Recurring Revenue for the Measurement Period for all Contracts; provided however that at no time shall the MRR Retention Rate be greater than one hundred percent (100%).

“Negotiable Collateral” means all letters of credit of which a Borrower is a beneficiary, notes, drafts, instruments, securities, documents of title, and chattel paper, and such each Borrower’s Books relating to any of the foregoing.

“Obligations” means all debt, principal, interest, Bank Expenses and other amounts owed to Bank by Borrowers pursuant to this Agreement or any other agreement, whether absolute or contingent, due or to become due, now existing or hereafter arising, including any interest that accrues after the commencement of an Insolvency Proceeding and including any debt, liability, or obligation owing from Borrowers to others that Bank may have obtained by assignment or otherwise.

“Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.

“Periodic Payments” means all installments or similar recurring payments that Borrowers may now or hereafter become obligated to pay to Bank pursuant to the terms and provisions of any instrument, or agreement now or hereafter in existence between Borrowers and Bank.

“Permitted Indebtedness” means:

(a) Indebtedness of Borrowers in favor of Bank arising under this Agreement or any other Loan Document;

(b) unsecured Indebtedness owing to trade creditors in the ordinary course of business;

(c) Indebtedness existing on the Closing Date incurred solely for the purpose of financing the acquisition or leasing of equipment, along with any extension, renewal or refinancing of such Indebtedness, provided that the principal amount of the indebtedness being extended, renewed or refinanced does not increase.

(d) other Indebtedness existing on the Closing Date and disclosed in the Schedule;

(e) Subordinated Debt;

(f) Indebtedness arising under the Founder Notes;

(g) Indebtedness arising after the Closing Date incurred solely for the purpose of financing the acquisition or leasing of equipment, including without limitation, capital lease obligations, provided that the aggregate principal amount of Indebtedness permitted by this clause (g) shall not exceed One Million Dollars ($1,000,000) at any time outstanding; and

(h) other unsecured Indebtedness of Borrowers in an aggregate principal amount not to exceed One Hundred Thousand Dollars ($100,000).

“Permitted Investment” means:

(a) Investments existing on the Closing Date disclosed in the Schedule;

(b) Investments by any Borrower and its Subsidiaries in any Subsidiary that is a coborrower hereunder;

(c) Investments by any Borrower and its Subsidiaries in any Subsidiary that is a not a coborrower hereunder, upon Bank’s prior written consent; and

(d) (i) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one (1) year from the date of acquisition thereof, (ii) commercial paper maturing no more than one (1) year from the date of creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (iii) certificates of deposit maturing no more than one (1) year from the date of investment therein issued by Bank and (iv) Bank’s money market accounts.

“Permitted Liens” means the following:

(a) Any Liens existing on the Closing Date and disclosed in the Schedule or arising under this Agreement or the other Loan Documents;

(b) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings, provided the same have no priority over any of Bank’s security interests;

(c) Liens securing the Indebtedness described in clause (c) and clause (g) of the defined term “Permitted Liens” provided that the Lien is confined solely to the property so acquired or leased and improvements thereon, and the proceeds of such equipment;

(d) Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses (a) through (c) above, provided that any extension,

renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase.

“Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency.

“Prime Rate” means the greater of three and one quarter percent (3.25%) per year, or the variable rate of interest, per annum, most recently announced by Bank, as its “prime rate”, whether or not such announced rate is the lowest rate available from Bank.

“Responsible Officer” means each of the Chief Executive Officer, the President and the Chief Financial Officer of each Borrower.

“Revolving Facility” means the facility under which Borrowers may request Bank to issue Advances, as specified in Section 2.1(a) hereof.

“Revolving Line” means a credit extension of up to Fifteen Million Dollars ($15,000,000).

“Revolving Maturity Date” means the second anniversary of the Closing Date.

“Schedule” means the schedule of exceptions attached hereto and approved by Bank, if any.

“Shares” is one hundred percent (100%) of the issued and outstanding capital stock, membership units or other securities owned or held of record by a Borrower or any Subsidiary of a Borrower, in any direct or indirect Subsidiary.

“Sublimit Amount” means an aggregate amount not to exceed One Million Dollars ($1,000,000) with respect to all services provided under the Cash Management Sublimit and the International Sublimit.

“Subordinated Debt” means any debt incurred by Borrowers that is subordinated to the debt owing by Borrowers to Bank on terms reasonably acceptable to Bank (and identified as being such by Borrowers and Bank), pursuant to a subordination agreement in form and substance reasonably satisfactory to Bank.

“Subsidiary” means, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries (including any Affiliate), or both, by such Person. Unless the context otherwise requires, each reference to a Subsidiary herein shall be a reference to a Subsidiary of a Borrower.

“Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrowers connected with and symbolized by such trademarks.

1.2 Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP and all calculations made hereunder shall be made in accordance with GAAP. When used herein, the terms “financial statements” shall include the notes and schedules thereto. In the event that any change in GAAP shall occur and such change results in a change in the method of calculation of financial covenants, negative covenants, standards or terms in this Agreement, then Borrowers and Bank agree to enter into negotiations in order to amend such provisions of this Agreement so as to reflect equitably such changes in GAAP with the desired result that the criteria for evaluating Borrowers’ financial condition shall be the same after such changes in GAAP as if such changes had not been made. Until such time as such an amendment shall have been executed and delivered by

Borrowers and Bank, all financial covenants, negative covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such changes in GAAP had not occurred.

2. LOAN AND TERMS OF PAYMENT.

2.1 Credit Extensions.

Each Borrower promises to pay to the order of Bank, in lawful money of the United States of America, the aggregate unpaid principal amount of all Credit Extensions made by Bank to Borrowers hereunder. Borrowers shall also pay interest on the unpaid principal amount of such Credit Extensions at rates in accordance with the terms hereof.

(a) Revolving Advances.

(i) Subject to and upon the terms and conditions of this Agreement, Borrowers may request Advances in an aggregate outstanding amount not to exceed the lesser of (i) the Revolving Line or (ii) the Borrowing Base, minus, in each case, the amount of services being provided under the Cash Management Sublimit and the aggregate amounts outstanding under the International Sublimit. Subject to the terms and conditions of this Agreement, amounts borrowed pursuant to this Section 2.1(a) may be repaid and reborrowed at any time prior to the Revolving Maturity Date, at which time all Advances under this Section 2.1(a) shall be immediately due and payable. Borrowers may prepay any Advances without penalty or premium.

(ii) Whenever Borrowers desire an Advance, Borrowers will notify Bank no later than 3:00 p.m. Pacific time, on the Business Day that the Advance is to be made. Each such notification shall be made (i) by telephone or in-person followed by written confirmation from Borrowers within 24 hours, (ii) by electronic mail or facsimile transmission, or (iii) by delivering to Bank a Revolving Advance Request Form in substantially the form of Exhibit B hereto. Bank is authorized to make Advances under this Agreement, based upon instructions received from a Responsible Officer or a designee of a Responsible Officer, or without instructions if in Bank’s discretion such Advances are necessary to meet Obligations which have become due and remain unpaid. Bank shall be entitled to rely on any notice given by a person who Bank reasonably believes to be a Responsible Officer or a designee thereof, and Borrowers shall indemnify and hold Bank harmless for any damages or loss suffered by Bank as a result of such reliance. Bank will credit the amount of Advances made under this Section 2.1(a) to a Borrower’s deposit account.

(b) Cash Management Sublimit. Subject to the terms and conditions of this Agreement and availability under the Revolving Line and the Borrowing Base, Borrowers may request cash management services which may include merchant services, business credit card, automated clearing house transactions, controlled disbursement accounts and check cashing services identified in various cash management services agreements related to such services (the “Cash Management Services”) by delivering to Bank such applications on Bank’s standard forms as requested by Bank; provided, however, that the total amount of the Cash Management Services shall not exceed the Sublimit Amount, and that availability under the Revolving Line shall be reduced by the entire amount of services provided under the Cash Management Sublimit. In addition, Bank may, in its sole discretion, charge as Advances any amounts that become due or owing to Bank in connection with the Cash Management Services. If at any time the Revolving Facility is terminated or otherwise ceases to exist, (i) Borrowers shall immediately secure to Bank’s satisfaction its obligations with respect to any Cash Management Services, and, effective as of such date, the balance in any deposit accounts held by Bank and the certificates of deposit issued by Bank in a Borrower’s name (and any interest paid thereon or proceeds thereof, including any amounts payable upon the maturity or liquidation of such certificates), shall automatically secure such obligations to the extent of the then outstanding Cash Management Services, and (ii) each Borrower authorizes Bank to hold such balances in pledge and to decline to honor any drafts thereon or any requests by a Borrower or any other Person to pay or otherwise transfer any part of such balances for so long as the Cash Management Services continue.

(c) International Sublimit.

(i) Letters of Credit. Subject to the terms and conditions of this Agreement, at any time prior to the Revolving Maturity Date, Bank agrees to issue letters of credit for the account of

Borrowers (each, a “Letter of Credit” and collectively, the “Letters of Credit”), provided, however, the aggregate outstanding face amount of all Letters of Credit shall not exceed the Sublimit Amount, and for purposes of determining availability under the Revolving Line, the aggregate outstanding face amount of all Letters of Credit (whether drawn or undrawn) shall decrease, on a dollar-for-dollar basis, the amount available for other Advances. All Letters of Credit shall be, in form and substance, acceptable to Bank in its sole discretion and shall be subject to the terms and conditions of Bank’s form of standard application and letter of credit agreement (the “Application”), which Borrowers hereby agree to execute, including Bank’s standard fees. On any drawn but unreimbursed Letter of Credit, the unreimbursed amount shall be deemed an Advance under Section 2.1(a). The obligation of Borrowers to reimburse Bank for drawings made under Letters of Credit shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, the Application, and such Letters of Credit, under all circumstances whatsoever. Each Borrower shall indemnify, defend, protect, and hold Bank harmless from any loss, cost, expense or liability, including, without limitation, attorneys’ fees, arising out of or in connection with any Letters of Credit, except for expenses caused by Bank’s gross negligence or willful misconduct.

(ii) Foreign Exchange. Subject to and upon the terms and conditions of this Agreement and any other agreement that Borrowers may enter into with Bank in connection with foreign exchange transactions (“FX Contracts”), Borrowers may request Bank to enter into FX Contracts with a Borrower due not later than the Revolving Maturity Date. Borrowers shall pay any standard issuance and other fees that Bank notifies Borrowers will be charged for issuing and processing FX Contracts for Borrowers. The FX Amount shall at all times be equal to or less than the Sublimit Amount, and availability under the Revolving Line shall be reduced by the FX Amount. The “FX Amount” shall equal the amount determined by multiplying (A) the aggregate amount, in United States Dollars, of FX Contracts between a Borrower and Bank remaining outstanding as of any date of determination by (B) the applicable Foreign Exchange Reserve Percentage as of such date. The “Foreign Exchange Reserve Percentage” shall be a percentage as determined by Bank, in its reasonable discretion from time to time. The initial Foreign Exchange Reserve Percentage shall be ten percent (10%).

(iii) If at any time the Revolving Facility is terminated or otherwise ceases to exist, Borrowers shall immediately secure in cash all obligations under the International Sublimit on terms reasonably acceptable to Bank.

2.2 Overadvances. If the aggregate amount of the outstanding Advances plus the amount of services provided under the Cash Management Sublimit plus the aggregate amounts outstanding under the International Sublimit exceeds the lesser of the Revolving Line or the Borrowing Base at any time, Borrowers shall immediately pay to Bank, in cash, the amount of such excess.

2.3 Interest Rates, Payments, and Calculations.

(a) Interest Rates.

(i) Advances. Except as set forth in Section 2.3(b), the Advances shall bear interest, on the outstanding Daily Balance thereof, at a rate equal to one percent (1.0%) above the Prime Rate; provided however that on and after the completion of Parent’s underwritten initial public offering of its securities registered under the Securities Act of 1933, as amended, the Advances shall bear interest, on the outstanding Daily Balance thereof, at a rate equal to one half of one percent (0.5%) above the Prime Rate.

(b) Late Fee; Default Rate. If any payment is not made within ten (10) days after the date such payment is due, Borrowers shall pay Bank a late fee equal to the lesser of (i) five percent (5%) of the amount of such unpaid amount or (ii) the maximum amount permitted to be charged under applicable law, not in any case to be less than $25.00. All Obligations shall bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate equal to five (5) percentage points above the interest rate applicable immediately prior to the occurrence of the Event of Default.

(c) Payments. Interest hereunder shall be due and payable on the tenth calendar day of each month during the term hereof. Bank shall, at its option, charge such interest, all Bank Expenses, and all Periodic Payments against any of Borrower’s deposit accounts or against the Revolving Line, in which case those amounts shall thereafter accrue interest at the rate then applicable hereunder. Any interest not paid when due shall be

compounded by becoming a part of the Obligations, and such interest shall thereafter accrue interest at the rate then applicable hereunder. All payments shall be free and clear of any taxes, withholdings, duties, impositions or other charges, to the end that Bank will receive the entire amount of any Obligations payable hereunder, regardless of source of payment.

(d) Computation. In the event the Prime Rate is changed from time to time hereafter, the applicable rate of interest hereunder shall be increased or decreased, effective as of the day the Prime Rate is changed, by an amount equal to such change in the Prime Rate. All interest chargeable under the Loan Documents shall be computed on the basis of a three hundred sixty (360) day year for the actual number of days elapsed.

2.4 Crediting Payments. Prior to the occurrence of an Event of Default, Bank shall credit a wire transfer of funds, check or other item of payment to such deposit account or Obligation as Borrowers specify. After the occurrence of an Event of Default, the receipt by Bank of any wire transfer of funds, check, or other item of payment shall be immediately applied to conditionally reduce Obligations, but shall not be considered a payment on account unless such payment is of immediately available federal funds or unless and until such check or other item of payment is honored when presented for payment. Notwithstanding anything to the contrary contained herein, any wire transfer or payment received by Bank after 12:00 noon Pacific time shall be deemed to have been received by Bank as of the opening of business on the immediately following Business Day. Whenever any payment to Bank under the Loan Documents would otherwise be due (except by reason of acceleration) on a date that is not a Business Day, such payment shall instead be due on the next Business Day, and additional fees or interest, as the case may be, shall accrue and be payable for the period of such extension.

2.5 Fees. Borrowers shall pay to Bank the following:

(a) Facility Fees. On the Closing Date and on the first anniversary of the Closing Date, a fee with respect to the Revolving Facility equal to $37,500; and

(b) Bank Expenses. On the Closing Date, all Bank Expenses incurred through the Closing Date, including attorneys’ fees and expenses and, after the Closing Date, all Bank Expenses, including attorneys’ fees and expenses, as and when they are incurred by Bank.

2.6 Term. This Agreement shall become effective on the Closing Date and, subject to Section 13.7, shall continue in full force and effect for so long as any Obligations remain outstanding or Bank has any obligation to make Credit Extensions under this Agreement. Notwithstanding the foregoing, Bank shall have the right to terminate its obligation to make Credit Extensions under this Agreement immediately and without notice upon the occurrence and during the continuance of an Event of Default. Notwithstanding termination, Bank’s Lien on the Collateral shall remain in effect for so long as any Obligations are outstanding.

2.7 Extension of Maturity. Notwithstanding anything contained herein to the contrary, Bank shall have the right, in its sole and absolute discretion, to extend the Revolving Maturity Date to the tenth day of the month next following the actual Revolving Maturity Date as stated in this Agreement.

3. CONDITIONS OF LOANS.

3.1 Conditions Precedent to Initial Credit Extension. The obligation of Bank to make the initial Credit Extension is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, the following:

(a) this Agreement;

(b) a certificate of the Secretary of each Borrower with respect to incumbency and resolutions authorizing the execution and delivery of this Agreement;

(c) UCC National Form Financing Statements;

(d) an intellectual property security agreement;

(e) subordination agreement with Eastward Fund Management, LLC;

(f) subordination agreement with Amerisourcebergen Drug Corporation/Bellco Drug Corp.;

(g) subordination agreement(s) with Fred Smith III, Stephen F. Olds, and the Olds Family 2002 Trust;

(h) payoff letter from Silicon Valley Bank;

(i) agreement to provide insurance;

(j) payment of the fees and Bank Expenses then due specified in Section 2.5 hereof;

(k) current financial statements of Borrowers;

(l) an audit of the Collateral, the results of which shall be satisfactory to Bank;

(m) a borrowing base certificate in substantially similar form as Exhibit C;

(n) a compliance certificate in substantially similar form as Exhibit D; and

(o) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

3.2 Conditions Precedent to all Credit Extensions. The obligation of Bank to make each Credit Extension, including the initial Credit Extension, is further subject to the following conditions:

(a) timely receipt by Bank of the Advance Request Form as provided in Section 2.1; and

(b) the representations and warranties contained in Section 5 shall be true and correct in all material respects on and as of the date of such Advance Request Form and on the effective date of each Credit Extension as though made at and as of each such date, and no Event of Default shall have occurred and be continuing, or would exist after giving effect to such Credit Extension. The making of each Credit Extension shall be deemed to be a representation and warranty by a Borrower on the date of such Credit Extension as to the accuracy of the facts referred to in this Section 3.2.

4. CREATION OF SECURITY INTEREST.

4.1 Grant of Security Interest. Each Borrower grants and pledges to Bank a continuing security interest in all presently existing and hereafter acquired or arising Collateral in order to secure prompt repayment of any and all Obligations and in order to secure prompt performance by such Borrower of each of its covenants and duties under the Loan Documents. Such security interest constitutes a valid, first priority security interest in the presently existing Collateral, subject to Permitted Liens described in clause (c) of such defined term, and will constitute a valid, first priority security interest in Collateral, subject to Permitted Liens described in clause (c) of such defined term, acquired after the date hereof.

4.2 Delivery of Additional Documentation Required. Borrowers shall from time to time execute and deliver to Bank, at the request of Bank, all Negotiable Collateral, all financing statements and other documents that Bank may reasonably request, in form satisfactory to Bank, to perfect and continue the perfection of Bank’s security interests in the Collateral and in order to fully consummate all of the transactions contemplated under the Loan Documents. Borrowers from time to time may deposit with Bank specific time deposit accounts to secure

specific Obligations. Each Borrower authorizes Bank to hold such balances in pledge and to decline to honor any drafts thereon or any request by a Borrower or any other Person to pay or otherwise transfer any part of such balances for so long as the Obligations are outstanding.

4.3 Right to Inspect. Bank (through any of its officers, employees, or agents) shall have the right, upon reasonable prior notice, from time to time during Borrowers’ usual business hours but no more than once a year (unless an Event of Default has occurred and is continuing), to inspect a Borrower’s Books and to make copies thereof and to check, test, and appraise the Collateral in order to verify each Borrower’s financial condition or the amount, condition of, or any other matter relating to, the Collateral.

4.4 Pledge of Shares. Each Borrower hereby pledges, assigns and grants to Bank, a security interest in all the Shares (except that, in the case of all non-domestic Subsidiaries of a Borrower, such pledged Shares shall be limited to sixty-five percent (65%) of the Shares of first-tier non-domestic Subsidiaries), together with all proceeds and substitutions thereof, all cash, stock and other moneys and property paid thereon, all rights to subscribe for securities declared or granted in connection therewith, and all other cash and noncash proceeds of the foregoing, as security for the performance of the Obligations. To the extent Shares are not certificated as of the Closing Date, within ten (10) days of the certification of any Shares, the certificate or certificates for the Shares will be delivered to Bank, accompanied by an instrument of assignment duly executed in blank by Borrowers. To the extent required by the terms and conditions governing the Shares, Borrowers shall cause the books of each entity whose Shares are part of the Collateral and any transfer agent to reflect the pledge of the Shares. Upon the occurrence and during the continuance of an Event of Default hereunder, Bank may effect the transfer of any securities included in the Collateral (including but not limited to the Shares) into the name of Bank and cause new (as applicable) certificates representing such securities to be issued in the name of Bank or its transferee. Borrowers will execute and deliver such documents, and take or cause to be taken such actions, as Bank may reasonably request to perfect or continue the perfection of Bank’s security interest in the Shares. Unless an Event of Default shall have occurred and be continuing, Borrowers shall be entitled to exercise any voting rights with respect to the Shares and to give consents, waivers and ratifications in respect thereof, provided that no vote shall be cast or consent, waiver or ratification given or action taken which would be inconsistent with any of the terms of this Agreement or which would constitute or create any violation of any of such terms. All such rights to vote and give consents, waivers and ratifications shall terminate upon the occurrence and continuance of an Event of Default.

5. REPRESENTATIONS AND WARRANTIES.

Each Borrower represents and warrants as follows:

5.1 Due Organization and Qualification. Each Borrower and each Subsidiary is a corporation duly existing under the laws of its state of incorporation and qualified and licensed to do business in any state in which the conduct of its business or its ownership of property requires that it be so qualified and where failure to so qualify could reasonably be expected to have a Material Adverse Effect.

5.2 Due Authorization; No Conflict. The execution, delivery, and performance of the Loan Documents are within each Borrower’s powers, have been duly authorized, and are not in conflict with nor constitute a breach of any provision contained in a Borrower’s Certificate/Articles of Incorporation or Bylaws, or Certificate of Formation or Operating Agreement, as applicable, nor will they constitute an event of default under any material agreement to which a Borrower is a party or by which a Borrower is bound. As of the date hereof, no Borrower is in default under any material agreement to which it is a party or by which it is bound.

5.3 No Prior Encumbrances. Each Borrower has good and marketable title to its property, free and clear of Liens, except for Permitted Liens.

5.4 Bona Fide Eligible Recurring Revenue Contracts. The Eligible Recurring Revenue Contracts are bona fide existing contracts. Borrowers have not received notice of an actual or imminent Insolvency Proceeding commenced by or against any customer of either Borrower whose Contracts are included in any Borrowing Base Certificate as Eligible Recurring Revenue Contract..

5.5 Merchantable Inventory. All Inventory is in all material respects of good and marketable quality, free from all material defects, except for Inventory for which adequate reserves have been made.

5.6 Intellectual Property Collateral. Each Borrower is the sole owner of the Intellectual Property Collateral, except for non-exclusive licenses granted by a Borrower to its customers in the ordinary course of business. To Borrowers’ knowledge, each of the Patents owned by Borrowers as of the date hereof is valid and enforceable. No part of the Intellectual Property Collateral owned by Borrowers as of the date hereof has been judged invalid or unenforceable, in whole or in part, and no written claim has been made that any part of the Intellectual Property Collateral owned by Borrowers as of the date hereof violates the rights of any third party. Except as set forth in the Schedule, each Borrower’s rights as a licensee of intellectual property do not give rise to more than five percent (5%) of its gross revenue in any given month, including without limitation revenue derived from the sale, licensing, rendering or disposition of any product or service. Except as set forth in the Schedule, no Borrower is a party to, or bound by, any agreement that restricts the grant by such Borrower of a security interest in such Borrower’s rights under such agreement.

5.7 Name; Location of Chief Executive Office. Except as disclosed in the Schedule, no Borrower has done business under any name other than that specified on the signature page hereof. The chief executive office of each Borrower is located at the address indicated in Section 10 hereof. All of Borrowers’ Inventory and Equipment is located only at the locations set forth in Section 10 hereof.

5.8 Litigation. Except as set forth in the Schedule, there are no actions or proceedings pending by or against a Borrower or any Subsidiary before any court or administrative agency that could reasonably be expected to have a Material Adverse Effect.

5.9 No Material Adverse Change in Financial Statements. All consolidated and consolidating financial statements related to Borrowers and any Subsidiary that Bank has received from Borrowers fairly present in all material respects Borrowers’ financial condition as of the date thereof and Borrowers’ consolidated and consolidating results of operations for the period then ended. There has not been a material adverse change in the consolidated or the consolidating financial condition of Borrowers since the date of the most recent of such financial statements submitted to Bank.

5.10 Solvency, Payment of Debts. Each Borrower is solvent and able to pay its debts (including trade debts) as they mature.

5.11 Regulatory Compliance. Each Borrower and each Subsidiary have met the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA, and no event has occurred resulting from a Borrower’s failure to comply with ERISA that could result in Borrower’s incurring any material liability thereunder. No Borrower is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940. No Borrower is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T and U of the Board of Governors of the Federal Reserve System). Each Borrower has complied with all the provisions of the Federal Fair Labor Standards Act. No Borrower has violated any statutes, laws, ordinances or rules applicable to it, violation of which could reasonably be expected to have a Material Adverse Effect.

5.12 Environmental Condition. None of Borrowers’ or any Subsidiary’s properties or assets has ever been used by a Borrower or any Subsidiary or, to the best of Borrowers’ knowledge, by previous owners or operators, in the disposal of, or to produce, store, handle, treat, release, or transport, any hazardous waste or hazardous substance other than in accordance with applicable law; to the best of Borrowers’ knowledge, none of Borrowers’ properties or assets has ever been designated or identified in any manner pursuant to any environmental protection statute as a hazardous waste or hazardous substance disposal site, or a candidate for closure pursuant to any environmental protection statute; no lien arising under any environmental protection statute has attached to any revenues or to any real or personal property owned by a Borrower or any Subsidiary; and neither Borrower nor any Subsidiary has received a summons, citation, notice, or directive from the Environmental Protection Agency or any other federal, state or other governmental agency concerning any action or omission by a Borrower or any Subsidiary resulting in the releasing, or otherwise disposing of hazardous waste or hazardous substances into the environment.

5.13 Taxes. Each Borrower and each Subsidiary have filed or caused to be filed all federal and state tax income returns and any other material tax returns required to be filed, and have paid, or have made adequate provision for the payment of, all taxes reflected therein.

5.14 Subsidiaries. Except as set forth on the Schedule, no Borrower owns any stock, partnership interest or other equity securities of any Person, except for Permitted Investments.

5.15 Government Consents. Each Borrower and each Subsidiary have obtained all material consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all governmental authorities that are necessary for the continued operation of such Borrower’s business as currently conducted.

5.16 Accounts. On and after the 60th day following the Closing Date, none of a Borrower’s nor any Subsidiary’s operating, depository or investment accounts are maintained or invested with a Person other than Bank, except as permitted under Section 6.8.

5.17 Shares. Each Borrower has full power and authority to create a first lien on the Shares and no disability or contractual obligation exists that would prohibit such Borrower from pledging the Shares pursuant to this Agreement. To Borrowers’ knowledge, there are no subscriptions, warrants, rights of first refusal or other restrictions on transfer relative to, or options exercisable with respect to the Shares. The Shares have been and will be duly authorized and validly issued, and are fully paid and non-assessable. To Borrowers’ knowledge, the Shares are not the subject of any present or threatened suit, action, arbitration, administrative or other proceeding, and no Borrower knows of any reasonable grounds for the institution of any such proceedings

5.18 Full Disclosure. No representation, warranty or other statement made by a Borrower in any certificate or written statement furnished to Bank contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such certificates or statements not misleading.

6. AFFIRMATIVE COVENANTS.

Each Borrower shall do all of the following:

6.1 Good Standing. Each Borrower shall maintain its and each of its Subsidiaries’ corporate existence and good standing in its jurisdiction of incorporation and maintain qualification in each jurisdiction in which it is required under applicable law, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect. Each Borrower shall maintain, and shall cause each of its Subsidiaries to maintain, in force all licenses, approvals and agreements, the loss of which could reasonably be expected to have a Material Adverse Effect.

6.2 Government Compliance. Each Borrower shall meet, and shall cause each Subsidiary to meet, the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA. Each Borrower shall comply, and shall cause each Subsidiary to comply, with all statutes, laws, ordinances and government rules and regulations to which it is subject, noncompliance with which could reasonably be expected to have a Material Adverse Effect.

6.3 Financial Statements, Reports, Certificates. Borrowers shall deliver the following to Bank: (a) as soon as available, but in any event within thirty (30) days after the last day of each month, a Borrowing Base Certificate signed by a Responsible Officer in substantially the form of Exhibit C hereto, together with aged listings of accounts receivable and accounts payable by invoice date and a deferred revenue report; (b) as soon as available, but in any event within thirty (30) days after the end of each calendar month, a company prepared consolidated and consolidating balance sheet, income statement, and cash flow statement covering Borrowers’ operations during such period, prepared in accordance with GAAP, consistently applied, in a form acceptable to Bank and certified by a Responsible Officer, together with a Compliance Certificate signed by a Responsible Officer in substantially the form of Exhibit D hereto; (c) as soon as available, but in any event within one hundred eighty (180) days after the end of Borrowers’ fiscal year, audited consolidated financial statements of Borrowers prepared in

accordance with GAAP, consistently applied, together with an unqualified opinion on such financial statements of an independent certified public accounting firm reasonably acceptable to Bank; (d) as soon as available, but in any event no later than the earlier to occur of thirty (30) days following the beginning of each fiscal year or the date of approval by such Borrowers’ board of directors, an annual operating budget and financial projections (including income statements, balance sheets and cash flow statements) for such fiscal year, presented in a monthly format, approved by Borrowers’ board of directors, and in a form reasonably acceptable to Bank (each, a “Financial Plan”); (e) copies of all statements, reports and notices sent or made available generally by a Borrower to its security holders or to any holders of Subordinated Debt and, if applicable, all reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission; (f) promptly upon receipt of notice thereof, a report of any legal actions pending or threatened against a Borrower or any Subsidiary that could reasonably be expected to result in damages or costs to a Borrower or any Subsidiary of Two Hundred Fifty Thousand Dollars ($250,000) or more; and (g) such budgets, sales projections, operating plans or other financial information as Bank may reasonably request from time to time.

6.4 Audits. Bank shall have a right from time to time hereafter to audit a Borrower’s Accounts and appraise Collateral at such Borrowers’ expense, provided that such audits will be conducted no more often than every twelve (12) months unless an Event of Default has occurred and is continuing.

6.5 Inventory; Returns. Borrowers shall keep all Inventory in good and marketable condition and free from all material defects, except for Inventory for which adequate reserves have been made. Returns and allowances, if any, as between Borrowers and its account debtors shall be on the same basis and in accordance with the usual customary practices of Borrowers, as they exist at the time of the execution and delivery of this Agreement. Borrowers shall promptly notify Bank of all returns and recoveries and of all disputes and claims, where the return, recovery, dispute or claim involves more than Two Hundred Fifty Thousand Dollars ($250,000).

6.6 Taxes. Borrowers shall make, and shall cause each Subsidiary to make, due and timely payment or deposit of all federal and state income taxes and all other material taxes, including local taxes, assessments, or contributions required of it by law, and will execute and deliver to Bank, on demand, appropriate certificates attesting to the payment or deposit thereof; and Borrowers will make, and will cause each Subsidiary to make, timely payment or deposit of all tax payments and withholding taxes required of it by applicable laws, including, but not limited to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request, furnish Bank with proof satisfactory to Bank indicating that such Borrower or a Subsidiary has made such payments or deposits; provided that Borrower or a Subsidiary need not make any payment if the amount or validity of such payment is contested in good faith by appropriate proceedings and is reserved against (to the extent required by GAAP) by Borrowers.

6.7 Insurance.

(a) Borrowers, at their expense, shall keep the Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and all other hazards and risks, and in such amounts, as ordinarily insured against by other owners in similar businesses conducted in the locations where a Borrower’s business is conducted on the date hereof. Borrowers shall also maintain insurance relating to Borrowers’ business, ownership and use of the Collateral in amounts and of a type that are customary to businesses similar to Borrowers’.

(b) All such policies of insurance shall be in such form, with such companies, and in such amounts as are reasonably satisfactory to Bank. All such policies of property insurance shall contain a lender’s loss payable endorsement, in a form satisfactory to Bank, showing Bank as an additional loss payee thereof, and all liability insurance policies shall show the Bank as an additional insured and shall specify that the insurer must give at least twenty (20) days’ notice to Bank before canceling its policy for any reason. Upon Bank’s request, Borrowers shall deliver to Bank certified copies of such policies of insurance and evidence of the payments of all premiums therefor. All proceeds payable under any such policy shall, at the option of Bank, be payable to Bank to be applied on account of the Obligations.

6.8 Accounts. Borrowers shall (i) maintain and shall cause each of their Subsidiaries to maintain its primary depository, operating, and investment accounts with Bank and (ii) endeavor to utilize and shall cause each of their Subsidiaries to endeavor to utilize Bank’s International Banking Division for any international banking services required by Borrowers, including, but not limited to, foreign currency wires, hedges, swaps, FX

Contracts, and Letters of Credit. For each deposit, operating, or investment account, other than Immaterial Accounts, that a Borrower maintains outside of Bank after the 60th day following the Closing Date, such Borrower shall cause the applicable bank or financial institution at or with which any such account is maintained to execute and deliver an account control agreement or other appropriate instrument in form and substance satisfactory to Bank. “Immaterial Accounts” shall mean operating, depository or investment accounts with a Person or institution other than Bank as long as the aggregate balance in such Immaterial Accounts does not exceed Ten Thousand Dollars ($10,000) at any time.

6.9 Lockbox and Cash Collateral Account. All proceeds of Accounts shall be deposited into a lockbox or dominion account (the “Cash Collateral Account”) with Bank, pursuant to the terms of such lockbox agreements as Bank shall reasonably request from time to time (the “Lockbox Agreements”); and Borrowers shall use the Cash Collateral Account address as the remit to and payment address for all proceeds of Accounts. If a Borrower receives any amount despite such instructions, Borrowers shall immediately deliver such payment to Bank in the form received, except for an endorsement to the order of Lender and, pending such delivery, shall hold such payment in trust for Bank. On the same day of clearance of any checks, Bank shall credit all amounts paid into the Cash Collateral Account to Borrowers’ operating account(s) maintained at Bank. Following an Event of Default that is continuing, Bank may, in its sole discretion, send requests for verification of Accounts or notify such Borrower’s account debtors of the assignment of such Accounts to Bank, and take such other actions as set forth in the Lockbox Agreements and credit any and all amounts paid into the Cash Collateral Account first, against any amounts outstanding pertaining to any Advances, and then, of any remaining balance of such amount to Borrowers’ operating account(s).

6.10 Financial Covenants.

(a) Minimum Cash. Borrowers shall maintain unrestricted cash balances in its accounts at Bank of at least $1,000,000 at all times through December 31, 2015, and at least $1,500,000 at all times thereafter.

(b) Minimum MRR Retention Rate. Borrowers shall maintain an MRR Retention Rate of at least ninety percent (90%), measured monthly.

(c) Minimum EBITDA. Borrowers’ EBITDA shall be at least (i) $2,000,000 for the six (6) months’ ending June 30, 2015, (ii) $3,500,000 for the six (6) months’ ending September 30, 2015 and (iii) $5,000,000 for the nine (9) months’ ending December 31, 2015. Borrowers’ minimum EBITDA, measured at the end of each quarter for 2016 and beyond shall be in such amounts as determined by Bank based on Borrowers’ Financial Plan for such year(s).

6.11 Intellectual Property Rights.

(a) Borrowers shall promptly give Bank written notice of any applications or registrations of intellectual property rights filed with the United States Patent and Trademark Office, including the date of such filing and the registration or application numbers, if any. Borrowers shall (i) give Bank not less than 30 days prior written notice of the filing of any applications or registrations with the United States Copyright Office, including the title of such intellectual property rights to be registered, as such title will appear on such applications or registrations, and the date such applications or registrations will be filed, and (ii) prior to the filing of any such applications or registrations, shall execute such documents as Bank may reasonably request for Bank to maintain its perfection in such intellectual property rights to be registered by Borrowers, and upon the request of Bank, shall file such documents simultaneously with the filing of any such applications or registrations. Upon filing any such applications or registrations with the United States Copyright Office, Borrowers shall promptly provide Bank with (i) a copy of such applications or registrations, without the exhibits, if any, thereto, (ii) evidence of the filing of any documents requested by Bank to be filed for Bank to maintain the perfection and priority of its security interest in such intellectual property rights, and (iii) the date of such filing.

(b) Bank may audit Borrowers’ Intellectual Property Collateral to confirm compliance with this Section, provided such audit may not occur more often than once per year, unless an Event of Default has occurred and is continuing. Bank shall have the right, but not the obligation, to take, at Borrowers’ sole expense, any actions that Borrowers are required under this Section to take but which Borrowers fail to take, after 15

days’ notice to Borrowers. Borrowers shall reimburse and indemnify Bank for all costs and expenses incurred in the exercise of its rights under this Section.

6.12 Formation or Acquisition of Subsidiaries. Notwithstanding and without limiting the negative covenants contained in Sections 7.3 and 7.7 hereof, at the time that Borrower forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary, Borrowers shall (a) if such Subsidiary is a domestic company, cause such new Subsidiary to provide to Bank a joinder to this Agreement to cause such Subsidiary to become a co-borrower hereunder, together with such appropriate financing statements and/or control agreements, all in form and substance reasonably satisfactory to Bank (including being sufficient to grant Bank a first priority Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Subsidiary), (b) provide to Bank appropriate certificates and powers and financing statements, pledging all (or, as to any non-domestic Subsidiary, 65%) of the direct or beneficial ownership interest in such new Subsidiary, in form and substance reasonably satisfactory to Bank, and (c) provide to Bank all other documentation in form and substance reasonably satisfactory to Bank that in its opinion is appropriate with respect to the execution and delivery of the applicable documentation referred to above.

6.13 Notices of Commercial Tort Claims; Event of Default. Without limiting or contradicting any other more specific provision of this Agreement, promptly (and in any event within three (3) Business Days) upon a Borrower becoming aware of the existence of any Event of Default or event described in Section 8 which, with the giving of notice or passage of time, or both, would constitute an Event of Default, such Borrower shall give written notice to Bank of such occurrence, which such notice shall include a reasonably detailed description of such Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default. If a Borrower shall acquire a commercial tort claim (as defined in the Code), such Borrower shall promptly notify Bank in writing of the general details thereof and grant to the Bank in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to the Bank.

6.14 Post Closing Covenants. Within 60 days following the Closing Date, Borrowers shall deliver to Bank, each in form and substance reasonably satisfactory to Bank, (i) landlord waiver(s) with respect to certain of Borrowers’ leased locations identified by Bank prior to the Closing Date; and (ii) delivery of the share certificates representing the Shares held by a Borrower, if certificated, and duly executed stock powers.

6.15 Further Assurances. At any time and from time to time Borrowers shall execute and deliver such further instruments and take such further action as may reasonably be requested by Bank to effect the purposes of this Agreement.

7. NEGATIVE COVENANTS.

Borrowers will not do any of the following:

7.1 Dispositions. Convey, sell, lease, transfer or otherwise dispose of (collectively, a “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, other than: (i) Transfers of Inventory in the ordinary course of business; (ii) Transfers of non-exclusive licenses and similar arrangements for the use of the property of a Borrower or its Subsidiaries in the ordinary course of business; or (iii) Transfers of worn-out or obsolete Equipment.

7.2 Change in Business or Executive Office. Engage in any business, or permit any of its Subsidiaries to engage in any business, other than the businesses currently engaged in by Borrowers and any business substantially similar or related thereto (or incidental thereto); or cease to conduct business in the manner conducted by Borrowers as of the Closing Date; or without thirty (30) days prior written notification to Bank, relocate its chief executive office or state of incorporation or change its legal name; or without Bank’s prior written consent, change the date on which its fiscal year ends.

7.3 Change in Control/Mergers or Acquisitions. (i) Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into any other business organization, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person; or (ii) suffer or permit

a Change in Control; provided however, only advance written notice to the Bank will be required for any action restricted by this Section 7.3 if all Obligations are paid in full in cash out of the proceeds of the initial closing of such action and such payment is listed as a condition to the consummation of such action. Notwithstanding the foregoing, a Subsidiary may merge or consolidate with or into another Borrower with written notice to Bank.

7.4 Indebtedness. Create, incur, assume or be or remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness.

7.5 Encumbrances. Create, incur, assume or suffer to exist any Lien with respect to any of its property (including without limitation, its Intellectual Property Collateral), or assign or otherwise convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, or agree with any Person other than Bank not to grant a security interest in, or otherwise encumber, any of its property (including without limitation, its Intellectual Property Collateral), or permit any Subsidiary to do so.

7.6 Distributions. Pay any dividends or make any other distribution or payment on account of or in redemption, retirement or purchase of any capital stock, or permit any of its Subsidiaries to do so, except that (i) Parent may repurchase the stock of former employees pursuant to stock repurchase agreements as long as an Event of Default does not exist prior to such repurchase or would not exist after giving effect to such repurchase; and (ii) Subsidiaries may pay any dividend or make any other distribution to its equityholders.

7.7 Investments. Directly or indirectly acquire or own, or make any Investment in or to any Person, or permit any of its Subsidiaries so to do, other than Permitted Investments; or maintain or invest any of its property with a Person other than Bank or permit any of its Subsidiaries to do so unless such Person has entered into an account control agreement with Bank in form and substance satisfactory to Bank; or suffer or permit any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary from paying dividends or otherwise distributing property to Borrowers.

7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrowers except for transactions that are in the ordinary course of Borrowers’ business, upon fair and reasonable terms that are no less favorable to Borrowers than would be obtained in an arm’s length transaction with a non-affiliated Person.

7.9 Subordinated Debt. Make any payment in respect of any Subordinated Debt, or permit any of its Subsidiaries to make any such payment, except in compliance with the terms of such Subordinated Debt, or amend any provision contained in any documentation relating to the Subordinated Debt, other than any amendment reducing the interest rate of such Subordinated Debt or extending the time for any payment of principal or interest under such Subordinated Debt, without Bank’s prior written consent.

7.10 Inventory and Equipment. Store the Inventory or the Equipment with a bailee, warehouseman, or other third party unless the third party has been notified of Bank’s security interest and Bank (a) has received an acknowledgment from the third party that it is holding or will hold the Inventory or Equipment for Bank’s benefit or (b) is in pledge possession of the warehouse receipt, where negotiable, covering such Inventory or Equipment. Store or maintain any Equipment or Inventory at a location other than the location set forth in Section 10 of this Agreement.

7.11 Compliance. Become an “investment company” or be controlled by an “investment company,” within the meaning of the Investment Company Act of 1940, or become principally engaged in, or undertake as one of its important activities, the business of extending credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Credit Extension for such purpose. Fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur, fail to comply with the Federal Fair Labor Standards Act or violate any law or regulation, which violation could have a Material Adverse Effect, or a material adverse effect on the Collateral or the priority of Bank’s Lien on the Collateral, or permit any of its Subsidiaries to do any of the foregoing.

7.12 Capital Expenditures. Make or contract to make, without Bank’s prior written consent, capital expenditures, including leasehold improvements, in any fiscal year in excess of $1,000,000 or incur liability for rentals of property (including both real and personal property) in an amount which, together with capital expenditures, shall in any fiscal year exceed such sum.

8. EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an Event of Default by Borrowers under this Agreement:

8.1 Payment Default. If Borrowers fail to pay, when due, any of the Obligations.

8.2 Covenant Default.

(a) If a Borrower fails to perform any obligation under Article 6 or violates any of the covenants contained in Article 7 of this Agreement; or

(b) If a Borrower fails or neglects to perform or observe any other material term, provision, condition, covenant contained in this Agreement, in any of the Loan Documents, or in any other present or future agreement between a Borrower and Bank and as to any default under such other term, provision, condition or covenant that can be cured, has failed to cure such default within ten days after a Borrower receives notice thereof or any officer of a Borrower becomes aware thereof; provided, however, that if the default cannot by its nature be cured within the ten day period or cannot after diligent attempts by Borrowers be cured within such ten day period, and such default is likely to be cured within a reasonable time, then Borrowers shall have an additional reasonable period (which shall not in any case exceed 30 days) to attempt to cure such default, and within such reasonable time period the failure to have cured such default shall not be deemed an Event of Default but no Credit Extensions will be made.

8.3 Material Adverse Effect. If there occurs any circumstance or circumstances that could have a Material Adverse Effect.

8.4 Attachment. If any portion of a Borrower’s assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within ten (10) days, or if a Borrower is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or if a judgment or other claim becomes a lien or encumbrance upon any portion of a Borrower’s assets, or if a notice of lien, levy, or assessment is filed of record with respect to any of a Borrower’s assets by the United States Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within ten (10) days after a Borrower receives notice thereof, provided that none of the foregoing shall constitute an Event of Default where such action or event is stayed or an adequate bond has been posted pending a good faith contest by Borrowers (provided that no Credit Extensions will be required to be made during such cure period).

8.5 Insolvency. If a Borrower becomes insolvent, or if an Insolvency Proceeding is commenced by a Borrower, or if an Insolvency Proceeding is commenced against a Borrower and is not dismissed or stayed within forty five (45) days (provided that no Credit Extensions will be made prior to the dismissal of such Insolvency Proceeding).

8.6 Other Agreements. If there is a default or other failure to perform in any agreement to which a Borrower is a party or by which it is bound resulting in a right by a third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000) or which could have a Material Adverse Effect.

8.7 Judgments. If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least Two Hundred Fifty Thousand Dollars ($250,000) shall be rendered against

a Borrower and shall remain unsatisfied and unstayed for a period of thirty (30) days (provided that no Credit Extensions will be made prior to the satisfaction or stay of such judgment).

8.8 Misrepresentations. If any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth herein or in any certificate delivered to Bank by any Responsible Officer pursuant to this Agreement or to induce Bank to enter into this Agreement or any other Loan Document.

8.9 Guaranty. If any guaranty of all or a portion of the Obligations (a “Guaranty”) ceases for any reason to be in full force and effect, or any guarantor fails to perform any obligation under any Guaranty or a security agreement securing any Guaranty (collectively, the “Guaranty Documents”), or any event of default occurs under any Guaranty Document or any guarantor revokes or purports to revoke a Guaranty, or any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth in any Guaranty Document or in any certificate delivered to Bank in connection with any Guaranty Document, or if any of the circumstances described in Sections 8.3 through 8.8 occur with respect to any guarantor or any guarantor dies or becomes subject to any criminal prosecution, or any circumstances arise causing Bank, in good faith, to become insecure as to the satisfaction of any of any guarantor’s obligations under the Guaranty Documents.

9. BANK’S RIGHTS AND REMEDIES.

9.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Bank may, at its election, without notice of its election and without demand, do any one or more of the following, all of which are authorized by Borrowers:

(a) Declare all or any portion of Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable (provided that upon the occurrence of an Event of Default described in Section 8.5, all Obligations shall become immediately due and payable without any action by Bank);

(b) Cease advancing money or extending credit to or for the benefit of Borrowers under this Agreement or under any other agreement between Borrowers and Bank;

(c) Settle or adjust disputes and claims directly with account debtors for amounts, upon terms and in whatever order that Bank reasonably considers advisable;

(d) Make such payments and do such acts as Bank considers necessary or reasonable to protect its security interest in the Collateral. Borrowers agree to assemble the Collateral if Bank so requires, and to make the Collateral available to Bank as Bank may designate. Each Borrower authorizes Bank to enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Bank’s determination appears to be prior or superior to its security interest and to pay all expenses incurred in connection therewith. With respect to any of a Borrower’s owned premises, each Borrower hereby grants Bank a license to enter into possession of such premises and to occupy the same, without charge, in order to exercise any of Bank’s rights or remedies provided herein, at law, in equity, or otherwise;

(e) Set off and apply to the Obligations any and all (i) balances and deposits of Borrowers held by Bank, or (ii) indebtedness at any time owing to or for the credit or the account of Borrowers held by Bank;

(f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner provided for herein) the Collateral. Bank is hereby granted a license or other right, solely pursuant to the provisions of this Section 9.1, to use, without charge, a Borrower’s labels, Patents, Copyrights, rights of use of any name, trade secrets, trade names, Trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale, and

selling any Collateral and, in connection with Bank’s exercise of its rights under this Section 9.1, Borrowers’ rights under all licenses and all franchise agreements shall inure to Bank’s benefit;

(g) Dispose of the Collateral by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including Borrowers’ premises) as Bank determines is commercially reasonable, and apply any proceeds to the Obligations in whatever manner or order Bank deems appropriate;

(h) Bank may credit bid and purchase at any public sale; and

(i) Any deficiency that exists after disposition of the Collateral as provided above will be paid immediately by Borrowers.

9.2 Power of Attorney. Effective only upon the occurrence and during the continuance of an Event of Default, each Borrower hereby irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as such Borrower’s true and lawful attorney to: (a) send requests for verification of Accounts or notify account debtors of Bank’s security interest in the Accounts; (b) endorse such Borrower’s name on any checks or other forms of payment or security that may come into Bank’s possession; (c) sign such Borrower’s name on any invoice or bill of lading relating to any Account, drafts against account debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all claims under and decisions with respect to such Borrower’s policies of insurance; (f) settle and adjust disputes and claims respecting the accounts directly with account debtors, for amounts and upon terms which Bank determines to be reasonable; and (g) to file, in its sole discretion, one or more financing or continuation statements and amendments thereto, relative to any of the Collateral. The appointment of Bank as each Borrower’s attorney in fact, and each and every one of Bank’s rights and powers, being coupled with an interest, is irrevocable until all of the Obligations have been fully repaid and performed and Bank’s obligation to provide Credit Extensions hereunder is terminated.

9.3 Accounts Collection. At any time after the occurrence and during the continuance of an Event of Default, Bank may notify any Person owing funds to Borrowers of Bank’s security interest in such funds and verify the amount of such Account. Borrowers shall collect for Bank all amounts owing to Borrowers, receive in trust all such payments as Bank’s trustee, and immediately deliver such payments to Bank in their original form as received from the account debtor, with proper endorsements for deposit.

9.4 Bank Expenses. If Borrowers fail to pay any amounts or furnish any required proof of payment due to third persons or entities, as required under the terms of this Agreement, then Bank may do any or all of the following after reasonable notice to Borrowers: (a) make payment of the same or any part thereof; (b) set up such reserves under the a loan facility in Section 2.1 as Bank deems necessary to protect Bank from the exposure created by such failure; or (c) obtain and maintain insurance policies of the type discussed in Section 6.7 of this Agreement, and take any action with respect to such policies as Bank deems prudent. Any amounts so paid or deposited by Bank shall constitute Bank Expenses, shall be immediately due and payable, and shall bear interest at the then applicable rate hereinabove provided, and shall be secured by the Collateral. Any payments made by Bank shall not constitute an agreement by Bank to make similar payments in the future or a waiver by Bank of any Event of Default under this Agreement.

9.5 Bank’s Liability for Collateral. So long as Bank complies with reasonable banking practices, Bank shall not in any way or manner be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage thereto occurring or arising in any manner or fashion from any cause; (c) any diminution in the value thereof; or (d) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other person whomsoever. All risk of loss, damage or destruction of the Collateral shall be borne by Borrowers.

9.6 Shares. Borrowers recognize that Bank may be unable to effect a public sale of any or all the Shares, by reason of certain prohibitions contained in federal securities laws and applicable state and provincial securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Borrowers acknowledge and agree that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable

manner. Bank shall be under no obligation to delay a sale of any of the Shares for the period of time necessary to permit the issuer thereof to register such securities for public sale under federal securities laws or under applicable state and provincial securities laws, even if such issuer would agree to do so. Upon the occurrence of an Event of Default which continues, Bank shall have the right to exercise all such rights as a secured party under the Code as it, in its sole judgment, shall deem necessary or appropriate, including without limitation the right to liquidate the Shares and apply the proceeds thereof to reduce the Obligations. Effective only upon the occurrence and during the continuance of an Event of Default, each Borrower hereby irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as such Borrower’s true and lawful attorney to enforce such Borrower’s rights against any Subsidiary, including the right to compel any Subsidiary to make to the Bank or a Borrower any payments or distributions respecting the Shares which are owing to such Borrower.

9.7 Remedies Cumulative. Bank’s rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be cumulative. Bank shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any Event of Default on a Borrower’s part shall be deemed a continuing waiver. No delay by Bank shall constitute a waiver, election, or acquiescence by it. No waiver by Bank shall be effective unless made in a written document signed on behalf of Bank and then shall be effective only in the specific instance and for the specific purpose for which it was given.

9.8 Demand; Protest. Each Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees at any time held by Bank on which Borrowers may in any way be liable.

10. NOTICES.

All notices, consents, requests, approvals, demands, or other communication by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by electronic mail or facsimile transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below. Bank or a Borrower may change its mailing or electronic mail address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10.

If to Borrowers:		Tabula Rasa Healthcare, Inc.
		110 Marter Avenue, Suite 309
		Moorestown, NJ 08057
		Attn: Brian Adams, CFO
		FAX: (856) 273-0254
		EMAIL: badams@carekinesis.com

		Morgan, Lewis & Bockius
		1701 Market Street
		Philadelphia, PA 19103-2921
		Attn: Jeffrey P. Bodle
		FAX: (215) 963-5001
		EMAIL: sgoodman@morganlewis.com

If to Bank:		Bridge Bank, National Association
		55 Almaden Blvd.
		San Jose, CA 95113
		Attn: Note Department
		FAX: (408) 282-1681
		EMAIL: notedepartment@bridgebank.com

		and

		Bridge Bank, National Association
		12011 Sunset Hills Road, Suite 425
		Reston, VA 20190
		Attn: Blake Reid
		FAX: (703) 964-1620
		EMAIL: blake.reid@bridgebank.com

The parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other.

11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

This Agreement and all other Loan Documents (except as otherwise expressly provided in any of the Loan Documents) shall be governed by, and construed in accordance with, the internal laws of the State of California, without regard to principles of conflicts of law. Borrowers and Bank each hereby submits to the exclusive jurisdiction of the state and Federal courts located in the County of Santa Clara, State of California. BORROWERS AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

12. JUDICIAL REFERENCE PROVISION.

12.1 In the event the jury trial waiver set forth above is not enforceable, the parties elect to proceed under this judicial reference provision.

12.2 With the exception of the items specified in Section 12.3, below, any controversy, dispute or claim (each, a “Claim”) between the parties arising out of or relating to this Agreement or any other Loan Document, will be resolved by a reference proceeding in California in accordance with the provisions of Sections 638 et seq. of the California Code of Civil Procedure (“CCP”), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether the Claim is subject to the reference proceeding. Except as otherwise provided in the Loan Documents, venue for the reference proceeding will be in the state or federal court in the county or district where the real property involved in the action, if any, is located or in the state or federal court in the county or district where venue is otherwise appropriate under applicable law (the “Court”).

12.3 The matters that shall not be subject to a reference are the following: (i) nonjudicial foreclosure of any security interests in real or personal property, (ii) exercise of self-help remedies (including, without limitation, set-off), (iii) appointment of a receiver and (iv) temporary, provisional or ancillary remedies (including, without limitation, writs of attachment, writs of possession, temporary restraining orders or preliminary injunctions). This reference provision does not limit the right of any party to exercise or oppose any of the rights and remedies described in clauses (i) and (ii) or to seek or oppose from a court of competent jurisdiction any of the items described in clauses (iii) and (iv). The exercise of, or opposition to, any of those items does not waive the right of any party to a reference pursuant to this reference provision as provided herein.

12.4 The referee shall be a retired judge or justice selected by mutual written agreement of the parties. If the parties do not agree within ten (10) days of a written request to do so by any party, then, upon request of any party, the referee shall be selected by the Presiding Judge of the Court (or his or her representative). A request for appointment of a referee may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm

would result if ex parte relief is not granted. Pursuant to CCP § 170.6, each party shall have one peremptory challenge to the referee selected by the Presiding Judge of the Court (or his or her representative).

12.5 The parties agree that time is of the essence in conducting the reference proceedings. Accordingly, the referee shall be requested, subject to change in the time periods specified herein for good cause shown, to (i) set the matter for a status and trial-setting conference within fifteen (15) days after the date of selection of the referee, (ii) if practicable, try all issues of law or fact within one hundred twenty (120) days after the date of the conference and (iii) report a statement of decision within twenty (20) days after the matter has been submitted for decision.

12.6 The referee will have power to expand or limit the amount and duration of discovery. The referee may set or extend discovery deadlines or cutoffs for good cause, including a party’s failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered based upon good cause shown, no party shall be entitled to “priority” in conducting discovery, depositions may be taken by either party upon seven (7) days written notice, and all other discovery shall be responded to within fifteen (15) days after service. All disputes relating to discovery which cannot be resolved by the parties shall be submitted to the referee whose decision shall be final and binding.

12.7 Except as expressly set forth herein, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter, except that when any party so requests, a court reporter will be used at any hearing conducted before the referee, and the referee will be provided a courtesy copy of the transcript. The party making such a request shall have the obligation to arrange for and pay the court reporter. Subject to the referee’s power to award costs to the prevailing party, the parties will equally share the cost of the referee and the court reporter at trial.

12.8 The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a court proceeding, including without limitation motions for summary judgment or summary adjudication. The referee shall issue a decision at the close of the reference proceeding which disposes of all claims of the parties that are the subject of the reference. Pursuant to CCP § 644, such decision shall be entered by the Court as a judgment or an order in the same manner as if the action had been tried by the Court and any such decision will be final, binding and conclusive. The parties reserve the right to appeal from the final judgment or order or from any appealable decision or order entered by the referee. The parties reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference proceeding under this provision.

12.9 If the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be determined by reference procedure will be resolved and determined by arbitration. The arbitration will be conducted by a retired judge or justice, in accordance with the California Arbitration Act §1280 through §1294.2 of the CCP as amended from time to time. The limitations with respect to discovery set forth above shall apply to any such arbitration proceeding.

12.10 THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.

13. GENERAL PROVISIONS.

13.1 Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by a Borrower without Bank’s prior written consent, which consent may be granted or withheld in Bank’s sole discretion. Bank shall have the right without the consent of or notice to Borrowers to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights and benefits hereunder.

13.2 Indemnification. Each Borrower shall defend, indemnify and hold harmless Bank and its officers, employees, and agents against: (a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Agreement; and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by Bank as a result of or in any way arising out of, following, or consequential to transactions between Bank and a Borrower whether under this Agreement, or otherwise (including without limitation attorneys’ fees and expenses), except for losses caused by Bank’s gross negligence or willful misconduct.

13.3 Time of Essence. Time is of the essence for the performance of all obligations set forth in this Agreement.

13.4 Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

13.5 Amendments in Writing, Integration. Neither this Agreement nor the Loan Documents can be amended or terminated orally. All prior agreements, understandings, representations, warranties, and negotiations between the parties hereto with respect to the subject matter of this Agreement and the Loan Documents, if any, are merged into this Agreement and the Loan Documents.

13.6 Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.

13.7 Survival. All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations remain outstanding or Bank has any obligation to make Credit Extensions to Borrowers. The obligations of each Borrower to indemnify Bank with respect to the expenses, damages, losses, costs and liabilities described in Section 13.2 shall survive until all applicable statute of limitations periods with respect to actions that may be brought against Bank have run.

13.8 Confidentiality. In handling any confidential information Bank and all employees and agents of Bank, including but not limited to accountants, shall exercise the same degree of care that it exercises with respect to its own proprietary information of the same types to maintain the confidentiality of any non-public information thereby received or received pursuant to this Agreement except that disclosure of such information may be made (i) to the subsidiaries or affiliates of Bank in connection with their present or prospective business relations with each Borrower, provided that such subsidiaries or affiliates agree to be bound by the confidentiality obligations contained herein; (ii) to prospective transferees or purchasers of any interest in the Credit Extensions, provided that such prospective transferees or purchasers agree to be bound by the confidentiality obligations contained herein; (iii) as required by law, regulations, rule or order, subpoena, judicial order or similar order; (iv) as may be required in connection with the examination, audit or similar investigation of Bank; and (v) as Bank may determine in connection with the enforcement of any remedies hereunder. Confidential information hereunder shall not include information that either: (a) is in the public domain or in the knowledge or possession of Bank when disclosed to Bank, or becomes part of the public domain after disclosure to Bank through no fault of Bank; or (b) is disclosed to Bank by a third party, provided Bank does not have actual knowledge that such third party is prohibited from disclosing such information.

13.9 Patriot Act Notice. Bank hereby notifies Borrowers that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law on October 26, 2001) (the “Patriot Act”), it is required

to obtain, verify and record information that identifies the Borrowers, which information includes names and addresses and other information that will allow Bank, as applicable, to identify the Borrowers in accordance with the Patriot Act.

14. CO-BORROWERS.

14.1 Co-Borrowers. Borrowers are jointly and severally liable for the Obligations and Bank may proceed against one Borrower to enforce the Obligations without waiving its right to proceed against any other Borrower. This Agreement and the Loan Documents are a primary and original obligation of each Borrower and shall remain in effect notwithstanding future changes in conditions, including any change of law or any invalidity or irregularity in the creation or acquisition of any Obligations or in the execution or delivery of any agreement between Bank and any Borrower. Each Borrower shall be liable for existing and future Obligations as fully as if all of the Credit Extensions were advanced to such Borrower. Bank may rely on any certificate or representation made by any Borrower as made on behalf of, and binding on, all Borrowers, including without limitation advance request forms and compliance certificates. Each Borrower appoints each other Borrower as its agent with all necessary power and authority to give and receive notices, certificates or demands for and on behalf of all Borrowers, to act as disbursing agent for receipt of any Credit Extensions on behalf of each Borrower and to apply to Bank on behalf of each Borrower for any Credit Extension, any waivers and any consents. This authorization cannot be revoked, and Bank need not inquire as to one Borrower’s authority to act for or on behalf of another Borrower.

14.2 Subrogation and Similar Rights. Notwithstanding any other provision of this Agreement or any other Loan Document, each Borrower irrevocably waives, until all Obligations are paid in full and Bank has no further obligation to make Credit Extensions to Borrowers, all rights that it may have at law or in equity (including, without limitation, any law subrogating a Borrower to the rights of Bank under the Loan Documents) to seek contribution, indemnification, or any other form of reimbursement from any other Borrower, or any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by a Borrower with respect to the Obligations in connection with the Loan Documents or otherwise and all rights that it might have to benefit from, or to participate in, any security for the Obligations as a result of any payment made by a Borrower with respect to the Obligations in connection with the Loan Documents or otherwise. Any agreement providing for indemnification, reimbursement or any other arrangement prohibited under this Section shall be null and void. If any payment is made to a Borrower in contravention of this Section, such Borrower shall hold such payment in trust for Bank and such payment shall be promptly delivered to Bank for application to the Obligations, whether matured or unmatured.

14.3 Waivers of Notice. Each Borrower waives, to the extent permitted by law, notice of acceptance hereof; notice of the existence, creation or acquisition of any of the Obligations; notice of an Event of Default except as set forth herein; notice of the amount of the Obligations outstanding at any time; notice of any adverse change in the financial condition of any other Borrower or of any other fact that might increase a Borrower’s risk; presentment for payment; demand; protest and notice thereof as to any instrument; and all other notices and demands to which a Borrower would otherwise be entitled by virtue of being a co-borrower or a surety. Each Borrower waives any defense arising from any defense of any other Borrower, or by reason of the cessation from any cause whatsoever of the liability of any other Borrower. Bank’s failure at any time to require strict performance by any Borrower of any provision of the Loan Documents shall not waive, alter or diminish any right of Bank thereafter to demand strict compliance and performance therewith. Each Borrower also waives any defense arising from any act or omission of Bank that changes the scope of a Borrower’s risks hereunder. Each Borrower hereby waives any right to assert against Bank any defense (legal or equitable), setoff, counterclaim, or claims that such Borrower individually may now or hereafter have against another Borrower or any other Person liable to Bank with respect to the Obligations in any manner or whatsoever.

14.4 Subrogation Defenses. Until all Obligations are paid in full and Bank has no further obligation to make Credit Extensions to Borrowers, each Borrower hereby waives any defense based on impairment or destruction of its subrogation or other rights against any other Borrower and waives all benefits which might otherwise be available to it under California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2848, 2849, 2850, 2899, and 3433 and California Code of Civil Procedure Sections 580a, 580b, 580d and 726, as those statutory provisions are now in effect and hereafter amended, and under any other similar statutes now and hereafter in effect.

14.5 Right to Settle, Release.

(a) The liability of Borrowers hereunder shall not be diminished by (i) any agreement, understanding or representation that any of the Obligations is or was to be guaranteed by another Person or secured by other property, or (ii) any release or unenforceability, whether partial or total, of rights, if any, which Bank may now or hereafter have against any other Person, including another Borrower, or property with respect to any of the Obligations.

(b) Without notice to any given Borrowers and without affecting the liability of any given Borrowers hereunder, Bank may (i) compromise, settle, renew, extend the time for payment, change the manner or terms of payment, discharge the performance of, decline to enforce, or release all or any of the Obligations with respect to any other Borrower by written agreement with such other Borrower, (ii) grant other indulgences to another Borrower in respect of the Obligations, (iii) modify in any manner any documents relating to the Obligations with respect to any other Borrower by written agreement with such other Borrower, (iv) release, surrender or exchange any deposits or other property securing the Obligations, whether pledged by a Borrower or any other Person, or (v) compromise, settle, renew, or extend the time for payment, discharge the performance of, decline to enforce, or release all or any obligations of any guarantor, endorser or other Person who is now or may hereafter be liable with respect to any of the Obligations.

14.6 Subordination. All indebtedness of a Borrower now or hereafter arising held by another Borrower is subordinated to the Obligations and a Borrower holding the indebtedness shall take all actions reasonably requested by Bank to effect, to enforce and to give notice of such subordination.

15. NOTICE OF FINAL AGREEMENT. NOTICE OF FINAL AGREEMENT. BY SIGNING THIS AGREEMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

	BORROWERS:

	TABULA RASA HEALTHCARE, INC.

	By:	/s/ Brian W. Adams

	Name:	Brian W. Adams

	Title:	Chief Financial Officer


	CAREKINESIS, INC.

	By:	/s/ Brian W. Adams

	Name:	Brian W. Adams

	Title:	Chief Financial Officer


	CAREVENTIONS, INC.

	By:	/s/ Brian W. Adams

	Name:	Brian W. Adams

	Title:	Chief Financial Officer


	CAPSTONE PERFORMANCE SYSTEMS, LLC

	By:	/s/ Brian W. Adams

	Name:	Brian W. Adams

	Title:	Chief Financial Officer


	J. A. ROBERTSON, INC.

	By:	/s/ Brian W. Adams

	Name:	Brian W. Adams

	Title:	Chief Financial Officer


	MEDLIANCE LLC

	By:	/s/ Brian W. Adams

	Name:	Brian W. Adams

	Title:	Chief Financial Officer

	IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

	BANK:

	BRIDGE BANK, NATIONAL ASSOCIATION

	By:	/s/ illegible

	Title:	Vice President

EXHIBIT A

DEBTORS: TABULA RASA HEALTHCARE, INC., CAREKINESIS, INC., CAREVENTIONS, INC., CAPSTONE PERFORMANCE SYSTEMS, LLC, J. A. ROBERTSON, INC. and MEDLIANCE LLC

SECURED PARTY: BRIDGE BANK, NATIONAL ASSOCIATION

COLLATERAL DESCRIPTION ATTACHMENT
TO LOAN AND SECURITY AGREEMENT

All personal property of each Borrower (herein referred to as “Borrower” or “Debtor”) whether presently existing or hereafter created or acquired, and wherever located, including, but not limited to:

(a) all accounts (including health-care-insurance receivables), chattel paper (including tangible and electronic chattel paper), commercial tort claims, deposit accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto), general intangibles (including payment intangibles and software), goods (including fixtures), instruments (including promissory notes), inventory (including all goods held for sale or lease or to be furnished under a contract of service, and including returns and repossessions), investment property (including securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books and records with respect to any of the foregoing, and the computers and equipment containing said books and records; and

(b) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including, without limitation, insurance proceeds, and all supporting obligations and the security therefor or for any right to payment. All terms above have the meanings given to them in the California Uniform Commercial Code, as amended or supplemented from time to time.

EXHIBIT B

ADVANCE REQUEST FORM

(To be submitted no later than 3:00 PM to be considered for same day processing)

To:	Bridge Bank, National Association

Fax:	(408) 282-1681

Date:

From:	Tabula Rasa Healthcare, Inc.,
	on behalf of all Borrowers
	Borrower’s Name


	Authorized Signature


	Authorized Signer’s Name (please print)


	Phone Number

To Account #

Borrowers hereby request funding of an Advance in the amount of $ in accordance with the Revolving Facility as defined in the Loan and Security Agreement dated April 29, 2015 and as amended from time to time.

Borrowers hereby authorize Bank to rely on facsimile stamp signatures and treat them as authorized by Borrowers for the purpose of requesting the above advance.

All representations and warranties of Borrowers stated in the Loan and Security Agreement are true, correct and complete in all material respects as of the date of this Advance Request; provided that those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects as of such date.

Capitalized terms used herein and not otherwise defined have the meanings set forth in the Loan and Security Agreement.

EXHIBIT C

BORROWING BASE CERTIFICATE

BORROWERS: TABULA RASA HEALTHCARE, INC., CAREKINESIS, INC., CAREVENTIONS, INC., CAPSTONE PERFORMANCE SYSTEMS, LLC, J. A. ROBERTSON, INC. and MEDLIANCE LLC

Monthly Recurring Revenue Borrowing Base Calculation			As of Date:
1	GAAP Revenue recognized during the trailing three months from Contracts	$
2.	Less: GAAP Revenue from Contracts that are not Eligible Recurring Revenue Contracts (i.e. customer (i) has elected to cancel or not renew its license or maintenance contract, or (ii) ceases conducting business, goes out of business or is insolvent, (iii) has failed to pay in full within ninety (90) days of invoice date or (iv) with foreign customers) for such trailing three months	$
3.	Eligible Monthly Recurring Revenue (#1 minus #2)		$
4.	MRR Retention Rate lesser #3 divided by #1, or 100%		%
5.	Borrowing Base Amount (#3 x #4)		$
6.	Maximum Loan Amount		$15,000,000
7.	Total Funds Available (Lesser of #5 or #6)		$
8.	Less: Outstanding Advances		$
9.	Less: Outstanding Cash Management Services		$
10.	Less: Outstanding International Sublimit Amounts		$
11.	Available for Drawdown/Need to Pay		$

If line #11 is a negative number, this amount must be remitted to the Bank immediately to bring loan balance into compliance. By signing this form Borrowers authorize the bank to deduct any advance amounts directly from any Borrower’s account(s) at Bridge Bank, National Association in the event there is an overadvance.

The undersigned represents and warrants that the foregoing is true, complete and correct, and that the information reflected in this Borrowing Base Certificate complies with the representations and warranties set forth in the Loan and Security Agreement between the undersigned and Bridge Bank, National Association.

		Date:
	Prepared By:

		Date:
	Bank Reviewed:

EXHIBIT D
COMPLIANCE CERTIFICATE

TO: BRIDGE BANK, NATIONAL ASSOCIATION

FROM: TABULA RASA HEALTHCARE, INC., CAREKINESIS, INC., CAPSTONE PERFORMANCE SYSTEMS, LLC, J. A. ROBERTSON, INC. CAREVENTIONS, INC., AND MEDLIANCE LLC

The undersigned authorized officer of Tabula Rasa Healthcare, Inc., on behalf of itself and all other Borrowers, hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrowers and Bank (the “Agreement”), (i) each Borrower is in complete compliance for the period ending with all required covenants except as noted below and (ii) all representations and warranties of Borrowers stated in the Agreement are true and correct as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes.

Please indicate compliance status by circling Yes/No under “Complies” column.

Reporting Covenant	Required		Complies
A/R & A/P Agings	Monthly within 30 days		Yes	No
Deferred Revenue Report	Monthly within 30 days		Yes	No
Borrowing Base Certificate	Monthly within 30 days		Yes	No
Monthly financial statements	Monthly within 30 days		Yes	No
Compliance Certificate	Monthly within 30 days		Yes	No
Annual audited financial statements	FYE within 180 days		Yes	No
Annual operating budget, sales projections and operating plans approved by board of directors	Annually no later than 30 days after to the beginning of each fiscal year or Board approval		Yes	No
A/R Audit	Initial and Annual		Yes	No
Deposit balances with Bank	$
Deposit balance outside Bank	$

Financial Covenant	Required	Actual	Complies

Minimum Unrestricted Cash at Bank through 12/31/15	$1,000,000	$	Yes	No
Minimum Unrestricted Cash at Bank on and after 1/1/16	$1,500,000	$	Yes	No
Minimum MRR Retention Rate	90%	%	Yes	No
Minimum EBITDA for the following periods:
six months ending 6/30/15:	$2,000,000	$	Yes	No
six months ending 9/30/15:	$3,500,000	$	Yes	No
nine months ending 12/31/15:	$5,000,000	$	Yes	No
2016 and beyond	TBD	$	Yes	No

Comments Regarding Exceptions: See Attached.	BANK USE ONLY

	Received by:
			AUTHORIZED SIGNER
Sincerely,
	Date:

	Verified:
SIGNATURE		AUTHORIZED SIGNER

	Date:
TITLE
	Compliance Status			Yes No

DATE

SCHEDULE OF EXCEPTIONS

Permitted Indebtedness (Section 1.1)

Permitted Investments (Section 1.1)

Permitted Liens (Section 1.1)

Inbound Licenses (Section 5.6)

Prior Names (Section 5.7)

Litigation (Section 5.8)

Subsidiaries (Section 5.14)

EX-10.7 20 a2226891zex-10_7.htm EX-10.7

Exhibit 10.7

MASTER LEASE AGREEMENT

(the “Master Lease”)

Dated as of December 31, 2014

Master Lease No. 628

LESSOR:

Eastward Fund Management, LLC

432 Cherry Street

West Newton, MA 02465

CO-LESSEE:

CareKinesis, Inc. (“CareKinesis”)

110 Marter Avenue, Suite 309

Moorestown, NJ 08057

Attention: Brian W. Adams

Phone No.: (866) 648-2767

State of Organization: Delaware

State of Organization Identification No. (state if none): 4674249

J. A. Robertson, Inc. (“JA Robertson”)

2166 Hayes Street, Suite 100

San Francisco, CA 94117

Attention: Brian W. Adams

Phone No.: (866) 648-2767

State of Organization: California

State of Organization Identification No. (state if none): C1087925

Capstone Performance Systems, LLC (“Capstone”)

110 Marter Avenue, Suite 309

Moorestown, NJ 08057

Attention: Brian W. Adams

Phone No.: (866) 648-2767

State of Organization: Delaware

State of Organization Identification No. (state if none): 5514716

CareVention, Inc.

110 Marter Avenue, Suite 309

Moorestown, NJ 08057

Attention: Brian W. Adams

Phone No.: (866) 648-2767

State of Organization: Delaware

State of Organization Identification No. (state if none): 5111014

Tabula Rasa Healthcare, Inc. (“Tabula Rasa”)

110 Marter Avenue, Suite 309

Moorestown, NJ 08057

Attention: Brian W. Adams

Phone No.: (866) 648-2767

State of Organization: Delaware

State of Organization Identification No. (state if none): 5537973

Medliance LLC (“Medliance”)

1839 S. Alma School Rd., Suite 230

Mesa, AZ 85210

Attention: Brian W. Adams

Phone No.: (866) 648-2767

State of Organization: Arizona

State of Organization Identification No. (state if none): L-1090376-4

Each of the above Co-Lessees, jointly and severally (individually, a “Co-Lessee” and collectively, the “Lessee”).

NOW, THEREFORE, in consideration of the mutual covenants hereinafter expressed and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1. DEFINITIONS AND RULES OF CONSTRUCTION. Unless the context shall otherwise require, capitalized terms used herein, but not otherwise defined herein, shall have the respective meanings specified in Section 22 hereof.

2. LEASE.

(a) Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor, under this Master Lease and any applicable Rental Schedule, Equipment with an aggregate Total Equipment Cost of up to Twelve Million Dollars ($12,000,000) (the “Facility Amount”) on or prior to December 31, 2014 (the “Facility Expiration Date”). Lessor shall fund the entire Facility Amount on the date of this Master Lease. The lease of Equipment shall be subject to the terms and conditions contained in this Master Lease and in any Rental Schedule thereto, under which Lessee agrees to lease from Lessor the Equipment described therein. Lessor and Lessee agree that the Facility Amount will be used only to consummate the transaction described in that certain Membership Interest Purchase Agreement dated as of the date hereof by and between Tabula Rasa as the Purchaser and Fred Smith III, Olds Family 2002 Trust, created under declaration of trust dated June 3, 2002, as amended, and Stephen F. Olds as Sellers, and, solely for the limited purposes set forth therein, Thomas Olds, Jr. (the “Acquisition Transaction”).

(b) This Master Lease is a master lease which sets forth the terms and conditions that govern the lease by Lessor to Lessee of items of Equipment specified on Rental Schedules executed and delivered by Lessor and Lessee from time to time, the form of which is attached hereto as Exhibit 1. Each Rental Schedule constitutes a separate and independent lease that incorporates by reference this Master Lease and specifies the Term, the amount of Interim Term Rent and Basic Rent, the payment dates on which such Interim Term Rent and Basic Rent are due, and such other information and provisions as Lessor and Lessee may agree. In the event of a conflict between the provisions of a Rental Schedule and any of the provisions of this Master Lease, the provisions of the Rental Schedule shall govern, but only with respect to the leasing of the items of Equipment listed on such Rental Schedule. References to “the Lease” or “this Lease” shall mean one or more applicable Rental Schedules, as the case may be, incorporating by reference this Master Lease. The original executed counterpart of a Rental Schedule shall be “chattel paper” for purposes of the Uniform Commercial Code.

3. TERM AND RENT; OBLIGATIONS UNCONDITIONAL.

(a) The Equipment is leased for the Term, unless and until the Term of this Lease shall sooner terminate pursuant to the terms hereof. The Term shall commence on the date of acceptance of such Equipment as set forth on the applicable Rental Schedule and shall expire at midnight on the date set forth on the applicable Rental Schedule as the “Primary Term Expiration Date.”

(b) Lessee shall pay to Lessor or an agent or any Transferee designated by Lessor in writing, in lawful money of the United States of America, (i) on each Interim Term Rent Payment Date as fixed rent for the Equipment during the Interim Term, the Interim Term Rent; (ii) if the closing date of any Rental Schedule occurs on any date prior to the first day of a month, on the Interim Term Commencement Date, the Interim Term Rent set forth in such Rental Schedule for the period prior to such date calculated at the daily rate set forth in (i) herein; and (iii) on each Basic Rent Payment Date as fixed rent for the Equipment during the Primary Term, the Basic Rent Per Month, in each case electronically by automatic debit through Automated Clearing House (ACH) payment (and Lessee hereby agrees to complete Lessor’s form of electronic funds transfer/automatic debit authorization form in connection therewith), or to such address or to such other Person as Lessor, from time to time, may designate in writing.

(c) Lessee shall also pay to Lessor or an agent or any Transferee designated by Lessor in writing, in lawful money of the United States of America, all Supplemental Rent. Supplemental Rent shall be paid electronically by ACH payment, or to such address or to such other Person as Lessor, from time to time, may designate in writing, when due or within 30 days following Lessor’s demand therefor if there is no due date therefor. Lessee shall also pay to Lessor the Excess Use Fee on all overdue Rent or any other amount payable under this Lease from the due date thereof until paid. Lessee shall perform all of its obligations under this Lease at its sole cost and expense, and shall pay all Rent when due, without further notice or demand.

(d) Except as otherwise expressly provided herein, this Lease is a net lease and Lessee acknowledges and agrees that Lessee’s obligation to pay all Rent and other sums payable hereunder, and the rights of Lessor in and to such payments, shall be absolute and unconditional and shall not be subject to any abatement, reduction, setoff, defense, counterclaim, recovery or recoupment due to or alleged to be due to, or by reason of, any past, present or future claims that Lessee may have against Lessor, any Transferee, the manufacturer or Supplier of the Equipment or any Person for any reason whatsoever.

(e) All Rent and other amounts payable under this Lease shall be payable in all events and in the manner and at the times herein provided, without notice or demand, unless the obligation to pay the same shall be terminated pursuant to the express provisions of this Lease. The obligation to pay Rent and all other amounts under this Lease is a full recourse obligation of Lessee.

4. PERSONAL PROPERTY; SECURITY INTEREST AND LIENS. Lessee covenants and agrees that:

(a) The Equipment is, and shall at all times be and remain, personal or movable property. If requested by Lessor, Lessee shall use good faith efforts to obtain prior to delivery of any item of Equipment or at any other time reasonably requested by Lessor, a certificate in form reasonably satisfactory to Lessor from all parties with a real property interest in the premises where the Equipment may be located waiving any claim with respect to the Equipment.

(b) During the Term of this Lease, an interest in the Equipment shall at all times remain in Lessor. To the extent that this Lease is deemed not to be a “true lease” under Applicable Law (including Section 1-201(37) of the UCC), Lessee hereby grants Lessor a security interest in the Equipment leased hereunder to secure the prompt payment and performance when due of all of Lessee’s obligations under this Lease. Lessee may not dispose of any of the Equipment except to the extent expressly provided herein.

(c) Lessee shall not directly or indirectly create, incur, assume or suffer to exist any Lien on or with respect to any of the Equipment, title thereto or any interest therein, except Permitted Liens. Lessee shall notify Lessor immediately in writing upon receipt of notice of any Lien affecting the Equipment in whole or in part (other than a Permitted Lien), and shall, at its own cost and expense, defend Lessor’s interest therein against all Persons (other than Lessor) holding or claiming to hold such a Lien on the Equipment (other than a Permitted Lien); and any losses, expenses or costs suffered by Lessor as a result thereof shall be covered by the Lessee’s indemnity in Section 18 hereof.

(d) Lessee shall not move any item of Equipment from the address set forth in any applicable Rental Schedule without prior written notice to Lessor. Lessee shall not move any item of Equipment outside of the United States of America without the prior written consent of Lessor and hereby represents that since the time that Lessee took possession of the Equipment from the Supplier or manufacturers thereof, the Equipment has never been located anywhere other than the address set forth in the applicable Rental Schedule.

the Collateral (exclusive of Permitted Liens). Notwithstanding anything contained in this subsection (e) to the contrary, Lessor acknowledges and agrees that (i) CareKinesis currently has a Credit Agreement with AmeriSourceBergen Drug Co. (“AmeriSourceBergen”), in an amount not exceeding $3,875,000 (the “AmeriSourceBergen Facility”), and CareKinesis’s obligations to AmeriSourceBergen under the AmericSourceBergen Facility are secured by a lien on all property and assets of CareKinesis and which lien is a Permitted Lien hereunder, and (ii) CareKinesis, JA Robertson, Capstone and Tabula Rasa currently have a formula-based monthly recurring revenue credit facility, in an amount not exceeding $7,000,000 (the “SVB Facility”; each of the SVB Facility and the AmeriSourceBergen Facility, a “Senior Facility” and collectively, the “Senior Facilities”), from Silicon Valley Bank (“SVB” each of SVB and AmeriSourceBergen, a “Senior Lender” and collectively, the “Senior Lender”), and CareKinesis’s, JA Robertson’s, Capstone’s and Tabula Rasa’s obligations to SVB under the SVB Facility are secured by a lien on all property and assets of such parties and which lien is a Permitted Lien hereunder. Lessor acknowledges and agrees that the security interest in the Collateral granted to Lessor hereunder is subject and subordinate to the security interests of the Senior Lenders. Lessor agrees to execute and deliver such agreements and documents as may be reasonably requested by Lessee from time to time which set forth the subordination described in this subsection (e) upon terms reasonably required by each of the Senior Lenders and are reasonably acceptable to Lessor (the “Subordination Agreement(s)”). Lessee hereby irrevocably authorizes Lessor at any time and from time to time to file in any Uniform Commercial Code jurisdiction any Financing Statements and amendments thereto as Lessor deems necessary in its sole discretion in order to perfect Lessor’s security interest in the Collateral.

5. INSTALLATION, MAINTENANCE AND REPAIR.

(a) Maintenance. At all times during the Term of this Lease, Lessee shall be solely responsible, at its own expense, for the delivery, installation, use, possession, operation, storage, de-installation, and drayage of the Equipment by a party reasonably acceptable to Lessor. Additionally, Lessee agrees, at its own cost and expense, to be responsible for the performance of all repair, replacement and maintenance required in the ordinary course of Lessee’s business and operations to keep, repair, maintain and preserve the Equipment in good order and operating condition (ordinary wear and tear excepted), and in compliance with such maintenance and repair standards and procedures as are set forth in the manufacturer’s manuals pertaining to the Equipment, and as otherwise may be required to enforce warranty claims against each vendor and manufacturer of each item of Equipment, and in compliance with the maintenance and repair standards of Lessee for similar equipment and in compliance in all material respects with prudent national industry standards and with all requirements of law applicable to the maintenance and condition of the Equipment. Lessee shall keep accurate, complete and current records of all repair, replacement and maintenance performed or provided on any item of Equipment and shall provide copies thereof to Lessor promptly upon demand.

(b) Alterations, Modifications. If any item of Equipment is required to be altered or modified in order to comply with Applicable Laws, Lessee is obligated to make or cause to be made such alterations or modifications. Lessee may make any other improvement or addition to the Equipment so long as no reduction in the value of the Equipment results therefrom. All repairs, alterations, modifications, improvements and additions to the Equipment shall immediately become part of the Equipment subject to the terms of this Lease. Lessee shall keep accurate, complete and current records of all alterations or modifications (whether required or permitted) made with respect to the Equipment and shall provide copies thereof to Lessor promptly upon demand.

(c) Inspection. Lessor shall be entitled to visit the business premises of Lessee and its subsidiaries and other properties and inspect the Equipment at the location thereof during normal business hours.

6. USE. Lessee shall use the Equipment for business purposes only and in a careful and proper manner and shall comply with and conform to all Applicable Laws, insurance requirements and the operating and maintenance instructions of the manufacturer or Supplier thereof.

7. QUIET ENJOYMENT. So long as no Event of Default has occurred and is continuing hereunder and subject to Section 6 hereof, Lessor warrants peaceful and quiet use and enjoyment of the Equipment by Lessee against acts of Lessor, its agents, and anyone else acting by or on Lessor’s behalf.

8. ACCEPTANCE, WARRANTIES, LIMITATION OF LIABILITY.

(a) EXCEPT AS SPECIFICALLY OTHERWISE PROVIDED FOR IN THIS MASTER LEASE, LESSEE HEREBY ACKNOWLEDGES AND AGREES THAT: THE EQUIPMENT, AND THE RIGHTS, TITLE AND/OR INTEREST BEING CONVEYED HEREIN WITH RESPECT THERETO, ARE BEING CONVEYED AND DELIVERED TO LESSEE “AS IS” AND “WHERE IS” WITHOUT ANY RECOURSE TO LESSOR AND LESSOR HAS NOT MADE, AND HEREBY DISCLAIMS, LIABILITY FOR, AND LESSEE HEREBY WAIVES ALL RIGHTS AGAINST LESSOR RELATING TO, ANY AND ALL WARRANTIES, GUARANTIES, REPRESENTATIONS OR OBLIGATIONS OF ANY KIND WITH RESPECT THERETO, EITHER EXPRESS OR IMPLIED OR ARISING BY APPLICABLE LAW OR OTHERWISE, INCLUDING (A) ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES, REPRESENTATIONS OR OBLIGATIONS OF, ARISING FROM OR IN (1) MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, (2) COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, (3) QUALITY OF WORKMANSHIP OR THE PROVISIONS OF ANY SUPPLY CONTRACT WITH SUPPLIER OR (4) TORT OR UNDER THE UCC OR OTHER APPLICABLE LAW WITH RESPECT TO THE EQUIPMENT, INCLUDING ANY WARRANTY OF TITLE THERETO, FREEDOM FROM TRADEMARK, PATENT OR COPYRIGHT INFRINGEMENT, LATENT DEFECTS (WHETHER OR NOT DISCOVERABLE), CONDITIONS, MANUFACTURE, DESIGN, SERVICING OR COMPLIANCE WITH APPLICABLE LAW AND (B) ALL OBLIGATIONS, LIABILITY, RIGHTS AND REMEDIES, HOWSOEVER ARISING UNDER ANY APPLICABLE LAW WITH RESPECT TO THE MATTERS WAIVED AND DISCLAIMED, INCLUDING FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO THE EQUIPMENT, OR ANY LIABILITY OF LESSEE OR LESSOR TO ANY THIRD PARTY, OR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (AS SUCH TERMS ARE USED IN SECTION 2-719(3) OF THE UCC, OR OTHER APPLICABLE LAW); all such risks, as between Lessor and Lessee, are to be borne by Lessee; Lessee acknowledges and agrees that the Equipment has been selected by Lessee on the basis of its own judgment, and Lessee has not asked for, been given or relied upon the skill or opinion of, or any statements, representations, guaranties or warranties by, Lessor or its agents or representatives in relation thereto. Lessee understands and acknowledges that Lessor is not in the business of manufacturing, assembling or supplying Equipment or otherwise in the business of being a vendor.

(b) Lessee agrees that the only representations, warranties, guaranties or indemnities made with respect to the Equipment are those made by the Supplier and/or manufacturer thereof. Provided that no Default or Event of Default has occurred and is continuing hereunder, Lessor: (i) shall cooperate fully with Lessee with respect to the resolution of any claims by Lessee against Supplier with respect to an item of Equipment, in good faith and by appropriate proceedings at Lessee’s expense, (ii) subject to the initial proviso of this sentence, hereby assigns to Lessee, for and during the Term of this Lease, any applicable warranties, indemnities or other rights under any Supply Contracts (excluding any refunds or other similar payments reflecting a decrease in the value of any such Equipment, which amount shall be received by and paid to Lessor, and applied by Lessor to reduce Lessee’s obligations to pay Rent for such Equipment), and (iii) hereby authorizes Lessee to obtain all services, warranties or amounts from the Supplier of such Equipment to be used to repair such Equipment (and such amounts shall be used by Lessee to repair such Equipment). Lessee understands, acknowledges and agrees that neither Supplier nor its salesmen or agents is an agent of Lessor or authorized to waive, alter or add to any provision of this Lease.

9. REPRESENTATION AND WARRANTIES. Lessee represents and warrants for the benefit of Lessor as of the date of acceptance of any item of Equipment for lease under this Lease:

indicated on the cover page hereof and is duly qualified to do business and is in good standing in that jurisdiction and in every jurisdiction where the failure to so qualify would materially and adversely affect such Co-Lessee; each Co-Lessee has adequate corporate or limited liability company power, as applicable, and authority to enter into and perform this Lease. The cover page hereof accurately sets forth each Co-Lessee’s organizational identification number issued by the state of its incorporation or organization, as applicable, or accurately states that such Co-Lessee has no such number.

(b) The Lease Documents have been duly authorized, executed and delivered by Lessee and constitute valid, legal and binding agreements of Lessee enforceable in accordance with their terms.

(c) The entering into and performance of the Lease Documents by Lessee shall not violate any Applicable Law or any provision of Lessee’s charter, bylaws or operating agreement, as applicable, or result in any breach of, or constitute a default under, or result in the creation of any Lien (other than Permitted Liens) upon any assets of Lessee leased hereunder or on the Equipment or Collateral pursuant to any instrument or Applicable Law to which Lessee is a party or by which it or its assets may be bound.

(d) There are no pending or threatened actions or proceedings to which Lessee is a party, or otherwise affecting Lessee, before any Governmental Authority, which if determined against Lessee, either individually or in the aggregate, would materially adversely affect the financial condition of Lessee, or the ability of Lessee to perform its obligations under, or comply with the terms of the Lease Documents.

(e) Lessee is not in default under any obligation for the payment of borrowed money, for the deferred purchase price of property or for the payment of any rent under any lease agreement which, either individually or in the aggregate, would materially adversely affect the financial condition of Lessee, or the ability of Lessee to perform its obligations under, or comply with the terms of the Lease Documents.

(f) No consent, approval or other authorization of or by any Governmental Authority is required in connection with the consummation by Lessee of the transactions contemplated by the Lease Documents.

(g) With respect to the Equipment, under the Applicable Law of the state(s) in which such Equipment is to be located, such Equipment consists solely of personal property and not fixtures.

(h) The financial statements of Lessee that have been provided to Lessor have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the absence of footnotes and except for year-end adjustments), and fairly present in all material respects Lessee’s financial condition and the results of its operations as of the date of and for the period covered by such statements, and since the date of such statements there has been no material adverse change in such conditions or operations.

(i) The address of Lessee as set forth on the cover page hereof and in the Perfection Certificate is Lessee’s place of business or, if more than one, its chief executive office (which terms shall have the meanings ascribed therefor in Article 9 of the UCC).

(j) With respect to the Equipment, no filing, recordation or registration of any document or instrument was or is necessary in order to cause Lessor to have good, valid and enforceable title and/or interest with respect thereto, except for the filing of any required Financing Statement(s) under the Uniform Commercial Code.

(k) Lessee has obtained all Permits necessary to possess and use the Equipment in compliance with and as contemplated by this Lease.

(l) The Collateral is located at the addresses set forth on the Perfection Certificate.

(m) Lessee has the right in or the power to transfer the Collateral and it has good and marketable title to the Collateral, subject to no Liens except for Permitted Liens. The security interest

granted in Section 4(e) of this Master Lease constitutes a valid and enforceable first priority Lien in the Collateral subject to Permitted Liens.

(n) No written representation, warranty or other statement of Lessee in any certificate or written statement given to Lessor taken together with all such written certificates and statements given to Lessor contains any untrue statement of material fact or omits to state a material fact necessary to make the statements contained in the certificates and statements not misleading in any material respect at the time when made.

10. CONDITIONS PRECEDENT.

(a) Lessor’s agreement to enter into this Master Lease shall be subject to the condition precedent that Lessor shall have received all of the following, in form and substance satisfactory to Lessor:

(i) A certificate of each Co-Lessee’s Secretary or Assistant Secretary certifying (i) the resolutions of the board of directors or board of managers, as applicable, authorizing the execution, delivery and performance of this Master Lease, and any related documents, (ii) such Co-Lessee’s bylaws or operating agreement, as applicable, (iii) such Co-Lessee’s certificate or articles of incorporation or certificate of formation, as applicable, and (iv) the signatures of the officers or agents of such Co-Lessee authorized to execute and deliver this Master Lease and other instruments, agreements and certificates on behalf of such Co-Lessee;

(ii) A Co-Investment Agreement;

(iii) A Warrant agreement (the “Warrant”) issued by Tabula Rasa to Lessor to purchase up to $1,440,000 of Series B Convertible Preferred Stock, par value $0.0001 per share;

(iv) Confirmation from Bank of America, N.A. (“BANA”) that all obligations of Medliance to BANA have been satisfied and all of BANA’s liens on Medliance’s assets have been released, in form and substance reasonably satisfactory to Lessor;

(v) An opinion of counsel;

(vi) The Perfection Certificate;

(vii) Payment of the Facility Fee and all expenses of closing (subject to the caps described in Section 21 hereof; and

(viii) Such other documents or items reasonably required by Lessor.

(b) Lessor’s agreement to enter into a Rental Schedule with Lessee and to lease the Equipment thereunder, shall be subject to the condition precedent that Lessor shall have received all of the following, each in form and substance satisfactory to Lessor:

(i) The Rental Schedule, properly executed on behalf of Lessee, and each of the schedules thereto properly completed;

(ii) Certificates of insurance required hereunder;

(iii) Any Financing Statement(s) required to be filed in order to create, in favor of the Lessor a first priority perfected security interest in the Collateral, subject only to the Permitted Liens, shall have been properly filed in each office in each jurisdiction required in order to create in favor of the Lessor a perfected lien on

the Collateral;

(iv) A true and correct copy of any and all purchase and sale or other agreements pursuant to which Lessee is acquiring the Equipment; and

(v) Such other documents or items reasonably required by Lessor.

11. COVENANTS OF LESSEE. Lessee covenants and agrees as follows:

(a) Lessee shall furnish Lessor (as to itself and its subsidiaries) (i) within one hundred fifty (150) days after the end of each fiscal year of Lessee, a balance sheet of Lessee as at the end of such year, and the related statements of income and retained earnings and cash flows of Lessee for such fiscal year, prepared in accordance with GAAP, all in reasonable detail and audited by independent certified public accountants of recognized standing selected by Lessee; (ii) within thirty (30) days after the end of each quarter of Lessee’s fiscal year a balance sheet of Lessee as at the end of such quarter, and the related statement of income and retained earnings and cash flows of Lessee for such quarter, prepared in accordance with GAAP (subject to the absence of footnotes and year-end adjustments); (iii) as soon as available, but no later than forty-five (45) days after completion, any 409A valuation report prepared by or at the direction of Lessee, (iv) within thirty (30) days after the end of each month of Lessee’s fiscal year, monthly financial information of Lessee, consisting of a balance sheet of Lessee as at the end of such month, and the related statement of income and retained earnings and cash flows of Lessee, (v) other financial information and reports which are provided by Lessee to its board of directors, at the same time that such information is so provided to Lessee’s board of directors; (vi) Tabula Rasa’s capitalization table promptly after the end of each fiscal year of Tabula Rasa, and promptly after any New Issuance (as defined in the Co-Investment Agreement), (vii) with regard to the each Senior Facility, copies of the borrowing base certificates and compliance certificates furnished to the Senior Lender, within thirty (30) days of the closing of each month, (viii) promptly upon receipt, statements of accounts from Lessee’s primary banking institutions and investment accounts managers; and (ix) such other financial information, operating reports and budgets as Lessor may reasonably require. Lessee shall furnish the information described in this Section 11(a) until Lessee has paid in full all amounts due to Lessor hereunder. Lessee may discharge its obligations under clauses (i) and (ii) of this Section 11(a) by furnishing to Lessor within ten (10) days after the date on which they are filed, all regular periodic reports, forms and other filings required to be made by Lessee and including its financial statements to any governmental agency or instrumentality under Applicable Law.

(b) Upon Lessor’s request, Lessee shall promptly execute and deliver to Lessor consents to assignments, certificates of no default and such other documents, instruments and assurances reasonably requested by Lessor to establish and protect its rights and/or interest in the Equipment and the Collateral and to assure that the Lease Documents remain in full force and effect.

(c) Lessee shall provide written notice to Lessor: (i) within thirty (30) days prior to any change in its name or its place of business or, if more than one, its chief executive office, or its mailing address or organizational number if it has one and, if Lessee does not have such a number and later obtains one, Lessee shall forthwith notify Lessor of such organizational identification number of Lessee; (ii) promptly upon Lessee becoming aware of the occurrence of any Default or Event of Default; (iii) promptly upon Lessee becoming aware of the commencement or overt threat of any action or proceeding against or affecting Lessee or the Collateral with an amount in controversy equal to or exceeding $1,000,000; (iv) of the commencement of proceedings under Federal bankruptcy laws, or any other insolvency laws (as now or hereafter in effect) involving Lessee or any Person (other than Lessor) holding an interest in the Equipment or Collateral or related property as the debtor; (v) promptly upon Lessee becoming aware of (1) any alleged material violation of Applicable Law by Lessee, or (2) any threatened or actual suspension, revocation or rescission of any Permit necessary for Lessee to be in compliance with the terms hereof; and (vi) promptly after any of the Equipment becomes lost, stolen, destroyed, materially damaged or worn out.

(d) Lessee will not change its type of organization, jurisdiction of organization or other legal structure.

(e) Lessee shall not attach or incorporate the Equipment to or in any other item of equipment or any realty in such a manner that the Equipment may be deemed to have become an accession to or a part of such other item of equipment or realty.

(f) Lessee shall cause each principal item of the Equipment to be marked at all times, in a plain, distinct and legible manner, with the name of Lessor or its designee followed by the words “Lessor and Secured Party,” or other appropriate words designated by Lessor on labels furnished by Lessor.

(g) Lessee will (i) refrain from withholding, from payments made by Lessee to Lessor or any Transferee under any Lease Document, any Federal income tax under any section of the Code (including, without limitation; Section 1442) provided that Lessee receives from any Transferee that is a foreign person (and from Lessor, if Lessor is a foreign person), a valid IRS Form W-8 BEN (and any successor form) or such other form or documentation as may be required to qualify payments hereunder for the “portfolio interest” exemption under Code Section 871(h) or 881(c), and (ii) timely file all required information and other returns required under Federal income tax regulations implementing and interpreting Section 871(h) and 881(c) of the Code.

(h) Lessee shall not convey, sell, lease, transfer or otherwise dispose of (collectively, a “Transfer”) all or any part of its business or property, except for Transfers of (i) obsolete equipment; (ii) inventory in the ordinary course of business, or (iii) non-exclusive licenses and similar arrangements for the use of property of Lessee in the ordinary course of business.

(i) If Lessee prepays all or substantially all of its Indebtedness owing to a third party, whether or not such prepayment is voluntarily or involuntarily made by Lessee before or after any default or acceleration of such obligations, Lessee shall pay, at Lessor’s option and immediately upon notice from Lessor, all or any part of Lessee’s obligations owing to Lessor hereunder. For the avoidance of doubt, if Lessee pays or prepays the Indebtedness described in subsection (l) of the definition of Permitted Indebtedness, Lessee shall provide prior written notice to Lessor of such payment or prepayment and Lessee shall pay, at Lessor’s option and immediately upon notice from Lessor, Lessee’s obligations owing to Lessor hereunder, such amount calculated as under Section 19 hereof.

(j) Lessee agrees to grant Lessor the management rights described below (as to itself and its current and future direct and indirect subsidiaries) and further agrees that it (and its current and future direct and indirect subsidiaries) will give due consideration to such input as may be provided by Lessor. In the event Lessor reasonably demonstrates such rights do not satisfy the requirement of the management rights for the purpose of qualifying Lessor’s interest in Lessee and its direct and indirect subsidiaries as a venture capital investment for the purposes of the United States Department of Labor “plan assets” regulation, 29 C.F.R. §2510.3-101, Lessee and Lessor shall reasonably cooperate in good faith to agree upon mutually satisfactory consultation rights that satisfy such regulation, including with respect to Lessee’s direct and indirect subsidiaries. Lessor will be entitled to the following rights: (i) to discuss, and provide advice with respect to, the business operations, properties and financial and other conditions of Lessee and its subsidiaries with their respective officers, employees and directors and the right to consult with and advise their respective senior management (the “Senior Management”) on matters materially affecting the business and affairs of Lessee and its subsidiaries; (ii) to submit business proposals or suggestions to Senior Management from time to time with the requirement that one or more members of Senior Management discuss such proposals or suggestions with Lessor within a reasonable period after such submission and the right to call a meeting with Senior Management in order to discuss such proposals or suggestions; and (iii) (a) to examine the books and records of Lessee and its subsidiaries, and (b) to request such other information at reasonable times and intervals in light of the normal business operations of Lessee and its subsidiaries concerning the general status of the business, financial condition and operations of Lessee and its subsidiaries but only to the extent such information is reasonably available to Lessee and its subsidiaries and in a format consistent with how Lessee and its subsidiaries maintain such information.

(k) Lessee shall not create, incur, assume or be liable for any Indebtedness, other than Permitted Indebtedness.

The covenants set forth in this Section 11 shall automatically terminate, without further action by any party, immediately upon the payment in full by Lessee of all amounts due to Lessor hereunder. Further, the security interest granted to the Lessor in the Collateral shall automatically, without further action by any party, terminate upon the payment in full by Lessee of all amounts due to Lessor hereunder.

12. ASSIGNMENT AND TRANSFER.

(a) WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, LESSEE SHALL NOT ASSIGN ANY OF ITS RIGHTS NOR DELEGATE ANY OF ITS OBLIGATIONS HEREUNDER, SUBLEASE THE EQUIPMENT OR OTHERWISE PERMIT THE EQUIPMENT TO BE OPERATED OR USED BY, OR TO COME INTO OR REMAIN IN THE POSSESSION OF, ANY PERSON BUT LESSEE, provided, however, so long as no Event of Default has occurred and is continuing, Lessee may upon written consent of Lessor, which consent shall not be unreasonably withheld, assign its rights and obligations hereunder to an entity wholly owned by it; and provided, further, that each controlled on-site access medication storage cabinet that constitutes Collateral may be operated by a Program of All-Inclusive Care for the Elderly (“PACE”) or similar Managed Care site in connection with an active contract between Lessee and PACE/Managed Care Provider in accordance with the contract between Lessee and the applicable PACE/Managed Care Provider. No assignment or sublease, whether authorized in this Section 12 or in violation of the terms hereof, shall relieve Lessee of its obligations hereunder and Lessee shall remain primarily liable hereunder.

(b) Lessor may transfer its rights and/or interest in the Equipment and the Lease Documents to one or more Transferees as collateral security or otherwise. Lessee hereby acknowledges and agrees that in the event Lessor or such other Transferee has transferred its interest herein (i) no Transferee(s) shall be obligated to perform any duty, covenant or condition required to be performed by Lessor under the terms of this Lease, and (ii) all notices or other communications shall be given to, and made by, Lessor or its designee.

(c) Lessee shall maintain this Lease in registered form within the meaning of Section 881(c)(2)(B)(i) of the Code and will establish a book entry system to record the ownership and Transfers of any interests herein. Payments under this Lease by Lessee shall only be made to the registered holder reflected in such book entry system. Lessor shall be the initial registered holder. Upon written notice from Lessor of a Transfer of an interest herein, Lessee shall promptly record such Transfer in its books and records, including such book entry system, including the name(s) and address(es) of the Transferee(s) and Lessee agrees to deliver all consents, certificates and other documents Lessor may reasonably request in connection with such Transfer. Lessee acknowledges and agrees that Lessor’s obligations to any Transferee(s) may be secured by Lessor’s interest in the Lease Documents and the Equipment.

(d) PROVIDED TRANSFEREE IS NOT IN VIOLATION OF ITS OBLIGATIONS UNDER SECTION 7 HEREOF, LESSEE HEREBY WAIVES AS AGAINST ANY SUCH TRANSFEREE(S) OF LESSOR, ITS SUCCESSORS AND ASSIGNS, ANY CLAIM OR DEFENSE THAT LESSEE MAY NOW OR HEREAFTER HAVE AS AGAINST LESSOR, WHETHER FOR BREACH OF THIS LEASE, BREACH OF WARRANTY OR OTHERWISE; PROVIDED, HOWEVER THAT ANY SUCH CLAIM OR DEFENSE IS RETAINED AS AGAINST LESSOR.

13. INSURANCE. At all times during the Term of this Lease, Lessee shall keep the Equipment and Collateral insured against all risks for its replacement value, and shall maintain public liability insurance against such risks and for such amounts as is customary and in accordance with industry practices, with insurer(s) of nationally-recognized standing. All such insurance policies shall name Lessor and its successors and Transferees as loss payee and additional insured and state that such policies may not be invalidated by any act or omission of Lessee or any other person or canceled or altered without at least thirty (30) days prior written notice to Lessor or its successors and Transferees. Lessee shall furnish Lessor with certificates or other satisfactory evidence of the maintenance of the insurance required hereunder within thirty (30) days of any material change in the information set forth in such certificate and promptly upon Lessor’s request.

14. LOSS AND DAMAGE. In the event of any condemnation, confiscation, theft or seizure of, or requisition of title to or use of, or loss or damage to (any such occurrence, a “Loss”), any item of Equipment or Collateral shall occur, Lessee shall give prompt written notice thereof to Lessor. Lessee acknowledges and agrees that all insurance and other payments resulting from or becoming due in connection with a Loss are for Lessor’s account and if any such payments are received by Lessee, such payments shall be held in trust for Lessor and remitted to Lessor immediately upon receipt thereof. In the event of a loss not constituting a Loss, subject to the requirements of any Senior Facility, any insurance and other payments resulting from or becoming due in connection with such Loss shall be held by Lessor and applied in reduction of future Basic Rent payments in the inverse order of maturity, provided however, that Lessor and Lessee may agree to use any such proceeds for the repair, restoration or replacement of the item(s) of Equipment or Collateral subject to such Loss.

15. TAXES AND FEES.

(a) Taxes. Lessee shall file any necessary reports and returns for, shall pay promptly when due, shall otherwise be liable to reimburse Lessor for, and agrees to indemnify and hold Lessor harmless from, any fees, taxes, assessments, charges or withholdings of any nature (together with any penalties or fines thereon) arising at any time upon or relating to the ownership, delivery, acquisition, use, operation or leasing of the Equipment or to the Lease Documents, or upon the Rent payable thereunder (“Taxes”), whether the same be assessed to Lessor (or any Transferee) or Lessee. Promptly upon Lessor’s request, Lessee shall furnish Lessor satisfactory evidence of the filing of such reports and returns and the payment of Taxes. If any report, return or property listing relating to any Taxes is, by Law, required to be filed by, assessed or billed to or paid by, Lessor, Lessee shall do all things required to be done by Lessor (to the extent permitted by Law) in connection therewith and is hereby authorized by Lessor to act on behalf of Lessor in all respects in relation thereto, including the contest or protest, in good faith and by appropriate proceedings, of the validity of any Taxes, or the amount thereof; provided, however, that Lessor hereby unconditionally reserves the right to revoke such authorization and such revocation shall not affect Lessee’s indemnity or other obligations under this Lease, including, without limitation, this Section 15 and Section 18 hereof. Lessor agrees fully to cooperate with Lessee in any such contest, and Lessee agrees promptly to indemnify Lessor for all reasonable expenses incurred by Lessor in the course of such cooperation. Taxes or claim therefor shall be paid by Lessee, subject to refund proceedings, if failure to pay would adversely affect the rights, title and/or interest of Lessor in the Equipment or otherwise hereunder. Provided that no Default or Event of Default has occurred and is then continuing, if Lessor obtains a refund of any Taxes that have been paid (by Lessee, or by Lessor and for which Lessor has been fully reimbursed by Lessee), Lessor shall promptly pay to Lessee the amount of such refund actually received.

(b) The provisions of this Section 15 shall not apply to any Taxes that Lessee is contesting in good faith, by appropriate proceedings and as otherwise permitted pursuant to the provisions of this Lease until the conclusion of such contest; except that Lessee’s right to contest any Taxes is conditioned upon the existence of such Taxes during any such contest not causing any material danger, as determined by Lessor in its reasonable discretion, of the sale, forfeiture or loss of the Equipment.

16. LESSEE’S FAILURE TO PAY TAXES, INSURANCE, ETC. Should Lessee fail to make any tax, insurance or other payment or do any act required to be performed by Lessee as herein provided, except any Taxes being contested in accordance with Section 15(b) hereof, Lessor shall have the right, but not the obligation and without releasing Lessee from any obligation hereunder, to make or do the same, and to pay, purchase, contest or compromise any Taxes that in the reasonable judgment of Lessor affects the Equipment, and, in exercising any such rights, incur any liability and expend whatever amounts in its reasonable discretion Lessor may deem necessary therefor. All sums so incurred or expended by Lessor and a reasonable fee for incurring or expending such sum (including any penalty incurred as a result of Lessee’s failure to perform such obligation or make such payment) shall be due and payable by Lessee within 30 days of Lessor’s demand therefor and shall be payable as Supplemental Rent.

17. DEFAULT AND REMEDIES.

(a) The occurrences of any of the following events shall constitute an Event of Default hereunder, and shall permit Lessor to exercise the remedies provided in Section 17(b) below, including the termination of Lessee’s right to possession of the Equipment and Collateral:

(i) The non-payment when due, of any installment of Rent or any other sum required hereunder to be paid by Lessee;

(ii) The failure by Lessee to perform any other material term, obligation, covenant or condition under any of the Lease Documents that is not cured within twenty (20) days after such failure;

(iii) The non-payment by Lessee when due or default in the performance of any other indebtedness or obligation to Lessor or any parent, subsidiary or affiliated company of Lessor (subject to any applicable cure periods).

(iv) The subjection of a substantial part of Lessee’s property or any part of the Equipment or Collateral to any Lien other than a Permitted Lien;

(v) Lessee shall be in default under the terms of any contract with any Person requiring the payment of money by Lessee in an amount greater than or equal to $75,000;

(vi) In the event that (A) Lessee shall (1) authorize or agree to the commencement of a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency, receivership or other similar Law now or hereafter in effect that authorizes the reorganization or liquidation of such party or its debt or the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, (2) make a general assignment for the benefit of its creditors, (3) fail generally or admit in writing its inability to pay its debts as they become due, (4) take any corporate action to authorize any of the foregoing or (5) have an involuntary or other proceeding commenced against it seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar Law now or hereafter in effect, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period exceeding 60 days; or (B) an order for relief pursuant to such applicable debtor/creditor law shall have been entered against Lessee;

(vii) If any representation or warranty made by Lessee herein, or made by Lessee in any statement or certificate furnished by the Lessee in connection with the execution of this Lease or the delivery of any items of Equipment hereunder or furnished by the Lessee pursuant hereto, proves untrue in any material respect as of the date of the issuance or making thereof;

(viii) The issuance of any writ or order of attachment or execution or other legal process against any Equipment or any Collateral which is not discharged, stayed, or satisfied within fifteen (15) days;

(ix) The occurrence of any event or condition described in subsections (iv), (v), (vi), or (vii) hereof with respect to any other party liable, in whole or in part, for performance of any of Lessee’s obligations under this Lease; and

(x) One or more final judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of at least One Hundred Fifty Thousand Dollars ($150,000) (not covered by independent third-party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against Lessee and the same are not, within fifteen (15) days after the entry thereof, discharged or execution thereof stayed or bonded pending appeal, or such judgments are not discharged prior to the expiration of any such stay.

(b) Upon the continuance and during the continuance of any of the above Events of Default, (i) all obligations hereunder shall bear interest at a rate per month which is one and one-half percent (1.5%) (or the highest rate permitted by law, whichever is lower) (“Default Rate”), and (ii) Lessor may demand, by

written notice to Lessee (provided that upon the occurrence of an Event of Default described in Section 17(a)(vi), no such written notice shall be required), that Lessee pay to Lessor an amount equal to the outstanding principal balance due hereunder plus the Default Rate plus all other sums then payable by Lessee hereunder.

(c) Upon the occurrence and during the continuance of an Event of Default to the extent requested by Lessor, and subject to the requirements of any Senior Facility, Lessee shall deliver the Equipment to Lessor, in good repair, condition and working order, ordinary wear and tear resulting from permitted use thereof under the terms of this Lease alone excepted, to a location within or outside the continental United States of America specified by Lessor. Such Equipment shall be carefully crated and shipped, freight, drayage and re-assembly costs prepaid and properly insured, by Lessee, and Lessee shall bear all risk of loss until the Equipment are delivered to Lessor or its designee. Lessor shall be entitled to sell the Equipment at private or public sale within or without the United States of America, in bulk or in parcels with or without notice, without having the Equipment present at the place of sale, with the privilege of becoming the purchaser thereof. Lessor shall be entitled to lease, otherwise dispose of or keep idle all or any part of the Equipment. Lessor shall also be entitled to draw on any letter of credit or take any deposit, in either case theretofore provided by Lessee to secure its obligations hereunder.

(d) Upon the occurrence and during the continuance of an Event of Default, Lessor shall be entitled to (i) require the Lessee to assemble the Collateral and make it available at the principal place of business or other places of business of the Lessee to allow the Lessor to take possession or dispose of the Collateral, (ii) subrogate to all of the Lessee’s interests, rights and remedies in respect to the Collateral, including the right to stop delivery, and (upon notice from the Lessee that the account debtor has returned, rejected, revoked acceptance of or failed to return the goods or that the goods have been reconsigned or diverted) the right to take possession of and to sell or dispose of the goods, (iii) make any payments or do any acts it considers necessary or reasonable to protect its security interest in the Collateral, and/or (iv) take and maintain possession of and sell or otherwise dispose of any or all of the Collateral at public or private sale, and if notice of such sale or of other action by the Lessor is required by Applicable Law, ten (10) day notice after the date of any public sale or the date after which Lessor enters into any private sale shall constitute sufficient notice of Lessor’s disposition of the Collateral, and further provided, (A) the Lessor has no obligation to refurbish or otherwise prepare the Collateral for sale, (B) the Lessor may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral, (C) the Lessor may specifically disclaim any warranties of title or the like, and (D) in the event the Lessor sells any Collateral upon credit, the Lessee will be credited only with the principal portion of payments actually made by the purchaser, received by Lessor and applied to the purchase of the Collateral.

(e) Lessee grants Lessor the right to enter and occupy any of its premises, without charge, to exercise any of Lessor’s rights or remedies. The proceeds of sale, lease or other disposition of the Equipment and Collateral, if any, or the proceeds of any letter of credit or deposit, if any, shall be applied (1) to all of Lessor’s costs, charges and expenses incurred in taking, removing, holding, repairing and selling, leasing or otherwise disposing of the Equipment and Collateral (including, without limitation, reasonable attorneys’ fees, costs and disbursements); then, (2) to the extent not previously paid by Lessee, to pay Lessor the amount required under Section 17(b); then, (3) any remaining amounts to the Lessee. Lessee shall pay any deficiency for amounts described in clauses (1) and (2) above forthwith. The exercise of any of the foregoing remedies by Lessor shall not constitute a termination of this Lease unless Lessor so notifies Lessee in writing.

(f) Power of Attorney. Lessee irrevocably appoints Lessor as its lawful attorney-in-fact, to be effective upon the occurrence and during the continuance of an Event of Default, to: (i) endorse Lessee’s name on any checks or other forms of payment or security; (ii) sign Lessee’s name on any invoice or bill of lading for any account or drafts against account debtors; (iii) settle and adjust disputes and claims about the accounts directly with account debtors, for amounts and on terms Lessor determines reasonable; (iv) make, settle and adjust all claims of Lessee’s insurance policies; and (v) transfer the Collateral into the name of the Lessor or any third party as Applicable Law permits. Lessee hereby appoints Lessor as its lawful attorney-in-fact to sign Lessee’s name on any document necessary to perfect or to continue the perfection

of any security interest regardless of whether an Event of Default has occurred until all obligations under the Lease Documents have been satisfied in full. Lessor’s foregoing appointment as Lessee’s attorney-in-fact, and all of Lessor’s rights and powers, coupled with an interest, are irrevocable until all obligations under the Lease Documents have been fully repaid and performed.

(g) Remedies Cumulative. No remedy referred to in this Section 17 is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity.

(h) Waiver of Notices. Notice of default and presentment, demand, protest and notice of dishonor as to any provision of any of the Lease Documents or any other agreement or instrument, notice of acceptance of Lease Document, notice of Leases made, Equipment or Collateral received or delivered or other action taken in reliance hereon and all other demands and notices of any description is hereby waived by the Lessee, except as may be otherwise specifically provided in this Master Lease.

18. INDEMNITY. Lessee agrees to indemnify, defend, and hold harmless Lessor and any Transferee and their respective officers, directors, partners, agents and employees, from and against any and all liabilities, claims, suits, actions, demands or judgments or other obligations (“Claims”) (other than such as may directly result from the gross negligence or willful misconduct of Lessor, Transferee or their respective, agents or employees), by paying (on an after-tax basis) or otherwise discharging same, when any such Claims shall become due, including, without limitation, Claims arising on account of (a) this Lease or any other Lease Documents, or (b) the Equipment, the Collateral, or any item or part thereof, including, without limitation, the selection, ordering, acquisition, delivery, installation, return, rejection, abandonment or other disposition of any item of Equipment or Collateral, the possession, maintenance, leasing, use, condition, ownership, operation or control of any item of Equipment or Collateral by whosoever owned, used or operated during the Term of this Lease or the existence of latent and other defects (whether or not discoverable or discovered by Lessor or Lessee). Lessor shall give Lessee prompt notice of any Claim or liability hereby indemnified against and Lessee shall be entitled to control the defense thereof. Notwithstanding anything to the contrary in this Master Lease, the foregoing indemnity requirements shall survive the termination of this Master Lease and the Rental Schedules.

19. EARLY TERMINATION. Provided that there is no default hereunder, Lessee may terminate this Master Lease at any time upon ninety (90) days’ prior written notice to Lessor by paying to Lessor the Present Value of all amounts remaining due to Lessor under the Master Lease and all Rental Schedules hereto (the “Early Termination Amount”).

20. CHANGE IN OWNERSHIP. If Lessee shall (a) consolidate with or merge into any other corporation, person or entity (other than a wholly-owned subsidiary of Lessee) in which Lessee is not the surviving entity; or (b) convey, sell, transfer, lease or dispose of all or substantially all of its assets to any corporation, person or entity; or (c) engage in any other transaction or series of related transactions in which more than fifty percent (50%) of the voting power of Lessee is disposed of, or (d) close any initial public offering of Lessee’s common stock, then Lessor shall have the right but not the obligation to demand the Lessee to terminate all Rental Schedule(s) hereto by paying to Lessor the Early Termination Amount.

21. MISCELLANEOUS.

(a) Lessee has paid a proposal fee in the amount of Fifteen Thousand Dollars ($15,000) which shall be applied towards Lessor’s transaction, legal and due diligence expenses, not to exceed such amount; provided, however, the foregoing expense limitation shall not include Lessor’s reasonable lien search and lien filing costs which will be paid by Lessee. In addition, Lessee shall pay the Facility Fee at the time Lessor funds the Facility Amount (to be netted from the proceeds of the funding of the Facility Amount).

(b) Lessor may (i) publish, for the sole purpose of its own advertising and promotion, via print and/or electronic media, Lessee’s name and logo; (ii) issue a press release announcing the lease funding; and (iii) link to Lessee’s Web site. Lessee agrees to reasonably cooperate with Lessor in this regard.

(c) Any notice required or permitted to be given by the provisions hereof shall be conclusively deemed to have been received by a party hereto on the day it is delivered by hand or by facsimile transmission to such party at the address as set forth on the cover page hereof (or at such other address as such party shall specify to the other party in writing), express overnight courier service, or, if sent by registered or certified mail, on the date on which mailed, addressed to such party at the address set forth above, postage prepaid.

(d) No delay or omission to exercise any right or remedy accruing to Lessor upon any breach or default of Lessee shall impair any such right to remedy or be construed to be a waiver of any such breach or default; nor shall any waiver of any single breach or default be construed to be a waiver of any such breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval on the part of Lessor of any breach or default under this Lease or, of any provision or condition hereof, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Lease or by Law or otherwise afforded to Lessor, shall be cumulative and not exclusive.

(e) Lessee agrees to reimburse Lessor on demand for any and all reasonable costs and expenses incurred by Lessor in the enforcement of the Lease Documents, including without limitation, reasonable attorneys’ fees (including, without limitation, those of in-house counsel) and costs of repossession, storage, insuring, releasing and selling of all Equipment and Collateral together with the Excess Use Fee with respect to all such amounts from Lessor’s payment thereof until its receipt of reimbursement from Lessee.

(f) THIS MASTER LEASE MAY NOT BE TERMINATED EXCEPT AS EXPRESSLY PROVIDED HEREIN. This Lease may be modified only by a written agreement duly signed by Persons authorized to sign agreements on behalf of Lessor and Lessee, and any variance from the terms and conditions of this Lease in any order or other notification from Lessee, written or oral, shall be of no effect. LESSEE ACKNOWLEDGES THAT IT HAS READ THIS MASTER LEASE, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, LESSEE AGREES THAT THIS MASTER LEASE IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE LEASE BETWEEN THE PARTIES, WHICH SUPERSEDES ALL PROPOSALS OR PRIOR AGREEMENTS OR UNDERSTANDINGS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS MASTER LEASE.

(g) This Lease and the covenants and agreements contained herein shall be binding upon, and inure to the benefit of, Lessor and its successors and assigns and Lessee and its successors and permitted assigns.

(h) The headings of the sections hereof are for convenience of reference only, are not a part of this Master Lease and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

(i) THIS MASTER LEASE AND THE TRANSACTION CONTEMPLATED HEREBY SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. LESSOR AND LESSEE HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE MASSACHUSETTS STATE AND FEDERAL COURTS LOCATED IN MIDDLESEX COUNTY, MASSACHUSETTS, FOR ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE OVERALL TRANSACTION EVIDENCED BY THE LEASE DOCUMENTS, LESSOR AND LESSEE HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDINGS MAY BE HEARD AND DETERMINED IN SUCH MASSACHUSETTS STATE COURTS, OR TO THE EXTENT PERMITTED BY LAW, SUCH FEDERAL COURTS. LESSOR AND LESSEE HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO, THE DEFENSE OF ANY INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING, LESSOR AND LESSEE HEREBY WAIVE ANY RIGHTS EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN ACTIONS OR PROCEEDINGS BROUGHT IN RESPECT OF THE LEASE DOCUMENTS.

(j) It is the express intent of the parties hereto not to violate any applicable usury laws or to exceed the maximum amounts permitted to be charged or collected under applicable law, and any such excess payment will be applied to payments due hereunder in the inverse order of maturity and any remaining excess shall be returned to Lessee. Should any Section or any part of a Section within this Master Lease be rendered void, invalid or unenforceable by any court or Law for any reason, such invalidity or unenforceability shall not void or render invalid or unenforceable any other Section or part of a Section in this Master Lease.

(k) Lessee agrees to execute such documents and take such further actions as Lessor may reasonably request in order to assure Lessor the full benefit of the rights granted Lessor hereunder.

22. DEFINITIONS AND RULES OF CONSTRUCTION.

(a) The following terms when capitalized as below, have the following meanings:

“Applicable Law”: any Law that may apply to (i) Lessee or its properties and operations, (ii) the operations, modification, maintenance, ownership, leasing or use of the Equipment and Collateral, or (iii) any transaction contemplated under any Lease Document, including in each case any environmental Law, federal or state securities Law, commercial Law (pertaining to the rights and obligations of sellers, purchasers, debtors, secured parties, or to any other pertinent matter), zoning, sanitation, site or building Law, energy, occupational safety and health practices Law or the Employee Retirement Income Security Act of 1974, as amended, and any regulations promulgated thereunder.

“Basic Rent”: the rental installments due from Lessee pursuant to Section 3(b) hereof for the Primary Term in the amounts and on the dates as provided in the applicable Rental Schedule, which amount shall be equal to 3.8364% of Total Equipment Cost for the period of time from the Primary Term Commencement Date to the Primary Term Expiration Date.

“Basic Rent Payment Date”: as set forth in a Rental Schedule with respect to the items of Equipment set forth therein.

“Basic Rent Per Month”: as set forth on a Rental Schedule with respect to the items of Equipment set forth therein.

“Business Day”: any day, other than a Saturday, Sunday or legal holiday for commercial banks under the laws of the Commonwealth of Massachusetts (or such other jurisdictions in the United States as Lessor specifies to Lessee by at least thirty (30) days’ prior written notice).

“Claims”: as set forth in Section 18 of this Master Lease.

“Co-Investment Agreement”: the Co-Investment Agreement dated as of the date hereof between Lessor and Tabula Rasa, as the same may be amended, supplemented or modified from time to time.

“Code”: the United States Internal Revenue Code of 1986, as amended.

“Collateral”: as defined in Section 4(e) of this Master Lease.

“Default”: except when inconsistent with the context of any provision hereof, an event that, but for the lapse of time or the giving of notice or both, would constitute an Event of Default.

“Dollars” or “$”: United States of America dollars.

“Equipment”: with respect to each Rental Schedule, the property described therein, which shall in any event be acceptable to Lessor, together with all appurtenances, parts, instruments,

accessories and furnishings that are from time to time incorporated in the Equipment, or having been so incorporated, are later removed therefrom, unless title and/or interest thereto is expressly released by Lessor, and all replacements of, and additions, improvements and accessions to any and all of the foregoing, and all books, records, maintenance logs and general intangibles (including all patents, copyrights and trade secrets) relating thereto; and, when used in the context of Lessor’s title and/or interest in the Equipment (whether relating to the creation, grant, perfection, release, priority, enforcement or application of proceeds thereof), shall also include all other property in which Lessor is granted a security interest hereunder or under the Rental Schedule.

“Event of Default”: any event of default as specified in Section 17(a) of the Master Lease.

“Excess Use Fee”: the fee payable by Lessee for the continued use or possession of the Equipment by the Lessee, which is payable if Lessee has not paid Rent when due and which shall equal 1-1/2% per month, or the highest rate permitted by law, whichever is lower, on all overdue Rent from the due date thereof until paid.

“Facility Fee”: shall mean one percent (1.0%) of the Facility Amount.

“Federal”: the Federal government of the United States of America.

“Financing Statement”: a Uniform Commercial Code financing statement on Form UCC-1 pursuant to the UCC.

“GAAP”: United States generally accepted accounting principles, applied consistently.

“Governmental Authority”: any federal, state, provincial, county, municipal, regional or other governmental authority, agency board, body, instrumentality or court, in each case of the United States of America, Canada or some other country.

“Indebtedness”: shall mean (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds, guarantees and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, and (c) capital or operating lease obligations (except for operating lease agreements for real property).

“Intellectual Property”: shall mean any of the following, whether now owned or hereafter acquired and wherever located:

(a) Any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, including source code and object code now or hereafter existing, created, acquired or held (collectively, the “Copyrights”);

(b) Any and all trade secrets, know-how, and any and all intellectual property rights in computer software and computer software products, including source code and object code, in development or embodied in products, now or hereafter existing, created, acquired or held;

(d) All patents, patent applications and like protections including, without limitation, improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same (collectively, the “Patents”) and all inventions and innovation, regardless of whether patentable or unpatentable;

(e) Any trademark and service mark rights, slogans, trade dress, and

tradenames, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Lessee connected with and symbolized by such trademarks (collectively, the “Trademarks”);

(f) All mask works or similar rights available for the protection of semiconductor chips, now owned or hereafter acquired (collectively, the “Mask Works”); and

(g) All amendments, extensions, renewals and extensions of any of the Copyrights, Trademarks, Patents, or Mask Works.

“Interim Term”: the period from and including the Interim Term Commencement Date to but not including the Primary Term Commencement Date.

“Interim Term Commencement Date”: the date on which Lessee accepts the Equipment as set forth in a Rental Schedule.

“Interim Term Rent”: as set forth in a Rental Schedule, which amount shall be equal to interest at 12.0% per annum on the Total Equipment Cost for the period of time from and including the Interim Term Commencement Date to but excluding the Primary Term Commencement Date.

“Interim Term Rent Payment Date”: as set forth in a Rental Schedule with respect to the items of Equipment set forth therein.

“Law”: any law, rule, regulation, ordinance, order, code, common law, interpretation, judgment, directive, decree, treaty, injunction, writ, determination, Permit or similar norm or decision of any Governmental Authority.

“Lease”: this Master Lease Agreement as incorporated by reference by an applicable Rental Schedule.

“Lease Documents”: collectively, the Master Lease, the Co-Investment Agreement, the Rental Schedule(s), the Warrant and any and all instruments, documents, certificates and agreements delivered pursuant hereto.

“Lessee”: collectively, CareKinesis, Inc., a Delaware corporation, J. A. Robertson, Inc., a California corporation, Capstone Performance Systems, LLC a Delaware limited liability company, CareVention, Inc., a Delaware corporation, Tabula Rasa Healthcare, Inc., a Delaware corporation, and Medliance LLC, an Arizona limited liability company, and their successors and permitted assigns.

“Lessor”: Eastward Fund Management, LLC, a Delaware limited liability company, its successors and assigns.

“Lien”: any mortgage, pledge, lease, sublease, security interest, attachment, charge, encumbrance or right or claim of others whatsoever (including any conditional sale or other retention agreement).

“Master Lease”: This Master Lease Agreement.

“Perfection Certificate”: the Perfection Certificate dated as of the date hereof delivered by Lessee to Lessor.

“Permit”: any action, approval, certificate of occupancy, consent, waiver, exemption, variance, franchise, order, permit, authorization, right or license, or other form of legally required permission, of or from a Governmental Authority.

“Permitted Indebtedness”: shall mean

(a) Lessee’s obligations under this Master Lease;

(b) Indebtedness in the form of purchase money financing existing on the date hereof and shown on the Perfection Certificate to (i) Boston Financial & Equity Corporation, provided that such Indebtedness does not exceed $591,000; and (ii) Liberty Bell Bank, provided that such Indebtedness does not exceed $385,000;

(c) Indebtedness to (i) Lessor’s affiliate Eastward Capital Partners V, L.P. pursuant to that certain Master Lease Agreement No. 531 dated as of March 23, 2012, and (ii) Lessor pursuant to that certain Master Lease Agreement No. 628 dated as of April 22, 2014;

(d) Indebtedness existing on the date hereof and shown on the Perfection Certificate to (i) Calvin Knowlton & Orsula Knowlton; and (ii) John Durham and Joanne Durham; provided that such Indebtedness is subordinated to Lessee’s obligations hereunder pursuant to a subordination agreement executed by each of such parties in a form reasonably acceptable to Lessor;

(e) Indebtedness to AmeriSourceBergen pursuant to the AmeriSourceBergen Facility provided that such Indebtedness does not exceed $3,875,000 at any time;

(f) Indebtedness to SVB pursuant to the SVB Facility provided that such Indebtedness does not exceed $7,000,000 at any time;

(g) Other Indebtedness existing on the date hereof and shown on the Perfection Certificate;

(h) Indebtedness subordinated to Lessee’s obligations hereunder (in the case of such indebtedness incurred after the date hereof, pursuant to a subordination agreement executed by the creditor of such subordinated indebtedness, in a form acceptable to Lessor) (“Subordinated Debt”);

(i) Indebtedness in respect of capital lease obligations and purchase money obligations for fixed or capital assets not included in subsection (h) above, provided that the aggregate original principal amount of such Indebtedness that may be incurred by the Lessee during any calendar year is limited to $1,000,000;

(j) Indebtedness to trade creditors in the ordinary course of business;

(k) Indebtedness secured by Permitted Liens;

(l) Indebtedness to each of Fred Smith III, Olds Family 2002 Trust, created under declaration of trust dated June 3, 2002, as amended, and Stephen F. Olds (the “Interest Sellers”) pursuant to a Subordinated Convertible Promissory Note to each such party, not to exceed $17,000,000 in the aggregate entered into by Tabula Rasa in connection with the Acquisition Transaction; provided that such Indebtedness is subordinated to Lessee’s obligations hereunder pursuant to a subordination agreement executed by each of such parties in a form reasonably acceptable to Lessor; and

(m) Extensions, refinancings, modifications, and amendments and restatements of any items of Permitted Indebtedness in (a) through (l) above; provided that the principal amount of such Permitted Indebtedness is not increased from the amount existing on the date of this Master Lease, and any Lien related to such Permitted Indebtedness does not attach to any property that was not subject to a Lien in favor of the holder thereof prior to the extension, refinancing, modification or amendment and restatement, except in either case as to the Indebtedness described in (a) above.

“Permitted Lien”: (a) Lessor’s and Lessee’s respective rights, titles and/or interests in the Equipment and Collateral, (b) Liens securing Permitted Indebtedness other than Permitted Indebtedness described in clauses (d), (j) and (l) above, (c) Liens for the benefit of mechanics, material men, laborers, employees or suppliers and similar Liens arising by operation of Law and incurred by Lessee in the ordinary course of business for sums that are not yet delinquent or are being contested in good faith by negotiations or by appropriate proceedings that suspend the collection and enforcement thereof (provided that the existence of such Lien while such negotiations or proceedings are pending does not involve any substantial risk (as determined by Lessor in its discretion) of the sale, forfeiture or loss of the Equipment, any Collateral or any interest therein, and for which adequate reserves have been provided in accordance with GAAP), (d) Liens arising out of any judgments or awards against Lessee that have been adequately bonded to protect Lessor’s interest or with respect to which a stay of execution has been granted pending an appeal or a proceeding for review; (e) Liens for taxes so long as Lessee is challenging such taxes in good faith, and (f) Sellers’ liens on the intellectual property of Medliance granted in connection with the Acquisition Transaction.

“Person”: any individual, corporation, partnership, joint venture, or other legal entity or a Governmental Authority.

“Present Value”: with respect to any prepayment of rent under this Lease, shall mean the aggregate amount obtained by discounting all remaining scheduled payments of Rent under each Rental Schedule from their respective scheduled Payment Dates to the date on which such prepayment is to be made (the “Prepayment Date”), in accordance with accepted financial practice, and at a discount rate of seven percent (7%).

“Primary Term”: as set forth in the Rental Schedule.

“Primary Term Commencement Date”: as set forth in the Rental Schedule.

“Primary Term Expiration Date”: as set forth in the Rental Schedule.

“Rent”: collectively, the Interim Term Rent, Basic Rent, and the Supplemental Rent.

“Rental Schedule”: a document in the form of Exhibit 1 hereto evidencing the agreement by Lessor and Lessee to lease the Equipment listed thereon pursuant to the Rent, terms and conditions set forth thereon and incorporating this Agreement by reference.

“Supplemental Rent”: all amounts, liabilities and obligations (other than Basic Rent and Interim Term Rent) that Lessee assumes or agrees to pay to Lessor, including, without limitation, payments constituting indemnities, reimbursements, expenses, Excess Use Fee and other charges payable pursuant to the terms of this Lease.

“Supplier”: the Person from whom Lessor is purchasing or has purchased the Equipment.

“Supply Contract”: any written contract from the Supplier of the Equipment or any item thereof, pursuant to which Lessor has purchased such Equipment (or item thereof) for lease to Lessee under a Rental Schedule.

“Term”: the period for which Equipment is leased under the Lease, including the Interim Term and the Primary Term.

“Total Equipment Cost”: the actual amount funded under the Facility Amount as set forth in the Rental Schedule for the Equipment subject to such Rental Schedule.

“Transfer”: any transfer or other agreement pursuant to which Lessor or Transferee has transferred or agreed to pay any Person the Rent, or a portion thereof, received from Lessee pursuant to the Lease, which obligation may be secured by Lessor’s interest in the Lease and the Equipment.

“Transferee”: any Person to whom Lessor or any subsequent transferee thereof has assigned any or all of its rights, obligation, title and/or interest under the Lease.

“Uniform Commercial Code” or “UCC”: the Uniform Commercial Code as in effect in the Commonwealth of Massachusetts or in any other pertinent jurisdiction; and any reference to an article or section thereof shall mean the corresponding article or section (however named) of any such other applicable version of the Uniform Commercial Code.

(b) Any defined term used in the singular preceded by “any” indicates any number of the members of the relevant class. Any Lease Document or other agreement or instrument referred to herein means such agreement or instrument as supplemented and amended from time to time. Any reference to Lessor or Lessee shall include their permitted successors and assigns. Any reference to a Law or Permit shall also mean such Law or Permit as amended, superseded or replaced from time to time. Unless otherwise expressly provided to the contrary herein, all actions that Lessee takes or is required to take under this Master Lease or any other Lease Document shall be taken at Lessee’s sole cost and expense.

23. CO-LESSEE ASPECTS. Each Co-Lessee shall be jointly and severally liable to Lessor for each and every representation, warranty, and covenant of Lessee or any other Co-Lessee made in or pursuant to this Master Lease. Insofar as Lessor is concerned, the act of any Co-Lessee shall bind all other Co-Lessees, and Lessor (and Lessee’s and each Co-Lessee’s rights and duties to Lessor) shall not be affected by any notice or action to the contrary. Lessor shall be fully protected, as to Lessee and all Co-Lessees, in dealing with any Co-Lessee. A Co-Lessee’s obligations under this Master Lease shall not be affected by any action taken or not taken by Lessor, by any lack of prior enforcement or retention of any rights against Lessee or any other Co-Lessee, by any illegality, unenforceability, or invalidity of any other Co-Lessee’s obligations, or by any circumstance or condition, including, without limitation, (i) any termination, amendment, or modification of, or supplement to this Master Lease or any action by any other Co-Lessee with respect to the Equipment or the Collateral, (ii) any failure or delay to confirm or comply with any term of this Master Lease, (iii) any waiver, consent, extension, indulgence, compromise, settlement, release, or other action or inaction under or in respect of this Master Lease, or any exercise or non-exercise of any right, remedy, power, or privilege under or in respect of this Master Lease; (iv) any voluntary or involuntary bankruptcy, insolvency, or similar proceeding with respect to any other Co-Lessee, (v) any limitation on the liability or obligations of Lessor or any other Co-Lessee, or any discharge, termination, cancellation, frustration, invalidity or unenforceability of this Master Lease, (vi) any defect in title to or condition of the Equipment or the Collateral, (vii) any merger or consolidation of any other Co-Lessee into or with any other corporation; and (viii) any other condition or circumstance which might otherwise constitute a legal or equitable discharge, release, defense, or limitation arising out of any laws of the United States of America or any state thereof. Each Co-Lessee agrees that Lessor shall not be required to file suit or proceed to obtain or assert against any other Co-Lessee or its assets, either before or as a condition to enforcing such first Co-Lessee’s liability under this Master Lease. Nothing in this section shall limit any Co-Lessee’s rights against any other Co-Lessee as to contribution, reimbursement, use of the Equipment or the Collateral, or otherwise. Lessor shall have no duty to see any allocation of use or benefits of the Equipment or Collateral, regardless of any notice or request from any Co-Lessee, all relations between or among Co-Lessees being an internal matter for them and not for Lessor.

24. ADDITIONAL PROVISIONS. The schedules and exhibits attached hereto and any riders signed by the parties hereto and attached hereto are hereby incorporated by reference.

This space intentionally left blank

IN WITNESS WHEREOF, Lessor and Lessee have caused this Master Lease Agreement to be duly executed, all as of the date first above written.

LESSOR:

	Eastward Fund Management, LLC


	By:	/s/ illegible
		Authorized Person

CO-LESSEES:

	CareKinesis, Inc.


	By:	/s/ Brian Adams
	Title:	Chief Financial Officer

	J. A. Robertson, Inc.


	By:	/s/ Brian Adams
	Title:	Chief Financial Officer

	Capstone Performance Systems, LLC


	By:	/s/ Brian Adams
	Title:	Chief Financial Officer

	CareVention, Inc.


	By:	/s/ Brian Adams
	Title:	Chief Financial Officer

	Tabula Rasa Healthcare, Inc.


	By:	/s/ Brian Adams
	Title:	Chief Financial Officer

	Medliance LLC


	By:	/s/ Brian Adams
	Title:	Chief Financial Officer

[Signature Page to Master Lease]

Exhibit 1

RENTAL SCHEDULE AND ACCEPTANCE CERTIFICATE NO. 628-01

(the “Rental Schedule”)

DATED AS OF December , 2014 TO MASTER LEASE AGREEMENT NO. 628

DATED AS OF December , 2014 (the “Master Lease”)

LESSOR:	Eastward Fund Management, LLC	LESSEE:	CareKinesis, Inc.
	432 Cherry Street		J.A. Robertson, Inc.
	West Newton, MA 02465		Capstone Performance Systems, LLC
			CareVention, Inc.
			Tabula Rasa Healthcare, Inc.
			Medliance LLC
			100 Marter Ave., Ste. 309
			Moorestown, NJ 08057

1. LEASE TERM, PAYMENT DATES

This Rental Schedule, between Lessor and Lessee incorporates by reference the terms and conditions of the Master Lease. Lessor hereby leases to Lessee and Lessee hereby leases from Lessor those items of Equipment described in Section 2 of this Rental Schedule for the Term and at the Basic Rent payable on the Payments Dates hereinafter set forth in Section 3 of this Rental Schedule, on the terms and conditions set forth herein and in the Master Lease.

2. EQUIPMENT DESCRIPTION

See attached Schedule A.

The Total Equipment Cost is $12,000,000

3. BASIC RENT

Interim Term Rent Per Month for Interim Term Months 1 through and including 12: $120,000 [12.0% per annum on the Total Equipment Cost]

Basic Rent Per Month for Primary Term Months 13 through and including 42: $460,373.62 [3.8364% of Total Equipment Cost]

The first payment of Interim Term Rent is due and payable on January 1, 2015 and is payable monthly in advance thereafter on the first Business Day of each month during the Interim Term (each, an “Interim Term Rent Payment Date”) to and including the Interim Term Rent Payment Date of December 1, 2015 [12 months]. Lessor and Lessee agree that if the closing date occurs on any day prior to the first day of a month, the Interim Term Rent that is payable on January 1, 2015 shall also include an additional Interim Term Rent payment for the period prior to such date calculated at the daily rate set forth above in the amount of $ . The first payment of Basic Rent is due and payable on January 1, 2016 and is payable monthly in advance thereafter on the first Business Day of each month during the Primary Term (each, a “Basic Rent Payment Date”) to and including the Basic Rent Payment Date June 1, 2018 [30 months].

4. TERM COMMENCEMENT

Interim Term: 12 months.

Primary Term: 30 months.

The Interim Term Commencement Date of this Rental Schedule is December , 2014. The Primary Term Commencement Date of this Rental Schedule is January 1, 2016. The Primary Term Expiration Date is June 30, 2018.

5. ACCEPTANCE CERTIFICATE

Lessee hereby represents, warrants and certifies (a) that the Equipment described herein has been delivered to and inspected by Lessee, is in good order, repair and condition, and is of a size, design, capacity and manufacturer acceptable and satisfactory to Lessee and is unconditionally and irrevocably accepted for lease by Lessee under this Rental Schedule and the Master Lease as incorporated herein by reference, as of the Interim Term Commencement Date set forth above; and (b) the representations and warranties of Lessee set forth in the Master Lease are true and correct as of the date hereof.

6. ENTIRE AGREEMENT, MODIFICATION AND WAIVERS, EXECUTION IN COUNTERPARTS.

Capitalized terms not defined herein shall have the meanings assigned to them in the Master Lease. To the extent any of the terms and conditions set forth in this Rental Schedule conflict with or are inconsistent with the Master Lease, this Rental Schedule shall govern and control. No amendment, modification or waiver of this Rental Schedule or the Master Lease will be effective unless evidenced by a writing signed by the party to be charged. This Rental Schedule may be executed in counterparts, all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF the parties hereto have caused this Rental Schedule and Acceptance Certificate 617-01 to be executed and delivered by their duly authorized representatives as of the date first above written.

LESSOR		LESSEE

Eastward Fund Management, LLC		CareKinesis, Inc.


By:		By:
Title:	Authorized Person	Title:	Chief Financial Officer

		J.A. Robertson, Inc.


		By:
		Title:	Chief Financial Officer

		Capstone Performance Systems, LLC


		By:
		Title:	Chief Financial Officer

		CareVention, Inc.


		By:
		Title:	Chief Financial Officer

		Tabula Rasa Healthcare, Inc.


		By:
		Title:	Chief Financial Officer

		Medliance LLC


		By:
		Title:	Chief Financial Officer

Exhibit 2

Collateral

For purposes of the Master Lease, “Collateral” means all of Lessee’s right, title and interest in and to and upon all Lessee’s tangible and intangible assets, now owned or hereafter acquired and wherever located, including, without limitation, all of the following property and interests in property of Lessee:

(a) all of Lessee’s tangible personal property, including without limitation all present and future goods, inventory and equipment (including items of equipment which are or become fixtures), computer hardware and software, now owned or hereafter acquired and all of Lessee’s real property, including leasehold interests, now owned or hereafter acquired;

(b) all of Lessee’s intangible personal property, including, without limitation, all present and future accounts, securities, contract rights, permits, general intangibles, chattel paper, investment property, documents, instruments, deposit accounts, letter-of-credit rights, rights to the payment of money or other forms of consideration of any kind, tax refunds, insurance proceeds (including, without limitation, proceeds of any life insurance policy), now owned or hereafter acquired, and all intangible and tangible personal property relating to or arising out of any of the foregoing, but in each case, including Intellectual Property (as defined below);

(c) all of Lessee’s present and future government contracts and rights thereunder and the related government accounts and proceeds thereof, now or hereafter owned or acquired by Lessee; provided, however, that Lessor shall not have a security interest in any rights under any government contract of Lessee or in the related government account where the taking of such security interest would be a violation of an express prohibition contained in such government contract (for purposes of this limitation, the fact that a government contract is subject to, or otherwise refers to, Title 31, § 203 or Title 41, § 15 of the United States Code shall not be deemed an express prohibition against assignment thereof) or is prohibited by Applicable Law; and

(d) any and all additions to any of the foregoing, and any and all replacements, products and proceeds (including insurance proceeds) of any of the foregoing.

“Intellectual Property” means:

(a) Any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, including source code and object code, now or hereafter existing, created, acquired or held (collectively, the “Copyrights”);

(d) All patents, patent applications and like protections including, without limitation, improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same (collectively, the “Patents”), and all inventions and innovation, regardless of whether patentable or unpatentable;

(e) Any trademark and service mark rights, slogans, trade dress, and tradenames, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of the Lessee connected with and symbolized by such trademarks (collectively, the

“Trademarks”);

(f) All mask works or similar rights available for the protection of semiconductor chips, now owned or hereafter acquired (collectively, the “Mask Works”);

(g) All amendments, extensions, renewals and extensions of any of the Copyrights, Trademarks, Patents, or Mask Works; and

(h) any and all additions to any of the foregoing, and any and all replacements, products and proceeds (including insurance proceeds) of any of the foregoing.

EX-10.8 21 a2226891zex-10_8.htm EX-10.8

Exhibit 10.8

MASTER LEASE AGREEMENT

(the “Master Lease”)

Dated as of April 22, 2014

Master Lease No. 617

LESSOR:

Eastward Fund Management, LLC

432 Cherry Street

West Newton, MA 02465

CO-LESSEE:

CareKinesis, Inc.

110 Marter Avenue, Suite 309

Moorestown, NJ 08057

Attention: Brian M. Adams

Phone No.: (866) 648-2767

State of Organization: Delaware

State of Organization Identification No. (state if none): 4674249

J. A. Robertson, Inc.

2166 Hayes Street, Suite 100

San Francisco, CA 94117

Attention: Brian M. Adams

Phone No.: (866) 648-2767

State of Organization: California

State of Organization Identification No. (state if none): C1087925

Capstone Performance Systems, LLC

6255 San Bonita Avenue

St. Louis, MO 63105

Attention: Brian M. Adams

Phone No.: (866) 648-2767

State of Organization: Delaware

State of Organization Identification No. (state if none): 5514716

Each of the above Co-Lessees, jointly and severally (individually, a “Co-Lessee” and collectively, the “Lessee”).

2. LEASE.

the assets of Capstone Performance Systems, LLC, a Colorado limited liability company, and/or for Lessee’s general corporate purposes.

3. TERM AND RENT; OBLIGATIONS UNCONDITIONAL.

4. PERSONAL PROPERTY; SECURITY INTEREST AND LIENS. Lessee covenants and agrees that:

(e) Lessee hereby grants to Lessor a security interest in the collateral as set forth on Exhibit 2 attached hereto (the “Collateral”), which security interest shall remain in full force and effect until all of the Lessee’s obligations under this Master Lease and all Rental Schedules are fully paid and satisfied. Lessee represents and warrants that the security interest granted herein shall be a first priority security interest in the Collateral (exclusive of Permitted Liens). Notwithstanding anything contained in this subsection (e) to the contrary, Lessor acknowledges and agrees that Lessee currently has (i) a Credit Agreement with AmeriSourceBergen Drug Co. (“AmeriSourceBergen”; such agreement, the “AmeriSourceBergen Facility”), and Lessee’s obligation to AmeriSourceBergen under the AmericSourceBergen Facility are secured by a lien on all property and assets of Lessee and which lien is a Permitted Lien hereunder, and (ii) a formula-based monthly recurring revenue credit facility, in an amount not exceeding $7,000,000 (the “SVB Facility” each of SVB Facility and the AmeriSourceBergen Facility, a “Senior Facility” and collectively, the “Senior Facilities”), from Silicon Valley Bank (“SVB” each of SVB and AmeriSourceBergen, a “Senior Lender” and collectively, the “Senior Lender”), and Lessee’s obligations to SVB under the SVB Facility are secured by a lien on all property and assets of Lessee and which lien is a Permitted Lien hereunder. Additionally, Lessor agrees that, within twelve (12) months following the date of this Master Lease, upon Lessor’s consent, not to be unreasonably withheld, conditioned or delayed, Lessee may enter into a term loan facility, in an amount not exceeding $2,000,000 (the “Term Facility”) with SVB, and Lessee’s obligations to SVB under the Term Facility will be secured by a lien on all property and assets of Lessee and which lien is a Permitted Lien hereunder. Lessor acknowledges and agrees that the security interest in the Collateral granted to Lessor hereunder is subject and subordinate to the security interests of the Senior Lenders and will be subject and subordinate to the security interest of SVB with regard to the Term Facility when the same is executed. Lessor agrees to execute and deliver such agreements and documents as may be reasonably requested by Lessee from time to time which set forth the subordination described in this subsection (e) upon terms reasonably required by each of the Senior Lenders and are reasonably acceptable to Lessor (the “Subordination Agreement(s)”). Lessee hereby irrevocably authorizes Lessor at any time and from time to time to file in any Uniform Commercial Code

jurisdiction any Financing Statements and amendments thereto as Lessor deems necessary in its sole discretion in order to perfect Lessor’s security interest in the Collateral.

5. INSTALLATION, MAINTENANCE AND REPAIR.

8. ACCEPTANCE, WARRANTIES, LIMITATION OF LIABILITY.

ANY SUPPLY CONTRACT WITH SUPPLIER OR (4) TORT OR UNDER THE UCC OR OTHER APPLICABLE LAW WITH RESPECT TO THE EQUIPMENT, INCLUDING ANY WARRANTY OF TITLE THERETO, FREEDOM FROM TRADEMARK, PATENT OR COPYRIGHT INFRINGEMENT, LATENT DEFECTS (WHETHER OR NOT DISCOVERABLE), CONDITIONS, MANUFACTURE, DESIGN, SERVICING OR COMPLIANCE WITH APPLICABLE LAW AND (B) ALL OBLIGATIONS, LIABILITY, RIGHTS AND REMEDIES, HOWSOEVER ARISING UNDER ANY APPLICABLE LAW WITH RESPECT TO THE MATTERS WAIVED AND DISCLAIMED, INCLUDING FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO THE EQUIPMENT, OR ANY LIABILITY OF LESSEE OR LESSOR TO ANY THIRD PARTY, OR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (AS SUCH TERMS ARE USED IN SECTION 2-719(3) OF THE UCC, OR OTHER APPLICABLE LAW); all such risks, as between Lessor and Lessee, are to be borne by Lessee; Lessee acknowledges and agrees that the Equipment has been selected by Lessee on the basis of its own judgment, and Lessee has not asked for, been given or relied upon the skill or opinion of, or any statements, representations, guaranties or warranties by, Lessor or its agents or representatives in relation thereto. Lessee understands and acknowledges that Lessor is not in the business of manufacturing, assembling or supplying Equipment or otherwise in the business of being a vendor.

9. REPRESENTATION AND WARRANTIES. Lessee represents and warrants for the benefit of Lessor as of the date of acceptance of any item of Equipment for lease under this Lease:

(a) Each Co-Lessee’s exact legal name is that indicated in the Perfection Certificate and on the cover and signature pages and in the Definitions section hereof. Each Co-Lessee is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction indicated on the cover page hereof and is duly qualified to do business and is in good standing in that jurisdiction and in every jurisdiction where the failure to so qualify would materially and adversely affect such Co-Lessee; each Co-Lessee has adequate corporate or limited liability company power, as applicable, and authority to enter into and perform this Lease. The cover page hereof accurately sets forth each Co-Lessee’s organizational identification number issued by the state of its incorporation or organization, as applicable, or accurately states that such Co-Lessee has no such number.

(b) The Lease Documents have been duly authorized, executed and delivered by Lessee and constitute valid, legal and binding agreements of Lessee enforceable in accordance with their terms.

(d) There are no pending or threatened actions or proceedings to which Lessee is a party, or otherwise affecting Lessee, before any Governmental Authority, which if determined against Lessee, either

individually or in the aggregate, would materially adversely affect the financial condition of Lessee, or the ability of Lessee to perform its obligations under, or comply with the terms of the Lease Documents.

(f) No consent, approval or other authorization of or by any Governmental Authority is required in connection with the consummation by Lessee of the transactions contemplated by the Lease Documents.

(g) With respect to the Equipment, under the Applicable Law of the state(s) in which such Equipment is to be located, such Equipment consists solely of personal property and not fixtures.

(k) Lessee has obtained all Permits necessary to possess and use the Equipment in compliance with and as contemplated by this Lease.

(l) The Collateral is located at the addresses set forth on the Perfection Certificate.

(m) Lessee has the right in or the power to transfer the Collateral and it has good and marketable title to the Collateral, subject to no Liens except for Permitted Liens. The security interest granted in Section 4(e) of this Master Lease constitutes a valid and enforceable first priority Lien in the Collateral subject to Permitted Liens.

10. CONDITIONS PRECEDENT.

certificate of formation, as applicable, and (iv) the signatures of the officers or agents of such Co-Lessee authorized to execute and deliver this Master Lease and other instruments, agreements and certificates on behalf of such Co-Lessee;

(ii) A Co-Investment Agreement;

(iii) A Warrant agreement (the “Warrant”) issued by Lessee to Lessor to purchase up to $300,000 of Series B Convertible Preferred Stock, par value $0.0001 per share;

(iv) An opinion of counsel;

(v) The Perfection Certificate;

(vi) Payment of the Facility Fee and all expenses of closing (subject to the caps described in Section 21 hereof; and

(vii) Such other documents or items reasonably required by Lessor.

(i) The Rental Schedule, properly executed on behalf of Lessee, and each of the schedules thereto properly completed;

(ii) Certificates of insurance required hereunder;

(iv) A true and correct copy of any and all purchase and sale or other agreements pursuant to which Lessee is acquiring the Equipment; and

(v) Such other documents or items reasonably required by Lessor.

11. COVENANTS OF LESSEE. Lessee covenants and agrees as follows:

(vii) with regard to the each Senior Facility, copies of the borrowing base certificates and compliance certificates furnished to the Senior Lender, within thirty (30) days of the closing of each month, (viii) promptly upon receipt, statements of accounts from Lessee’s primary banking institutions and investment accounts managers; and (ix) such other financial information, operating reports and budgets as Lessor may reasonably require. Lessee shall furnish the information described in this Section 11(a) until Lessee has paid in full all amounts due to Lessor hereunder. Lessee may discharge its obligations under clauses (i) and (ii) of this Section 11(a) by furnishing to Lessor within ten (10) days after the date on which they are filed, all regular periodic reports, forms and other filings required to be made by Lessee and including its financial statements to any governmental agency or instrumentality under Applicable Law.

(d) Lessee will not change its type of organization, jurisdiction of organization or other legal structure.

(i) If Lessee prepays all or substantially all of its Indebtedness owing to a third party, whether or not such prepayment is voluntarily or involuntarily made by Lessee before or after any default

or acceleration of such obligations, Lessee shall pay, at Lessor’s option and immediately upon notice from Lessor, all or any part of Lessee’s obligations owing to Lessor hereunder.

(k) Lessee shall not create, incur, assume or be liable for any Indebtedness, other than Permitted Indebtedness.

12. ASSIGNMENT AND TRANSFER.

15. TAXES AND FEES.

18 hereof. Lessor agrees fully to cooperate with Lessee in any such contest, and Lessee agrees promptly to indemnify Lessor for all reasonable expenses incurred by Lessor in the course of such cooperation. Taxes or claim therefor shall be paid by Lessee, subject to refund proceedings, if failure to pay would adversely affect the rights, title and/or interest of Lessor in the Equipment or otherwise hereunder. Provided that no Default or Event of Default has occurred and is then continuing, if Lessor obtains a refund of any Taxes that have been paid (by Lessee, or by Lessor and for which Lessor has been fully reimbursed by Lessee), Lessor shall promptly pay to Lessee the amount of such refund actually received.

17. DEFAULT AND REMEDIES.

(i) The non-payment when due, of any installment of Rent or any other sum required hereunder to be paid by Lessee;

(ii) The failure by Lessee to perform any other material term, obligation, covenant or condition under any of the Lease Documents that is not cured within twenty (20) days after such failure;

(iv) The subjection of a substantial part of Lessee’s property or any part of the Equipment or Collateral to any Lien other than a Permitted Lien;

(v) Lessee shall be in default under the terms of any contract with any Person requiring the payment of money by Lessee in an amount greater than or equal to $75,000;

effect, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period exceeding 60 days; or (B) an order for relief pursuant to such applicable debtor/creditor law shall have been entered against Lessee;

(b) Upon the continuance of any of the above Events of Default, Lessor may declare this Lease in Default. Such declaration shall be by written notice to Lessee and if so stated in such notice shall apply to all Equipment and Collateral subject hereto. Lessee hereby authorizes Lessor at any time thereafter to enter with or without legal process any premises where the Equipment or Collateral may be and take possession thereof. Lessee shall, without further demand, forthwith pay to Lessor an amount that is equal to any unpaid Rent due on or before Lessor has declared this Lease to be in Default plus, as liquidated damages for loss of a bargain and not as a penalty, an amount equal to the Stipulated Loss Value of the Equipment on the date the Lessor shall declare this Lease in Default (in each case together with any Excess Use Fee measured from the date the Lease is declared to be in Default to the date payment is received by Lessor). After an Event of Default, to the extent requested by Lessor and subject to the requirements of any Senior Facility, Lessee shall return the Equipment and deliver the Collateral to Lessor in good repair, condition and working order, ordinary wear and tear resulting from permitted use thereof under the terms of this Lease alone excepted, to a location within the continental United States of America specified by Lessor for sale and application as described below. Such Equipment and Collateral shall be carefully crated and shipped, freight, drayage and re-assembly costs prepaid and properly insured, by Lessee, and Lessee shall bear all risk of loss until the Equipment and Collateral are delivered to Lessor or its designee. Lessor shall be entitled to sell the Equipment and Collateral at private or public sale within or without the United States of America, in bulk or in parcels with or without notice, without having the Equipment or Collateral present at the place of sale, with the privilege of becoming the purchaser thereof. Lessor shall be entitled to lease, otherwise dispose of or keep idle all or any part of the Equipment or Collateral, and Lessor may use Lessee’s premises for any or all of the foregoing without liability for rent, costs, damages or otherwise. Lessor shall also be entitled to draw on any letter of credit or take any deposit, in either case theretofore provided by Lessee to secure its obligations hereunder. The proceeds of sale, lease or other disposition of the Equipment and Collateral, if any, or the proceeds of any letter of credit or deposit, if any, shall be applied (1) to all of Lessor’s costs, charges and expenses incurred in taking, removing, holding, repairing and selling, leasing or otherwise disposing of the Equipment and/or Collateral (including, without limitation, reasonable attorneys’ fees, costs and disbursements); then, (2) to the extent not previously paid by Lessee, to pay Lessor the Stipulated Loss Value for the Equipment as set forth above and all other sums then payable by Lessee hereunder, including any unpaid Rent; then, (3) any remaining amounts to the Lessee. Lessee shall pay any deficiency for amounts described in clauses (1) and (2) above forthwith. The exercise of any of the foregoing remedies by Lessor shall not constitute a termination of this Lease unless Lessor so notifies Lessee in writing.

(c) Upon the continuance of any Event of Default, Lessor shall be entitled to (i) require the Lessee to assemble the Collateral and make it available at the principal place of business or other places of business of the Lessee to allow the Lessor to take possession or dispose of the Collateral, (ii) subrogate to all of the Lessee’s interests, rights and remedies in respect to the Collateral, including the right to stop delivery, and (upon notice from the Lessee that the account debtor has returned, rejected, revoked acceptance of or failed to return the goods or that the goods have been reconsigned or diverted) the right to take possession of and to sell or dispose of the goods, (iii) make any payments or do any acts it considers necessary or reasonable to protect its security interest in the Collateral, and/or (iv) take and maintain possession of and sell or otherwise dispose of any or all of the Collateral at public or private sale, and if notice of such sale or of other action by the Lessor is required by Applicable Law, ten (10) day notice after the date of any public sale or the date after which Lessor enters into any private sale shall constitute sufficient notice of Lessor’s disposition of the Collateral, and further provided, (A) the Lessor has no obligation to refurbish or otherwise prepare the Collateral for sale, (B) the Lessor may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral, (C) the Lessor may specifically disclaim any warranties of title or the like, and (D) in the event the Lessor sells any Collateral upon credit, the Lessee will be credited only with the principal portion of payments actually made by the purchaser, received by Lessor and applied to the purchase of the Collateral. Lessee grants Lessor the right to enter and occupy any of its premises, without charge, to exercise any of Lessor’s rights or remedies.

(d) Power of Attorney. Lessee irrevocably appoints Lessor as its lawful attorney-in-fact, to be effective upon the occurrence and during the continuance of an Event of Default, to: (i) endorse Lessee’s name on any checks or other forms of payment or security; (ii) sign Lessee’s name on any invoice or bill of lading for any account or drafts against account debtors; (iii) settle and adjust disputes and claims about the accounts directly with account debtors, for amounts and on terms Lessor determines reasonable; (iv) make, settle and adjust all claims of Lessee’s insurance policies; and (v) transfer the Collateral into the name of the Lessor or any third party as Applicable Law permits. Lessee hereby appoints Lessor as its lawful attorney-in-fact to sign Lessee’s name on any document necessary to perfect or to continue the perfection of any security interest regardless of whether an Event of Default has occurred until all obligations under the Lease Documents have been satisfied in full. Lessor’s foregoing appointment as Lessee’s attorney-in-fact, and all of Lessor’s rights and powers, coupled with an interest, are irrevocable until all obligations under the Lease Documents have been fully repaid and performed.

(e) Remedies Cumulative. No remedy referred to in this Section 17 is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity.

(f) Waiver of Notices. Notice of default and presentment, demand, protest and notice of dishonor as to any provision of any of the Lease Documents or any other agreement or instrument, notice of acceptance of Lease Document, notice of Leases made, Equipment or Collateral received or delivered or other action taken in reliance hereon and all other demands and notices of any description is hereby waived by the Lessee, except as may be otherwise specifically provided in this Master Lease.

defects (whether or not discoverable or discovered by Lessor or Lessee). Lessor shall give Lessee prompt notice of any Claim or liability hereby indemnified against and Lessee shall be entitled to control the defense thereof. Notwithstanding anything to the contrary in this Master Lease, the foregoing indemnity requirements shall survive the termination of this Master Lease and the Rental Schedules.

21. MISCELLANEOUS.

(a) Lessee has paid a proposal fee in the amount of Six Thousand Dollars ($6,000) which shall be applied towards Lessor’s transaction, legal and due diligence expenses, not to exceed such amount; provided, however, the foregoing expense limitation shall not include Lessor’s reasonable lien search and lien filing costs which will be paid by Lessee. In addition, Lessee shall pay the Facility Fee at the time Lessor funds the Facility Amount (to be netted from the proceeds of the funding of the Facility Amount).

AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, LESSEE AGREES THAT THIS MASTER LEASE IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE LEASE BETWEEN THE PARTIES, WHICH SUPERSEDES ALL PROPOSALS OR PRIOR AGREEMENTS OR UNDERSTANDINGS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS MASTER LEASE.

(k) Lessee agrees to execute such documents and take such further actions as Lessor may reasonably request in order to assure Lessor the full benefit of the rights granted Lessor hereunder.

22. DEFINITIONS AND RULES OF CONSTRUCTION.

(a) The following terms when capitalized as below, have the following meanings:

“Basic Rent”: the rental installments due from Lessee pursuant to Section 3(b) hereof for the Primary Term in the amounts and on the dates as provided in the applicable Rental Schedule, which

amount shall be equal to 3.8147% of Total Equipment Cost for the period of time from the Primary Term Commencement Date to the Primary Term Expiration Date.

“Basic Rent Payment Date”: as set forth in a Rental Schedule with respect to the items of Equipment set forth therein.

“Basic Rent Per Month”: as set forth on a Rental Schedule with respect to the items of Equipment set forth therein.

“Claims”: as set forth in Section 18 of this Master Lease.

“Co-Investment Agreement”: the Co-Investment Agreement dated as of the date hereof between Lessor and Lessee, as the same may be amended, supplemented or modified from time to time.

“Code”: the United States Internal Revenue Code of 1986, as amended.

“Collateral”: as defined in Section 4(e) of this Master Lease.

“Default”: except when inconsistent with the context of any provision hereof, an event that, but for the lapse of time or the giving of notice or both, would constitute an Event of Default.

“Dollars” or “$”: United States of America dollars.

“Equipment”: with respect to each Rental Schedule, the property described therein, which shall in any event be acceptable to Lessor, together with all appurtenances, parts, instruments, accessories and furnishings that are from time to time incorporated in the Equipment, or having been so incorporated, are later removed therefrom, unless title and/or interest thereto is expressly released by Lessor, and all replacements of, and additions, improvements and accessions to any and all of the foregoing, and all books, records, maintenance logs and general intangibles (including all patents, copyrights and trade secrets) relating thereto; and, when used in the context of Lessor’s title and/or interest in the Equipment (whether relating to the creation, grant, perfection, release, priority, enforcement or application of proceeds thereof), shall also include all other property in which Lessor is granted a security interest hereunder or under the Rental Schedule.

“Event of Default”: any event of default as specified in Section 17(a) of the Master Lease.

“Facility Fee”: shall mean one percent (1.0%) of the Facility Amount.

“Federal”: the Federal government of the United States of America.

“Financing Statement”: a Uniform Commercial Code financing statement on Form UCC-1 pursuant to the UCC.

“GAAP”: United States generally accepted accounting principles, applied consistently.

“Intellectual Property”: shall mean any of the following, whether now owned or hereafter acquired and wherever located:

(e) Any trademark and service mark rights, slogans, trade dress, and tradenames, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Lessee connected with and symbolized by such trademarks (collectively, the “Trademarks”);

(f) All mask works or similar rights available for the protection of semiconductor chips, now owned or hereafter acquired (collectively, the “Mask Works”); and

(g) All amendments, extensions, renewals and extensions of any of the Copyrights, Trademarks, Patents, or Mask Works.

“Interim Term”: the period from and including the Interim Term Commencement Date to but not including the Primary Term Commencement Date.

“Interim Term Commencement Date”: the date on which Lessee accepts the Equipment as set forth in a Rental Schedule.

“Interim Term Rent”: as set forth in a Rental Schedule, which amount shall be equal to interest at 11.5% per annum on the Total Equipment Cost for the period of time from and including the Interim Term Commencement Date to but excluding the Primary Term Commencement Date.

“Interim Term Rent Payment Date”: as set forth in a Rental Schedule with respect to the items of Equipment set forth therein.

“Lease”: this Master Lease Agreement as incorporated by reference by an applicable Rental Schedule.

“Lessee”: collectively, CareKinesis, Inc., a Delaware corporation, J. A. Robertson, Inc., a California corporation, and Capstone Performance Systems, LLC a Delaware limited liability company, and their successors and permitted assigns.

“Lessor”: Eastward Fund Management, LLC, a Delaware limited liability company, its successors and assigns.

“Master Lease”: This Master Lease Agreement.

“Perfection Certificate”: the Perfection Certificate dated as of the date hereof delivered by Lessee to Lessor.

“Permitted Indebtedness”: shall mean

(a) Lessee’s obligations under this Master Lease;

(b) Indebtedness in the form of purchase money financing existing on the date hereof and shown on the Perfection Certificate to (i) Boston Financial & Equity Corporation, provided that such Indebtedness does not exceed $808,100; and (ii) Liberty Bell Bank, provided that such Indebtedness does not exceed $620,000;

(c) Indebtedness to Lessor’s affiliate Eastward Capital Partners V, L.P. pursuant to that certain Master Lease Agreement No. 531 dated as of March 23, 2012;

(e) Indebtedness to AmeriSourceBergen pursuant to the AmeriSourceBergen Facility provided that such Indebtedness does not exceed $3,875,000 at any time;

(f) Indebtedness to SVB pursuant to the SVB Facility provided that such Indebtedness does not exceed $7,000,000 at any time;

(g) Indebtedness to SVB pursuant to the Term Facility provided that such Indebtedness does not exceed $2,000,000 at any time;

(h) Other Indebtedness existing on the date hereof and shown on the Perfection Certificate;

(i) Indebtedness subordinated to Lessee’s obligations hereunder (in the case of such indebtedness incurred after the date hereof, pursuant to a subordination agreement executed by the creditor of such subordinated indebtedness, in a form acceptable to Lessor) (“Subordinated Debt”);

(j) Indebtedness in respect of capital lease obligations and purchase money obligations for fixed or capital assets not included in subsection (h) above, provided that the aggregate original principal amount of such Indebtedness that may be incurred by the Lessee during any calendar year is limited to $1,000,000;

(k) Indebtedness to trade creditors in the ordinary course of business;

(l) Indebtedness secured by Permitted Liens; and

(m) Extensions, refinancings, modifications, and amendments and restatements of any items of Permitted Indebtedness in (a) through (k) above; provided that the principal amount of such Permitted Indebtedness is not increased from the amount existing on the date of this Master Lease, and any Lien related to such Permitted Indebtedness does not attach to any property that was not subject to a Lien in favor of the holder thereof prior to the extension, refinancing, modification or amendment and restatement, except in either case as to the Indebtedness described in (a) above.

“Permitted Lien”: (a) Lessor’s and Lessee’s respective rights, titles and/or interests in the Equipment and Collateral, (b) Liens securing Permitted Indebtedness other than Permitted Indebtedness described in clauses (d) and (k) above, (c) Liens for the benefit of mechanics, material men, laborers, employees or suppliers and similar Liens arising by operation of Law and incurred by Lessee in the ordinary course of business for sums that are not yet delinquent or are being contested in good faith by negotiations or by appropriate proceedings that suspend the collection and enforcement thereof (provided that the existence of such Lien while such negotiations or proceedings are pending does not involve any substantial risk (as determined by Lessor in its discretion) of the sale, forfeiture or loss of the Equipment, any Collateral or any interest therein, and for which adequate reserves have been provided in accordance with GAAP), (d) Liens arising out of any judgments or awards against Lessee that have been adequately bonded to protect Lessor’s interest or with respect to which a stay of execution has been granted pending an appeal or a proceeding for review; and (e) Liens for taxes so long as Lessee is challenging such taxes in good faith.

“Person”: any individual, corporation, partnership, joint venture, or other legal entity or a Governmental Authority.

“Primary Term”: as set forth in the Rental Schedule.

“Primary Term Commencement Date”: as set forth in the Rental Schedule.

“Primary Term Expiration Date”: as set forth in the Rental Schedule.

“Rent”: collectively, the Interim Term Rent, Basic Rent, and the Supplemental Rent.

“Stipulated Loss Value”: the product of the Total Equipment Cost and the applicable percentage (“Stipulated Loss Factor”) set forth on the Schedule of Stipulated Loss Value attached as Exhibit 3 hereto.

“Supplemental Rent”: all amounts, liabilities and obligations (other than Basic Rent and Interim Term Rent) that Lessee assumes or agrees to pay to Lessor, including, without limitation, if applicable, Stipulated Loss Value, and payments constituting indemnities, reimbursements, expenses, Excess Use Fee and other charges payable pursuant to the terms of this Lease.

“Supplier”: the Person from whom Lessor is purchasing or has purchased the Equipment.

“Term”: the period for which Equipment is leased under the Lease, including the Interim Term and the Primary Term.

“Total Equipment Cost”: the actual amount funded under the Facility Amount as set forth in the Rental Schedule for the Equipment subject to such Rental Schedule.

“Transferee”: any Person to whom Lessor or any subsequent transferee thereof has assigned any or all of its rights, obligation, title and/or interest under the Lease.

23. CO-LESSEE ASPECTS. Each Co-Lessee shall be jointly and severally liable to Lessor for each and every representation, warranty, and covenant of Lessee or any other Co-Lessee made in or pursuant to

this Master Lease. Insofar as Lessor is concerned, the act of any Co-Lessee shall bind all other Co-Lessees, and Lessor (and Lessee’s and each Co-Lessee’s rights and duties to Lessor) shall not be affected by any notice or action to the contrary. Lessor shall be fully protected, as to Lessee and all Co-Lessees, in dealing with any Co-Lessee. A Co-Lessee’s obligations under this Master Lease shall not be affected by any action taken or not taken by Lessor, by any lack of prior enforcement or retention of any rights against Lessee or any other Co-Lessee, by any illegality, unenforceability, or invalidity of any other Co-Lessee’s obligations, or by any circumstance or condition, including, without limitation, (i) any termination, amendment, or modification of, or supplement to this Master Lease or any action by any other Co-Lessee with respect to the Equipment or the Collateral, (ii) any failure or delay to confirm or comply with any term of this Master Lease, (iii) any waiver, consent, extension, indulgence, compromise, settlement, release, or other action or inaction under or in respect of this Master Lease, or any exercise or non-exercise of any right, remedy, power, or privilege under or in respect of this Master Lease; (iv) any voluntary or involuntary bankruptcy, insolvency, or similar proceeding with respect to any other Co-Lessee, (v) any limitation on the liability or obligations of Lessor or any other Co-Lessee, or any discharge, termination, cancellation, frustration, invalidity or unenforceability of this Master Lease, (vi) any defect in title to or condition of the Equipment or the Collateral, (vii) any merger or consolidation of any other Co-Lessee into or with any other corporation; and (viii) any other condition or circumstance which might otherwise constitute a legal or equitable discharge, release, defense, or limitation arising out of any laws of the United States of America or any state thereof. Each Co-Lessee agrees that Lessor shall not be required to file suit or proceed to obtain or assert against any other Co-Lessee or its assets, either before or as a condition to enforcing such first Co-Lessee’s liability under this Master Lease. Nothing in this section shall limit any Co-Lessee’s rights against any other Co-Lessee as to contribution, reimbursement, use of the Equipment or the Collateral, or otherwise. Lessor shall have no duty to see any allocation of use or benefits of the Equipment or Collateral, regardless of any notice or request from any Co-Lessee, all relations between or among Co-Lessees being an internal matter for them and not for Lessor.

24. ADDITIONAL PROVISIONS. The schedules and exhibits attached hereto and any riders signed by the parties hereto and attached hereto are hereby incorporated by reference.

This space intentionally left blank

IN WITNESS WHEREOF, Lessor and Lessee have caused this Master Lease Agreement to be duly executed, all as of the date first above written.

	LESSOR:

	Eastward Fund Management, LLC


	By:	/s/ illegible
		Authorized Person


	CO-LESSEES:

	CareKinesis, Inc.


	By:	/s/ Brian Adams

	Title:	Chief Financial Officer

	J. A. Robertson, Inc.


	By:	/s/ Brian Adams

	Title:	Chief Financial Officer

	Capstone Performance Systems, LLC


	By:	/s/ Brian Adams

	Title:	Chief Financial Officer

[Signature Page to Master Lease]

Exhibit 1

RENTAL SCHEDULE AND ACCEPTANCE CERTIFICATE NO. 617-01

(the “Rental Schedule”)

DATED AS OF April , 2014 TO MASTER LEASE AGREEMENT NO. 617

DATED AS OF April , 2014 (the “Master Lease”)

LESSOR:	Eastward Fund Management, LLC	LESSEE:	CareKinesis, Inc.
	432 Cherry Street		J.A. Robertson, Inc.
	West Newton, MA 02465		Capstone Performance Systems, LLC
			100 Marter Ave., Ste. 309
			Moorestown, NJ 08057

1. LEASE TERM, PAYMENT DATES

2. EQUIPMENT DESCRIPTION

See attached Schedule A.

The Total Equipment Cost is $3,000,000

3. BASIC RENT

Interim Term Rent Per Month for Interim Term Months 1 through and including 12: $28,750.00 [11.5% per annum on the Total Equipment Cost]

Basic Rent Per Month for Primary Term Months 13 through and including 42: $114,441.27 [3.8147% of Total Equipment Cost]

The first payment of Interim Term Rent is due and payable on May 1, 2014 and is payable monthly in advance thereafter on the first Business Day of each month during the Interim Term (each, an “Interim Term Rent Payment Date”) to and including the Interim Term Rent Payment Date of April 1, 2015 [12 months]. Lessor and Lessee agree that if the closing date occurs on any day prior to the first day of a month, the Interim Term Rent that is payable on May 1, 2014 shall also include an additional Interim Term Rent payment for the period prior to such date calculated at the daily rate set forth above in the amount of $ . The first payment of Basic Rent is due and payable on May 1, 2015 and is payable monthly in advance thereafter on the first Business Day of each month during the Primary Term (each, a “Basic Rent Payment Date”) to and including the Basic Rent Payment Date October 1, 2017 [30 months].

4. TERM COMMENCEMENT

Interim Term: 12 months.

Primary Term: 30 months.

The Interim Term Commencement Date of this Rental Schedule is April , 2014. The Primary Term Commencement Date of this Rental Schedule is May1, 2015. The Primary Term Expiration Date is October 31, 2017.

5. ACCEPTANCE CERTIFICATE

6. ENTIRE AGREEMENT, MODIFICATION AND WAIVERS, EXECUTION IN COUNTERPARTS.

LESSOR		LESSEE

Eastward Fund Management, LLC		CareKinesis, Inc.


By:		By:

Title:	Authorized Person	Title:

		J.A. Robertson, Inc.


		By:

		Title:

		Capstone Performance Systems, LLC


		By:

		Title:

Exhibit 2

Collateral

(d) any and all additions to any of the foregoing, and any and all replacements, products and proceeds

(including insurance proceeds) of any of the foregoing.

“Intellectual Property” includes:

(a) Any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, including source code and object code, now or hereafter existing, created, acquired or held (collectively, the “Copyrights”);

(d) All patents, patent applications and like protections including, without limitation, improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same (collectively, the “Patents”), and all inventions and innovation, regardless of whether patentable or unpatentable;

“Trademarks”);

(f) All mask works or similar rights available for the protection of semiconductor chips, now owned or hereafter acquired (collectively, the “Mask Works”);

(g) All amendments, extensions, renewals and extensions of any of the Copyrights, Trademarks, Patents, or Mask Works; and

(h) any and all additions to any of the foregoing, and any and all replacements, products and proceeds

(including insurance proceeds) of any of the foregoing.

EX-10.9 22 a2226891zex-10_9.htm EX-10.9

Exhibit 10.9

LEASE AGREEMENT

228 Strawbridge Associates, LLC
Landlord

AND

Tabula Rasa HealthCare, Inc.
Tenant

228 Strawbridge Drive
Moorestown, New Jersey

LEASE AGREEMENT

INDEX

§ Section		Page

1. Basic Lease Terms and Definitions		2
2. Premises		3
3. Use		4
4. Term; Possession		4
5. Rent		4
6. Operating Expenses; Property Taxes		4
7. Services		5
8. Insurance; Waivers; Indemnification		6
9. Maintenance and Repairs		7
10. Compliance		7
11. Signs		8
12. Alterations		9
13. Mechanics’ Liens		9
14. Landlord’s Right of Entry		10
15. Damage by Fire or Other Casualty		10
16. Condemnation		10
17. Quiet Enjoyment		11
18. Assignment and Subletting		11
19. Subordination; Mortgagee’s Rights		11
20. Tenant’s Certificate; Financial Information		12
21. Surrender		12
22. Defaults - Remedies		13
23. Tenant’s Authority		14
24. Liability		14
25. Miscellaneous		15
26. Notices		16
27. Security Deposit		16
28. Utilities		17
29. Rights Reserved to Landlord		17
30. Parking		18

Additional Provisions:

1(q) Contingency for Certain Leases.

31. Furniture.

Addendum 1 — Total Building Lease Provisions

THIS LEASE AGREEMENT is made by and between 228 Strawbridge Associates, LLC, a New Jersey limited liability company (“ Landlord”) and Tabula Rasa HealthCare, Inc., a corporation organized under the laws of Delaware (“ Tenant”), and is dated as of the date on which this Lease has been fully executed by Landlord and Tenant.

1. Basic Lease Terms and Definitions.

(a) Premises: Suite 100, as shown on Exhibit “A”, consisting of approximately 24,855 rentable square feet on the first (1st) floor of the Building.

(b) Building: Approximately 74,565 rentable square feet

Address: 228 Strawbridge Drive, West Route 38, Moorestown, NJ 08057

(c) Term: 11 years and 3 months from the Commencement Date of this Lease, plus any additional period of time then remaining until the date of expiration of the last to expire of the Total Building Leases.

(d) Commencement Date: The date the Work by Landlord described in Exhibit “E” is Substantially Complete and the Premises delivered to Tenant, estimated to be approximately February 1, 2016 or 12 weeks after the building permit for the Work is issued by the local municipality as described in Exhibit “ E”, if later (“Estimated Commencement Date”), subject to adjustment as provided in Section 4 and Exhibit “ E”, or the date Tenant takes possession of the Premises, if earlier. At the request of Landlord or Tenant, the parties will execute and deliver a written confirmation of the Commencement Date, Expiration Date and applicable Base Rent period dates for purposes of Section 1(f).

(e) Expiration Date: The last day of the Term.

(f) Base Rent: Beginning on the Commencement Date of this Lease and thereafter payable in monthly installments at the applicable rate for the then-current period of the Term of this Lease, determined with reference to the Commencement Date of the Phase I Lease, as follows:

Period of Term From	To	Base Rent/RSF		Annual Base Rent		Monthly Base Rent
Commencement Date of this Lease	Month 12 of Phase I Lease	$	19.20	$	477,216.00	$	39,768.00
Month 13 of Phase I Lease	Month 24 of Phase I Lease	$	19.70	$	489,643.50	$	40,803.63
Month 25 of Phase I Lease	Month 36 of Phase I Lease	$	20.20	$	502,071.00	$	41,839.25
Month 37 of Phase I Lease	Month 48 of Phase I Lease	$	20.70	$	514,498.50	$	42,874.88
Month 49 of Phase I Lease	Month 60 of Phase I Lease	$	21.20	$	526,926.00	$	43,910.50
Month 61 of Phase I Lease	Month 72 of Phase I Lease	$	21.45	$	533,139.75	$	44,428.31
Month 73 of Phase I Lease	Month 84 of Phase I Lease	$	21.70	$	539,353.50	$	44,946.13
Month 85 of Phase I Lease	Month 96 of Phase I Lease	$	21.95	$	545,567.25	$	45,463.94
Month 97 of Phase I Lease	Month 108 of Phase I Lease	$	22.20	$	551,781.00	$	45,981.75
Month 109 of Phase I Lease	Month 120 of Phase I Lease	$	22.45	$	557,994.75	$	46,499.56
Month 121 of Phase I Lease	Month 132 of Phase I Lease	$	22.70	$	564,208.50	$	47,017.38
Month 133 of Phase I Lease	Month 144 of Phase I Lease or Expiration Date if earlier	$	22.95	$	570,422.25	$	47,535.19
If applicable: Month 145 of Phase I Lease	Month 156 of Phase I Lease or Expiration Date if earlier	$	23.20	$	576,636.00	$	48,053.00

Provided there is no Event of Default by Tenant, Tenant’s obligation to pay Base Rent for the first 3 full calendar months of the Term following the Commencement Date of this Lease will be abated under this Lease only. If the Commencement Date is not the first day of the month, Tenant will pay Base Rent for such partial month beginning on the Commencement Date, prorated at the applicable rate for the first full month of the Term on the basis of the number of days included in such partial month.

Notwithstanding the abatement of Base Rent provided for the first 3 full calendar months of the Term following the Commencement Date of this Lease as set forth herein above, Tenant’s obligation to pay Additional Rent including,

without limitation, costs and charges for electricity and other utilities pursuant to Rider 2, shall not be waived, released or abated and shall commence as of the Commencement Date or any earlier occupancy of the Premises.

(g) Base Year: 2016

(h) Tenant’s Share: 33.34% (also see Definitions)

(i) Use: General office and a closed door (non-retail) pharmacy.

(j) Security Deposit: $500,000.00 Letter of Credit. See Section 27.

(k) Parking Spaces: 107 unassigned parking stalls.

(l) Addresses For Notices:

Landlord:	Tenant:	Before the Commencement Date:
c/o Keystone Property Group, L.P.		110 Marter Avenue, Suite 309
125 E. Elm Street, Suite 400		Moorestown, NJ 08057
Conshohocken, PA 19428
Attn: Senior Vice President of Operations		On or after the Commencement Date: Premises

(m) Broker: CBRE, Inc.

(n) Additional Defined Terms: See Rider 1 for the definitions of other capitalized terms.

(o) Contents: The following are attached to and made a part of this Lease:

Rider 1 — Additional Definitions	Exhibits:	“ A” — Plan showing Premises
Rider 2 — Utilities		“ B” — Building Rules
Addendum 1 — Total Building Lease Provisions		“ C” — Estoppel Certificate Form
		“ D” — Cleaning Schedule
		“ E” — Work Letter
		“ F” — Term Extension Option
		“ G” — SNDA

(p) Contingency for Certain Leases: The effectiveness of this Lease is conditioned upon Landlord and Tenant entering into three (3) leases (including this Lease, collectively, the “ Total Building Leases”) which, together with this Lease, shall cover all of the rentable area of the Building. The Total Building Leases include (i) a lease for 24,855 rentable square feet on the second (2nd) floor of the Building (the “ Phase I Lease”), (ii) a lease for 24,855 rentable square feet on the first (1st) floor of the Building (the “ Phase II Lease”), and (iii) a lease for 24,855 rentable square feet on the third (3rd) floor of the Building (the “ Phase III Lease”). This Lease is the Phase II Lease. If any or all of the Total Building Leases have not been executed and delivered by and between Landlord and Tenant within five (5) days of the date of this Lease, for any reason or no reason, then Landlord and Tenant each shall have the right, without the consent of the other party, to terminate this Lease upon written notice to such other party, whereupon neither party hereunder shall have any further right or remedy against the other (except for obligations and liabilities which this Lease expressly provides are to survive termination or expiration of this Lease). Notwithstanding the foregoing, the aforesaid termination right shall expire automatically upon the satisfaction of the condition set forth in the first sentence of this paragraph. Upon request by either Landlord or Tenant, the parties will execute and deliver written confirmation of the satisfaction of such condition and release of the termination right set forth in this paragraph; however, any failure or refusal to furnish such written confirmation will not affect the rights or obligations of the parties.

access to the Building. As of the date of this Lease an electronic door lock system has been installed at the Building with key card access for admission outside of Normal Business Hours. Tenant shall be provided with the number of key cards equal to the number of employees of Tenant working at the Premises from time to time, and a reasonable number of additional cards for other Agents of Tenant as requested by Tenant from time to time, provided that Tenant shall pay Landlord $7.50 per key card provided to Tenant and any replacement key cards.

3. Use. Tenant shall occupy and use the Premises only for the Use specified in Section l above. Tenant shall not knowingly permit any conduct or condition which may endanger, disturb or otherwise interfere with the normal operations of any other tenant or occupant of the Building or Property or with the management of the Building or Property. Tenant may use all Common Areas only for their intended purposes. Landlord shall have exclusive control of all Common Areas at all times, except as provided in Addendum 1 if the terms and provisions of Addendum 1 are applicable.

4. Term; Possession. The Term of this Lease shall commence on the Commencement Date and shall end on the Expiration Date, unless sooner terminated in accordance with this Lease. If Landlord is delayed in delivering possession of all or any portion of the Premises to Tenant as of the Commencement Date, Tenant will take possession on the date Landlord delivers possession, which date will then become the Commencement Date (and the Expiration Date will be extended so that the length of the Term remains unaffected by such delay). Landlord shall not be liable for any loss or damage to Tenant resulting from any delay in delivering possession due to the holdover of any existing tenant or other circumstances outside of Landlord’s reasonable control. If Substantial Completion of the Work is delayed beyond April 1, 2016 (“ Outside Date”) for reasons other than Tenant Delay, Tenant shall be entitled to a credit in the amount of one (1) day of Base Rent for each day of delay that occurs beyond the Outside Date until June 1, 2016 or the date of Substantial Completion, whichever is earlier, such credit to be applied against Base Rent first coming due until said credits are fully realized by Tenant. If Substantial Completion of the Work is delayed beyond June 1, 2016 (“ Final Date”) for reasons other than Tenant Delay, Tenant shall be entitled to a credit in the amount of two (2) days of Base Rent for each day of delay that occurs beyond the Final Date until the date of Substantial Completion, such credit to be applied against Base Rent first coming due until said credits are fully realized by Tenant. The Outside Date and the Final Date shall each be extended by one day for each one day that construction is delayed due to Tenant Delay. The rights of Tenant to a rent credit or abatement under the terms and conditions of this paragraph shall be Tenant’s sole and exclusive remedies for any such failure or delay on the part of Landlord in connection with completing the Work and delivery of the Premises to Tenant by the date or dates set forth herein above and Tenant shall not have and hereby expressly waives any right to terminate this Lease by reason thereof. Landlord shall not be liable for any loss or damage to Tenant resulting from any delay in delivering possession.

5. Rent. Tenant agrees to pay to Landlord, without demand, deduction or offset except as otherwise set forth in this Lease, Base Rent, Excess Operating Expenses, Excess Property Taxes and all other Additional Rent for the Term. Tenant shall pay the Monthly Rent, in advance, on the first day of each calendar month during the Term, at Landlord’s address designated in Section 1 above unless Landlord designates otherwise with at least thirty (30) days advance notice in writing to Tenant of such changed designation; provided that Monthly Rent for the first full month shall be paid at the signing of this Lease. If the Commencement Date is not the first day of the month, the Monthly Rent for that partial month shall be apportioned on a per diem basis and shall be paid on or before the Commencement Date. Tenant shall pay Landlord a service and handling charge equal to the lesser of 5% of any Rent not paid within 5 days after the date due or the maximum amount permitted by applicable Laws. In addition, any Rent, including such charge, not paid within 5 days after the due date will bear interest at the Interest Rate from the date due to the date paid. Tenant shall pay before delinquency all taxes levied or assessed upon, measured by, or arising from the conduct of Tenant’s business, use or occupancy of the Premises, Tenant’s leasehold estate or Tenant’s property. Additionally, and notwithstanding anything to the contrary, Tenant shall pay to Landlord all sales, use, transaction privilege, or other excise tax that may at any time be levied or imposed upon, or measured by, any Rent or other amount payable by Tenant or any subtenant or occupant under this Lease.

be deemed to have waived the right to contest the statement. Tenant shall have the right, within 60 days of receipt of Landlord’s statement of actual Operating Expenses and Property Taxes for any calendar year, at Tenant’s expense, during Normal Business Hours, at a reasonable location to be determined by Landlord, and upon reasonable prior written notice to Landlord, to conduct an inspection of Landlord’s books and records of the actual Operating Expenses and Property Taxes for the calendar year in question, using Tenant’s employees or a certified professional accountant reasonably approved by Landlord (the “ Inspection Right”). Tenant shall not employ, in connection with the exercise of its Inspection Right under this Section 6, any person or entity who is to be compensated in whole or in part, on a contingency fee basis or a recovery basis. Tenant shall supply Landlord with a copy of any written results of such audit and inspection within 15 days from receipt thereof. Provided that Landlord agrees in good faith with Tenant’s inspection, and in the event Tenant’s inspection shall disclose that the actual Tenant’s Share of Operating Expenses or Property Taxes set forth in Landlord’s statement was overstated, then Tenant shall receive a credit against the installments of Additional Rent next falling due in the amount of any such overstatement. If Tenant has underpaid the actual Additional Rent, Tenant shall promptly pay to Landlord any amounts due. If, due to errors by Landlord disclosed by Tenant’s inspection, the amount Tenant overpaid for the year in question was more than 5% of the total Operating Expenses and Property Taxes for the Property for the year in question, Landlord shall also pay the reasonable costs of Tenant’s inspection, not to exceed the amount of the overpayment by Tenant. In the event that Landlord disagrees with Tenant’s inspection, Landlord may require that a third party certified public accountant (“Landlord’s CPA”), reasonably selected by Landlord and reasonably acceptable to Tenant, be engaged to perform an inspection of the Landlord’s books and records with respect to any items of Operating Expenses and Property Taxes which are in dispute, and the results of such inspection by Landlord’s CPA shall be final and binding on the parties. Landlord shall bear the costs of such inspection by Landlord’s CPA; provided, however, that if the inspection by Landlord’s CPA determines Tenant did not overpay by more than 5% of the total Operating Expenses and Property Taxes for the Property for the year in question, Tenant shall pay the costs of Landlord’s CPA’s inspection to Landlord. Landlord’s and Tenant’s obligation to pay any overpayment or deficiency due the other pursuant to this Section shall survive the expiration or termination of this Lease. Notwithstanding any other provision of this Lease to the contrary, Landlord may, in its reasonable discretion, determine from time to time the method of computing and allocating Operating Expenses, including the method of allocating Operating Expenses to various types of space in the Building or Property to reflect any disparate levels of services provided to different types of space, and in computing and allocating Property Taxes to reflect any tax parcels included in the Property. If the Building or Property is not fully occupied during any period, or if services are not fully utilized by any tenant, Operating Expenses which vary based on occupancy or utilization for such period will be grossed-up to the amount that Operating Expenses would have been if the Building and Property had been fully occupied and services had been fully utilized for such period as determined by Landlord.

7. Services. Landlord will furnish the following services for the normal use and occupancy of the Premises for general office purposes: (i) electricity at least in the capacity and standards set forth on Rider 2 as the Electricity Standards, (ii) heating and air conditioning in season during Normal Business Hours at least in the capacity and standards set forth on Schedule 7(ii), (iii) hot and cold drinking water, (iv) trash removal and janitorial services pursuant to the cleaning schedule attached as Exhibit “D” and (v) such other services Landlord reasonably determines are appropriate or necessary. If Tenant requests, and if Landlord is able to furnish, services in addition to those identified above, including heating or air conditioning outside of Normal Business Hours, Tenant shall pay Landlord’s reasonable charge for such supplemental services, which shall be in addition to all costs and charges for electricity payable by Tenant under Section 28. If because of Tenant’s density, equipment or other Tenant circumstances, Tenant puts demands on the Building Systems in excess of those of the typical office user in the Building, Landlord may install supplemental equipment and meters at Tenant’s expense. Landlord shall have the exclusive right to select, and to change, the companies providing such services to the Building, Property or Premises. Any wiring, cabling or other equipment necessary to connect Tenant’s telecommunications equipment shall be Tenant’s responsibility, and shall be installed in a manner approved by Landlord. Subject to compliance with Section 12 below, Tenant shall be permitted to install supplemental HVAC equipment in the Building from time to time; and notwithstanding anything to the contrary, Tenant, at its sole cost, shall Maintain all supplemental HVAC equipment and systems installed by Tenant in good condition and compliant with all Laws. Landlord shall not be responsible or liable for any interruption in such services, nor shall such interruption affect the continuation or validity of this Lease; provided, however, that notwithstanding any contrary provision of this Lease, if Tenant is prevented from using for the conduct of its business, and does not use for the conduct of its business, the Premises or any material portion thereof, for 10 consecutive Business Days (the “ Eligibility Period”) as a result of any failure, interruption or cessation of any of the utilities and services required to be provided to the Premises or Tenant by Landlord, provided such failure is not due to any act or omission Tenant or its Agents, and is due to direct physical loss or damage affecting the Building or Property, then from the 11th consecutive Business Day that Tenant is so prevented from using or occupying for the conduct of its business and does not so use or occupy for the conduct of its business, the Premises or any material portion thereof, and continuing for such time that Tenant continues to be so prevented from using or occupying for the conduct of its business, and does not so use or occupy for the conduct of its business, the Premises or a material portion thereof, Tenant’s obligation to pay Base Rent and Additional Rent shall be equitably abated or reduced, as the case may be, in the proportion that the rentable square feet of the portion of the Premises that Tenant is prevented from using and occupying, and does not so use or occupy, bears to the total rentable square feet of the Premises. The conditional abatement of Base Rent and Additional Rent on the terms and conditions of the preceding sentence

shall be Tenant’s sole and exclusive remedy against Landlord and its Agents for any such failure, cessation or interruption of utilities or services.

8. Insurance; Waivers; Indemnification.

(a) Landlord shall maintain insurance against loss or damage to the Building and Property with coverage for perils as set forth under the “ Causes of Loss-Special Form” or equivalent property insurance policy in an amount equal to the full insurable replacement cost of the Building and Property (excluding coverage of Tenant’s personal property, furniture, fixtures, equipment and any Alterations made by Tenant) subject to a commercially reasonable deductible (as of the date of this Lease, $10,000 per occurrence), and such other insurance, including rent loss coverage, as Landlord may reasonably deem appropriate or as any Mortgagee may require.

(b) Tenant, at its expense, shall keep in effect: (i) commercial general liability insurance, including blanket contractual liability insurance, covering Tenant’s use of the Property, with such coverages and limits of liability as Landlord may reasonably require, but not less than a $1,000,000 combined single limit with a $3,000,000 general aggregate limit (which general aggregate limit may be satisfied by an umbrella liability policy) for bodily injury or property damage; however, such limits shall not limit Tenant’s liability hereunder, and (ii) property insurance, insuring against any loss or damage to the property of T enant and any Alterations made by Tenant, arising out of fire or other casualty coverable by a standard “ Causes of Loss-Special Form” property insurance policy with, in the case of Tenant, such endorsements and additional coverages as are considered good business practice in Tenant’s business. Each policy shall name Landlord, Landlord’s manager and any other associated or affiliated entity as their interests may appear and at Landlord’s request, any Mortgagee(s), as additional insureds, shall be written on an “ occurrence” basis and not on a “ claims made” basis and shall be endorsed to provide that it is primary to and not contributory to any policies carried by Landlord and, if commercially available, that it shall not be canceled or reduced (below the limits required hereunder) without prior notice to Landlord in accordance with the policy provisions. The insurer shall be authorized to issue such insurance, licensed to do business and admitted in the state in which the Property is located and rated at least A VII in the most current edition of Best’s Insurance Reports. Tenant shall deliver to Landlord on or before the Commencement Date or any earlier date on which Tenant accesses the Premises, and at least 30 days prior to the date of each policy renewal, a certificate of insurance evidencing such coverage.

(c) Landlord and Tenant each waive, and release each other from and against, all claims for recovery against the other for any loss or damage to the property of such party arising out of fire or other casualty coverable by a standard “ Causes of Loss-Special Form” property insurance policy with, in the case of Tenant, such endorsements and additional coverages as are considered good business practice in Tenant’s business, even if such loss or damage shall be brought about by the fault or negligence of the other party or its Agents; provided, however, such waiver by Landlord shall not be effective with respect to Tenant’s liability described in Sections 9(b) and 10(d) below. This waiver and release is effective regardless of whether the releasing party actually maintains the insurance described above in this subsection and is not limited to the amount of insurance actually carried, or to the actual proceeds received after a loss. Each party shall have its insurance company that issues its property coverage waive any rights of subrogation, and shall have the insurance company include an endorsement acknowledging this waiver, if necessary. Except to the extent caused by the gross negligence or willful misconduct of Landlord, Tenant assumes all risk of damage of Tenant’s property within the Property, including any loss or damage caused by water leakage, fire, windstorm, explosion, theft, act of any other tenant, or other cause.

(d) Subject to subsection (c) above, and unless caused by the negligence or willful misconduct of Landlord or its Agents, Tenant will indemnify, defend, and hold harmless Landlord and its Agents from and against any and all claims, actions, damages, liability and expense (including fees of attorneys, investigators and experts, through all appeals) which may be asserted against, imposed upon, or incurred by Landlord or its Agents and arising out of or in connection with loss of life, personal injury or damage to property in or about the Premises or arising out of the occupancy or use of the Property by Tenant or its Agents or occasioned wholly or in part by any act or omission of Tenant or its Agents, whether prior to, during or after the Term. Tenant’s obligations pursuant to this subsection shall survive the expiration or termination of this Lease.

(e) Subject to subsection (c) above, and unless caused by the negligence or willful misconduct of Tenant or its Agents, Landlord will indemnify, defend, and hold harmless Tenant and its Agents from and against any and all claims, actions, damages, liability and expense (including fees of attorneys, investigators and experts, through all appeals) which may be asserted against, imposed upon, or incurred by Tenant or its Agents arising out of or in connection with any loss of life, personal injury or damage to property occurring at the Property, to the extent caused by the negligence or willful misconduct of Landlord or its Agents, whether prior to, during or after the Term. Landlord’s obligations pursuant to this subsection shall survive the expiration or termination of this Lease.

9. Maintenance and Repairs.

(a) Landlord shall Maintain the Building, including the Premises, the Common Areas, the Building Systems and any other improvements owned by Landlord located on the Property. If Tenant becomes aware of any condition that is Landlord’s responsibility to Maintain, Tenant shall promptly notify Landlord of the condition.

(b) Tenant at its sole expense shall keep the Premises in a neat and orderly condition and Maintain the property of Tenant and any Alterations made by Tenant. Alterations, repairs and replacements to the Property, including the Premises, made necessary because of Tenant’s Alterations or installations, any use or circumstances special or particular to Tenant, or any act or omission of Tenant or its Agents shall be made at the sole expense of Tenant to the extent not covered by any applicable insurance proceeds paid to Landlord; provided, however, that the maximum amount of Tenant’s liability for loss or damage to property under this provision shall not exceed the deductible amount under any policy of property insurance maintained by Landlord covering the Property.

10. Compliance.

(a) Tenant will, at its expense, promptly comply with all Laws pertaining to the Premises or Tenant’s use or occupancy at any time on and after the Commencement Date. Tenant will pay any taxes or other charges by any authority on Tenant’s property or trade fixtures or relating to Tenant’s use of the Premises. Neither Tenant nor its Agents shall use the Premises in any manner that under any Law would require Landlord to make any Alteration to or in the Building, Property or Common Areas (without limiting the foregoing, Tenant shall not use the Premises in any manner that would cause the Premises, Building or Property to be deemed a “ place of public accommodation” under the ADA if such use would require any such Alteration). Landlord is responsible for Substantial Completion of the Work and delivery of the Premises and Common Areas on the Commencement Date in compliance with all Laws, including without limitation, the then current ADA, except that Tenant shall be responsible for the costs of correcting any non-compliance caused or created due to (i) any Alterations or installations by Tenant or its Agents (including Tenant’s furniture, fixtures and equipment) or (ii) Tenant’s particular manner of use and occupancy of the Premises as distinguished from office use generally, or any of them. Tenant shall be responsible for compliance with the ADA, and any other Laws regarding accessibility, with respect to the Premises.

(b) Tenant will comply, and will cause its Agents to comply, with the Building Rules.

(c) Tenant shall not knowingly do anything or fail to do anything which will increase the cost of Landlord’s insurance or which will prevent Landlord from procuring policies (including commercial general liability) from companies and in a form reasonably satisfactory to Landlord. If any breach of the preceding sentence by Tenant causes the rate of fire or other insurance to be increased, Tenant shall pay the amount of such increase as Additional Rent within 30 days after being billed.

(d) Tenant represents and warrants that its North American Industrial Classification System (NAICS) Number, as currently designated by the United States Environmental Protection Agency and the United States Occupational Safety and Health Administration, is 62. Tenant represents and warrants that its operation on the Premises does not and will not now or hereafter constitute an Industrial Establishment (as that term is defined under ISRA) subject to the requirements of ISRA. Tenant shall not, without the prior written consent of Landlord, intentionally or unintentionally generate, use, store, handle, spill or discharge any hazardous material at or in the vicinity of the Premises or the Building, in such manner and shall not use the Premises in any manner, or engage in any transaction, which will cause the Premises or the Building to be classified as an Industrial Establishment. Tenant’s failure to abide by the terms of this Section shall be restrainable by injunction. Tenant shall promptly provide all information requested from time to time by Landlord for the preparation of any notices, submissions or affidavits (including without limitation ISRA Non-Applicability Affidavits and Remediation Plans), and, when requested by Landlord, shall sign such notices, submissions or affidavits, in order to comply with the laws, requirements or regulations of any local, state or federal authority concerning environmental matters or hazardous materials. Tenant shall promptly supply to Landlord true and complete copies of (i) all notices, correspondence and submissions made by Tenant to, or received by Tenant from, the ISRA Bureau, NJDEP, the United States Environmental Protection Agency, the United States Occupational Safety and Health Administration, or any other local, state or federal authority concerning environmental matters or hazardous materials pertaining to the Premises or the Property, and (ii) all sampling and test results from any samples or tests taken at or in the vicinity of the Premises. The parties recognize that no adequate remedy at law may exist for Tenant’s breach of this Section. Accordingly, Landlord may obtain specific performance of any provision of this Section. Without limiting the foregoing, Tenant agrees that (i) no activity will be conducted on the Premises that will use or produce any Hazardous Materials, except for activities which are part of the ordinary course of Tenant’s business and are conducted in accordance with the terms and conditions of this Section and all Environmental Laws (“ Permitted Activities”); (ii) the Premises will not be used for storage of any Hazardous Materials, except for materials used in the Permitted Activities which are properly stored in a manner and location complying with all Environmental Laws; (iii) no portion of the Premises or Property will be used by Tenant or Tenant’s Agents for disposal of Hazardous Materials; (iv) Tenant will deliver to Landlord copies of all Material Safety Data Sheets and other written information prepared by manufacturers, importers or suppliers of any chemical; and (v) Tenant will immediately notify Landlord of any violation by Tenant or Tenant’s Agents of any Environmental Laws or the release or suspected release of Hazardous Materials in,

under or about the Premises, and Tenant shall immediately deliver to Landlord a copy of any notice, filing or permit sent or received by Tenant with respect to the foregoing. If at any time during or after the Term, any portion of the Property is found to be contaminated by Tenant or Tenant’s Agents or subject to conditions prohibited in this Lease caused by Tenant or Tenant’s Agents, Tenant will indemnify, defend and hold Landlord harmless from all claims, demands, actions, liabilities, costs, expenses, reasonable attorneys’ fees (through all appeals), damages and obligations of any nature arising from or as a result thereof, and Landlord shall have the right to direct remediation activities, all of which shall be performed at Tenant’s cost. Tenant’s obligations pursuant to this subsection shall survive the expiration or termination of this Lease. Landlord represents and warrants to Tenant, as of the date of this Lease, to the extent of Landlord’s knowledge, (i) that no Hazardous Materials are present at the Premises or Property except in a condition complying with Environmental Laws and (ii) that no violation of any Environmental Laws is existing and uncured at the Premises or Property. Landlord shall indemnify, defend, and hold harmless Tenant and its Agents from and against any and all claims, actions, damages, liability and expense (including reasonable fees of attorneys, investigators and experts, through all appeals) which may be asserted against, imposed upon, or incurred by the Tenant or its Agents as the result of any violation of Environmental Laws existing as of the date of this Lease and pertaining to the Property, or the presence of any Hazardous Materials at the Premises or the Property in a condition not in compliance with Environmental Laws on or before the Commencement Date, unless such violation of Environmental Laws or presence of Hazardous Materials shall be caused by Tenant or Tenant’s Agents.

11. Signs.

(a) Landlord will furnish Tenant, at Tenant’s cost, with (i) Building standard identification signage on the interior Building directory, (ii) a single building standard identification sign located on or beside the main entrance door to the Premises and (iii) a single sign panel identifying Tenant on the existing monument sign for the Building. Tenant shall pay all of Landlord’s costs and expenses for such signs and signage, as additional rent, within 10 days of Landlord’s invoice. Tenant shall not place any signs on the Property without the prior consent of Landlord, other than signs that are located wholly within the interior of the Premises and not visible from the exterior of the Premises. Tenant shall maintain all signs installed by Tenant in good condition. Tenant shall remove its signs at the termination of this Lease, shall repair any resulting damage, and shall restore the Property to its condition existing prior to the installation of Tenant’s signs.

(b) Landlord will furnish Tenant, at Tenant’s cost, with a single sign identifying Tenant on the exterior of the Building, subject to the terms and conditions hereof including the following:

(i) The design, materials, dimensions, location, method of attachment and illumination, if any, of such sign panel shall be in accordance with applicable laws, codes and ordinances and shall comply with Landlord’s standards for the Building. Tenant’s sign plans and specifications shall be subject to Landlord’s reasonable review and consent. Tenant’s sign plans and specifications will be prepared by Tenant at Tenant’s expense and submitted to Landlord for its review within a reasonable time, not to exceed 30 days, after the date of this Lease. If Landlord requires changes to Tenant’s sign plans and specifications submitted to Landlord after execution of this Lease, then Tenant shall promptly make the changes required by Landlord and resubmit the same for Landlord’s further review, the above process to continue until Tenant’s sign plans and specifications are acceptable to Landlord. Once Landlord has given its consent to Tenant’s sign plans and specifications, no further changes shall be made thereto without Landlord’s review and consent as provided above.

(ii) Tenant’s rights with respect to the exterior Building sign will be subject to any necessary governmental permits and approvals. Once Tenant’s plans and specifications for such sign are acceptable to Landlord, Landlord or its contractor will apply to local governmental authority for necessary permits, provided that no variance, conditional use or other zoning approval shall be required therefor. Any required variance, conditional use or other zoning approval shall be subject to Landlord’s consent, which may be withheld in Landlord’s sole discretion.

(iii) Landlord will be responsible for the fabrication, delivery and installation of such sign, at Tenant’s cost as provided herein.

(iv) Landlord will Maintain Tenant’s sign during the Term, at Tenant’s cost as provided herein.

(v) At the expiration or sooner termination of the Term or Tenant’s right to occupy the Premises if earlier, or if Tenant permanently vacates or abandons the Premises at any time, Tenant (or at Landlord’s option, Landlord) shall remove such sign and repair all damage to the Building caused by such removal (including filling holes and restoring fascia) to Landlord’s reasonable satisfaction, at Tenant’s cost as provided herein.

(vi) If required by Landlord, Tenant’s sign may be relocated. Landlord may temporarily remove such sign for up to thirty (30) days to facilitate any necessary maintenance, repairs and Alterations to the Building from time to time.

(vii) Any alterations, modifications, replacements or substitutions of Tenant’s sign or the plans and specifications therefor shall be subject to Tenant first submitting to Landlord Tenant’s proposed sign plans and specifications therefor and obtaining Landlord’s written consent.

(viii) If Tenant’s sign is not in compliance with the provisions hereof, or if Tenant permanently vacates or abandons the Premises at any time, Landlord may require Tenant to cover or remove all of its signs, to repair any resulting damage, and to restore the Building to its condition existing prior to the installation of Tenant’s signs, at Tenant’s cost.

(ix) Tenant’s signage, as contemplated by this Section 11(b), shall only be for the identification of Tenant as an occupant of the Building, and it is not intended that the Building be named after Tenant. This right granted by Landlord to Tenant to have its name on the Building is personal to Tenant and shall not be assigned or transferred except in the event of a Transfer of all of the Total Building Leases to an Affiliate.

(x) Tenant shall pay all of Landlord’s reasonable costs and expenses for such signs and signage, as Additional Rent to Landlord, within 30 days of Landlord’s invoice. All such costs and expenses shall be in addition to (and not included in) Operating Expenses.

(xi) Tenant’s rights to have its signage on the Building exterior is conditioned upon all of the Total Building Leases covering all of the rentable space in the Building remaining in full force and effect. Notwithstanding that Landlord and Tenant expect to enter into three (3) Total Building Leases including this Lease, and this signage provision is expected to be repeated in all of the Total Building Leases, the same shall not be deemed to permit more than one (1) single sign on the Building exterior to be installed with respect to all of the spaces covered by the Total Building Leases (including this Lease) at any time.

12. Alterations. Except for non-structural Alterations that (a) do not exceed $150,000.00 in the aggregate, (b) are not visible from the exterior of the Premises if the Tenant leases less than all of the Building, or are not visible from the exterior of the Building if Tenant leases the entire Building, and (c) do not affect any Building System or any structural elements of the Building, including, without limitation, the foundation, load-bearing walls, windows, façade, and roof of the Building (collectively, “ Structural Alterations”), Tenant shall not make or permit any Alterations in or to the Premises without first obtaining Landlord’s consent, which consent shall not be unreasonably withheld. Landlord’s consent with respect to Structural Alterations may be withheld in Landlord’s sole discretion. With respect to any Alterations made by or on behalf of Tenant (whether or not the Alteration requires Landlord’s consent): (i) not less than 10 days prior to commencing any Alteration, if required for the applicable Alteration, Tenant shall deliver to Landlord the plans, specifications and necessary permits for the Alteration, if any, together with certificates evidencing that Tenant’s contractors and subcontractors have adequate insurance coverage naming Landlord, Landlord’s manager and any other associated or affiliated entity as their interests may appear as additional insureds, (ii) Tenant shall obtain Landlord’s prior written approval of any contractor or subcontractor, such approval not to be unreasonably withheld, conditioned or delayed, (iii) the Alteration shall be constructed with new materials, in a good and workmanlike manner, and in compliance with all Laws and the plans and specifications delivered to, and, if required above, approved by Landlord, (iv) Tenant shall pay Landlord all reasonable out of pocket costs and expenses in connection with Landlord’s review of Tenant’s plans and specifications, and of any supervision or inspection of the construction Landlord deems necessary, and (v) if the total anticipated cost of the Alterations exceeds $150,000.00, upon Landlord’s request Tenant shall, prior to commencing any Alteration, provide Landlord reasonable security against liens arising out of such construction. Any Alteration by Tenant shall be the property of Tenant until the expiration or termination of this Lease; at that time without payment by Landlord the Alteration shall remain on the Property and become the property of Landlord unless Landlord gives notice to Tenant to remove it, in which event Tenant will remove it, will repair any resulting damage and will restore the Premises to the condition existing prior to Tenant’s Alteration. Within ten (10) days after Tenant’s notice to Landlord of the proposed Alteration if no Landlord consent is required, or as part of Landlord’s consent if such consent is required, Landlord will notify Tenant whether Tenant is required to remove the Alterations at the expiration or termination of this Lease. Tenant may install its trade fixtures, furniture and equipment in the Premises from time to time without Landlord’s consent, provided that the installation and removal of them will not affect any structural portion of the Building or Property, any Building System or any other equipment or facilities serving the Building or any occupant, and otherwise subject to the applicable provisions of the Lease including this Section.

improvements or alterations made by or on behalf of Tenant hereunder, shall promptly notify the contractor making such improvements to the Premises of this provision exculpating the Property and Landlord’s interest in the Property from any such liens. Further, nothing in this Lease is intended to authorize Tenant to do or cause any work to be done or materials to be supplied for the account of Landlord, all of the same to be solely for Tenant’s account and at Tenant’s risk and expense. Throughout the Term “ mechanics’ lien” is used to include any lien, encumbrance or charge levied or imposed upon all or any portion of, interest in or income from the Property on account of any mechanic’s, laborer’s, materialman’s or construction lien or arising out of any debt or liability to or any claim of any contractor, mechanic, supplier, materialman or laborer and shall include any mechanic’s notice of intention to file a lien given to Landlord or Tenant, any stop order given to Landlord or Tenant, any notice of refusal to pay naming Landlord or Tenant and any injunctive or equitable action brought by any person claiming to be entitled to any mechanic’s lien.

14. Landlord’s Right of Entry. Tenant shall permit Landlord and its Agents to enter the Premises at all reasonable times following reasonable notice (except in an emergency) to inspect, Maintain, or make Alterations to the Premises or Property, to exhibit the Premises for the purpose of sale or financing, and, during the last 12 months of the Term, to exhibit the Premises to any prospective tenant. Landlord will make reasonable efforts not to inconvenience Tenant in exercising such rights, and the terms and conditions of Section 7 will apply with respect to any interruption of Tenant’s utilities due to Landlord’s entry or other exercise of its rights hereunder, but Landlord shall not be liable for any interference with Tenant’s occupancy resulting from Landlord’s entry or other exercise of its rights hereunder.

15. Damage by Fire or Other Casualty. If the Premises or Common Areas shall be damaged or destroyed by fire or other casualty, Tenant shall promptly notify Landlord, and Landlord, subject to the conditions set forth in this Section, shall repair such damage and restore the Premises or Common Areas to substantially the same condition in which they were immediately prior to such damage or destruction, but not including the repair, restoration or replacement of the fixtures, equipment, or other property of Tenant, or any Alterations installed by or on behalf of Tenant. Landlord shall notify Tenant, within 30 days after the date of the casualty, as estimated by a independent third party architect hired by Landlord, of the estimated time to restore the Premises and Common Areas to the condition required above and the date upon which Landlord anticipates commencing such restoration and the date upon which Landlord anticipates Substantial Completion of the restoration (“ Restoration Notice”). If the Restoration Notice indicates that the restoration will take more than 180 days from the date of the casualty to complete either Landlord or Tenant (unless the damage was intentionally caused by Tenant) may terminate this Lease effective as of the date of casualty by giving notice to the other within 10 days after receipt of the Restoration Notice. In addition, if Landlord either (i) fails to commence the restoration within 180 days from the date of the casualty, or (ii) fails to complete the restoration within 1 year from the date of the casualty, for any reason other than any Force Majeure event, Tenant may elect to terminate this Lease by giving notice to Landlord; provided however if Landlord completes the restoration of the Premises within thirty (30) days of the date of Tenant’s notice, Tenant’s termination notice provided in accordance with this sentence shall be deemed void and Tenant shall not have any right to cancel this Lease under this sentence. If a casualty occurs during the last 12 months of the Term and the Restoration Notice indicates that it will take more than thirty (30) days to restore, Landlord or Tenant may terminate this Lease unless Tenant has the right to extend the Term for at least 3 more years and does so within 30 days after the date of the Restoration Notice. Landlord’s obligation to restore the Premises after a fire or other casualty shall be subject to the consent and rights of any Mortgagee under its Mortgage and related loan documents. Moreover, Landlord may terminate this Lease if the loss is not covered by the insurance required to be maintained by Landlord under this Lease, or if any Mortgagee shall not permit the application of adequate insurance proceeds for repair or restoration, or if the cost to repair and restore the damage would exceed 50% of the insurable replacement cost of the Building. Tenant will receive an abatement of Base Rent, Excess Operating Expenses and Excess Property Taxes to the extent the Premises are rendered untenantable as a result of the casualty. If this Lease is not terminated as provided above, upon completion of Landlord’s repairs to the Premises Tenant shall repair and restore the fixtures, equipment, and other property of Tenant, and any Alterations installed by or on behalf of Tenant.

16. Condemnation. If (a) all of the Premises are Taken, (b) any part of the Premises is Taken and the remainder is insufficient in Landlord’s reasonable opinion for the reasonable operation of Tenant’s business, or (c) any of the Property is Taken, and, in Landlord’s opinion, (i) the Taking would have a material adverse effect on the value of the Property or on the expenses of the Property, or (ii) it would be impractical or the condemnation proceeds are insufficient to restore the remainder, or if any Mortgagee shall not permit the application of the condemnation proceeds necessary for repair or restoration, then this Lease shall terminate as of the date the condemning authority takes possession. Landlord’s obligation to restore the Premises after a condemnation shall be subject to the consent and rights of any Mortgagee under its Mortgage and related loan documents. If this Lease is not terminated, Landlord shall restore the Building to a condition as near as reasonably possible to the condition prior to the Taking, the Base Rent shall be abated for the period of time all or a part of the Premises is untenantable in proportion to the square foot area untenantable, and this Lease shall be amended appropriately. The compensation awarded for a Taking shall belong to Landlord. Except for any relocation benefits to which Tenant may be entitled or the value assigned to Tenant’s personal property so Taken, Tenant hereby assigns all claims against the condemning authority to Landlord, including, but not limited to, any claim relating to Tenant’s leasehold estate.

17. Quiet Enjoyment. Landlord covenants that Tenant, provided no Event of Default is ongoing hereunder, shall have quiet and peaceful possession of the Premises as against anyone claiming by or through Landlord, subject, however, to the terms of this Lease, matters of public record and any mortgage to which this Lease shall be subordinate. Landlord represents and warrants to Tenant that (a) it has the full right and power to execute and perform this Lease and to grant and convey the estate demised herein, (b) it owns the Building and the Property and (c) the Building is not located on a tax parcel with any other building.

18. Assignment and Subletting.

(a) Except as provided in Section (b) below, Tenant shall not enter into nor permit any Transfer voluntarily or by operation of law, without the prior consent of Landlord, which consent shall not be unreasonably withheld. Without limitation, Tenant agrees that Landlord’s consent shall not be considered unreasonably withheld if (i) the proposed transferee is an existing tenant of Landlord or an affiliate of Landlord, (ii) the business, business reputation, or creditworthiness of the proposed transferee is unacceptable to Landlord, (iii) Landlord or an affiliate of Landlord has comparable space available for lease by the proposed transferee, (iv) Tenant is in default under this Lease or any act or omission has occurred which would constitute a default with the giving of notice and/or the passage of time, (v) less than all of the Total Building Leases (including this Lease) are being Transferred simultaneously to the same Transferee or (vi) the Transfer would result in less than all of the rentable area of the Building being leased to the same Tenant. A consent to one Transfer shall not be deemed to be a consent to any subsequent Transfer. In no event shall any Transfer relieve Tenant from any obligation under this Lease. Landlord’s acceptance of Rent from any person shall not be deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any Transfer. Any Transfer not in conformity with this Section 18 shall be void at the option of Landlord.

(b) Landlord’s consent shall not be required in the event of any Transfer by Tenant to (i) any Affiliate of Tenant, (ii) any successor to Tenant by merger, consolidation or reorganization, (iii) any purchaser of all or substantially all of the outstanding stock of Tenant or (iii) any acquirer of all or substantially all of the assets of Tenant as a going concern, provided that (1) the Transferee has positive annual cash flow and liquid assets sufficient to pay and perform its obligations as the substitute tenant under this Lease and a tangible net worth not less than the greater of One Hundred Million Dollars ($100,000,000) and the net worth of Tenant as of the date of this Lease (after giving effect to the transaction in question), as evidenced by audited financial statements prepared in accordance with generally accepted accounting principles consistently applied and certified by an executive officer of the successor or purchaser as applicable, and (2) Tenant provides Landlord notice of the Transfer within 15 days after the effective date. The effectiveness of any such Transfer shall be further conditioned upon the Tenant and the Transferee having executed and delivered to Landlord in forms reasonably acceptable to Landlord (A) in the case of a merger, consolidation or reorganization, or change of control, a ratification of the Lease acknowledging that Tenant continues to be bound by all of the terms and conditions of this Lease, or (B) in the case of an assignment and assumption of the Lease, a written assignment and assumption of Tenant’s obligations under this Lease, including the transferee’s agreement to be bound by all of the terms and conditions of this Lease, or (C) in the case of a sublet of the Premises, a written sublease agreement including the subtenant’s agreement to be bound by all of the terms and conditions of this Lease applicable to the sublet area of the Premises. Tenant shall also deliver to Landlord supporting documentation evidencing the satisfaction of the terms and conditions of this Section and a certificate of insurance evidencing the Transferee’s compliance with the insurance requirements of Tenant under the Lease.

(c) The provisions of subsection (a) above notwithstanding, if Tenant proposes to Transfer all of the Premises for all or substantially all of the remainder of the Term (other than a Transfer permitted without Landlord’s consent as provided in subsection (b) above), Landlord may terminate this Lease, either conditioned on execution of a new lease between Landlord and the proposed transferee or without that condition. If Tenant proposes to enter into a Transfer of less than all of the Premises (other than a Transfer permitted without Landlord’s consent as provided in subsection (b) above), Landlord may amend this Lease to remove the portion of the Premises to be transferred, either conditioned on execution of a new lease between Landlord and the proposed transferee or without that condition. If this Lease is not so terminated or amended, Tenant shall pay to Landlord, immediately upon receipt, the excess of (i) all compensation received by Tenant for the Transfer over (ii) the Rent allocable to the Premises transferred.

(d) If Tenant requests Landlord’s consent to a Transfer, Tenant shall provide Landlord, at least 15 days prior to the proposed Transfer, current financial statements of the transferee certified by an executive officer of the transferee, a complete copy of the proposed Transfer documents, and any other information Landlord reasonably requests. Immediately following any approved assignment or sublease, Tenant shall deliver to Landlord an assumption agreement reasonably acceptable to Landlord executed by Tenant and the transferee, together with a certificate of insurance evidencing the transferee’s compliance with the insurance requirements of Tenant under this Lease. Tenant agrees to reimburse Landlord for reasonable administrative and attorneys’ fees in connection with the processing and documentation of any Transfer for which Landlord’s consent is requested.

19. Subordination; Mortgagee’s Rights.

(a) Within 30 days after the date of execution of this Lease, Landlord shall deliver to Tenant a subordination, non-disturbance, and attornment agreement executed by the holder of any Mortgage affecting the Premises in the form attached to this Lease as Exhibit “ G” (the “ SNDA”). Tenant accepts this Lease subject and subordinate to any Mortgage now or in the future affecting the Premises; provided, however, that the subordination of this Lease to any future Mortgage shall be conditioned on the holder of such Mortgage executing and delivering to Tenant another SNDA in the form of Exhibit “ G” or if not in the form of Exhibit “ G”, in another form of subordination, non-disturbance, and attornment agreement that is reasonably acceptable to Tenant.

(b) In the event of any transfer of Landlord’s interest in the Premises, termination of any underlying lease of premises which include the Premises, re-entry or dispossession of Landlord or the purchase of the Premises or Landlord’s interest therein in a foreclosure sale or by deed in lieu of foreclosure under any Mortgage or pursuant to a power of sale contained in any Mortgage, then in any of such events, Tenant shall, at the request of such Mortgagee, transferee or purchaser of Landlord’s interest, attorn to and recognize the Mortgagee, transferee or purchaser of Landlord’s interest or underlying lease, as the case may be (any such person, “ Successor Landlord”), as “ Landlord” under this Lease for the balance then remaining of the Term, and thereafter this Lease shall continue as a direct Lease between such Successor Landlord, as “ Landlord”, and Tenant, as “ Tenant”. This clause shall be self-operative, but within 10 days after request, Tenant shall execute and deliver any further instruments confirming the subordination of this Lease and any further instruments of attornment that the Mortgagee may reasonably request, provided that the same include the SNDA provisions described in subsection (a) above. However, any Mortgagee may at any time subordinate its Mortgage to this Lease, without Tenant’s consent, by giving notice to Tenant, and this Lease shall then be deemed prior to such Mortgage without regard to their respective dates of execution and delivery; provided that such subordination shall not affect any Mortgagee’s rights with respect to condemnation awards, casualty insurance proceeds, intervening liens or any right which shall arise between the recording of such Mortgage and the execution of this Lease.

20. Estoppel Certificates; Financial Information.

(a) Within 10 days after Landlord’s request from time to time, (a) Tenant shall execute, acknowledge and deliver to Landlord, for the benefit of Landlord, Mortgagee, any prospective Mortgagee, and any prospective purchaser of Landlord’s interest in the Property, an estoppel certificate in the form of attached Exhibit “C” (or other form requested by Landlord), modified as necessary to accurately state the facts represented, and (b) Tenant shall furnish to Landlord, Landlord’s Mortgagee, prospective Mortgagee and/or prospective purchaser reasonably requested financial information. At any time that Tenant’s outstanding capital stock is listed on a nationally recognized stock exchange such as the NYSE, NASDAQ or any successor, Tenant shall be deemed to have satisfied its obligation to furnish financial information by the filing with the federal Securities Exchange Commission of Tenant’s most recent annual and quarterly report including its financial statements, provided such reports and financial statements are made readily available to the public (including Landlord) at no or nominal charge by the Securities Exchange Commission.

(b) Within 10 days after Tenant’s request from time to time, Landlord shall execute and deliver to Tenant an estoppel certificate, modified as necessary to accurately state the facts represented, including the following: (i) setting forth the Commencement Date and Expiration Date; (ii) certifying that this Lease is in full force and effect; (iii) certifying that all work and other obligations under this Lease to be performed by Tenant have been completed; (iv) certifying that no Event of Default by Tenant is then existing and uncured; (v) setting forth Landlord’s current estimate of monthly Additional Rent payments due from Tenant; and (vi) certifying the dates to which annual Base Rent and Additional Rent have been paid.

21. Surrender.

(a) On the date on which this Lease expires or terminates, Tenant shall return possession of the Premises to Landlord in good condition, except for ordinary wear and tear, and except for casualty damage or other conditions that Tenant is not required to remedy under this Lease. Prior to the expiration or termination of this Lease, Tenant shall remove from the Property all furniture, trade fixtures, equipment (unless Landlord directs Tenant otherwise), and all other personal property installed by Tenant or its assignees or subtenants; provided Tenant shall not be required to remove any wiring or cabling existing within the walls or above the ceiling. Tenant shall repair any damage resulting from such removal and shall restore the Property to good order and condition. Any of Tenant’s personal property not removed as required shall be deemed abandoned, and Landlord, at Tenant’s expense, may remove, store, sell or otherwise dispose of such property in such manner as Landlord may see fit and/or Landlord may retain such property or sale proceeds as its property. If Tenant does not return possession of the Premises to Landlord in the condition required under this Lease, Tenant shall pay Landlord all resulting damages Landlord may suffer.

the expiration or termination of this Lease shall operate to extend the Term or prevent Landlord from immediate recovery of possession of the Premises by summary proceedings or otherwise. Any provision in this Lease to the contrary notwithstanding, any holdover by Tenant shall constitute a default on the part of Tenant under this Lease entitling Landlord to exercise, without obligation to provide Tenant any notice or cure period, all of the remedies available to Landlord in the event of a Tenant default, and Tenant shall be liable for all damages, including consequential damages if such holdover continues longer than sixty (60) days, that Landlord suffers as a result of the holdover.

22. Defaults - Remedies.

(a) It shall be an Event of Default:

(i) If Tenant does not pay in full when due any and all Rent and, except as provided in Section 22(c) below, Tenant fails to cure such default on or before the date that is 5 days after Landlord gives Tenant notice of default;

(ii) If Tenant enters into or permits any Transfer in violation of Section 18 above;

(iii) If Tenant fails to observe and perform or otherwise breaches any other provision of this Lease, and, except as provided in Section 22(c) below, Tenant fails to cure the default on or before the date that is 10 days after Landlord gives Tenant notice of default; provided, however, if the default cannot reasonably be cured within 10 days following Landlord’s giving of notice, Tenant shall be afforded additional reasonable time (not to exceed 30 days following Landlord’s notice) to cure the default if Tenant begins to cure the default within 10 days following Landlord’s notice and continues diligently in good faith to completely cure the default;

(iv) If Tenant becomes insolvent or makes a general assignment for the benefit of creditors or offers a settlement to creditors, or if a petition in bankruptcy or for reorganization or for an arrangement with creditors under any federal or state law is filed by or against Tenant, or a bill in equity or other proceeding for the appointment of a receiver for any of Tenant’s assets is commenced, or if any of the real or personal property of Tenant shall be levied upon; provided that any proceeding brought by anyone other than Landlord or Tenant under any bankruptcy, insolvency, receivership or similar law shall not constitute an Event of Default until such proceeding has continued unstayed for more than 60 consecutive days. The occurrence of any of the foregoing with respect to any Guarantor shall also constitute an Event of Default by Tenant; or

(v) If any breach or default by Tenant or any Affiliate of Tenant occurs under any of the Total Building Leases and is not cured within any notice or grace periods permitted in such documents.

(b) If an Event of Default occurs, Landlord shall have the following rights and remedies:

(i) Landlord, without any obligation to do so, may elect to cure the default on behalf of Tenant, in which event Tenant shall reimburse Landlord upon demand for any sums paid or costs incurred by Landlord (together with an administrative fee of 10% thereof) in curing the default, plus interest at the Interest Rate from the respective dates of Landlord’s incurring such costs, which sums and costs together with interest at the Interest Rate shall be deemed additional Rent;

(ii) To enter and repossess the Premises, by breaking open locked doors if necessary, and remove all persons and all or any property, by action at law or otherwise, without being liable for prosecution or damages. Landlord may, at Landlord’s option, make Alterations and repairs in order to relet the Premises and relet all or any part(s) of the Premises for Tenant’s account. Tenant agrees to pay to Landlord on demand any deficiency (taking into account all costs incurred by Landlord) that may arise by reason of such reletting. In the event of reletting without termination of this Lease, Landlord may at any time thereafter elect to terminate this Lease for such previous breach. Following an Event of Default by Tenant and the recovery of possession by Landlord free of any claim by Tenant, Landlord agrees to use commercially reasonable efforts to re-let the Premises and mitigate its damages hereunder, provided that: (A) Landlord shall not be obligated to offer the Premises to a prospective tenant when other space in the Building or another property of Landlord or any Affiliate suitable for that prospective tenant’s use is (or soon will be) available; (B) Landlord shall not be obligated to lease the Premises to a prospective tenant for a rental less than the current fair market rental then prevailing for similar uses in comparable buildings in the same market area as the Building; and (C) Landlord shall not be required to offer the Premises to a prospective tenant whose financial strength, character, proposed use, or other leasing terms and conditions are unacceptable to Landlord under Landlord’s then current leasing policies for comparable space in the Building. No reentry or repossession of the Premises by Landlord shall (1) relieve Tenant of its obligation to pay the Rent in arrears of the time of entry or which becomes due subsequent to reentry, (2) constitute an acceptance of a surrender by Tenant, (3) be construed as an election by Landlord to terminate this Lease, unless Landlord terminates this Lease by written notice to Tenant as set forth in Section 22(b)(iv) below;

(iii) To accelerate the whole or any part of the Rent for the balance of the Term, and declare the same to be immediately due and payable, in the amount of such accelerated sum discounted to its then present value at the prime rate of interest then in effect as announced by Wells Fargo Bank (or its successor), minus the fair rental value of the Premises for the balance of the Term at such time, similarly discounted, plus all anticipated costs of reletting (including without limit, Alterations and repairs, brokers’ commissions and market concessions);

(iv) To terminate this Lease and the Term by written notice to Tenant, without any right on the part of Tenant to save the forfeiture by payment of any sum due or by other performance of any condition, term or covenant broken; and

(v) every other right or remedy given in this Lease or now or hereafter existing at law or in equity.

(c) Any provision to the contrary in this Section 22 notwithstanding, (i) Landlord shall not be required to give Tenant the notice and opportunity to cure provided in Section 22(a) above more than twice in any consecutive 12-month period, and thereafter Landlord may declare an Event of Default without affording Tenant any of the notice and cure rights provided under this Lease, and (ii) Landlord shall not be required to give such notice prior to exercising its rights under Section 22(b) if Tenant fails to comply with the provisions of Sections 13, 20 or 27 within the applicable time set forth therein respectively and such failure is not cured within 5 days of notice given by or on behalf of Landlord.

(d) No waiver by Landlord of any breach by Tenant shall be a waiver of any subsequent breach, nor shall any forbearance by Landlord to seek a remedy for any breach by Tenant be a waiver by Landlord of any rights and remedies with respect to such or any subsequent breach. Efforts by Landlord to mitigate the damages caused by Tenant’s default shall not constitute a waiver of Landlord’s right to recover damages hereunder. No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy provided herein or by law, but each shall be cumulative and in addition to every other right or remedy given herein or now or hereafter existing at law or in equity. No payment by Tenant or receipt or acceptance by Landlord of a lesser amount than the total amount due Landlord under this Lease shall be deemed to be other than on account, nor shall any endorsement or statement on any check or payment be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of Rent due, or Landlord’s right to pursue any other available remedy.

(e) If either party commences an action against the other party arising out of or in connection with this Lease, the prevailing party shall be entitled to have and recover from the other party attorneys’ fees, costs of suit, investigation expenses and discovery costs, including costs of appeal.

(f) LANDLORD AND TENANT WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON OR RELATED TO, THE SUBJECT MATTER OF THIS LEASE.

23. Authority.

(a) Tenant represents and warrants to Landlord that: (a) Tenant is duly formed, validly existing and in good standing under the laws of the state under which Tenant is organized, and qualified to do business in the state in which the Property is located, (b) the execution, delivery and performance of this Lease have been duly approved by Tenant and no further corporate action is required on the part of Tenant to execute, deliver and perform this Lease, (c) the person(s) signing this Lease are duly authorized to execute and deliver this Lease on behalf of Tenant and (d) this Lease, as executed and delivered by such person(s), is valid, legal and binding on Tenant, and is enforceable against Tenant in accordance with its terms.

(b) Landlord represents and warrants to Tenant that: (a) Landlord is duly formed, validly existing and in good standing under the laws of the state under which Landlord is organized, and qualified to do business in the state in which the Property is located, (b) the execution, delivery and performance of this Lease have been duly approved by Landlord and no further corporate action is required on the part of Landlord to execute, deliver and perform this Lease, (c) the person(s) signing this Lease are duly authorized to execute and deliver this Lease on behalf of Landlord and (d) this Lease, as executed and delivered by such person(s), is valid, legal and binding on Landlord, and is enforceable against Landlord in accordance with its terms.

24. Liability.

(a) The word “ Landlord” in this Lease includes the Landlord executing this Lease as well as its successors and assigns, each of which shall have the same rights, remedies, powers, authorities and privileges as it would have had it originally signed this Lease as Landlord. Any such person or entity, whether or not named in this Lease, shall have no liability under this Lease after it ceases to hold title to the Premises except for obligations already accrued (and, as to any unapplied portion of Tenant’s Security Deposit or Letter of Credit, Landlord shall be relieved of all liability upon transfer of such portion or Letter of

Credit to its successor in interest). Tenant shall look solely to Landlord’s successor in interest for the performance of the covenants and obligations of the Landlord hereunder which subsequently accrue.

(b) Landlord shall not be deemed to be in default under this Lease unless Landlord fails to perform any of its obligations hereunder within thirty (30) days after written notice from Tenant specifying such failure; provided that where any such failure cannot reasonably be cured within a thirty (30) day period after Landlord’s receipt of such notice, Landlord shall not be in default if Landlord commences to cure the failure within such thirty (30) day period, and thereafter diligently pursues to complete the work necessary to cure the failure. If the terms and provisions of Addendum 1 are applicable, this Section 25(b) shall be supplemented as provided by the applicable terms and conditions of Addendum 1.

(c) Tenant will look solely to Landlord’s interest in the Property for recovering any judgment or collecting any obligation from Landlord, its property manager, and their respective officers, directors, partners, shareholders, members and employees, and those of their affiliates (each a “ Landlord Party”). Tenant agrees that neither Landlord nor any other Landlord Party will be personally liable for any judgment or deficiency decree.

(d) Except for consequential damages as set forth in Section 21(b), neither Landlord nor Tenant shall be liable to the other for consequential, special, punitive or exemplary damages, such as lost profits or interruption of either party’s business, except that this sentence shall not limit the indemnification obligations of either party under this Lease with respect to third party claims.

25. Miscellaneous.

(a) The captions in this Lease are for convenience only, are not a part of this Lease and do not in any way define, limit, describe or amplify the terms of this Lease.

(b) Together with the other Building Leases, this Lease represents the entire agreement between the parties hereto and there are no collateral or oral agreements or understandings between Landlord and Tenant with respect to the Premises or the Property. No rights, easements or licenses are acquired in the Property or any land adjacent to the Property by Tenant by implication or otherwise except as expressly set forth in this Lease. This Lease shall not be modified in any manner except by an instrument in writing executed by the parties. The masculine (or neuter) pronoun and the singular number shall include the masculine, feminine and neuter genders and the singular and plural number. The word “ including” followed by any specific item(s) is deemed to refer to examples rather than to be words of limitation. The word “ person” includes a natural person, a partnership, a corporation, a limited liability company, an association and any other form of business association or entity. Both parties having participated fully and equally in the negotiation and preparation of this Lease, this Lease shall not be more strictly construed, nor any ambiguities in this Lease resolved, against either Landlord or Tenant.

(c) Each covenant, agreement, obligation, term, condition or other provision contained in this Lease shall be deemed and construed as a separate and independent covenant of the party bound by, undertaking or making the same, not dependent on any other provision of this Lease unless otherwise expressly provided. All of the terms and conditions set forth in this Lease shall apply throughout the Term unless otherwise expressly set forth herein.

(d) If any provisions of this Lease shall be declared unenforceable in any respect, such unenforceability shall not affect any other provision of this Lease, and each such provision shall be deemed to be modified, if possible, in such a manner as to render it enforceable and to preserve to the extent possible the intent of the parties as set forth herein. This Lease shall be construed and enforced in accordance with the laws of the state in which the Property is located.

(e) This Lease shall be binding upon and inure to the benefit of Landlord and Tenant and their respective heirs, personal representatives and permitted successors and assigns. All persons liable for the obligations of Tenant under this Lease shall be jointly and severally liable for such obligations.

(f) Tenant shall not record this Lease or any memorandum without Landlord’s prior consent.

(g) The submission of this Lease for examination does not constitute an offer to lease, or a reservation of or option for the Premises, and this Lease becomes effective only upon execution and delivery hereof by both Landlord and Tenant.

(h) The Broker(s) identified in Section 1, if any, will be paid a commission by Landlord pursuant to a separate written agreement between Landlord and such Broker(s). Each party represents and warrants to the other party that the Broker(s) identified in Section 1, if any, are the only brokers or agents dealt with by such party in connection with the negotiation or execution of this Lease. Each such party hereby agrees to indemnify and hold the other party (and any Mortgagee) harmless from

any and all claims by any broker or agent other than the Broker(s) identified in Section 1, if any, for commissions, fees or expenses arising out of or in connection with the negotiation of or entering into this Lease by Landlord and Tenant, based on the assertion that the indemnifying party agreed to pay or (cause to be paid) such other broker or agent. In no event shall any Mortgagee have any obligation to any broker or agent involved in this transaction.

(i) If Landlord or Tenant shall be delayed, hindered or prevented from the performance of any acts required under this Lease or by law, other than payment of any sums of money due, by reason of an act of God, fire, casualty, actions of the elements, strikes, lockouts, other labor trouble, inability to procure or shortage of labor, equipment, facilities, materials or supplies despite reasonable efforts, failure of transportation or power, restrictive governmental laws or regulations, unreasonable governmental delay, riots, insurrection, war, terrorism or any other cause similar or dissimilar to the foregoing beyond the reasonable control of the party whose performance is delayed (“ Force Majeure”), then the performance of such act or acts shall be excused for the period of delay, in which case the period for the performance of any such act or acts shall be extended for the period reasonably necessary to complete performance after the end of the period of such delay. In no event shall any monetary obligations under this Lease be extended due to Force Majeure, and in no event shall financial inability constitute a cause beyond the reasonable control of a party. In order for any party hereto to claim the benefit of a delay due to Force majeure, such party shall be required to use reasonable efforts to minimize the extent and duration of such delay, and to give the other party reasonable notice of the cause of such delay within a reasonable time of its commencement. In addition, each party’s delay in performance of its non-monetary obligations under this Lease shall be excused to the extent that such delay is due to any act or omission of the other party or such other party’s Agents in breach of such other party’s obligations under this Lease.

26. Notices. Any notice, consent or other communication under this Lease shall be in writing and addressed to Landlord or Tenant at their respective addresses specified in Section 1 above (or to such other address as either may designate by notice to the other) with a copy to any Mortgagee or other party designated by Landlord. Each notice or other communication shall be deemed given if sent by prepaid overnight delivery service or by certified mail, return receipt requested, postage prepaid or in any other manner, with delivery in any case evidenced by a receipt, and shall be deemed to have been given on the day of actual delivery to the intended recipient or on the business day delivery is refused. The giving of notice by Landlord’s attorneys, property manager (including Keystone Property Group, L.P. and any successor) or property manager’s attorneys under this Section shall be deemed to be the acts of Landlord.

27. Security Deposit.

(a) At the time of signing this Lease, Tenant shall deliver to Landlord a single unconditional letter of credit in the amount of Five Hundred Thousand Dollars ($500,000.00) as security for the faithful performance and observance by Tenant of the provisions of this Lease and the other Total Building Leases (the “ Letter of Credit”). The Letter of Credit shall be in a form and substance satisfactory to Landlord, naming Landlord as beneficiary. The Letter of Credit and any renewal or substitute Letter of Credit shall be drawn on a bank or trust company reasonably satisfactory to Landlord, which may be drawn upon in Pennsylvania or another location reasonably satisfactory to Landlord. Upon a default by Tenant under any of the Total Building Leases including this Lease, including but not limited to the failure to timely provide a renewal or substitute Letter of Credit to Landlord as provided below, Landlord shall have the right to present the Letter of Credit for payment and use, apply or retain the whole or any part of the proceeds thereof, to cure such default or pay any expenses (including, without limitation, reasonable attorney’s fees) incurred as a result of such default, or for the payment of any amount as to which Tenant is in default or to compensate Landlord for any loss or damage it may suffer by reason of Tenant’s default under any of the Total Building Leases including this Lease. If Landlord shall so use, apply or retain the whole or any part of the proceeds of the Letter of Credit, Tenant shall upon demand by Landlord immediately deposit with Landlord a sum of cash equal to the amount used, applied or retained, as security as aforesaid or a letter of credit (in the form as set forth herein) in said amount, failing which Landlord shall have the same rights and remedies as under this Lease for non-payment of Rent. To the extent that Landlord has not used, applied or retained the whole or any part of the proceeds of the Letter of Credit, the Letter of Credit, or so much of the proceeds thereof as shall remain after any application pursuant to the terms of this Lease, shall be returned to Tenant after the Expiration Date and surrender of the Premises to Landlord. Tenant agrees to cause the issuing bank to automatically renew the Letter of Credit, subject to adjustment in the amount of the Letter of Credit in accordance with subsection (b) below, in the same form from time to time during the Term, at least thirty (30) days prior to the expiration of the Letter of Credit or any renewal thereof so that a Letter of Credit issued by the bank to Landlord shall be in force and effect throughout the Term. In the event of any sale, transfer or leasing of Landlord’s interest in the Building, Landlord shall have the right to automatically transfer either the Letter of Credit or any sums collected thereunder without the bank’s consent, together with any other unapplied sums held by Landlord as security and the interest thereon, if any, to which Tenant is entitled, to the vendee, transferee or lessee, and upon giving notice to Tenant of such fact and the name and address of the transferee, Landlord shall thereupon be released by Tenant from all liability for the return or payment thereof, and Tenant shall look solely to the new owner for the return of payment of same. All fees and charges of the issuer of the Letter of Credit in connection with the Letter of Credit shall be paid by Tenant. If Landlord is required (or elects) to pay any such fees and charges, Tenant shall pay the same to Landlord as Additional Rent upon presentation of an invoice.

(b) Notwithstanding anything to the contrary herein, so long as no Event of Default exists by Tenant, and provided Tenant has complied in all material respects with the provisions of this Section 27, the amount of the Letter of Credit shall be reduced by an amount equal to: (i) $100,000.00 after the 20th month of the Term (to a remaining balance of $400,000.00), (ii) $100,000.00 after the 32nd month of the Term (to a remaining balance of $300,000.00), (iii) $100,000.00 after the 44th month of the Term (to a remaining balance of $200,000.00) and (iv) $100,000.00 after the 57th month of the Term (to a remaining balance of $100,000.00). Thereafter, subject to the foregoing, the amount of the Letter of Credit shall be $100,000.00 during the remainder of the Term.

(c) If any of the proceeds drawn on the Letter of Credit are not applied immediately to sums owing to Landlord under this Lease, Landlord may retain any such excess proceeds as a cash Security Deposit as cash security for the faithful performance and observance by Tenant of the provisions of any of the Total Building Leases including this Lease. Tenant shall not be entitled to any interest on the Security Deposit. Landlord shall have the right to commingle the Security Deposit with its other funds. Landlord may use the whole or any part of the Security Deposit to cure such default or pay any expenses (including, without limitation, reasonable attorney’s fees) incurred as a result of such default, or for the payment of any amount as to which Tenant is in default or to compensate Landlord for any loss or damage it may suffer by reason of Tenant’s default under this Lease. If Landlord uses all or any portion of the Security Deposit as herein provided, within 10 days after demand, Tenant shall pay Landlord cash in an amount equal to that portion of the Security Deposit used by Landlord. If Tenant complies fully and faithfully with all of the provisions of this Lease, the Security Deposit shall be returned to Tenant after the Expiration Date and surrender of the Premises to Landlord.

(d) For clarity of understanding, notwithstanding that each of the Total Building Leases refers to the Letter of Credit in the initial amount of $500,000.00 as described above, only one Letter of Credit is required to be maintained by Tenant in the amount required hereunder with respect to all of the Total Building Leases including this Lease.

28. Utilities. See Rider 2.

29. Rights Reserved to Landlord. Landlord waives no rights, except those that may be specifically waived herein, and explicitly retains all other rights including, without limitation, the following rights, each of which Landlord may exercise without notice to Tenant and, except as otherwise expressly set forth in the Lease, without liability to Tenant for damage or injury to property, person or business on account of the exercise thereof, and the exercise of any such rights shall not be deemed to constitute an eviction or disturbance of Tenant’s use or possession of the Premises and shall not give rise to any claim for set-off or abatement of Rent or any other claim:

(a) To name or rename the Property and the Building and change the name or street address of the Property and the Building. Landlord shall have the exclusive right to use the name and image of the Property and the Building for all purposes, except that Tenant may use the name on its business address and for no other purpose.

(b) Subject to Tenant’s signage rights in Section 11, to install, affix and maintain any and all signs on the exterior or interior of the Building or the Property.

(c) To designate all sources furnishing sign painting and lettering, ice, drinking water, towels, toilet paper, shoe shining, vending machines, mobile vending service, catering and like services used on the Property or in the Building. If Landlord elects to make available to tenants in the Building or Property any services or supplies, or arranges a master contract therefor, Tenant agrees to obtain its requirements, if any, therefor from Landlord or under any such contract, provided that the charges therefor are reasonably consistent with market rates.

(d) To make Alterations to the Property, Building and Common Areas and to alter the layout, design and/or use of the Property, Building and Common Areas in such manner as Landlord, in its sole discretion, deems appropriate, and for such purposes to enter upon the Premises and during the continuance of any of such work, to temporarily close doors, entry ways, public space, corridors and common areas in the Building or the Property, and to interrupt or temporarily suspend services or use of common areas, all without affecting any of Tenant’s obligations hereunder, so long as the Premises are reasonably accessible. Tenant shall cooperate with Landlord and Landlord’s contractors, subcontractors, architects, engineers and agents during the preparation and construction of any such Alterations.

(e) If Tenant permanently vacates or abandons the entire Premises, to decorate, remodel, alter, or otherwise prepare the Premises for re-occupancy, without affecting Tenant’s obligation to pay Rent.

(f) To hold at all times, and to use in appropriate instances, passkeys and security system codes necessary for access to the Premises and all doors within and into the Premises. On the expiration of the Term or Tenant’s right to possession, Tenant shall return all keys to Landlord and shall disclose to Landlord the combination of any safes, cabinets or vaults left in the

Premises.

(g) To install vending machines of all kinds in the Building and upon the Property, and to provide mobile vending service therefor, and to receive all of the revenues derived therefrom; provided, however, that no vending machines shall be installed by Landlord in the Premises nor shall any mobile vending service be provided therefor, unless Tenant so requests.

(h) To erect, use and maintain pipes, ducts, wiring and conduits, and appurtenances thereto, in and through the Premises.

(i) To grant to any person or to reserve unto itself the exclusive right to conduct any business or render any service in the Building or on the Property.

(j) The exclusive right to use or dispose of the use of the roof of the Building.

30. Parking. Appurtenant to the lease of the Premises, Tenant shall have the non-exclusive privilege during the Term to use the number of parking spaces specified in Section 1 of the Lease, including 97 parking spaces located in the parking facilities of the Building on the Property and 10 parking spaces located in the parking facilities of the other two (2) existing buildings included in the project currently known as Moorestown Corporate Center (the “ Project”) and subject to a Declaration of Restrictions and Easements as contained in Book 2649 Page 179 (the “ Declaration”), on an unassigned basis in common with other tenants and occupants, in areas reasonably designated by Landlord. The parking facilities of the Building are located on the Property and elsewhere at the Project and may in future be in another location reasonably convenient to the Property and the Project as Landlord may determine from time to time, but such parking facilities wherever located will be deemed to be included in and are considered a Common Area of the Building. Tenant’s parking privileges shall be subject to the rules and regulations relating to parking adopted by Landlord from time to time. Landlord shall have the right to grant designated, reserved parking stalls to other tenants and occupants. In no event shall the number of parking stalls used by Tenant and Tenant’s Agents exceed the number of stalls allocated to Tenant in Section 1 of this Lease, but this sentence shall not be deemed to limit Tenant’s rights to use additional spaces under the other Total Building Leases. Landlord shall have no obligation to monitor, secure or police the use of the parking facilities or other Common Areas. If the terms and provisions of Addendum 1 are applicable, this Section 30 shall be supplemented as provided by the applicable terms and conditions of Addendum 1.

31. Furniture. If and to the extent that any furniture is located at the Premises on the date of this Lease (“ Furniture”), Landlord will give Tenant a quit-claim Bill of Sale for such Furniture, “ as-is” “ where-is” and “ with all faults,” without representation or warranty.

[signatures on next following page]

Landlord and Tenant have executed this Lease on the respective date(s) set forth below.

Date signed:	Landlord:


August 21, 2015	228 Strawbridge Associates, LLC,
	a New Jersey limited liability company

Witness:


/s/ Stefanie J. Hill	By:	/s/ Marc Rash
Name (printed): Stefanie J. Hill	Name: Marc Rash
	Title: Secretary


Date signed:	Tenant:


August 3, 2015	Tabula Rasa HealthCare, Inc.,
	a Delaware corporation

Attest/Witness:


/s/ Connie H. Phillips-Davis	By:	/s/ Brian W. Adams
Name (printed): Connie H. Phillips-Davis	Name: Brian W. Adams
	Title: CFO

Rider 1 to Lease Agreement

ADDITIONAL DEFINITIONS

“ ADA” means the Americans With Disabilities Act of 1990 (42 U.S.C. § 1201 et seq.), as amended and supplemented from time to time.

“ Affiliate” means any entity, directly or indirectly, controlling, controlled by or under common control of, Tenant (for the purposes of this definition, the concepts of control, controlling and controlled mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities or ownership interests, by contract or otherwise).

“ Agents” of a party means such party’s employees, agents, representatives, contractors, licensees or invitees.

“ Alteration” means any addition, installation, alteration or improvement to the Premises or Property, as the case may be.

“ Building Rules” means the rules and regulations attached to this Lease as Exhibit “B” as they may be reasonably amended from time to time.

“ Building Systems” means any electrical, mechanical, structural, plumbing, heating, ventilating, air conditioning, sprinkler, life safety or security systems serving the Building.

“ Business Day” means every day other than Sundays and Federal holidays.

“ Common Areas” means all areas and facilities as provided by Landlord from time to time for the use or enjoyment of all tenants in the Building or Property, including, if applicable, lobbies, hallways, restrooms, elevators, driveways, sidewalks, parking, loading and landscaped areas.

“ Environmental Laws” means all present or future federal, state or local laws, ordinances, rules or regulations (including the rules and regulations of the federal Environmental Protection Agency and comparable state agency) relating to the protection of human health or the environment, including, without limitation, the New Jersey Industrial Site Recovery Act N.J.S.A. 13:1K-6 et. seq. and its implementing regulations (“ ISRA”).

“ Event of Default” means a default described in Section 22(a) of this Lease.

“ Hazardous Materials” means pollutants, contaminants, toxic or hazardous wastes or other materials the removal of which is required or the use of which is regulated, restricted, or prohibited by any Environmental Law.

“ Interest Rate” means interest at the rate of 10% per annum.

“ Land” means the lot or plot of land on which the Property is situated or the portion thereof allocated by Landlord to the Property, as more particularly described in Rider 1-A attached hereto.

“ Laws” means all laws, ordinances, rules, orders, regulations, guidelines and other requirements of federal, state or local governmental authorities or of any private association or contained in any restrictive covenants or other declarations or agreements, now or subsequently pertaining to the Property or the use and occupation of the Property.

“ Lease Year” means the period from the Commencement Date through the succeeding 12 full calendar months (including for the first Lease Year any partial month from the Commencement Date until the first day of the first full calendar month) and each successive 12-month period thereafter during the Term.

“ Maintain” means to provide such maintenance, repair and, to the extent necessary and appropriate, replacement, as may be needed to keep the subject property in good condition and repair.

“ Monthly Rent” means the monthly installment of Base Rent plus the monthly installment of estimated Excess Operating Expenses and the monthly installment of Excess Property Taxes payable by Tenant under this Lease.

“ Mortgage” means any mortgage, deed of trust or other lien or encumbrance on Landlord’s interest in the Property or any portion thereof, including without limitation any ground or master lease if Landlord’s interest is or becomes a leasehold estate.

“ Mortgagee” means the holder of any Mortgage, including any ground or master lessor if Landlord’s interest is or becomes a leasehold estate.

“ Normal Business Hours” means 8:00 a.m. to 6:00 p.m., Monday through Friday, and 9:00 a.m. to 1:00 p.m. Saturday, legal holidays excepted.

“ Operating Expenses” means all costs, fees, charges and expenses incurred or charged by Landlord in connection with the ownership, operation, maintenance and repair of, and services provided to, the Property, including, but not limited to, (i) the charges at standard actual rates for any services provided by Landlord pursuant to Section 7 of this Lease and not separately paid or reimbursed to Landlord under Section 28 and Rider 2, (ii) the cost of insurance carried by Landlord pursuant to Section 8 of this Lease together with the cost of any deductible paid by Landlord in connection with an insured loss, (iii) Landlord’s cost to Maintain the Property pursuant to Section 9 of this Lease, (iv) the cost of trash collection and janitorial services, day porter services, landscaping and snow and ice removal, (v) the annual amortization (over their estimated economic useful life as determined by GAAP so that Operating Expenses for each calendar year includes only the annual amortization for that calendar year) of the costs (including reasonable financing charges) of capital improvements or replacements (a) required by any Laws enacted after the Commencement Date or (b) made for the purpose of reducing Operating Expenses and actually reduces expenses that would otherwise be included in Operating Expenses, and (vi) a management fee not to exceed 5% of gross revenues and rents at the Building. The foregoing notwithstanding, Operating Expenses will not include: (i) depreciation on the Building or Property, (ii) financing and refinancing costs (except as provided above), interest on debt or amortization payments on any mortgage, or rental under any ground or underlying lease, (iii) leasing commissions, advertising expenses, lease preparation (including attorneys’ fees), tenant improvements or other costs directly related to the leasing of the Property, including tenant acquisition and inducement costs such as lease assumption or takeover costs, moving allowances and design costs; (iv) Property Taxes; (v) Landlord’s general corporate overhead and general and administrative expenses; (vi) wages, salaries, benefits or other compensation paid to any personnel above the grade of building manager; (vii) payments by Landlord to affiliates of Landlord to the extent such payments exceed the amounts which would be paid to unaffiliated third parties providing the same services on an arm’s length, competitive basis in the same geographic submarket as the Building is in; (viii) any compensation paid to clerks, attendants or other persons in commercial concessions operated by Landlord; (ix) expenses of constructing the Building or resulting from defects in the design or construction of the Building; (x) the cost of repairs or replacements caused by fire or other casualty for which Landlord is reimbursed by insurance proceeds or by reason of the exercise of the power of eminent domain for which Landlord is compensated pursuant to eminent domain proceedings; (xi) expenses caused by Landlord’s default under this Lease or any other lease in the Building, or by the finally-adjudicated (beyond all appeals) negligence or willful misconduct of Landlord or its agents or contractors; (xii) expenses incurred to correct any misrepresentation by Landlord expressly made in this Lease (including, without limitation, a misrepresentation with respect to whether the Building or the Premises is in compliance, as of the date hereof, with applicable laws); (xiii) expenses necessary for Landlord to comply with any Laws or insurance requirement applicable to Landlord, existing and effective on the date of this Lease; (xiv) any fines or penalties assessed against Landlord or any managing agent of the Building for the failure to cure a violation of any Law for which Landlord is responsible; (xv) expenses incurred in the removal, encapsulation, replacement with alternative substances or disposal of asbestos, asbestos-containing material, hydro chlorofluorocarbons or chlorofluorocarbons; (xvi) expenses incurred in the removal, encapsulation or other treatment of Hazardous Materials; (xvii) costs of any legal action or legal proceeding with any tenant; (xviii) expenses relating to vacant space, including security, removal of property and renovation; (xix) expenses of services, utilities, or other benefits furnished directly to Tenant and other tenants and tenantable areas of the Building for which Landlord is reimbursed separately from Operating Expenses; (xx) expenses in connection with designing and constructing any expansion of the Building; (xxi) any expenses to the extent of reimbursement paid to Landlord, or to the extent Landlord receives a credit, refund or discount against such expenses; (xxii) any expense for which Landlord is otherwise compensated or has the right to be compensated through the proceeds of insurance or would have been so compensated had Landlord carried the insurance coverage required by this Lease or is otherwise compensated or has the right to be compensated by any tenant (including Tenant) or any occupant of the Building; (xxiii) any expenses for repairs or maintenance which are covered by warranties for the benefit of Landlord; (xxiv) the cost of the acquisition or installation of any art work, including, without limitation, any statues, paintings, electronic art work or advertising; (xxv) the cost of furnishing heating, ventilation and air conditioning, cleaning or any other Building services to any retail space located in the Building; (xxvi) the cost of performing work or furnishing services to or for any tenant other than Tenant to the extent that such work or service is in excess of any work or service provided to Tenant; (xxvii) the cost of installing, operating and maintaining any specialty facility such as an observatory, broadcasting facility, restaurant or luncheon club, athletic or recreational club, theater or child care facility unless Tenant shall have previously approved such costs to be included in

Operating Expenses; (xxviii) the cost of overtime heating, ventilation, and air conditioning furnished to the Premises or any other space in the Building; (xxix) interest, fines, penalties, or other late charges payable by Landlord; (xxx) expenses incurred with respect to a sale of all or any portion of the Building, or any interest therein, or in any person or entity of whatever tier owning an interest therein; (xxxi) the cost of any judgment, settlement or arbitration award resulting from any liability of Landlord; (xxxiii) the cost of any separate electrical or water meter Landlord may provide to any space in the Building, and the cost of the maintenance and measurement thereof; (xxxiv) expenses of compliance with the Americans with Disabilities Act; (xxxv) expenses arising from Landlord’s charitable or political contributions. Landlord shall have the right to directly perform (by itself or through an affiliate) any services provided under this Lease.

“ Phase I Lease,” “ Phase II Lease” and “ Phase III Lease” are each as defined in Section 1(p).

“ Property” means the Land, the Building, all other buildings and improvements now or hereafter constructed on the Land, the Common Areas, and all appurtenances to them.

“ Property Taxes” means to the extent not otherwise payable by Tenant pursuant to Section 5 of this Lease, all levies, taxes (including real estate taxes, sales taxes and gross receipt taxes), assessments, liens, license and permit fees, together with the reasonable cost of contesting any of the foregoing, which are applicable to the Term, and which are imposed by any authority or under any Law, or pursuant to any recorded covenants or agreements, upon or with respect to the Property, or any improvements thereto, or against Landlord because of Landlord’s estate or interest in the Property. The foregoing notwithstanding, Property Taxes will not include income, excess profits or corporate capital stock tax imposed or assessed upon Landlord, or directly upon this Lease or the Rent or upon amounts payable by any subtenants or other occupants of the Premises, unless such tax or any similar tax is levied or assessed in lieu of all or any part of any taxes includable in Property Taxes.

“ Rent” means the Base Rent, Excess Operating Expenses, Excess Property Taxes and any other amounts payable by Tenant to Landlord under this Lease. “ Additional Rent” means all amounts payable by Tenant to Landlord under this Lease, other than Base Rent.

“ Taken” or “ Taking” means acquisition by a public authority having the power of eminent domain by condemnation or conveyance in lieu of condemnation.

“ Telecommunications Services” means services associated with electronic telecommunications, whether in a wired or wireless mode. Basic voice telephone services are included within this definition.

“ Tenant’s Share” means the percentage obtained by dividing the rentable square feet of the Premises by the rentable square feet of the Property, as set forth in Section 1 of this Lease. Landlord may make an equitable adjustment to Tenant’s Share if the rentable square feet of the Premises or the Property shall change as determined by Landlord’s architect in accordance with applicable BOMA standards.

“ Total Building Leases” is as defined in Section 1(p).

“ Transfer” means (i) any assignment, transfer, pledge or other encumbrance of all or a portion of Tenant’s interest in this Lease, (ii) any sublease, license or concession of all or a portion of Tenant’s interest in the Premises, or (iii) any transfer of a controlling interest in Tenant; provided, however, a transfer of a controlling interest in Tenant shall not deemed to have occurred if such transfer arises from the initial public offering of Tenant’s common stock pursuant to an effective registration statement under the Securities Act of 1933, as amended.

Rider 1-A

Legal Description of Property

Rider 2 to Lease Agreement

ELECTRICITY RIDER

(a) Electricity shall be supplied to the Premises during the Term, at a minimum in compliance with the Electricity Standards set forth below, in accordance with the provisions of paragraph (c) of this Rider. However, at any time and from time to time during the term hereof, provided it is then permissible under the provisions of legal requirements, Landlord shall have the option to have electricity supplied to the Premises in accordance with paragraph (d) of this Rider.

(b) For the purposes of this Rider:

(i) The term “Electric Rate” shall mean the Service Classification pursuant to which Tenant would purchase electricity directly from the utility company servicing the Building, provided, however, at no time shall the amount payable by Tenant for electricity be less than Landlord’s Cost per Kilowatt and Cost per Kilowatt Hour (as such terms are hereinafter defined), and provided further that in any event, the Electric Rate shall include all applicable surcharges, and demand, energy, losses, fuel adjustment and time of day charges (if any), taxes and other sums payable in respect thereof.

(ii) The term “Cost per Kilowatt Hour” shall mean the total cost for electricity incurred by Landlord to service the Building during a particular time period (including all applicable surcharges, and energy, fuel adjustment and time of day charges (if any), taxes and other sums payable in respect thereof) divided by the total kilowatt hours purchased by Landlord during such period.

(iii) The term “Cost per Kilowatt” shall mean the total cost for demand incurred by Landlord to service the Building during a particular time period (including all applicable surcharges, demand, and time of day charges (if any), taxes and other sums payable in respect to thereof) divided by the total kilowatts purchased by Landlord during such period.

(iv) The “Electricity Standards” are described in Schedule 1 attached hereto.

(c) (i) Unless one or more check meters shall be installed to determine Tenant’s consumption of and demand for electricity within the Premises, Landlord shall supply electricity to service the Premises on a pro rata share basis, and T enant shall pay to Landlord, as Additional Rent, the sum of (y) an amount determined by applying the Electric Rate or, at Landlord’s election, the Cost per Kilowatt Hour and Cost per Kilowatt, to Tenant’s consumption of and demand for electricity within the Premises as reasonably determined by Landlord on a pro rata share basis, and (z) the actual, commercially reasonable administrative costs incurred by Landlord in supplying electricity on a pro rata share basis as reasonably determined by Landlord (such combined sum being hereinafter called “ Electric Rent”). Except as set forth in the foregoing clause (z), Landlord will not charge T enant more than the Electric Rate or, at Landlord’s election, the Cost per Kilowatt and Cost per Kilowatt Hour for the electricity provided pursuant to this paragraph.

(ii) Where one or more than one meter measures the electric service to Tenant, the electric service rendered through each meter shall be computed and billed separately in accordance with the provisions herein set forth.

(iii) For and with respect to each year of the Term including, without limit, the Base Year and the first calendar year included in the Term, beginning on the Commencement Date or any earlier occupancy of the Premises, Tenant shall pay to Landlord, on account of the Electric Rent payable pursuant to this paragraph (c), the annual sum reasonably estimated by Landlord (“Estimated Electric Rent”), subject to the adjustments on the first day of each and every calendar month of the Term (except that if the first day of the T erm is other than the first day of a calendar month, the first monthly installment, prorated to the end of said calendar month, shall be payable on the first day of the first full calendar month).

(iv) From time to time during the term, the Estimated Electric Rent may be adjusted by Landlord on the basis of either Landlord’s reasonable estimate of T enant’s electric consumption and demand (if at any time the meter(s) servicing the Premises are inoperative) or T enant’s actual consumption of and demand for electricity as recorded on the meter(s) servicing the Premises, and, in either event, the Electric Rate or Cost per Kilowatt and Cost per Kilowatt Hour then in effect.

(v) Subsequent to the end of each calendar year during the T erm, or more frequently if Landlord shall elect, Landlord shall submit to Tenant a statement of the Electric Rent for such year or shorter period together with the components thereof, as set forth in clause (i) of this paragraph (c) (“Electric Statement”). To the extent that the Estimated Electric Rent paid by Tenant for the period covered by the Electric Statement shall be less than the Electric Rent as set forth on such Electric Statement, Tenant shall pay Landlord the difference within 30 days after receipt of the Electric Statement. If the Estimated Electric Rent paid by Tenant for the period covered by the Electric Statement shallbe greater than the Electric Rent as set forth on the Electric Statement, such difference shall be credited against the next required payment(s) of Estimated Electric Rent. If no Estimated Electric Rent payment(s) shall thereafter be due, Landlord shall pay such difference to Tenant.

(vi) For any period during which the meter(s) servicing the Premises are inoperative, the Electric Rent shall be determined by Landlord, based upon its reasonable estimate of Tenant’s actual consumption of and demand for electricity, and the Electric Rate or Cost per Kilowatt and Cost per Kilowatt Hour then in effect.

(d) If Landlord discontinues furnishing electricity to the Premises pursuant to paragraph (c) of this Rider, Tenant shall make its own arrangements to obtain electricity directly from the utility company furnishing electricity to the Building. The cost of such service shall be paid by Tenant directly to such utility company. Landlord shall permit its electric feeders, risers and wiring serving the Premises to be used by T enant, to the extent available, safe and capable of being used for such purpose. All meters and all additional panel boards, feeders, risers, wiring and other conductors and equipment which may be required to enable Tenant to obtain electricity of substantially the same quality and character, shall be installed by Landlord at T enant’s cost and expense.

(e) Bills for electricity supplied pursuant to paragraph (c) of this Article shall be rendered to Tenant at such times as Landlord may elect. Tenant’s payments for electricity supplied in accordance with paragraph (c) of this Article shall be due and payable within 30 days after delivery of a statement therefor, by Landlord to Tenant. If any tax is imposed upon Landlord’s receipts from the sale of electricity to Tenant by legal requirements, Tenant agrees that, unless prohibited by such legal requirements, Tenant’s Share of such taxes shall be included in the bills of, and paid by Tenant to Landlord, as Additional Rent.

(f) Landlord’s failure during the term to prepare and deliver any statements or bills under this Rider, or Landlord’s failure to make a demand under this Article, shall not in any way be deemed to be a waiver of, or cause Landlord to forfeit or surrender, its rights to collect any amount of additional rent which may become due pursuant to this Rider. Tenant’s liability for any amounts due under this Article shall survive the expiration or sooner termination of the Term.

(g) Tenant’s failure or refusal, for any reason, to utilize the electrical energy provided by Landlord, shall not entitle Tenant to any abatement or diminution of Base Rent or Additional Rent, or otherwise relieve Tenant from any of its obligations under this Lease.

(h) If either the quantity or character of the electrical service is changed by the utility company supplying electrical service to the Building or is no longer available or suitable for T enant’s requirements, or if there shall be a change, interruption o r termination of electrical service due to a failure or defect on the part of the utility company, no such change, unavailability, unsuitability, failure or defect shall constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any payment from Landlord for any loss, damage or expense, or to abatement or diminution of Base Rent or Additional Rent, or otherwise relieve Tenant from any of its obligations under this Lease, or impose any obligation upon Landlord or its agents. Landlord will use reasonable efforts to insure that there is no interruption in electrical service to Tenant, but in no event shall Landlord be responsible for any failures of the utility providing such service or the negligence or other acts of third parties causing any such interruption; provided, however, that .

(i) Tenant shall not make any electrical installations, alterations, additions or changes to the electrical equipment or appliances in the Premises without prior written consent of Landlord in each such instance. Tenant shall comply with the rules and regulations applicable to the service, equipment, wiring and requirements of Landlord and of the utility company supplying electricity to the Building. Tenant agrees that its use of electricity in the Premises will not exceed the capacity of existing feeders to the Building or the risers or wiring installations therein and T enant shall not use any electrical equipment which, in Landlord’s reasonable judgment, will overload such installations or interfere with the use thereof by other tenants in the Building. If, in Landlord’s reasonable judgment, Tenant’s electrical requirements necessitate installation of an additional riser, risers or other proper and necessary equipment or services, including additional ventilating or air-conditioning, the same shall be provided or installed by Landlord at Tenant’s expense, which shall be chargeable and collectible as Additional Rent and paid within 30 days after the rendition to Tenant of a bill therefor.

(j) If, after Landlord’s initial installation work, (i) Tenant shall request the installation of additional risers, feeders or other equipment or service to supply its electrical requirements and Landlord shall determine that the same are necessary and will not cause damage or injury to the Building or the Premises or cause or create a dangerous or hazardous condition or entail excessive or unreasonable alterations, repairs or expense or interfere with or disturb other Tenants or occupants of the Building, or (ii) Landlord shall determine that the installation of additional risers, feeders or other equipment or service to supply T enant’s electrical requirements is necessary, then and in either of such events Landlord shall cause such installations to be made, at T enant’s sole cost and expense and Tenant shall pay Landlord for such installations, as Additional Rent, within 30 days after submission of a statement therefor.

(k) Landlord, at Tenant’s expense, shall furnish and install all replacement lighting tubes, lamps, ballasts and bulbs required in the Premises. Tenant, however, shall have the right to furnish and/or install any or all of the items mentioned in this Rider.

(l) For and with respect to each year of the Term including, without limit, the Base Year and t he first calendar year included in the Term, beginning on the Commencement Date or any earlier occupancy of the Premises, in addition to all other sums and charges due hereunder, Tenant shall pay, as Additional Rent, Tenant’s Share of the cost to the Building (including applicable sales or use taxes) for utility and energy costs, including any fuel surcharges or adjustments with respect thereto, incurred for water, sewer, gas and other utilities and heating, ventilating and air conditioning for the Building, to include all leased and leasable areas (not separately billed or metered within the Building) and Common Area electric and lighting, for the Building and Property, for any Lease Year or partial Lease Year, during the Term (collectively, “Additional Utility Rent”). Tenant shall pay to Landlord, on account of the Additional Utility Rent

payable pursuant to this paragraph (l), the annual sum reasonably estimated by Landlord (“ Estimated Additional Utility Rent”), subject to the adjustments on the first day of each and every calendar month of the term (except that if the first day of the term is other than the first day of a calendar month, the first monthly installment, prorated to the end of said calendar month, shall be payable on the first day of the first full calendar month). From time to time during the term, the Estimated Additional Utility Rent may be adjusted by Landlord on the basis of either Landlord’s reasonable estimate of the Building’s and Property’s electric consumption and demand or the Building’s and Property’s actual consumption of and demand for electricity, and, in either event, the Electric Rate or Cost per Kilowatt and Cost per Kilowatt Hour then in effect, the area served by any utility system serving less than all of the Building on a pro rata basis and any disparate levels of services provided to different types of space and uses. Subsequent to the end of each calendar year during the Term, or more frequently if Landlord shall elect, Landlord shall submit to Tenant a statement of the Additional Utility Rent for such year or shorter period together with the components thereof, as set forth in this paragraph (l) (“Additional Utility Statement”). To the extent that the Estimated Additional Utility Rent paid by Tenant for the period covered by the Additional Utility Statement shall be less than the Additional Utility Rent as set forth on such Additional Utility Statement, Tenant shall pay Landlord the difference within 30 days after receipt of the Additional Utility Statement. If the Estimated Additional Utility Rent paid by Tenant for the period covered by the Additional Utility Statement shall be greater than the Additional Utility Rent as set forth on the Additional Utility Statement, such overpayment shall be credited against the next required payment(s) of Estimated Additional Utility Rent. If no Estimated Additional Utility Rent payment(s) shall thereafter be due, Landlord shall pay such overpayment to Tenant. The utility and energy costs that vary with use or occupancy and that are attributable to any part of the Term in which less than ninety percent (95%) of the Building is occupied by tenants, or in which such utility and energy services are separately billed or metered to any tenant, will be adjusted by Landlord to the amount that Landlord reasonably determines they would have been if ninety percent (95%) of the Building had been occupied and such utility and energy services had been fully utilized and had not been separately billed or metered to any tenant.

– END –

Schedule 1
to
Rider 2
Electricity Standards

228 Strawbridge Drive

Electric Service:

The building is served by a single PSE&G pad mounted transformer. The transformer is located near the southwest corner of the building. The supply voltage is 460/265V, 3 phase 4 wire. The transformer rating (as noted on the side of the transformer) is 1500kVA. The transformer supplies a switchboard in the main electrical room that’s rated at 3000 amperes. The gross building area is approximately 74,565 square feet. Using the transformer as a basis for the capacity expressed on a square foot basis, the available power is about 20VA per square foot.

Electric Distribution:

There are small electrical rooms located throughout the building for servicing tenant and house loads. Each room typically has at least one 480/277V panel, small distribution dry type transformers and several 208/120V panels. This type of distribution is typical for office buildings.

ADDENDUM 1

TOTAL BUILDING LEASE PROVISIONS

The terms and conditions of this Addendum 1 shall be effective only on the condition, and for so long as, the Tenant under this Lease is the sole tenant and occupant of the Building pursuant to the Total Building Leases and all of the Total Building Leases are in full force and effect such that Tenant leases the entire Building from Landlord. In the event that any space in the Building shall be leased, licensed or occupied by anyone other than Tenant, whether or not pursuant to any Transfer, with or without Landlord’s consent, or otherwise, or any of the Total Building Leases shall expire or terminate, for any reason, at any time, the terms and conditions of this Addendum 1 shall be null and void and of no effect.

1. Section 2 of the Lease (Premises) is supplemented by adding that Tenant’s control of the Common Areas shall be exclusive, subject to Landlord’s and its Agents’ rights of access, use and control as necessary to observe, perform and exercise its rights and obligations under the Lease.

2. Section 24 of the Lease (Liability) is supplemented by adding the following as subsection (d):

If Landlord shall be in default of its obligations under this Lease and such default shall not be cured within thirty (30) days after Landlord receives written notice of such default from Tenant (or, if such default shall reasonably take more than thirty (30) days to cure, if Landlord shall not have commenced such cure within the thirty (30) days and thereafter diligently prosecuted such cure to completion), and such continuing default is creating a material impairment to Tenant’s occupancy or the operation of Tenant’s business at the Premises, then Tenant may, at Tenant’s option, without waiving any claim for damages for breach of agreement, at any time after the expiration of such notice and cure period, perform such work as may be reasonably necessary to cure such default, at Landlord’s expense as provided below. If an emergency situation exists, Tenant may cure any such default as aforesaid prior to the expiration of said cure period, upon as much written notice to Landlord as shall be practical in the circumstances, but solely if the curing of such default prior to the expiration of said cure period is necessary to protect the Premises or to prevent injury or death to persons or substantial damage to property. Landlord shall reimburse Tenant for any reasonable amounts properly incurred by Tenant as aforesaid within thirty (30) days of Tenant’s written demand therefor and, if Landlord fails to reimburse Tenant for the reasonable costs, fees and expenses incurred by Tenant in taking such curative actions, or if Landlord fails to pay any other amount owed to Tenant under this Lease (including, without limitation, any tenant improvement or construction allowance or any other reimbursement), within thirty (30) days after demand therefor, accompanied by supporting evidence of the expenses incurred by Tenant where applicable, Tenant may bring an action against Landlord to recover the amounts due pursuant to appropriate legal proceedings. If any Mortgagee of Landlord shall have given prior notice to Tenant that it is the holder of a Mortgage affecting the Premises, or Tenant is a party to any subordination or non-disturbance agreement that includes the Mortgagee’s address, Tenant agrees to give such Mortgagee notice simultaneously with any notice given to Landlord to correct any default of Landlord as hereinabove provided and Tenant further agrees that such Mortgagee shall have the right, but not the obligation, to cure such default on behalf of Landlord. Notwithstanding the foregoing, any work by or on behalf of Tenant under this subsection shall be limited solely to the Premises and any Building Systems serving the Premises and such work shall not affect the roof of the Building, the facade, entrances, exits or structural supports of the Building, or the Common Areas of the Property outside the Building. Any work by Tenant hereunder shall not damage, impair or prevent access to or use of the Building or Building Systems, or the Common Areas, and Tenant shall not do or cause to be done anything that would create a breach or default by Landlord in its obligations to other tenants or occupants or its lenders. In no event shall this provision be deemed to allow Tenant to perform any Work required to be performed by Landlord under Exhibit E to construct the Building or the Premises.

3. Section 30 of the Lease (Parking) is supplemented by adding the following: Tenant’s rights to use the parking spaces described therein shall be exclusive, subject to Landlord’s and its Agents’ rights of access, use and control as necessary to observe, perform and exercise its rights and obligations under the Lease. Notwithstanding anything to the contrary in Section 30, Landlord shall not have the right to grant designated, reserved parking stalls to other tenants and occupants within the parking facilities serving the Building located on the Property. As of the date of this Lease, the parking facilities of the Building located on the Property include a total of 291 spaces (consisting of 39 spots at the front of the Building; 243 in back lot; 3 visitor; 6 handicap). During the Term, Landlord shall not, without Tenant’s written consent, make Alterations to the parking facilities of the Building located on the Property that would reduce the number of parking spaces located on the Property below a total of 291 spaces. During the Term, Landlord shall not, without Tenant’s written consent, agree to amend, modify or terminate the Declaration in a manner that would result in reducing the number of parking spaces available to Tenant elsewhere at the Project below the number of 10 such parking spaces provided for herein.

4. RIGHT OF OFFER. Tenant shall have the one-time right (“Right of Offer”) during the first sixty (60) months after the Commencement Date of the Phase I Lease to elect to lease space in the existing buildings located adjacent to the Property at 224 Strawbridge Drive (the “ 224 Building”) and 232 Strawbridge Drive (the “ 232 Building”) in Moorestown, New Jersey, or portions thereof as identified in notices to Tenant pursuant to Paragraph B below, to the extent that such spaces are or become Available Space (as defined below), on and subject to the terms and conditions hereof.

A. (1) Space in the 224 Building and the 232 Building, or any part thereof, shall constitute Available Space upon the expiration of all rights to such space including, but not limited to (i) any lease currently in effect with respect to such space as of the date of this Lease, (ii) any rights of the tenant thereunder to renew or extend such lease, whether existing or granted after the date of this Lease, and (iii) any rights of other tenants with respect to such space, whether existing or granted after the date of this Lease, whether pursuant to a Vacant Space Lease or pursuant to a lease entered into after such space has been offered to and rejected (or deemed rejected) by Tenant as provided in this Section 4. The date following the expiration of all such rights shall be deemed to be the date on which such space becomes available for lease pursuant to this Section 4.

(2) Any space in the 224 Building and the 232 Building that is vacant and unleased (“ Vacant Space”) as of the date of this Lease shall not be deemed to be Available Space. Such Vacant Space may be leased for such term and rents as may be determined by Landlord in its sole discretion at any time (“ Vacant Space Lease”), free and clear of any right or claim by Tenant.

(3) Tenant’s right to lease additional space in the 224 Building and the 232 Building under this Section 4 shall be conditioned on and effective only for so long as the Building, the 224 Building and 232 Building are and remain under common ownership and not encumbered by any Mortgage or Mortgages held by anyone other than one and the same Mortgagee. For purposes hereof, “ common ownership” means the Building, the 224 Building and 232 Building are all owned by Landlord and Landlord’s Affiliated Entities. “ Landlord’s Affiliated Entities” means any entity, directly or indirectly, controlling, controlled by or under common control of, Landlord (for the purposes of this definition, the concepts of control, controlling and controlled mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities or ownership interests, by contract or otherwise). This Right of Offer and Tenant’s right to lease additional space in the 224 Building and the 232 Building under this Section 4 shall automatically terminate and expire absolutely upon the occurrence of any one (or more) of the following: (i) upon any sale, assignment or other transfer of the interest of Landlord or any of Landlord’s Affiliated Entities in the Building, the 224 Building or the 232 Building (including a sale, assignment or other transfer of a controlling interest in the entity that is the Landlord or any of Landlord’s Affiliated Entities) to a third party (meaning any person or entity that is not one of Landlord’s Affiliated Entities), and (ii) upon the grant of any Mortgage encumbering the Building, the 224 Building or the 232 Building, or any of them, to a Mortgagee that is not one and the same as the holder of any other Mortgage encumbering the Building, the 224 Building or the 232 Building.

B. Landlord shall use reasonable efforts to give notice to Tenant as and when Landlord anticipates that any Available Space will become available. In the case of leases that are terminated prior to their scheduled expiration date, Landlord shall give notice as soon as such termination is reasonably certain. Landlord shall state in each notice hereunder (i) the space available, (ii) the date Landlord anticipates that such space will be available for delivery, and (iii) the term such space is available for lease by Tenant.

C. Tenant may elect to lease all (but not less than all) of any Available Space by giving Landlord written notice of such election within ten (10) days after receipt of Landlord’s notice. If Tenant fails to respond to Landlord’s notice within the applicable time period set forth above, Tenant’s rights under this Section 4 with respect to such space shall automatically terminate, and Tenant shall have no further right under this Section 4 to lease such space.

D. The Right of Offer under this Section 4 shall terminate and expire on the last day of the month that is sixty (60) full calendar months after the Commencement Date of the Phase I Lease. Landlord shall have no obligation to offer space to Tenant, and Tenant shall have no right to lease any of such space under this Section, at any time following the said sixtieth (60th) month.

E. Any space for which Tenant elects to exercise its Right of Offer under this Section 4 shall become part of the Premises, and except to the extent expressly provided to the contrary in this Section 4 (including without limitation, this Paragraph E), shall be subject to the terms of this Lease applicable thereto, without modification, and the term of this Lease shall commence for such Available Space upon the date (the “ Available Space Rental Commencement Date”) such space is delivered to Tenant as provided by Paragraph H below.

F. Base Rent for such Available Space (the “ Available Space Rent”) shall be the same as the annual rate of Base Rent payable with respect to the Premises on a per rentable square foot basis, as set forth in the table in Section 1(f) of this Lease in the column headed “ Base Rent/RSF,” multiplied by the number of rentable square feet included in such Available Space, for the then-current period of the Term as applied to the Available Space. Tenant’s obligation to pay Base Rent for such Available Space shall commence as of the applicable Available Space Rental Commencement Date with respect to such Available Space. Tenant shall also be obligated to pay Excess Operating Expenses, Excess Property Taxes and all other Additional Rent as to such Available Space. Commencing as of the applicable Available Space Rental Commencement Date, and on the first day of each and every month thereafter, Tenant shall pay to Landlord in addition to the Rent then in effect with respect to the Premises (exclusive of such Available Space), an amount equal to one twelfth (1/12th) of the Available Space Rent, plus Tenant’s Additional Rent, Tenant’s Share of Operating Expenses and Tenant’s Share of Taxes with respect to such Available Space.

G. The term of this Lease shall expire for all Available Space included within the Premises upon the expiration of the Term for the Premises, unless, as specified in Landlord’s notice, such space is not available to be leased to Tenant through the expiration of the Term for the Premises (in which event such shorter term specified in the Landlord’s notice shall apply to any such Available Space). In no event shall this Lease continue in force and effect as to any Available Space included within the Premises beyond the termination of this Lease as to the Premises.

H. Landlord, at Landlord’s sole cost, not to exceed the Prorated Available Space Allowance as provided below, will furnish Alterations to the Available Space, as necessary and requested by Tenant, to prepare the same for Tenant’s use and occupancy. Such Alterations (including finishes) will be substantially consistent with the Work provided to the Premises pursuant to the Work Letter in Exhibit “ E” of this Lease. The lease amendment agreement (or new lease if applicable) with respect to such Available Space as provided in Paragraph I below shall include a Work Letter agreement on the same terms and conditions as the Work Letter in Exhibit “ E” of this Lease, as applied to such Available Space, except as follows:

1. The Allowance with respect to such Available Space shall be equal to the Prorated Available Space Allowance calculated as set forth below. Such Prorated Available Space Allowance will be applied against the costs to Landlord of all work, labor and materials, including hard costs and soft costs, in connection with Alterations to the Available Space to prepare the same for Tenant’s use and occupancy.

2. Tenant shall be obligated to submit its preliminary plans and specifications for Alterations to such Available Space to Landlord within thirty (30) days after Tenant gives Landlord notice of its election to lease such Available Space under Paragraph C above. Tenant’s proposed plans and specifications will be subject to Landlord’s consent (not to be unreasonably withheld, conditioned or delayed), and thereafter the Final Plans therefor will be prepared in accordance with the procedure set forth in Paragraph E-2 of the Work Letter in Exhibit “ E” of the Phase III Lease. If Tenant fails to timely deliver complete plans and specifications by said date, such failure shall automatically and without notice constitute Tenant Delay and the Available Space Rental Commencement Date shall be deemed to be not later than 6 months after said date notwithstanding that Landlord may be unable to commence or Substantially Complete the Work, or the date Tenant, with Landlord’s consent, takes possession of the Premises, or otherwise as determined in accordance with the definition of Tenant Delay, if earlier.

3. For purposes hereof, “ Prorated Available Space Allowance” shall mean the product obtained by multiplying the Base Amount by the Proration Factor. The “ Base Amount” shall be the product obtained by multiplying Twenty-Five and No/100 Dollars ($25.00) by the number of rentable square feet of space contained in the Available Space. The “ Proration Factor” shall mean a fraction, the numerator of which shall be the number of full calendar months then remaining in the Term of the Lease from the Available Space Rental Commencement Date until the Expiration Date, and the denominator of which shall be one hundred forty (140) full calendar months. Notwithstanding that this provision is included in each of the Total Building Leases, in no event shall Tenant be entitled to more than a single Prorated Available Space Allowance with respect to any Available Space.

4. If the cost of Alterations to the Available Space to prepare the same for Tenant’s use and occupancy exceeds the available amount of the Prorated Available Space Allowance with respect to such Available Space, Tenant shall pay such excess costs out of Tenant’s own funds. Except for the Alterations to be provided by Landlord with respect to such Available Space as described herein, and subject to the Prorated Available Space Allowance, Tenant shall accept any Available Space or permitted portion thereof in its “ as is” condition as of the applicable Available Space Rental Commencement Date, and Landlord shall not be obligated to make any other improvements to any Available Space and Tenant shall not be entitled to any other construction, buildout or other allowance with respect thereto.

I. Within ten (10) days after request by Landlord or Tenant, the parties shall execute an amendment to this Lease adding to the Premises any Available Space which Tenant has elected to lease, as of the date specified in Section E with respect to such space, or if required by Landlord or any owner of the 224 Building or the 232 Building, a separate lease agreement, upon the terms set forth in this Section 4, and otherwise upon the terms and conditions of this Lease. Failure or refusal to execute and deliver such amendment to this Lease or separate lease agreement shall not waive or release the rights and obligations of the parties, which shall be deemed modified as of Tenant’s notice to Landlord of Tenant’s election to lease such space.

J. This Section 4 shall in no event constitute a covenant or guarantee by Landlord that any Available Space will be available for lease by Tenant at any time.

K. If Tenant is in default under this Lease beyond the applicable grace period (if any) on the date Landlord’s notice is due under Section B above or at any time thereafter until the applicable Available Space Rental Commencement Date, Tenant’s right to exercise its option as to the Available Space and/or to lease the Available Space shall automatically expire and terminate.

L. If at the time Landlord’s notice is due pursuant to Section B above Tenant has assigned this Lease, or any portion thereof or interest therein or subleased any portion of the Premises, Tenant will have no right to exercise its option as to any such space.

M. Landlord shall not be liable for failure to give possession of any Available Space by reason of any holding over or retention of possession by any previous tenants or occupants of same, nor shall such failure impair the validity of this Lease.

N. The conditions set forth in Paragraphs K and L and the time limitation conditions with respect to Tenant’s election to lease any Available Space set forth in Paragraph C are solely for the benefit of Landlord, and Landlord may at its option waive any such condition.

O. Notwithstanding anything to the contrary contained in the Lease, the Right of Offer shall inure solely to the benefit of the Tenant originally named herein (i.e., Tabula Rasa HealthCare, Inc., a Delaware corporation) and not to the benefit of any of the Tenant’s successors or assigns, whether or not permitted by Landlord. Upon the occurrence of any such assignment or transfer during the Term, the Right of Offer shall automatically terminate and become null and void without further need of any documentation with respect thereto.

EXHIBIT “A”

PLAN SHOWING PREMISES

A-1

EXHIBIT “B”

BUILDING RULES

1. Any sidewalks, lobbies, passages, elevators and stairways shall not be obstructed or used by Tenant for any purpose other than ingress and egress from and to the Premises. Landlord shall in all cases retain the right to control or prevent access by all persons whose presence, in the judgment of Landlord, shall be prejudicial to the safety, peace or character of the Property.

2. The toilet rooms, toilets, urinals, sinks, faucets, plumbing or other service apparatus of any kind shall not be used for any purposes other than those for which they were installed, and no sweepings, rubbish, rags, ashes, chemicals or other refuse or injurious substances shall be placed therein or used in connection therewith or left in any lobbies, passages, elevators or stairways.

3. Tenant shall not impair in any way the fire safety system and shall comply with all security, safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency. No person shall go on the roof without Landlord’s prior written permission.

4. Skylights, windows, doors and transoms shall not be covered or obstructed by Tenant, and Tenant shall not install any window covering which would affect the exterior appearance of the Building, except as approved in writing by Landlord. Tenant shall not remove, without Landlord’s prior written consent, any shades, blinds or curtains in the Premises.

5. Without Landlord’s prior written consent, Tenant shall not hang, install, mount, suspend or attach anything from or to any sprinkler, plumbing, utility or other lines. If Tenant hangs, installs, mounts, suspends or attaches anything from or to any doors, windows, walls, floors or ceilings, Tenant shall spackle and sand all holes and repair any damage caused thereby or by the removal thereof at or prior to the expiration or termination of the Lease.

6. Tenant shall not change any locks nor place additional locks upon any doors.

7. Tenant shall not use nor keep in the Building any matter having an offensive odor, nor explosive or highly flammable material, nor shall any animals other than handicap assistance dogs in the company of their masters be brought into or kept in or about the Property.

8. If Tenant desires to introduce electrical, signaling, telegraphic, telephonic, protective alarm or other wires, apparatus or devices, Landlord shall direct where and how the same are to be placed, and except as so directed, no installation boring or cutting shall be permitted. Landlord shall have the right to prevent and to cut off the transmission of excessive or dangerous current of electricity or annoyances into or through the Building or the Premises and to require the changing of wiring connections or layout at Tenant’s expense, to the extent that Landlord may deem necessary, and further to require compliance with such reasonable rules as Landlord may establish relating thereto, and in the event of non-compliance with the requirements or rules, Landlord shall have the right immediately to cut wiring or to do what it considers necessary to remove the danger, annoyance or electrical interference with apparatus in any part of the Building. All wires installed by Tenant must be clearly tagged at the distributing boards and junction boxes and elsewhere where required by Landlord, with the number of the office to which said wires lead, and the purpose for which the wires respectively are used, together with the name of the concern, if any, operating same. No machinery of any kind other than customary small business machines shall be allowed in the Premises. Tenant shall not use any method of heating, air conditioning or air cooling other than that provided by Landlord.

9. Tenant shall not place weights anywhere beyond the safe carrying capacity of the Building which is designed to normal office building standards for floor loading capacity. Landlord shall have the right to exclude from the Building heavy furniture, safes and other articles which may be hazardous or to require them to be located at designated places in the Premises.

10. The use of rooms as sleeping quarters is strictly prohibited at all times.

11. Tenant shall have the right, at Tenant’s sole risk and responsibility, to use only Tenant’s Share of the parking spaces at the Property as reasonably determined by Landlord. The number of parking stalls used by Tenant and Tenant’s Agents shall not at any time exceed the number of spaces specified in the definition of the Parking Spaces in Section 1 of the Lease. Tenant shall comply with all parking regulations promulgated by Landlord from time to time for the

B-1

orderly use of the vehicle parking areas, including without limitation the following: Parking shall be limited to automobiles, passenger or equivalent vans, motorcycles, light four wheel pickup trucks and (in designated areas) bicycles. No vehicles shall be left in the parking lot overnight without Landlord’s prior written approval. Parked vehicles shall not be used for vending or any other business or other activity while parked in the parking areas. Vehicles shall be parked only in striped parking spaces, except for loading and unloading, which shall occur solely in zones marked for such purpose, and be so conducted as to not unreasonably interfere with traffic flow within the Property or with loading and unloading areas of other tenants. Employee and tenant vehicles shall not be parked in spaces marked for visitor parking or other specific use. All vehicles entering or parking in the parking areas shall do so at owner’s sole risk and Landlord assumes no responsibility for any damage, destruction, vandalism or theft. Tenant shall cooperate with Landlord in any measures implemented by Landlord to control abuse of the parking areas, including without limitation access control programs, tenant and guest vehicle identification programs, and validated parking programs, provided that no such validated parking program shall result in Tenant being charged for spaces to which it has a right to free use under its Lease. Each vehicle owner shall promptly respond to any sounding vehicle alarm or horn, and failure to do so may result in temporary or permanent exclusion of such vehicle from the parking areas. Any vehicle which violates the parking regulations may be cited, towed at the expense of the owner, temporarily or permanently excluded from the parking areas, or subject to other lawful consequence. Bicycles are not permitted in the Building.

12. Tenant and its Agents shall not smoke in the Building or at the Building entrances and exits.

13. Tenant shall provide Landlord with a written identification of any vendors engaged by Tenant to perform services for Tenant at the Premises (examples: security guards/monitors, telecommunications installers/maintenance), and all vendors shall be subject to Landlord’s reasonable approval. No mechanics shall be allowed to work on the Building or Building Systems other than those engaged by Landlord. Tenant shall permit Landlord’s employees and contractors and no one else to clean the Premises unless Landlord consents in writing. Tenant assumes all responsibility for protecting its Premises from theft and vandalism and Tenant shall see each day before leaving the Premises that all lights are turned out and that the windows and the doors are closed and securely locked.

14. Tenant shall comply with any move-in/move-out rules provided by Landlord and with any rules provided by Landlord governing access to the Building outside of Normal Business Hours. Throughout the Term, no furniture, packages, equipment, supplies or merchandise of Tenant will be received in the Building, or carried up or down in the elevators or stairways, except during such hours as shall be designated by Landlord, and Landlord in all cases shall also have the exclusive right to prescribe the method and manner in which the same shall be brought in or taken out of the Building.

15. Tenant shall not place oversized cartons, crates or boxes in any area for trash pickup without Landlord’s prior approval. Landlord shall be responsible for trash pickup of normal office refuse placed in ordinary office trash receptacles only. Excessive amounts of trash or other out-of-the-ordinary refuse loads will be removed by Landlord upon request at Tenant’s expense.

16. Tenant shall use its best efforts all of Tenant’s Agents to comply with these Building Rules, and will be responsible for any non-compliance by Tenant’s Agents.

17. Landlord reserves the right to rescind, suspend or modify any rules or regulations and to make such other reasonable rules and regulations as, in Landlord’s reasonable judgment, may from time to time be needed for the safety, care, maintenance, operation and cleanliness of the Property. Notice of any action by Landlord referred to in this section, given to Tenant, shall have the same force and effect as if originally made a part of the foregoing Lease. New rules or regulations will not, however, be unreasonably inconsistent with the proper and rightful enjoyment of the Premises by Tenant under the Lease.

18. Tenant shall not burn candles, incense, matches or other ignitable materials in the Building.

19. These Building Rules are not intended to give Tenant any rights or claims in the event that Landlord does not enforce any of them against any other tenants or if Landlord does not have the right to enforce them against any other tenants and such non-enforcement will not constitute a waiver as to Tenant.

B-2

EXHIBIT “C”

TENANT ESTOPPEL CERTIFICATE

Please refer to the documents described in Schedule 1 hereto, (the “ Lease Documents”) including the “ Lease” therein described; all defined terms in this Certificate shall have the same meanings as set forth in the Lease unless otherwise expressly set forth herein. The undersigned Tenant hereby certifies that it is the tenant under the Lease. Tenant hereby further acknowledges that it has been advised that the Lease may be collaterally assigned in connection with a proposed financing secured by the Property and/or may be assigned in connection with a sale of the Property and certifies both to Landlord and to any and all prospective mortgagees and purchasers of the Property, including any trustee on behalf of any holders of notes or other similar instruments, any holders from time to time of such notes or other instruments, and their respective successors and assigns (the “ Beneficiaries”) that as of the date hereof:

1. The information set forth in attached Schedule 1 is true and correct.

2. Tenant is in occupancy of the Premises and the Lease is in full force and effect, and, except by such writings as are identified on Schedule l, has not been modified, assigned, supplemented or amended since its original execution, nor are there any other agreements between Landlord and Tenant concerning the Premises, whether oral or written.

3. All conditions and agreements under the Lease to be satisfied or performed by Landlord have been satisfied and performed.

4. Tenant is not in default under the Lease Documents, Tenant has not received any notice of default under the Lease Documents, and, to Tenant’s knowledge, there are no events which have occurred that, with the giving of notice and/or the passage of time, would result in a default by Tenant under the Lease Documents.

5. Tenant has not paid any Rent due under the Lease more than 30 days in advance of the date due under the Lease and Tenant has no rights of setoff, counterclaim, concession or other rights of diminution of any Rent due and payable under the Lease except as set forth in Schedule 1.

6. To Tenant’s knowledge, there are no uncured defaults on the part of Landlord under the Lease Documents, Tenant has not sent any notice of default under the Lease Documents to Landlord, and there are no events which have occurred that, with the giving of notice and/or the passage of time, would result in a default by Landlord thereunder, and that at the present time Tenant has no claim against Landlord under the Lease Documents.

7. Except as expressly set forth in Part G of Schedule 1, there are no provisions for any, and Tenant has no, options with respect to the Premises or all or any portion of the Property.

8. No action, voluntary or involuntary, is pending against Tenant under federal or state bankruptcy or insolvency law.

9. The undersigned has the authority to execute and deliver this Certificate on behalf of Tenant and acknowledges that all Beneficiaries will rely upon this Certificate in purchasing the Property or extending credit to Landlord or its successors in interest.

10. This Certificate shall be binding upon the successors, assigns and representatives of Tenant and any party claiming through or under Tenant and shall inure to the benefit of all Beneficiaries.

IN WITNESS WHEREOF, Tenant has executed this Certificate this day of , 2 .


	Name of Tenant

	By:
	Title:

C-1

SCHEDULE 1 TO TENANT ESTOPPEL CERTIFICATE

Lease Documents, Lease Terms and Current Status

A. Date of Lease:

B. Parties:

1. Landlord:

2. Tenant:

C. Premises:

D. Modifications, Assignments, Supplements or Amendments to Lease:

E. Commencement Date:

F. Expiration of Current Term:

G. Option Rights:

H. Security Deposit Paid to Landlord: $

I. Current Base Rent: $

J. Current Excess Operating Expenses and Excess Property Taxes: $ and $

K. Current Total Rent: $

L. Square Feet Demised:

C-2

EXHIBIT “D”

CLEANING SCHEDULE

LOBBIES & ENTRANCES

Daily Cleaning

· Stone, ceramic tile, marble, terrazzo, or other stone or resilient flooring will be vacuumed or dry mopped and wet mopped.

· Waste receptacles will be emptied, and washed as necessary.

· Carpets, including walk off mats will be vacuumed.

· Wall surfaces will be spot cleaned.

· Stainless steel, chrome, brass and other brightwork will be cleaned and polished.

· Entrance door and sidelight glass will be cleaned inside and out.

· Exterior of entrance areas will be swept. Smoking urns and outside trash receptacles will be emptied. Urns will be filled with fresh sand as needed.

· Lobby areas will be maintained at all times to a superior appearance.

Weekly Cleaning

· Reachable picture frames, moldings, door and window frames will be dusted. Artwork will be returned to level position.

· Door handles, doorknobs, switch plates, kick plates, will be cleaned.

· Vinyl tile and similar types of flooring will be spray buffed.

Monthly Cleaning

· Reachable paneling, door trim, ornamental work, baseboards, entire doors, woodwork, diffusers, grills, will be dusted.

· Bases, corners, edges and carpeted areas will be detailed vacuumed.

Bi-Annually

· Vinyl tile floors will be scrubbed or stripped and recoated.

· Stone or hard floors will be machine scrubbed and rinsed.

GENERAL OFFICE AREAS

Daily Cleaning

· Waste receptacles will be emptied and liners will be replaced as needed. Trash can liners will be neatly arranged. Trash will be removed from building and deposited in designated containers or compactors.

· Furniture, workstations, fixtures, filing cabinets, will be dusted. Work surfaces will be dusted provided they have been cleared of papers and personal belongings.

· Walls, doors, windowsills, ledges will be dusted.

· Carpeting and rugs will be vacuumed and spot cleaned.

· Vinyl tile floors will be dry mopped and damp mopped.

· Interior partition glass will be spot cleaned.

· Water coolers and fountains will be cleaned and sanitized.

Monthly Cleaning

· Stiff brush or vacuum all upholstered furniture.

· Detail vacuum all edges and corners.

· Grills and diffusers will be dusted.

· Vinyl tile floors will be spray buffed.

Annually

· Vinyl tile floors will be scrubbed or stripped and recoated.

D-1

PRIVATE OFFICES & CONFERENCE ROOMS

Daily Cleaning

· Empty and clean all waste receptacles replacing liners as needed. Trash can liners will be neatly arranged. Remove all building waste to designated refuse containers outside the buildings.

· Hand dust all furniture, fixtures, filing cabinets and other dust collecting objects.

· Spot clean walls, doors, windowsills, ledges and wall areas.

· Wipe clean all metal doorknobs, light switches, kick plates and door saddles.

· Vacuum all carpeting and rugs. Spot clean to remove spillage and stains.

· Clean all “ grease boards” with appropriate cleaner (unless “ DO NOT ERASE” notation is left on board).

Weekly Cleaning

· High dust including picture frames, moldings, door and window frames, and return artwork to level position.

· Wipe clean all metal doorknobs, light switch plates, kick plates, and door saddles.

Monthly Cleaning

· Stiff brush or vacuum all upholstered furniture.

· Dust all paneling, door trim and other architectural louvers, ornamental work, baseboards, entire doors and woodwork, air diffusers and ceiling ventilation grilles.

· Detail vacuum all edges and corners.

RESTROOMS

Daily Cleaning

· Thoroughly sanitize and wipe clean all toilets and urinals.

· Clean, sanitize and polish all sinks and fixtures with a non-abrasive cleaner.

· All hand soap, paper towel, toilet paper, and sanitary napkin dispensers will be filled, sanitized and polished. Any over spray from cleaning product is to be wet mopped immediately.

· Spot clean all partitions, tiled walls and vertical surfaces.

· Empty, clean and sanitize all trash receptacles and sanitary disposal units.

· Thoroughly clean all mirrors and bright work.

· Wet mop to sanitize all floors.

Weekly Cleaning

· High dust including high moldings, door frames, ceiling ventilations grills, and diffusers.

Quarterly

· Machine scrub restroom floors.

LUNCHROOM, BREAKROOMS, & VENDING AREAS

Daily Cleaning

· Empty and clean all waste receptacles (recyclable and non-recyclables) replacing liners if needed. Remove all building waste to designated refuse containers outside the building.

· Vacuum all carpeting, moving tables and chairs as needed. Spot clean to remove spillage and stains.

· Dry and wet mop all vinyl and similar types of flooring

· Wipe clean all vending machines as needed including spot cleaning glass display.

· Clean and sanitize tables. Spot clean seating to remove spillage and stains.

· Thoroughly clean and sanitize cabinet fronts, tray slides, counter tops, microwave ovens, etc.

· Replenish hand soap and paper towels.

Weekly Cleaning

· High dust including picture frames, moldings, door and window frames, and return artwork to level position.

· Wipe clean all metal doorknobs, light switch plates, kick plates, and door saddles.

· Spray buff vinyl tile floors.

· Wash waste containers inside and out.

Monthly Cleaning

· Detail vacuum all edges and corners.

· Grills and diffusers will be dusted.

· Stiff brush or vacuum all upholstered furniture; wipe clean all vinyl furniture.

D-2

Bi-Annually

· Strip or scrub re-coat vinyl tile floors.

ELEVATORS

Daily Cleaning

· Vacuum all cab floors, doors, tracks, and saddles.

· Wipe clean any wood, plastic laminate or other hard finish vertical surfaces.

· Sanitize and polish all stainless steel or other metal work on control panels and throughout the elevator cabs.

ELEVATOR LOBBIES, COMMON AREAS & CORRIDORS

Daily Cleaning

· Vacuum carpeting. Dry mop and damp mop hard floors.

· Dust and wipe clean all baseboards, wood panel and trim.

· All waste receptacles will be emptied and washed.

· Dust and wipe clean all furniture, windowsills, picture frames and door frames removing smudges, fingerprints, stains, splash marks, dust, and dirt.

· Spot clean all wall surfaces.

Weekly Cleaning

· High dust including picture frames, moldings, door and window frames, and return artwork to level position.

· Clean all paneling, door trim and other architectural louvers, ornamental work, baseboards, entire doors and woodwork, air diffusers, and ceiling ventilation grilles.

· Detail vacuum all edges, baseboards, corners, and carpeted areas.

STAIR TOWERS

Daily Cleaning

· Police for debris and mop for spillage.

Weekly Cleaning

· Sweep or vacuum.

· Wet mop stairs.

· Spot clean wall surfaces within reach; dust horizontal surfaces within reach.

D-3

EXHIBIT “E”

WORK LETTER

E-1. Description of Improvements. Subject to the provisions of this Work Letter, Landlord shall, at Landlord’s expense not to exceed the Allowance, construct certain improvements on or about the Premises (the “ Work”) in accordance with those plans and specifications attached hereto as Schedule 1 and incorporated herein by this reference. Tenant hereby approves the plans and specifications attached as Schedule 1. The estimated schedule for planning, design and construction of the Work is as follows:

1. From the parties’ agreement on the Preliminary Plans and Specifications or the date of this Lease if later, approximately 6 weeks for design, engineering and the parties’ review of the Final Plans.

2. From the parties’ agreement on the Final Plans, approximately 3 weeks for requests for proposals, bid review and award/selection of the general contractor.

3. From the time of entering into the construction contract with the selected general contractor, approximately 1 week to complete and submit application to local municipality for the building permit.

4. From submission of application for building permit, estimate between 4 weeks and 12 weeks for the building permit for the Work to be issued.

5. From issuance of the building permit, approximately 12 weeks for Substantial Completion of the Work.

E-2. Preliminary Plans; Final Plans. If the plans and specifications referenced in Schedule 1 are final plans and specifications, such final plans and specifications are hereinafter referred to as the “ Final Plans,” and the remainder of this Paragraph shall be inoperative. All of the materials and finishes used in the Work shall be consistent with the standards and specifications for tenant improvements at the Building established by Landlord (the “ Standards”) attached hereto as Schedule 2, except as otherwise specified on the plans and specifications attached hereto as Schedule 1. If the plans and specifications referenced in Schedule 1 are preliminary plans, Landlord shall cause its architect to prepare final working construction drawings and outlined specifications for the Work and submit such plans and specifications to Tenant for its approval within a reasonable time after execution of the Lease, subject to Tenant’s cooperation. Tenant shall make its construction representatives available for consultation upon request, shall promptly furnish all information necessary for final working construction drawings to be prepared (including without limitation, detailed mechanical, electrical, plumbing and HVAC specifications, finishes, lighting and layout) and shall otherwise cooperate in the preparation of such construction drawings and specifications. Tenant’s approval of the final construction drawings and specifications shall not be unreasonably withheld, conditioned or delayed and shall be deemed given unless Tenant delivers written notice of its objection, describing in detail the reasons therefor, within 5 business days after receiving the proposed final construction drawings and specifications from Landlord or its architect. Tenant shall not have the right to disapprove such drawings and specifications except and to the extent they are materially inconsistent with the plans and specifications attached hereto as Schedule 1 and the Standards established by Landlord. If Tenant disapproves such drawings and specifications, within 5 business days after receiving the proposed final construction drawings and specifications, Tenant shall return the same with notes and comments specifically describing the changes necessary to make the same acceptable to Tenant. If such changes are acceptable to Landlord, Landlord shall cause its architect to make the changes requested by Tenant and resubmit the same, within a reasonable time after receiving Tenant’s comments, for Tenant’s further review, within the same 5 business day period and on the same terms and conditions above. The above process shall continue until the final construction drawings are approved by Tenant. If Landlord does not receive written notice from Tenant of any objections a provided herein within the applicable 5 business day period provided herein, Tenant shall be deemed to have approved the drawings and specifications submitted to Landlord and waived its rights to object thereto. If Tenant reasonably objects to the final construction drawings and specifications presented by Landlord’s architect, or to any changes requested by Landlord, the parties shall promptly meet in an attempt to resolve any dispute regarding such drawings and specifications. Any preparation or review by Landlord or its Agents of the final working drawings and outlined specifications and any inspection of the Work constructed pursuant thereto shall be for its sole purpose and shall not imply Landlord’s inspection, review or approval of the same, or obligate Landlord to inspect, review or approve the same, for quality, design, Code compliance or other like matters. Accordingly, notwithstanding that any such drawings or specifications are reviewed by Landlord or its space planner, architect, engineers, and consultants, and notwithstanding any consent, approval, advice or assistance, or any inspection of the Work, which may be rendered to Tenant by Landlord or Landlord’s space planner, architect, engineers, and consultants, Landlord shall have no liability whatsoever in connection therewith and shall not be responsible for any defects, omissions or errors contained in said drawings or specifications, or with respect to any defects, errors or omissions in the Work constructed by Tenant and Tenant’s Agents. Final working drawings and specifications prepared in accordance with this Paragraph E-2 and approved by Landlord and Tenant are hereinafter

E-1

referred to as the “ Final Plans.”

E-3 Non-Standard Tenant Improvements. Prior to final approval of the Final Plans, Landlord will permit Tenant to deviate from the Standards and will authorize the inclusion of such deviations in the Final Plans provided that (a) the deviations shall not be of a lesser quality than the Standards; (b) the deviations will not result in an increased electric load for lighting and power in the Premises; (c) the deviations conform to all applicable governmental laws, codes, ordinances, rules and regulations and all necessary governmental permits and approvals, if any, required for such deviations have been secured by Tenant, at Tenant’s sole cost and expense; (d) the deviations do not require building service beyond the level of service normally provided to other tenants and occupants of the Building; (e) the deviations do not overload the floors; (f) Landlord has determined, in Landlord’s sole and absolute (even if arbitrary) discretion, that the deviations are of a nature, quality and character that are consistent with the overall objectives of Landlord for the Building; (g) the deviations shall not, in Landlord’s determination, result in any increase in the cost to Landlord of the construction of the Work above the Allowance unless Tenant otherwise agrees to pay for the overage; and (h) the deviations shall not, in Landlord’s determination, result in a delay in the construction of the Work. If Landlord determines that the deviations will result in any increase in the cost to Landlord of the Work over the Allowance, Landlord may require Tenant to pay Landlord the amount of such increased costs in advance of performing the Work. At Landlord’s sole option, upon the expiration or sooner termination of the Lease, Tenant, at Tenant’s sole cost and expense, shall remove all or any portion of any special equipment and trade fixtures installed by Tenant or its Agents (i.e., pharmaceutical operations, storage and handling equipment) and restore the affected area of the Premises to a condition compatible with the remainder of the Premises, including finishes, satisfactory to Landlord in its reasonable judgment.

E-4. Completion of Work and Commencement Date.

(a) The term “ Substantial Completion” (or “ Substantially Complete” or similar terms used with respect to the completion of the Work) shall mean that state of completion of the Work which will, except for any improvements or work to be performed by Tenant, allow Tenant to utilize the Premises for its intended purposes without material interference to the customary business activities of Tenant by reason of any incomplete Work including Punch List items, and a certificate of occupancy for the Premises has been obtained from the local municipality. Notwithstanding the foregoing, Tenant shall be responsible for any State or Federal inspection, permit and licensing requirements relating to Tenant’s pharmacy business; and if Landlord is unable to obtain a certificate of occupancy for the Premises due to such State or Federal requirements, the Work shall be deemed Substantially Complete. The Work shall be deemed Substantially Complete even though minor or insubstantial details of construction, mechanical adjustment or decoration remain to be performed, the non-completion of which does not materially interfere with Tenant’s use of the Premises or the conduct of its business therein.

(b) On the Commencement Date, it shall be presumed (subject to rebuttal) that all Work theretofore performed by or on behalf of Landlord was satisfactorily performed in accordance with, and meeting the requirements of, this Lease. The foregoing presumption shall not apply, however, to Punch List items, which Landlord agrees it shall complete with reasonable speed and diligence. The punch list identifying all items of the Work by Landlord which Tenant has determined by reasonable visual inspection have not been completed substantially in accordance with the approved plans (the “ Punch List”), must be delivered to Landlord, in writing, within five (5) business days after the Commencement Date. If Tenant fails to deliver such Punch List within this time period, such failure shall be deemed to be an irrevocable waiver by Tenant of its right to require the correction of any Work, except for latent defects not known to Tenant and not reasonably discoverable within such time period. If Tenant timely delivers the Punch List, Landlord will correct all Punch List items within a reasonable time commencing promptly after receipt of the Punch List. In addition, Landlord will correct all latent defects in the Work within a reasonable time commencing promptly after Landlord’s receipt of written notice from Tenant specifying such latent defects, provided such notice is received by Landlord no later than one (1) year after the Commencement Date, and thereafter Landlord shall assign to Tenant or enforce for Tenant’s benefit all manufacturer’s warranties on any portion of the Work.

E-2

work by Landlord or Landlord’s contractors, subcontractors and employees at the Building. Tenant shall indemnify Landlord against any injury, loss or damage which may occur to any person or to any of the work in the Premises or in the Building, and to any personal property therein, by reason of Tenant’s early entry, all of which shall be at Tenant’s sole risk. All personal property of Tenant and Tenant’s Agents left at the Premises or the Property before the Commencement Date shall be at the Tenant’s sole risk, and Landlord shall not be responsible or liable for any security nor for any loss, theft or damage thereof. Prior to early entry by Tenant, Tenant shall provide Landlord with proof of insurance coverage required of Tenant by this Lease.

E-5 Construction; Changes. The Final Plans agreed upon by Landlord and Tenant shall be submitted by Landlord or Landlord’s contractor to the local governmental body for plan checking and the issuance of a building permit. Landlord, with Tenant’s cooperation, shall cause to be made to the Final Plans any changes necessary to obtain the building permit. After final approval of the Final Plans by applicable governmental authorities, no further changes may be made thereto without the prior written approval of both Landlord and Tenant. If Tenant, however, requests in writing any change, addition or alteration (“ Changes”) in such plans and specifications or in the construction of the Work, and, if Landlord approves the proposed Changes, Landlord shall notify Tenant of the cost to perform the Changes and Tenant shall pay to Landlord such cost to perform such Changes plus an amount equal to five percent (5%) of such cost before Landlord shall perform the Changes. Notwithstanding the foregoing, Landlord shall have the right to substitute materials and finishes of like kind and quality to those specified in the Final Plans if such items are unavailable, or are unavailable at commercially reasonable cost or within the time required to avoid delay in the Substantial Completion of the Work. Any delay caused by Tenant’s request for any Changes or from the construction of any Changes shall not, in any event, delay the Commencement Date, which shall occur on the date it would have occurred but for such Changes. After a building permit for the Work is issued, Landlord shall cause its contractor to begin construction of the Work in accordance with the Final Plans. Landlord shall supervise the completion of the Work and cause its contractor to diligently pursue substantial completion of the Work. The Work shall be the property of Landlord and shall remain upon and be surrendered with the Property upon the expiration of the Lease Term, subject to Paragraph E-3.

E-6 Tenant’s Work. Landlord’s obligation to prepare the Premises for Tenant’s occupancy is limited to the completion of the Work set forth in the plans and specifications attached hereto as Schedule 1 or in the Final Plans. Landlord shall not be required to furnish, construct or install any items not shown thereon. Except for the Work to be provided by Landlord, Tenant shall be responsible for constructing and installing and shall pay all of the costs of any work, labor and materials necessary to prepare the Premises for Tenant’s occupancy, including without limitation, Tenant’s furniture, fixtures, equipment, and telecommunications and data wiring and cabling and any chases, risers, drops and outlets relating thereto, in accordance with applicable provisions of the Lease concerning work and Alterations by Tenant, subject to Landlord’s prior approval of all such Alterations by Tenant.

E-7 Cost of Work. As used herein, cost of the Work shall mean all the costs and charges incurred by Landlord or Tenant to design and construct the Work, including, without limitation, (i) the actual contractor costs and charges for material and labor, including overtime and prevailing wage requirements, contractor’s profit, overhead and general conditions incurred by Landlord in having the Work constructed in accordance with the Final Plans, (ii) Governmental agency plan check, permit and other fees (including, without limitation, certificate of occupancy fees) and sales and use taxes, (iii) testing and inspection costs, (iv) any paint touch-up or repair work necessary due to Tenant’s move into the Premises, (v) architectural and engineering fees, (vi) all other costs expended or to be expended by Landlord or Tenant in the construction of the Work.

E-8 Allowance for Cost of Work.

(a) In the event the cost of the Work being constructed pursuant to the Final Plans exceeds Six Hundred Twenty-Six Thousand Three Hundred Forty-Six and No/100 ($626,346.00) Dollars (“ Allowance”), Tenant shall pay to Landlord the cost of the Work in excess of the Allowance after accounting for any portion of the Allowance already disbursed by Landlord or in the process of being disbursed by Landlord (the “ Excess Cost”) as provided herein. The Excess Cost shall be paid to Landlord in cash prior to the commencement of construction of the Work unless otherwise agreed by the parties. In no event shall Landlord be obligated to spend or incur more than the amount of the Allowance for the cost of the Work. Tenant shall be responsible for and shall pay for the entire cost of the Work in excess of the Allowance out of its own funds. The Excess Cost amount delivered to Landlord shall be disbursed by Landlord on a pari passu basis with the then remaining portion of the Allowance, and such disbursement shall be pursuant to the same procedure as the Allowance. In the event that, after the Excess Cost amount has been delivered by Tenant to Landlord, the cost of Work shall change, any additional costs shall be paid by Tenant to Landlord immediately as an addition to the Excess Cost or at Landlord’s option, Tenant shall make payments for such additional costs out of its own funds. Any delay caused by Tenant’s failure to timely pay an Excess Cost or any cost Tenant is responsible for paying resulting from Changes shall not, in any event, delay the Commencement Date, which shall occur on the date it would have occurred but for such delay. Any unused amount of the

E-3

Allowance shall be retained by Landlord. In no event shall Tenant be entitled to apply any unused amount of the Allowance to pay Base Rent or Additional Rent.

(b) In addition to the Allowance, Landlord, at its sole cost, will remove certain trees from the Property. The specific trees to be removed will be those designated by Tenant, within the area between the Building and Route 38, provided, however, that all tree removal shall be subject to any necessary approval by local township or other governmental authority.

(c) Notwithstanding the foregoing, to the extent that the Landlord’s costs of preliminary plans and designs for the Premises and the Work (“Cost of Test Fit”) exceed Nine Cents ($0.09) per rentable square foot of the Premises, i.e., $2,237.00 (“Test Fit Allowance”), Tenant shall pay to Landlord the Cost of Test Fit in excess of the Test Fit Allowance after accounting for any portion of the Test Fit Allowance already disbursed by Landlord or in the process of being disbursed by Landlord (the “ Excess Test Fit Cost”) as provided herein. The Excess Test Fit Cost shall be paid to Landlord in cash within 30 days of the date of this Lease. In no event shall Landlord be obligated to spend or incur more than the amount of the Test Fit Allowance for the Cost of Test Fit. Tenant shall be responsible for and shall pay for the entire Cost of Test Fit in excess of the Test Fit Allowance out of its own funds.

E-9 Tenant’s Representative. Tenant has designated Brian Adams as its sole representative with respect to the matters set forth in this Exhibit E, who shall have full authority and responsibility to act on behalf of the Tenant as required in this Exhibit E.

E-10 Landlord’s Representative. Landlord has designated Gregory Kane and Kim Tiger as its sole representatives with respect to the matters set forth in this Exhibit E, who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of the Landlord as required in this Exhibit E.

E-11 Other Delays. Any delay in the construction of the Work caused by “Tenant Delay” including any one or more of the following: (i) Tenant’s request for materials, finishes or installations other than the Standards, including any so-called long lead items (meaning items that are not readily available at local retailers for immediate delivery, or are unavailable at commercially reasonable cost), or (ii) Tenant’s failure to timely prepare and submit any plans, specifications and construction drawings for Landlord’s review, timely submit information and cooperate in connection with preparing plans, specifications and construction drawings, or to timely review and approve any plans, specifications and construction drawings submitted by Landlord, within the time specified in this Exhibit E (or if not specified, then within 5 days of receipt), or (iii) any delays in obtaining governmental approvals, permits or licenses with respect to any of the Work (including delays due to rejection and necessary modifications of any documents submitted for review) due to any failure of plans, specifications and construction drawings prepared or modified by Tenant or Tenant’s Agents to comply with applicable laws, codes or governmental requirements, or due to any incomplete work, alterations or improvements for which Tenant is responsible, or due to any licensing, inspection or permitting requirements relating to Tenant’s specialized equipment, improvements, alterations or betterments relating to pharmacy operations, or (iv) Tenant’s failure to timely install its furniture, trade fixtures, equipment, wiring and cabling, or any other work or improvements for which Tenant is responsible, or (v) any other delay requested or caused by Tenant or Tenant’s Agents, shall not, in any event, delay the Commencement Date, which shall occur on the date it would have occurred but for such Tenant Delay.

E-4

SCHEDULE 1
TO
WORK LETTER
TENANT’S PLANS AND SPECIFICATIONS

E-5

SCHEDULE 1
TO
WORK LETTER
TENANT’S PLANS AND SPECIFICATIONS (CONTINUED)

Tenant’s Prevailing Wage Requirements: At Tenant’s request, Landlord’s construction contract with its general contractor will include a requirement that prevailing wages will be paid to construction workers of the general contractor and subcontractors, and that all contractors and subcontractors will comply with the Affirmative Action Program as set forth at N.J.A.C. 19:30-3 et seq. (“ Prevailing Wage and Affirmative Action Requirements”). For this purpose prevailing wages will be in accordance with the current publication of the Prevailing Wage Rate Determination made by the Department of Labor and Workforce Development pursuant to the New Jersey Prevailing Wage Act (N.J.S.A. 34:11-56.25 et seq.). The 2015 publication of the Prevailing Wage Rate Determination has been provided to Landlord by Tenant before the date of this Lease and will be provided by Landlord to its general contractor.

E-6

SCHEDULE 2
TO
WORK LETTER
STANDARD SPECIFICATIONS FOR TENANT FIT-OUT

DEMOLITION:

A. Demolition includes full or partial removal of existing partitions doors/frames, floor/wall finishes, lights, ceilings, plumbing, electrical or mechanical equipment, etc., as required. Remove all portions completely and totally whether or not specifically noted herein, in such a manner that the remaining construction is ready and acceptable to receive new work.

CARPENTRY:

A. Blocking: To be provided for all door stops, toilet partitions, bath accessories, shelving and cabinetry, if required or as noted. Costs to be included in any unit prices.

B. Finish Carpentry: Provide and install all millwork, installation of solid core stain grade wood doors, hardware, shelving, hanger rods, as shown on individual drawings.

C. Window Sills: All windowsills to be GWB unless otherwise noted.

DOORS, FRAMES AND HARDWARE:

A. Standard interior wood office door solid particle door leaf, 1 3/4 inch thick, 3’ -0” x 8’-0”, stain grade birch veneer (2nd and 3rd floors); 3’0” x 7’0” (1st floor).

B. Interior double doors to be the same as single doors, each leaf to be 3’-0” x 7’-0”.

C. Tenant entry doors match base building standard 1-3/4 inch thick, 3’-0” x 7’-0” stain grade Oak veneer — 1 hr. rated.

D. Frames: Frames to be hollow metal 16 gauge hollow metal knock down frames, rust inhibitive primer, field painted, fire rated as required. Frames to have a minimum of 3 door silencers

E. Hardware: Obtain each type of hardware from a single manufacturer.

F. Schlage AL-Series, Jupiter Lever Handle, Finish to be brushed aluminum. Closers on rated doors. Provide full mortise 5 knuckle hinges, wall mounted rubber doorstops with blocking in wall for doorstop, and rubber silencers.

G. Provide passage latch set as standard for all doors except suite entry door.

H. Suite entrance doors and all tenant egress doors to be keyed to the building master.

WALL TYPES:

A. Interior Wall to underside of ACT: 5/8 inch gypsum wall board on 3 5/8 inch 25 gauge steel stud 16 inches o/c. Height to underside of suspended ceiling. Provide bracing to structure above per local code. Typical at all locations U.O.N.

B. Slab to Deck Partition: 5/8 inch GWB on 3 5/8 inch 25 gauge steel studs 16 inches 0/c. -studs to underside of deck, GWB to underside of deck and tightly sealed, 3 1/2 inch sound attenuation blanket to 6 inches above finished ceiling.

C. Fire-rated Partition: One Hour Fire Rated - 5/8 inch fire-rated GWB on 3 5/8 inch 25 gauge steel studs 16 inches o/c. -studs and GWB continuous to underside of deck, fire safe at deck flutes. Seal all penetrations to maintain fire rating. Install 3 1/2 inch acoustic batt insulation within wall to full height. Tape and spackle face outside tenant area to achieve fire rating. Finish tape to six (6) inches above ceiling. Fire tape above to deck.

D. Tape and spackle all GWB where exposed or required by code. Use metal corner beads and metal “ J” beads on exposed edges.

E. All fire-rated and partition walls to be sealed against window mullions, existing walls, etc.

F. Every opening and penetration of a smoke, fire or demising partition shall be protected with approved protective material, to limit the spread of fire and restrict the movement of smoke from one side of assembly to the other as required by local code.

CEILINGS:

A. Standard - 2’ x 4’ lay-in angled tegular white mineral fiber board fissured pattern, Armstrong Cortega Second Look II, 2767 or equal. Color to be white. Ceiling grid system, exposed tee, Prelude 15/16” installed per manufacturer’s recommendations.

FLOORING:

A. Resilient Tile Flooring: Provide 12” x 12” x 1/8” thick Vinyl Composition Tile where indicated on plans. Color to be selected from full line of standard colors, manufactured by Armstrong Excelon or equal. Buff wax floor prior to tenant walk through. Typical at kitchen areas, pantry, and storage rooms.

B. Carpeting: Carpet to be Shaw Digital, or equal, upgraded carpet to be Shaw Design Series V, or equal, carpet to be

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selected from Selection Boards furnished by Landlord. Allow for proper placement of seams. Carpet installation to be direct glue down.

C. Provide vinyl cove base to all carpeted and resilient tile floor areas. Vinyl base to be 1/8” thick, Johnsonite, or equal.

D. Provide a transaction strip where carpet and VCT meet.

E. All floors to be prepared in strict accordance with manufacturers recommendations for first quality installation, by means of flash patching or leveling as required.

PAINTING:

A. Interior Gypsum Drywall two coats latex wall paint, Sherwin Williams Interior Latex Flat Finish or equivalent.

B. All trim and hollow metal doorframes to receive 2 coats of Sherwin Williams ProClassic interior waterbased acrylic-alkyd enamel or equivalent, semi gloss finish.

C. Doors to be either factory or field stained, or field painted.

D. Mechanical piping ductwork and sprinklers will not be painted.

WINDOW BLINDS:

A. If not existing Contractor to furnish and install new 1” Building Standard mini blinds to be manufactured by SWF
Contract and the color is to match existing building blinds. Install blinds inside the window mullions.

MILLWORK/ CASEWORK (Available at additional cost to Tenant):

A. High pressure plastic laminate base cabinets with countertop and back splash. Laminates to be Formica or equal, selected from manufacturers standard colors. All plastic laminate cabinets, shelves and counters shall conform to “ heavy duty” standards for commercial use.

PLUMBING:

All work to be completed in accordance with the following:

1) The most recent IBC

2) The most recent IPC

3) State and Local Health Departments

4) Local Building Codes and the requirements of applicable regulatory authorities.

5) In cases of a conflict between the Contract Documents and the requirements of the local jurisdiction, the more stringent requirements shall apply.

6) Standard for tenant of 10,000 s.f. or more, (1) sink at kitchen/pantry area with 6’ of countertop and a total of 3’ of base cabinets.

FIRE PROTECTION:

A. Provide one each 5 lb. ABC fire extinguisher with semi- recessed cabinet per 4000 SF or as required to meet local code, and at kitchen/pantries.

B. Furnish and install branch and distribution sprinkler piping from building sprinkler mains. Size piping based on hydraulic calculations or pipe schedule if applicable.

C. Provide semi recessed sprinkler heads spaced to meet building requirement coverage in accordance with NFPA13, upright heads in open ceiling areas.

D. Furnish and install tampers and flows switch, as required by code.

HVAC:

A. Furnish and install duct work, flex, and diffusers from base building main duct work for all tenant office areas.

B. Furnish and install required HVAC appropriate for the configuration of the tenant space, which will include units, fans, controls, duct work, flex, diffusers, power, etc. work to be installed to meet the requirements of local code, IBC mechanical code, Ashrae standards, and NFPA.

C. Additional tonnage for computer rooms, IT server rooms, conference rooms, and copy rooms is an additional cost to the tenant.

ELECTRICAL SYSTEM:

A. All installation per local code and the most recent update of the NEC.

B. Lighting in ACT areas to be 3 tube 2x4 deep cell parabolic fixtures with electronic ballast and T -8 lamps. All fit-up areas to have one fixture per 90 sq. ft. Existing spaces will utilize existing lighting fixtures unless otherwise noted. All lighting must comply with COMcheck.

C. Typical workstation to have 2 - 20 amp circuits per 4 workstations fed from walls, column or junction box above ceiling.

D. Duplex outlets to be provided as follows;

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· Private offices to have 3 standard 20 amp outlets on interior walls only.

· Meeting/Conference rooms: 1 standard 20 amp duplex each wall, except exterior wall.

· General corridors/ Public Space: 1 standard 20-amp duplex spaced at a maximum distance of 40’ or as required by local code.

E. Dedicated outlets: 2 will be provided for each tenant space.

F. Light switches will be provided as per code.

G. TeleData: All teledata work is to be provided by tenant. Tenant’s telecom contractor to provide any fire rated backboard required.

H. Provide additional fire alarm devices as required by the fit-out to meet the requirements of local code, NFPA, IBC and IFC. Same system will be utilized as the base building system.

I. Security system is the responsibility of the tenant for their space.

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EXHIBIT “F”

EXTENSION OPTION

A. Tenant is granted the option (“ Extension Option”) to extend the Term of this Lease for one (1) additional period of ten (10) years (“ Extension Term”), subject to the terms, conditions and requirements as follows:

1. The Extension Option must be exercised, if at all, by written notice from Tenant to Landlord given at least twelve (12) months prior to the expiration of the current Term, time being of the essence and timely notice being an express condition of valid exercise of any Extension Option;

2. At the time of exercising an Extension Option, and on the commencement date of the applicable Extension Term, all of the Total Building Leases, including this Lease, shall cover all of the rentable area of the Building and shall be in full force and effect and there shall exist no Event of Default by Tenant under this Lease or any of the Total Building Leases which remains uncured beyond any applicable period of grace;

3. At the time of exercising an Extension Option, Tenant shall properly exercise all of its Extension Options to extend all of the Total Building Leases, which, including this Lease, shall cover all of the rentable area of the Building for the full Extension Term; and

4. If the Extension Option is effectively exercised, all the terms and conditions contained in this Lease shall continue to apply during the applicable Extension Term except that:

(a) There shall be no further right of extension beyond the Extension Option for the Extension Term specified in this Exhibit “F”;

(b) The Extension Option under the Total Building Leases including this Lease shall apply to all (and not less than all) of the Premises originally leased hereunder and all other space in the Building;

(c) If Tenant shall have assigned this Lease or sublet all or any portion of the Premises, or any other space covered by the Total Building Leases or any of them, any unexercised Extension Options shall automatically expire and be null and void;

(d) The leasehold improvements will be provided in their then-existing condition (on an “ as is” basis) at the time of commencement of the Extension Term and Tenant shall not be entitled to any construction, build out or other allowances with respect to the Premises or any other space during the Extension Term, unless otherwise negotiated by the parties; and

(e) The Base Rent applicable to the Premises shall be equal to ninety-five percent (95%) of the Market Base Rental Rate determined in accordance with the following provisions:

(i) Base Rent shall be the Market Base Rental Rate determined as of the applicable commencement date of the Extension Term. Tenant shall also be obligated to pay Additional Rent including without limitation, Tenant’s Share of Excess Operating Expenses and Excess Property Taxes. Within thirty (30) days of Landlord’s receipt of written notice from Tenant validly exercising its Extension Option hereunder, Landlord shall give Tenant notice of Landlord’s reasonable determination of the Market Base Rental Rate for the Extension Term. If Landlord and Tenant cannot agree upon the determination of the Market Base Rental Rate within 30 days after Landlord’s notice, the determination of the Market Base Rental Rate will be submitted to arbitration in accordance with this Exhibit “ F”. If the arbitration has not been completed on the applicable commencement date of the Extension Term, until such determination is made Tenant will pay, as monthly installments, one-twelfth of Landlord’s reasonable determination of the Market Base Rental Rate, plus all Additional Rent. Upon determination of the Market Base Rental Rate through arbitration, Landlord shall pay to Tenant or Tenant shall pay to Landlord, as appropriate, the amount equal to the overpayment or underpayment of the Base Rent from the applicable commencement date of the Extension Term until the determination of the Market Base Rental Rate under arbitration. From and after such determination is made Tenant will pay Base Rent in accordance with the Market Base Rental Rate as determined in accordance with this Exhibit “ F” plus all Additional Rent.

(ii) For purposes of this Exhibit “ F” the term “ Market Base Rental Rate” is understood to mean the amount of cash which a landlord would receive annually by then renting the space in question assuming the landlord to be a prudent person willing to lease but being under no compulsion to do so, assuming the tenant to be a prudent

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person willing to lease but being under no compulsion to do so, and assuming a lease extension on the same terms and provisions as those herein contained. Market Base Rental Rate shall take into consideration all relevant factors including the condition of the space, negotiated tenant improvement allowances, free rent credits, parking rights and other concessions negotiated by the parties, if any (or lack of same as applicable). Landlord and Tenant agree that bona fide written offers to lease comparable space located in the Building from third parties may be used as a factor in determining the Market Base Rental Rate. Notwithstanding anything to the contrary contained herein, in no event shall the annual rate of Market Base Rental Rate be deemed to be less than the annual rate of Base Rent payable under the Lease for the final 12 months of the Term ending on the scheduled expiration thereof.

(iii) If Tenant and Landlord cannot agree to the Market Base Rental Rate (it being agreed that both Landlord and Tenant will be reasonable in their attempt to determine the Market Base Rental Rate), either party may cause said rate to be determined by arbitration in accordance with the following provisions:

The determination of the Market Base Rental Rate will be determined by an arbitration board consisting of three reputable real estate professionals with experience with comparable office buildings in the County where the Building is located, each of whom shall be a Member of the American Institute of Real Estate Appraisers with the designation of “ MAI”. Within twenty (20) days after initiation of arbitration, each party shall appoint one arbitrator who shall have no material financial or business interest in common with the party making the selection and shall not have been employed by such party for a period of three years prior to the date of selection. If a party fails to give notice of appointment of its arbitrator within the 20-day period specified above, then upon 2 business days’ notice the other party may appoint the second arbitrator. The arbitrators selected by the parties shall attempt to agree upon a third arbitrator. If the first two arbitrators are unable to agree on a third arbitrator within thirty (30) days after the appointment of the second arbitrator, then such third arbitrator shall be appointed by the presiding judge of the Superior Court, civil trial division, for the County in which the Building is located, or by any person to whom such presiding judge formally delegates the matter or, if such methods of appointment fail, by the American Arbitration Association. The parties will submit to the arbitrators the definition of the Market Base Rental Rate from this Exhibit “ F” and each arbitrator shall submit his or her determination made in accordance with the provisions of this Exhibit “F” in a sealed envelope by the 30th day following appointment of the last arbitrator, and any determination not submitted by such time shall be disregarded. The parties shall meet on said 30th day (or if it is not a business day, on the first business day thereafter) at 11:00 a.m. at the office of Landlord, or such other place as the parties may agree and simultaneously deliver the determinations. If the determinations of at least two of the arbitrators shall be identical in amount, such amount shall be deemed the Market Base Rental Rate. If the determination of the three arbitrators shall be different in amount, the Market Base Rental Rate shall be determined as follows:

(1) If neither the highest or lowest determination differs from the middle determination by more than ten (10) percent of such middle determination, then the Market Base Rental Rate shall be deemed to be the average of the three determinations; and

(2) If clause (1) does not apply, then the Market Base Rental Rate shall be deemed to be the average of the middle determination and the determination closest in amount to such middle determination.

The decision of the arbitrators, determined as above set forth, will be final and non-appealable. Except where specifically provided otherwise in this Lease, each party shall bear its own expenses in connection with the arbitration and the costs of its arbitrator, and the cost of the third arbitrator shall be shared equally by Landlord and Tenant. The costs of all counsel, experts and other representatives that are retained by a party will be paid by such party.

B. Limitation. Notwithstanding anything to the contrary contained in the Lease, the Extension Option shall inure solely to the benefit of the Tenant originally named herein (i.e., Tabula Rasa HealthCare, Inc., a Delaware corporation) and not to the benefit of any of the Tenant’s successors or assigns, whether or not permitted by Landlord. Upon the occurrence of any such assignment or transfer during the Term, any Extension Option then remaining shall automatically terminate and become null and void without further need of any documentation with respect thereto.

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EXHIBIT “G”

SNDA

SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT

THIS SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT (“ Agreement”) is entered into as of July , 2015 the (“ Effective Date”) by and between U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE BENEFICIAL OWNER OF THE NORTHSTAR 2013-1 GRANTOR TRUST, SERIES A (as successor-in-interest to NS INCOME SUB-REIT CORP., as successor-in-interest to NSREIT CB LOAN, LLC, as successor-in-interest to NS INCOME OPPORTUNITY REIT HOLDINGS, LLC) (together with its successors and assigns, the “ Mortgagee”) and Tabula Rasa HealthCare, Inc., a Delaware corporation (hereinafter, collectively the “ Tenant”), with reference to the following facts:

228 Strawbridge Associates LLC, a New Jersey limited liability company, whose address is c/o Keystone Property Group, L.P., One Presidential Boulevard, Suite 300, Bala Cynwyd, PA 19004 (the “ Landlord”), owns fee simple title to the real property described in Exhibit “ A” attached hereto (the “ Property”).

Mortgagee has made a loan to Landlord in the original principal amount of $22,000,000.00 (the “ Loan”), which is secured by a certain mortgage (the “ Mortgage”) encumbering the Property.

Pursuant to those three (3) certain Lease Agreements each for a separate floor of the building located at the Property and each dated as of the date hereof (individually and collectively, the “ Lease”), Landlord has demised to Tenant the entire building located at the Property (the “ Leased Premises”).

Tenant and Mortgagee desire to agree upon the relative priorities of their interests in the Property and their rights and obligations if certain events occur.

NOW, THEREFORE, for good and sufficient consideration, Tenant and Mortgagee agree:

1. Definitions. The following terms shall have the following meanings for purposes of this Agreement.

(a) Foreclosure Event. A “ Foreclosure Event” means: (i) foreclosure under the Mortgage; (ii) any other exercise by Mortgagee of rights and remedies (whether under the Mortgage or under applicable law, including bankruptcy law) as holder of the Loan and/or the Mortgage, as a result of which a Successor Landlord becomes owner of the Property; or (iii) delivery by Landlord to Mortgagee (or its designee or nominee) of a deed or other conveyance of Landlord’s interest in the Property in lieu of any of the foregoing.

(b) Former Landlord. A “ Former Landlord” means Landlord and any other party that was landlord under the Lease at any time before the occurrence of any attornment under this Agreement.

(c) Offset Right. An “ Offset Right” means any right or alleged right of Tenant to any offset, defense (other than one arising from actual payment and performance, which payment and performance would bind a Successor Landlord pursuant to this Agreement), claim, counterclaim, reduction, deduction, or abatement against Tenant’s payment of Rent or performance of Tenant’s other obligations under the Lease, arising (whether under the Lease or under applicable law) from Landlord’s breach or default under the Lease.

(d) Rent. The “ Rent” means any fixed rent, base rent or additional rent under the Lease.

(e) Successor Landlord. A “ Successor Landlord” means any party that becomes owner of the Property as the result of a Foreclosure Event.

(f) Other Capitalized Terms. If the initial letter of any other term used in this Agreement is capitalized and no separate definition is contained in this Agreement, then such term shall have the same respective definition as set forth in the Lease.

2. Subordination. The Lease shall be, and shall at all times remain, subject and subordinate to the terms of the Mortgage, the lien imposed by the Mortgage, and all advances made under the Mortgage.

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3. Nondisturbance, Recognition and Attornment.

(a) No Exercise ofMortgage Remedies Against Tenant. So long as the Tenant is not in default under the Lease beyond any applicable grace or cure periods (an “ Event of Default”), Mortgagee shall not name or join Tenant as a defendant in any exercise of Mortgagee’s rights and remedies arising upon a default under the Mortgage unless applicable law requires Tenant to be made a party thereto as a condition to proceeding against Landlord or prosecuting such rights and remedies. In the latter case, Mortgagee may join Tenant as a defendant in such action only for such purpose and not to terminate the Lease or otherwise adversely affect Tenant’s rights under the Lease or this Agreement in such action.

(b) Nondisturbance and Attornment. If an Event of Default by Tenant is not then continuing, then, when Successor Landlord takes title to the Property: (i) Successor Landlord shall not terminate or disturb Tenant’s possession of the Leased Premises under the Lease, except in accordance with the terms of the Lease and this Agreement; (ii) Successor Landlord shall be bound to Tenant under all the terms and conditions of the Lease (except as provided in this Agreement); (iii) Tenant shall recognize and attorn to Successor Landlord as Tenant’s direct landlord under the Lease as affected by this Agreement; and (iv) the Lease shall continue in full force and effect as a direct lease, in accordance with its terms (except as provided in this Agreement), between Successor Landlord and Tenant. Tenant acknowledges notice of the Mortgage and assignment of rents, leases and profits from the Landlord to the Mortgagee. Tenant agrees to continue making payments of rents and other amounts owed by Tenant under the Lease to the Landlord and to otherwise recognize the rights of Landlord under the Lease until notified otherwise in writing by the Mortgagee (a “ Rent Payment Notice”), and after receipt of such notice the Tenant agrees thereafter to make all such payments to the Mortgagee, without any further inquiry on the part of the Tenant, and Landlord consents to the foregoing. Landlord irrevocably directs Tenant to comply with any Rent Payment Notice, notwithstanding any contrary direction, instruction, or assertion by Landlord. Tenant shall be entitled to rely on any Rent Payment Notice. Tenant shall be under no duty to controvert or challenge any Rent Payment Notice. Tenant’s compliance with a Rent Payment Notice shall not be deemed to violate the Lease. Landlord hereby releases Tenant from any and all claims Landlord may have based upon Tenant’s compliance with any Rent Payment Notice. Landlord shall look solely to the Mortgagee with respect to any claims Landlord may have on account of an incorrect or wrongful Rent Payment Notice. Tenant shall be entitled to full credit under the Lease for any rent paid to Mortgagee pursuant to a Rent Payment Notice to the same extent as if such rent were paid directly to Landlord.

(c) Further Documentation. The provisions of this Article 3 shall be effective and self-operative without any need for Successor Landlord or Tenant to execute any further documents. Tenant and Successor Landlord shall, however, confirm the provisions of this Article 3 in writing upon request by either of them within ten (10) business days of such request.

4. Protection of Successor Landlord. Notwithstanding anything to the contrary in the Lease or the Mortgage, Successor Landlord shall not be liable for or bound by any of the following matters:

(a) Claims Against Former Landlord. Any Offset Right that Tenant may have against any Former Landlord relating to any event or occurrence before the date of attornment, including any claim for damages of any kind whatsoever as the result of any breach by Former Landlord that occurred before the date of attornment.

(b) Prepayments. Any payment of Rent that Tenant may have made to Former Landlord more than thirty (30) days before the date such Rent was first due and payable under the Lease with respect to any period after the date of attornment other than, and only to the extent that, the Lease expressly required such a prepayment.

(c) Payment; Security Deposit. Any obligation: (i) to pay Tenant any sum(s) that any Former Landlord owed to Tenant unless such sums, if any, shall have been delivered to Mortgagee by way of an assumption of escrow accounts or otherwise; (ii) with respect to any security deposited with Former Landlord, unless such security was actually delivered to Mortgagee; (iii) to commence or complete any initial construction of improvements in the Leased Premises or any expansion or rehabilitation of existing improvements thereon; (iv) to reconstruct or repair improvements following a fire, casualty or condemnation (except as explicitly required by the terms of the Lease). Notwithstanding the foregoing, if Successor Landlord takes title to the Property and as of the date of attornment any portion of the Work (as defined in the Lease) has not been completed by Former Landlord in accordance with the terms of the Lease, Successor Landlord shall complete such portion of the Work subject to and in accordance with the terms of the Lease (it being agreed, for the avoidance of doubt, that Successor Landlord’s obligation to complete the Work shall not require that Successor Landlord expend an amount that exceeds (x) the Allowance (as defined in the Lease) less (y) any portion of the Allowance expended by any Former Landlord prior to the date of attornment).

(d) Modification, Amendment or Waiver. Any material modification or amendment of the Lease, or any waiver of the terms of the Lease, made without Mortgagee’s written consent.

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(e) Surrender, Etc. Any consensual or negotiated surrender, cancellation, or termination of the Lease, in whole or in part, agreed upon between Landlord and Tenant, unless effected unilaterally by Tenant pursuant to the express terms of the Lease.

Notwithstanding the foregoing limitations on Successor Landlord’s liability, from and after the date of attornment, Successor Landlord shall perform day-to-day maintenance and repairs to the Property to the extent expressly required pursuant to the terms of the Lease.

5. Exculpation ofSuccessor Landlord. Notwithstanding anything to the contrary in this Agreement or the Lease, upon any attornment pursuant to this Agreement, the Lease shall be deemed to have been automatically amended to provide that Successor Landlord’s obligations and liability under the Lease shall never extend beyond Successor Landlord’s (or its successors’ or assigns’) interest, if any, in the Leased Premises from time to time, including insurance and condemnation proceeds, security deposits, escrows, Successor Landlord’s interest in the Lease, and the proceeds from any sale, lease or other disposition of the Property (or any portion thereof) by Successor Landlord (collectively, the “ Successor Landlord’s Interest”). Tenant shall look exclusively to Successor Landlord’s Interest (or that of its successors and assigns) for payment or discharge of any obligations of Successor Landlord under the Lease as affected by this Agreement. If Tenant obtains any money judgment against Successor Landlord with respect to the Lease or the relationship between Successor Landlord and Tenant, then Tenant shall look solely to Successor Landlord’s Interest (or that of its successors and assigns) to collect such judgment. Tenant shall not collect or attempt to collect any such judgment out of any other assets of Successor Landlord.

6. Notice to Mortgagee and Right to Cure. Tenant shall notify Mortgagee of any default by Landlord under the Lease and agrees that, notwithstanding any provisions of the Lease to the contrary, no notice of cancellation thereof or of an abatement shall be effective unless Mortgagee shall have received notice of default giving rise to such cancellation or abatement and (i) in the case of any such default that can be cured by the payment of money, until forty-five (45) days shall have elapsed following the giving of such notice or (ii) in the case of any other such default, until a reasonable period for remedying such default shall have elapsed following the giving of such notice and following the time when Mortgagee shall have become entitled under the Mortgage to remedy the same, including such time as may be necessary to acquire possession of the Property if possession is necessary to effect such cure, provided Mortgagee, with reasonable diligence, shall (a) pursue such remedies as are available to it under the Mortgage so as to be able to remedy the default, and (b) thereafter shall have commenced and continued to remedy such default or cause the same to be remedied. Notwithstanding the foregoing, Mortgagee shall have no obligation to cure any such default.

7. Miscellaneous.

(a) Notices. Any notice or request given or demand made under this Agreement by one party to the other shall be in writing, and may be given or be served by hand delivered personal service, or by depositing the same with a reliable overnight courier service or by deposit in the United States mail, postpaid, registered or certified mail, and addressed to the party to be notified, with return receipt requested or by telefax transmission, with the original machine- generated transmit confirmation report as evidence of transmission. Notice deposited in the mail in the manner hereinabove described shall be effective from and after the expiration of three (3) days after it is so deposited; however, delivery by overnight courier service shall be deemed effective on the next succeeding business day after it is so deposited and notice by personal service or telefax transmission shall be deemed effective when delivered to its addressee or within two (2) hours after its transmission unless given after 3:00 p.m. on a business day, in which case it shall be deemed effective at 9:00 a.m. on the next business day. For purposes of notice, the addresses and telefax number of the parties shall, until changed as herein provided, be as follows:

If to the Mortgagee, at: 399 Park Avenue

18th Floor

New York, New York 10022

Attention: Dan Gilbert

Facsimile No.: (212) 547-2780

Email: gilbert@nrfc.com

and

433 East Las Colinas Blvd.

Suite 100

Irving, Texas 75039

Attention: Robert S. Riggs

Facsimile No.: (972) 869-6521

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Email: riggs@nrfc.com

With a copy to:

Haynes & Boone LLP

30 Rockefeller Plaza, 26th Floor

New York, New York, 10112

Attention: Steven Koch

Telecopier: (212) 884-8205

Email: steven.koch@haynesboone.com

If to the Tenant, at: Tabula Rasa HealthCare, Inc.

228 Strawbridge Drive
West Route 38

Moorestown, NJ 08057
Attention: CFO

(b) Successors and Assigns. This Agreement shall bind and benefit the parties, their successors and assigns, any Successor Landlord, and its successors and assigns. If Mortgagee assigns the Mortgage, then upon delivery to Tenant of written notice thereof accompanied by the assignee’s written assumption of all obligations under this Agreement, all liability of the assignor shall terminate. If Tenant consists of more than one person or entity, the representations, warranties, covenants and obligations of such persons and entities hereunder shall be joint and several. A separate action may be brought or prosecuted against any such person or entity comprising Tenant, regardless of whether the action is brought or prosecuted against the other persons or entities comprising Tenant, or whether such persons or entities are joined in the action. Mortgagee may compromise or settle with any one or more of the persons or entities comprising Tenant for such sums, if any, as it may see fit and may in its discretion release any one or more of such persons or entities from any further liability to Mortgagee without impairing, affecting or releasing the right of Mortgagee to proceed against any one or more of the persons or entities not so released.

(c) Entire Agreement. This Agreement constitutes the entire agreement between Mortgagee and Tenant regarding the subordination of the Lease to the Mortgage and the rights and obligations of Tenant and Mortgagee as to the subject matter of this Agreement.

(d) Interaction with Lease and with Mortgage. If this Agreement conflicts with the Lease, then this Agreement shall govern as between the parties and any Successor Landlord, including upon any attornment pursuant to this Agreement. This Agreement supersedes, and constitutes full compliance with, any provisions in the Lease that provide for subordination of the Lease to, or for delivery of nondisturbance agreements by the holder of, the Mortgage.

(e) Mortgagee’s Rights and Obligations. Except as expressly provided for in this Agreement, Mortgagee shall have no obligations to Tenant with respect to the Lease. If an attornment occurs pursuant to this Agreement, then all rights and obligations of Mortgagee under this Agreement shall terminate, without thereby affecting in any way the rights and obligations of Successor Landlord provided for in this Agreement.

(f) Interpretation; Governing Law. The interpretation, validity and enforcement of this Agreement shall be governed by and construed under the internal laws of the State of New York, excluding such State’s principles of conflict of laws.

(g) Amendments. This Agreement may be amended, discharged or terminated, or any of its provisions waived, only by a written instrument executed by the party to be charged.

(h) Due Authorization. Tenant represents to Mortgagee that it has full authority to enter into this Agreement, which has been duly authorized by all necessary actions. Mortgagee represents to Tenant that it has full authority to enter into this Agreement, which has been duly authorized by all necessary actions.

(i) Execution. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

[THIS SPACE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the Mortgagee and Tenant have caused this Agreement to be executed as of the date first above written.

MORTGAGEE:

U.S. BANK NATIONAL ASSOCIATION, as trustee for the Beneficial Owner of the NorthStar 2013-1 Grantor Trust, Series A

By:	NS Servicing II, LLC, a Delaware limited
	liability company, as attorney-in-fact and Special Servicer

	By:	NRFC Sub-REIT Corp., a Maryland
		corporation, as sole managing member


		By:
		Name:
		Title:


TENANT:

Tabula Rasa HealthCare, Inc., a Delaware corporation


BY:
Name:
Title:

G-5

STATE OF )

) ss.:

COUNTY OF )

On the day of in the year 2015 before me, the undersigned, a Notary Public in and for said State, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.


Notary Public

STATE OF )

) ss.:

COUNTY OF )


Notary Public

G-6

LANDLORD’S CONSENT

Landlord, as of the date first written above, consents and agrees to the foregoing Agreement, which was entered into at Landlord’s request. The foregoing Agreement shall not alter, waive or diminish any of Landlord’s obligations under the Mortgage or the Lease. The above Agreement discharges any obligations of Mortgagee under the Mortgage and related loan documents to enter into a nondisturbance agreement with Tenant. Landlord is not a party to the above Agreement.

	LANDLORD:

	228 STRAWBRIDGE ASSOCIATES L.L.C.,
	a New Jersey limited liability company


	By:
		Name:
		Title:

STATE OF )

) ss.:

COUNTY OF )


Notary Public

G-7

Exhibit A

ALL that certain lot, piece or parcel of land, with the buildings and improvements thereon erected, situate, lying and being in Moorestown Township, County of Burlington and State of New Jersey, being more particularly described as follows:

Tract III:

BEGINNING at a point in the Southerly right-of-way line of New Jersey State Highway Route 38, said point located from the intersection of the Southerly right-of-way line of New Jersey State Highway Route 38 and the Easterly right-of-way line of Pleasant Valley Avenue North 62 degrees 32 minutes 30 seconds East, 1009.97 feet; thence from said point of beginning along the Southerly right-of-way line of New Jersey State Highway Route 38, North 62 degrees 32 minutes 30 seconds East, 98.42 feet; thence still along the Southerly right-of-way line on a curve to the right having a radius 5,659.65 feet the arc distance of 53.51 feet; thence leaving the Southerly right-of-way line of New Jersey State Highway Route 38 and along the line of Lot 3.01 the following three courses and distances;

(1) South 27 degrees 27 minutes 30 seconds East, 416.73 feet; thence

(2) North 62 degrees 32 minutes 30 seconds East, 64.81 feet; thence

(3) South 27 degrees 27 minutes 30 seconds East, 305.00 feet to a point, a corner of Lot 3.01 and lands of Joseph R. Kramer, et ux (Lot 3-0); thence by lands of Joseph R. Kramer, et ux (Lot 3-0), Robert W. Vanace et ux (Lot 3N), Connell V. O’Brien (Lot 3M) Jesse A. Williams, et ux (Lot 3L) and T.D. Robenhymer, et ux (Lot 3K), South 35 degrees 57 minutes 00 seconds West, 393.64 feet to a point, a corner of Lot 3.02, thence along the line of Lot 3.02 the following two courses and distances;

(1) North 27 degrees 27 minutes 30 seconds West, 332.18 feet;

(2) South 62 degrees 32 minutes 30 seconds West, 8.70 feet to a point, the intersection of the Southerly and Easterly right-of-way lines of Strawbridge Drive; thence along the Easterly right-of-way line of Strawbridge Drive the following five courses and distances;

(1) North 27 degrees 27 minutes 30 seconds West, 227.14 feet; thence

(2) A curve to the right having a radius of 267.00 feet the arc distance of 108.66 feet;

(3) North 4 degrees 08 minutes 30 seconds West, 154.03 feet;

(4) A curve to the left having a radius of 208.00 feet, the arc distance of 53.86 feet;

(5) A curve to the right having a radius of 47.00 feet, the arc distance of 66.87 feet to the point and place of Beginning.

Being known and designated as Lot 3, as shown on a certain map entitled “Major Subdivision Plan, Route 38 Office Park”, Moorestown Township, County of Burlington, State of New Jersey, and filed in the Burlington County Clerk’s Office on December 8, 1982, as Map #03716.

FOR INFORMATION PURPOSES ONLY:

BEING Known as Lot 43 Block 3401, on the Official Tax Map of Moorestown Township BEING commonly known as 228 W Route 38, Moorestown, New Jersey

G-8

SCHEDULE 7(ii)

HVAC STANDARDS

228 Strawbridge Drive

This 3-story building encompasses approximately 74,565 square feet. The HVAC systems serving the building are as follows:

AAON EQUIPMENT

Model Number	Serial Number	Nominal Capacity	Vintage
RN-070	2008T0ENCY01346	70 tons	less than 5 yr.
RN-070	2008T0ENCY01347	70 tons	less than 5 yr.
RN-050	2008T0BNCW01348	50 tons	less than 5 yr.
RN-040	2008T0BN0U01349	40 tons	less than 5 yr.

TRANE EQUIPMENT

Model Number	Serial Number	Nominal Capacity	Vintage
TED036	J98B900451	3 tons	1998
TED036	J98B900450	3 tons	1998

TOTAL CAPACITY -		236 tons

This translates to an average installed capacity of 1 ton of air conditioning for every 315 square feet. These units are all electric heat pumps. This installed capacity is more than sufficient to satisfy the needs of the building.

228 Strawbridge Drive

The building is served with a series of VAV and fan powered boxes complete with electric heat. The electric baseboard is limited to the atrium area.

The heating, ventilating and air conditioning system shall maintain indoor temperature conditions in the Premises at a minimum of 70 degrees F with an outdoor temperature of 10 degrees F dry bulb in the winter, and a maximum of 75 degrees F with an outdoor temperature of 93 degrees F dry bulb/75 degrees F wet bulb in the summer, subject to Tenant’s proper use and operation of the system at normal office levels of occupancy during normal business hours.

EX-10.10 23 a2226891zex-10_10.htm EX-10.10

Exhibit 10.10

LEASE AGREEMENT

228 Strawbridge Associates, LLC
Landlord

AND

Tabula Rasa HealthCare, Inc.
Tenant

228 Strawbridge Drive
Moorestown, New Jersey

LEASE AGREEMENT

INDEX

§ Section		Page

1. Basic Lease Terms and Definitions		2
2. Premises		3
3. Use		4
4. Term; Possession		4
5. Rent		4
6. Operating Expenses; Property Taxes		4
7. Services		5
8. Insurance; Waivers; Indemnification		5
9. Maintenance and Repairs		6
10. Compliance		7
11. Signs		8
12. Alterations		9
13. Mechanics’ Liens		9
14. Landlord’s Right of Entry		10
15. Damage by Fire or Other Casualty		10
16. Condemnation		10
17. Quiet Enjoyment		10
18. Assignment and Subletting		11
19. Subordination; Mortgagee’s Rights		11
20. Tenant’s Certificate; Financial Information		12
21. Surrender		12
22. Defaults - Remedies		13
23. Tenant’s Authority		14
24. Liability		14
25. Miscellaneous		15
26. Notices		16
27. Security Deposit		16
28. Utilities		17
29. Rights Reserved to Landlord		17
30. Parking		18

Additional Provisions:

1(q) Contingency for Certain Leases.

31. Furniture.

Addendum 1 — Total Building Lease Provisions

THIS LEASE AGREEMENT is made by and between 228 Strawbridge Associates, LLC, a New Jersey limited liability company (“ Landlord”) and Tabula Rasa HealthCare, Inc., a corporation organized under the laws of Delaware (“ Tenant”), and is dated as of the date on which this Lease has been fully executed by Landlord and Tenant.

1. Basic Lease Terms and Definitions.

(a) Premises: Suite 200, as shown on Exhibit “A”, consisting of approximately 24,855 rentable square feet on the second (2nd) floor of the Building.

(b) Building: Approximately 74,565 rentable square feet

Address: 228 Strawbridge Drive, West Route 38, Moorestown, NJ 08057

(c) Term: 11 years and 8 months from the Commencement Date, plus any additional period of time then remaining until the date of expiration of the last to expire of the Total Building Leases.

(d) Commencement Date: The date the Work by Landlord described in Exhibit “E” is Substantially Complete and the Premises delivered to Tenant, estimated to be approximately February 1, 2016 or 12 weeks after the building permit for the Work is issued by the local municipality as described in Exhibit “ E”, if later (“Estimated Commencement Date”), subject to adjustment as provided in Section 4 and Exhibit “ E”, or the date Tenant takes possession of the Premises, if earlier. At the request of Landlord or Tenant, the parties will execute and deliver a written confirmation of the Commencement Date, Expiration Date and applicable Base Rent period dates for purposes of Section 1(f).

(e) Expiration Date: The last day of the Term.

(f) Base Rent: Payable in monthly installments as follows:

Period of Term From	To	Base Rent/RSF		Annual Base Rent		Monthly Base Rent
Commencement Date	Month 12	$	19.20	$	477,216.00	$	39,768.00
Month 13	Month 24	$	19.70	$	489,643.50	$	40,803.63
Month 25	Month 36	$	20.20	$	502,071.00	$	41,839.25
Month 37	Month 48	$	20.70	$	514,498.50	$	42,874.88
Month 49	Month 60	$	21.20	$	526,926.00	$	43,910.50
Month 61	Month 72	$	21.45	$	533,139.75	$	44,428.31
Month 73	Month 84	$	21.70	$	539,353.50	$	44,946.13
Month 85	Month 96	$	21.95	$	545,567.25	$	45,463.94
Month 97	Month 108	$	22.20	$	551,781.00	$	45,981.75
Month 109	Month 120	$	22.45	$	557,994.75	$	46,499.56
Month 121	Month 132	$	22.70	$	564,208.50	$	47,017.38
Month 133	Month 144 or Expiration Date if earlier	$	22.95	$	570,422.25	$	47,535.19
If applicable: Month 145	Month 156 or Expiration Date if earlier	$	23.20	$	576,636.00	$	48,053.00

Provided there is no Event of Default by Tenant, Tenant’s obligation to pay Base Rent for the 8-month period consisting of Months 7 through 14 of the Term will be abated under this Lease only.

Notwithstanding the abatement of Base Rent provided for Months 7 through 14 of the Term as set forth herein above, Tenant’s obligation to pay Additional Rent including, without limitation, costs and charges for electricity and other utilities pursuant to Rider 2, shall not be waived, released or abated and shall commence as of the Commencement Date or any earlier occupancy of the Premises.

(g) Base Year: 2016

(h) Tenant’s Share: 33.34% (also see Definitions)

(i) Use: General office and a closed door (non-retail) pharmacy.

(j) Security Deposit: $500,000.00 Letter of Credit. See Section 27.

(k) Parking Spaces: 107 unassigned parking stalls.

(l) Addresses For Notices:

Landlord:	Tenant:	Before the Commencement Date:
c/o Keystone Property Group, L.P.		110 Marter Avenue, Suite 309
125 E. Elm Street, Suite 400		Moorestown, NJ 08057
Conshohocken, PA 19428
Attn: Senior Vice President of Operations		On or after the Commencement Date: Premises

(m) Broker: CBRE, Inc.

(n) Additional Defined Terms: See Rider 1 for the definitions of other capitalized terms.

(o) Contents: The following are attached to and made a part of this Lease:

Rider 1 — Additional Definitions	Exhibits:	“ A” — Plan showing Premises
Rider 2 — Utilities		“ B” — Building Rules
Addendum 1 — Total Building Lease Provisions		“ C” — Estoppel Certificate Form
		“ D” — Cleaning Schedule
		“ E” — Work Letter
		“ F” — Term Extension Option
		“ G” — SNDA

(p) Contingency for Certain Leases: The effectiveness of this Lease is conditioned upon Landlord and Tenant entering into three (3) leases (including this Lease, collectively, the “ Total Building Leases”) which, together with this Lease, shall cover all of the rentable area of the Building. The Total Building Leases include (i) a lease for 24,855 rentable square feet on the second (2nd) floor of the Building (the “ Phase I Lease”), (ii) a lease for 24,855 rentable square feet on the first (1st) floor of the Building (the “ Phase II Lease”), and (iii) a lease for 24,855 rentable square feet on the third (3rd) floor of the Building (the “ Phase III Lease”). This Lease is the Phase I Lease. If any or all of the Total Building Leases have not been executed and delivered by and between Landlord and Tenant within five (5) days of the date of this Lease, for any reason or no reason, then Landlord and Tenant each shall have the right, without the consent of the other party, to terminate this Lease upon written notice to such other party, whereupon neither party hereunder shall have any further right or remedy against the other (except for obligations and liabilities which this Lease expressly provides are to survive termination or expiration of this Lease). Notwithstanding the foregoing, the aforesaid termination right shall expire automatically upon the satisfaction of the condition set forth in the first sentence of this paragraph. Upon request by either Landlord or Tenant, the parties will execute and deliver written confirmation of the satisfaction of such condition and release of the termination right set forth in this paragraph; however, any failure or refusal to furnish such written confirmation will not affect the rights or obligations of the parties.

2. Premises. Landlord leases to Tenant and Tenant leases from Landlord the Premises, together with the right in common with others to use the Common Areas, except as provided in Addendum 1 if the terms and provisions of Addendum 1 are applicable. Subject to Landlord’s obligation to complete the Work, Tenant accepts the Premises, Building, Property and Common Areas “ AS IS”, without relying on any representation, covenant or warranty by Landlord other than as expressly set forth in this Lease. Tenant expressly agrees that there are and shall be no implied warranties of merchantability, habitability, fitness for a particular purpose or of any other kind arising out of this Lease and there are no warranties which extend beyond those expressly set forth in this Lease. Landlord and Tenant (a) acknowledge that all square foot measurements are approximate and (b) stipulate and agree to the rentable square footages set forth in Sections 1(a) and (b) above for all purposes with respect to this Lease. Subject to the terms and conditions of this Lease, the Building Rules and Landlord’s reasonable security procedures, Tenant shall have 24-hour access to the Building. As of the date of this Lease an electronic door lock system has been installed at the Building with key card access for admission outside of Normal Business Hours. Tenant shall be provided with the number of key cards equal to the number of employees of Tenant working at the Premises from time to time, and a reasonable number of additional cards for other Agents of Tenant as requested by Tenant from time to time, provided that Tenant shall pay Landlord $7.50 per key card provided to Tenant and any replacement key cards.

6. Operating Expenses; Property Taxes. The Base Year is set forth in Section 1(g) above. Commencing on the first day after the expiration of the Base Year, Tenant shall pay to Landlord, without demand, deduction or offset, the sum of (i) Tenant’s S hare of Operating Expenses for the current year in excess of Operating Expenses for the Base Year (“ Excess Operating Expenses”) plus (ii) Tenant’s Share of Property Taxes for the current year in excess of Property Taxes for the Base Year (“ Excess Property Taxes”), prorated to reflect any partial year included in the Term, in monthly installments (each in the amount equal to one-twelfth of Excess Operating Expenses and Excess Property Taxes as estimated by Landlord), on the first day of the month. Landlord may adjust the estimated Excess Operating Expenses and Excess Property Taxes from time to time if the estimated annual Operating Expenses or annual Property Taxes increase or decrease. By April 30th of each year (and as soon as practical after the expiration or termination of this Lease or, at Landlord’s option, after a sale of the Property), Landlord shall provide Tenant with a statement of Operating Expenses and Property Taxes for the preceding calendar year or part thereof. Within 30 days after delivery of the statement to Tenant, Landlord or Tenant shall pay to the other the amount of any overpayment or deficiency then due from one to the other or, at Landlord’s option, Landlord may credit Tenant’s account for any overpayment. If Tenant does not give Landlord notice within 60 days after receiving Landlord’s statement that that Tenant disputes Landlord’s statement and desires to conduct an inspection of the Landlord’s records of Operating Expenses and Property Taxes, Tenant shall be deemed to have waived the right to contest the statement. Tenant shall have the right, within 60 days of receipt of Landlord’s statement of actual Operating Expenses and Property Taxes for any calendar year, at Tenant’s expense, during Normal Business Hours, at a reasonable location to be determined by Landlord, and upon reasonable prior written notice to Landlord, to conduct an inspection of Landlord’s books and records of the actual Operating Expenses and Property Taxes for the calendar year in question, using Tenant’s employees or a certified professional accountant reasonably approved by Landlord (the “ Inspection Right”). Tenant shall not employ, in connection with the exercise of its Inspection Right under this Section 6, any person or

entity who is to be compensated in whole or in part, on a contingency fee basis or a recovery basis. Tenant shall supply Landlord with a copy of any written results of such audit and inspection within 15 days from receipt thereof. Provided that Landlord agrees in good faith with Tenant’s inspection, and in the event Tenant’s inspection shall disclose that the actual Tenant’s Share of Operating Expenses or Property Taxes set forth in Landlord’s statement was overstated, then Tenant shall receive a credit against the installments of Additional Rent next falling due in the amount of any such overstatement. If Tenant has underpaid the actual Additional Rent, Tenant shall promptly pay to Landlord any amounts due. If, due to errors by Landlord disclosed by Tenant’s inspection, the amount Tenant overpaid for the year in question was more than 5% of the total Operating Expenses and Property Taxes for the Property for the year in question, Landlord shall also pay the reasonable costs of Tenant’s inspection, not to exceed the amount of the overpayment by Tenant. In the event that Landlord disagrees with Tenant’s inspection, Landlord may require that a third party certified public accountant (“Landlord’s CPA”), reasonably selected by Landlord and reasonably acceptable to Tenant, be engaged to perform an inspection of the Landlord’s books and records with respect to any items of Operating Expenses and Property Taxes which are in dispute, and the results of such inspection by Landlord’s CPA shall be final and binding on the parties. Landlord shall bear the costs of such inspection by Landlord’s CPA; provided, however, that if the inspection by Landlord’s CPA determines Tenant did not overpay by more than 5% of the total Operating Expenses and Property Taxes for the Property for the year in question, Tenant shall pay the costs of Landlord’s CPA’s inspection to Landlord. Landlord’s and Tenant’s obligation to pay any overpayment or deficiency due the other pursuant to this Section shall survive the expiration or termination of this Lease. Notwithstanding any other provision of this Lease to the contrary, Landlord may, in its reasonable discretion, determine from time to time the method of computing and allocating Operating Expenses, including the method of allocating Operating Expenses to various types of space in the Building or Property to reflect any disparate levels of services provided to different types of space, and in computing and allocating Property Taxes to reflect any tax parcels included in the Property. If the Building or Property is not fully occupied during any period, or if services are not fully utilized by any tenant, Operating Expenses which vary based on occupancy or utilization for such period will be grossed-up to the amount that Operating Expenses would have been if the Building and Property had been fully occupied and services had been fully utilized for such period as determined by Landlord.

8. Insurance; Waivers; Indemnification.

insurable replacement cost of the Building and Property (excluding coverage of Tenant’s personal property, furniture, fixtures, equipment and any Alterations made by Tenant) subject to a commercially reasonable deductible (as of the date of this Lease, $10,000 per occurrence), and such other insurance, including rent loss coverage, as Landlord may reasonably deem appropriate or as any Mortgagee may require.

9. Maintenance and Repairs.

omission of Tenant or its Agents shall be made at the sole expense of Tenant to the extent not covered by any applicable insurance proceeds paid to Landlord; provided, however, that the maximum amount of Tenant’s liability for loss or damage to property under this provision shall not exceed the deductible amount under any policy of property insurance maintained by Landlord covering the Property.

10. Compliance.

(b) Tenant will comply, and will cause its Agents to comply, with the Building Rules.

to Tenant, as of the date of this Lease, to the extent of Landlord’s knowledge, (i) that no Hazardous Materials are present at the Premises or Property except in a condition complying with Environmental Laws and (ii) that no violation of any Environmental Laws is existing and uncured at the Premises or Property. Landlord shall indemnify, defend, and hold harmless Tenant and its Agents from and against any and all claims, actions, damages, liability and expense (including reasonable fees of attorneys, investigators and experts, through all appeals) which may be asserted against, imposed upon, or incurred by the Tenant or its Agents as the result of any violation of Environmental Laws existing as of the date of this Lease and pertaining to the Property, or the presence of any Hazardous Materials at the Premises or the Property in a condition not in compliance with Environmental Laws on or before the Commencement Date, unless such violation of Environmental Laws or presence of Hazardous Materials shall be caused by Tenant or Tenant’s Agents.

11. Signs.

(b) Landlord will furnish Tenant, at Tenant’s cost, with a single sign identifying Tenant on the exterior of the Building, subject to the terms and conditions hereof including the following:

(iii) Landlord will be responsible for the fabrication, delivery and installation of such sign, at Tenant’s cost as provided herein.

(iv) Landlord will Maintain Tenant’s sign during the Term, at Tenant’s cost as provided herein.

13. Mechanics’ Liens. Tenant promptly shall pay for any labor, services, materials, supplies or equipment furnished to Tenant in or about the Premises. Tenant shall keep the Premises and the Property free from any liens arising out of any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to Tenant. Tenant shall take all steps permitted by law in order to avoid the imposition of any such lien. Should any such lien or notice of such lien be filed against the Premises or the Property, Tenant shall discharge the same by bonding or otherwise within 15 days after Tenant has notice that the lien or claim is filed regardless of the validity of such lien or claim. Neither the Property nor any interest of Landlord in the Property shall be subject in any way to any liens, including mechanic’s liens or any type of construction lien, for improvements to or other work performed with respect to the Property by or on behalf of Tenant. Tenant acknowledges that Tenant, with respect to improvements or alterations made by or on behalf of Tenant hereunder, shall promptly notify the contractor making such improvements to the Premises of this provision exculpating the Property and Landlord’s interest in the Property from any such liens. Further, nothing in this Lease is intended to authorize Tenant to do or cause any work to be done or materials to be supplied for the account of Landlord, all of the same to be solely for Tenant’s account and at Tenant’s risk and expense. Throughout the Term “ mechanics’ lien” is used to include any lien, encumbrance or charge levied or imposed upon all or any portion of, interest in or income from the Property on account of any mechanic’s, laborer’s, materialman’s or construction lien or arising out of any debt or liability to or any claim of any contractor, mechanic, supplier, materialman or laborer and shall include any mechanic’s notice of intention to file a lien given to Landlord or Tenant, any stop order given to Landlord or Tenant, any notice of refusal to

pay naming Landlord or Tenant and any injunctive or equitable action brought by any person claiming to be entitled to any mechanic’s lien.

18. Assignment and Subletting.

(a) Except as provided in Section (b) below, Tenant shall not enter into nor permit any Transfer voluntarily or by operation of law, without the prior consent of Landlord, which consent shall not be unreasonably withheld. Without limitation, Tenant agrees that Landlord’s consent shall not be considered unreasonably withheld if (i) the proposed transferee is an existing tenant of Landlord or an affiliate of Landlord, (ii) the business, business reputation, or creditworthiness of the proposed transferee is unacceptable to Landlord, (iii) Landlord or an affiliate of Landlord has comparable space available for lease by the proposed transferee, (iv) Tenant is in default under this Lease or any act or omission has occurred which would constitute a default with the giving of notice and/or the passage of time, (v) less than all of the Total Building Leases (including this Lease) are being Transferred simultaneously to the same Transferee or (vi) the Transfer would result in less than all of the rentable area of the Building being leased to the same Tenant. A consent to one Transfer shall not be deemed to be a consent to any subsequent Transfer. In no event shall any Transfer relieve Tenant from any obligation under this Lease. Landlord’s acceptance of Rent from any person shall not be deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any Transfer. Any Transfer not in conformity with this Section 18 shall be void at the option of Landlord.

(c) The provisions of subsection (a) above notwithstanding, if Tenant proposes to Transfer all of the Premises for all or substantially all of the remainder of the Term (other than a Transfer permitted without Landlord’s consent as provided in subsection (b) above), Landlord may terminate this Lease, either conditioned on execution of a new lease between Landlord and the proposed transferee or without that condition. If Tenant proposes to enter into a Transfer of less than all of the Premises (other than a Transfer permitted without Landlord’s consent as provided in subsection (b) above), Landlord may amend this Lease to remove the portion of the Premises to be transferred, either conditioned on execution of a new lease between Landlord and the proposed transferee or without that condition. If this Lease is not so terminated or amended, Tenant shall pay to Landlord, immediately upon receipt, the excess of (i) all compensation received by Tenant for the Transfer over (ii) the Rent allocable to the Premises transferred.

(d) If Tenant requests Landlord’s consent to a Transfer, Tenant shall provide Landlord, at least 15 days prior to the proposed Transfer, current financial statements of the transferee certified by an executive officer of the transferee, a complete copy of the proposed Transfer documents, and any other information Landlord reasonably requests. Immediately following any approved assignment or sublease, Tenant shall deliver to Landlord an assumption agreement reasonably acceptable to Landlord executed by Tenant and the transferee, together with a certificate of insurance evidencing the transferee’s compliance with the insurance requirements of Tenant under this Lease. Tenant agrees to reimburse Landlord for reasonable administrative and attorneys’ fees in connection with the processing and documentation of any Transfer for which Landlord’s consent is requested.

19. Subordination; Mortgagee’s Rights.

(a) Within 30 days after the date of execution of this Lease, Landlord shall deliver to Tenant a subordination, non-disturbance, and attornment agreement executed by the holder of any Mortgage affecting the Premises in the form attached to this Lease as Exhibit “ G” (the “ SNDA”). Tenant accepts this Lease subject and subordinate to any Mortgage now or in the future affecting the Premises; provided, however, that the subordination of this Lease to any future Mortgage shall be conditioned on the holder of such Mortgage executing and delivering to Tenant another SNDA in the form of Exhibit “ G” or if not in the form of Exhibit “ G”, in another form of subordination, non-disturbance, and attornment agreement that is reasonably acceptable to Tenant.

20. Estoppel Certificates; Financial Information.

21. Surrender.

(b) If Tenant remains in possession of the Premises after the expiration or termination of this Lease, Tenant’s occupancy of the Premises shall be that of a tenancy at will. Tenant’s occupancy during any holdover period shall otherwise be subject to the provisions of this Lease (unless clearly inapplicable), except that the Monthly Rent shall be one and one half times the Monthly Rent payable for the last full month immediately preceding the holdover. No holdover or payment by Tenant after the expiration or termination of this Lease shall operate to extend the Term or prevent Landlord from immediate recovery of possession of the Premises by summary proceedings or otherwise. Any provision in this Lease to the contrary notwithstanding, any holdover by Tenant shall constitute a default on the part of Tenant under this Lease entitling Landlord to exercise, without obligation to provide Tenant any notice or cure period, all of the remedies available to Landlord in the event of a Tenant default, and Tenant shall be liable for all damages, including consequential damages if such holdover continues longer than sixty (60) days, that Landlord suffers as a result of the holdover.

22. Defaults - Remedies.

(a) It shall be an Event of Default:

(ii) If Tenant enters into or permits any Transfer in violation of Section 18 above;

(v) If any breach or default by Tenant or any Affiliate of Tenant occurs under any of the Total Building Leases and is not cured within any notice or grace periods permitted in such documents.

(b) If an Event of Default occurs, Landlord shall have the following rights and remedies:

(v) every other right or remedy given in this Lease or now or hereafter existing at law or in equity.

(f) LANDLORD AND TENANT WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON OR RELATED TO, THE SUBJECT MATTER OF THIS LEASE.

23. Authority.

24. Liability.

(c) Tenant will look solely to Landlord’s interest in the Property for recovering any judgment or collecting any obligation from Landlord, its property manager, and their respective officers, directors, partners, shareholders, members and employees, and those of their affiliates (each a “ Landlord Party”). Tenant agrees that neither Landlord nor any other Landlord Party will be personally liable for any judgment or deficiency decree.

25. Miscellaneous.

(a) The captions in this Lease are for convenience only, are not a part of this Lease and do not in any way define, limit, describe or amplify the terms of this Lease.

(b) Together with the other Building Leases, this Lease represents the entire agreement between the parties hereto and there are no collateral or oral agreements or understandings between Landlord and Tenant with respect to the Premises or the Property. No rights, easements or licenses are acquired in the Property or any land adjacent to the Property by Tenant by implication or otherwise except as expressly set forth in this Lease. This Lease shall not be modified in any manner except by an instrument in writing executed by the parties. The masculine (or neuter) pronoun and the singular number shall include the masculine, feminine and neuter genders and the singular and plural number. The word “ including” followed by any specific item(s) is deemed to refer to examples rather than to be words of limitation. The word “ person” includes a natural person, a partnership, a corporation, a limited liability company, an association and any other form of business association or entity. Both parties having participated fully and equally in the negotiation and preparation of this Lease, this Lease shall not be more strictly construed, nor any ambiguities in this Lease resolved, against either Landlord or Tenant.

(c) Each covenant, agreement, obligation, term, condition or other provision contained in this Lease shall be deemed and construed as a separate and independent covenant of the party bound by, undertaking or making the same, not dependent on any other provision of this Lease unless otherwise expressly provided. All of the terms and conditions set forth in this Lease shall apply throughout the Term unless otherwise expressly set forth herein.

(d) If any provisions of this Lease shall be declared unenforceable in any respect, such unenforceability shall not affect any other provision of this Lease, and each such provision shall be deemed to be modified, if possible, in such a manner as to render it enforceable and to preserve to the extent possible the intent of the parties as set forth herein. This Lease shall be construed and enforced in accordance with the laws of the state in which the Property is located.

(e) This Lease shall be binding upon and inure to the benefit of Landlord and Tenant and their respective heirs, personal representatives and permitted successors and assigns. All persons liable for the obligations of Tenant under this Lease shall be jointly and severally liable for such obligations.

(f) Tenant shall not record this Lease or any memorandum without Landlord’s prior consent.

(g) The submission of this Lease for examination does not constitute an offer to lease, or a reservation of or option for the Premises, and this Lease becomes effective only upon execution and delivery hereof by both Landlord and Tenant.

(h) The Broker(s) identified in Section 1, if any, will be paid a commission by Landlord pursuant to a separate written agreement between Landlord and such Broker(s). Each party represents and warrants to the other party that the Broker(s) identified in Section 1, if any, are the only brokers or agents dealt with by such party in connection with the negotiation or execution of this Lease. Each such party hereby agrees to indemnify and hold the other party (and any Mortgagee) harmless from any and all claims by any broker or agent other than the Broker(s) identified in Section 1, if any, for commissions, fees or expenses arising out of or in connection with the negotiation of or entering into this Lease by Landlord and Tenant, based on the assertion that the indemnifying party agreed to pay or (cause to be paid) such other broker or agent. In no event shall any Mortgagee have any obligation to any broker or agent involved in this transaction.

be excused for the period of delay, in which case the period for the performance of any such act or acts shall be extended for the period reasonably necessary to complete performance after the end of the period of such delay. In no event shall any monetary obligations under this Lease be extended due to Force Majeure, and in no event shall financial inability constitute a cause beyond the reasonable control of a party. In order for any party hereto to claim the benefit of a delay due to Force majeure, such party shall be required to use reasonable efforts to minimize the extent and duration of such delay, and to give the other party reasonable notice of the cause of such delay within a reasonable time of its commencement. In addition, each party’s delay in performance of its non-monetary obligations under this Lease shall be excused to the extent that such delay is due to any act or omission of the other party or such other party’s Agents in breach of such other party’s obligations under this Lease.

27. Security Deposit.

performance and observance by Tenant of the provisions of any of the Total Building Leases including this Lease. Tenant shall not be entitled to any interest on the Security Deposit. Landlord shall have the right to commingle the Security Deposit with its other funds. Landlord may use the whole or any part of the Security Deposit to cure such default or pay any expenses (including, without limitation, reasonable attorney’s fees) incurred as a result of such default, or for the payment of any amount as to which Tenant is in default or to compensate Landlord for any loss or damage it may suffer by reason of Tenant’s default under this Lease. If Landlord uses all or any portion of the Security Deposit as herein provided, within 10 days after demand, Tenant shall pay Landlord cash in an amount equal to that portion of the Security Deposit used by Landlord. If Tenant complies fully and faithfully with all of the provisions of this Lease, the Security Deposit shall be returned to Tenant after the Expiration Date and surrender of the Premises to Landlord.

28. Utilities. See Rider 2.

(b) Subject to Tenant’s signage rights in Section 11, to install, affix and maintain any and all signs on the exterior or interior of the Building or the Property.

(h) To erect, use and maintain pipes, ducts, wiring and conduits, and appurtenances thereto, in and through the Premises.

(i) To grant to any person or to reserve unto itself the exclusive right to conduct any business or render any service in the Building or on the Property.

(j) The exclusive right to use or dispose of the use of the roof of the Building.

30. Parking. Appurtenant to the lease of the Premises, Tenant shall have the non-exclusive privilege during the Term to use the number of parking spaces specified in Section 1 of the Lease, including 97 parking spaces located in the parking facilities of the Building on the Property and 10 parking spaces located in the parking facilities of the other two (2) existing buildings included in the project currently known as Moorestown Corporate Center (the “ Project”) and subject to a Declaration of Restrictions and Easements as contained in Book 2649 Page 179 (the “ Declaration”), on an unassigned basis in common with other tenants and occupants, in areas reasonably designated by Landlord. The parking facilities of the Building are located on the Property and elsewhere at the Project and may in future be in another location reasonably convenient to the Property and the Project as Landlord may determine from time to time, but such parking facilities wherever located will be deemed to be included in and are considered a Common Area of the Building. Tenant’s parking privileges shall be subject to the rules and regulations relating to parking adopted by Landlord from time to time. Landlord shall have the right to grant designated, reserved parking stalls to other tenants and occupants. In no event shall the number of parking stalls used by Tenant and Tenant’s Agents exceed the number of stalls allocated to Tenant in Section 1 of this Lease, but this sentence shall not be deemed to limit Tenant’s rights to use additional spaces under the other Total Building Leases. Landlord shall have no obligation to monitor, secure or police the use of the parking facilities or other Common Areas. If the terms and provisions of Addendum 1 are applicable, this Section 30 shall be supplemented as provided by the applicable terms and conditions of Addendum 1.

31. Furniture. If and to the extent that any furniture is located at the Premises on the date of this Lease (“Furniture”), Landlord will give Tenant a quit-claim Bill of Sale for such Furniture, “ as-is” “ where-is” and “ with all faults,” without representation or warranty.

[signatures on next following page]

Landlord and Tenant have executed this Lease on the respective date(s) set forth below.

Date signed:	Landlord:

August 21, 2015	228 Strawbridge Associates, LLC,
	a New Jersey limited liability company
Witness:


/s/ Stefanie J. Hill	By:	/s/ Marc Rash
Name (printed): Stefanie J. Hill	Name: Marc Rash
	Title: Secretary


Date signed:	Tenant:


August 3, 2015	Tabula Rasa HealthCare, Inc.,
	a Delaware corporation
Attest/Witness:


/s/ Connie H. Phillips-Davis	By:	/s/ Brian W. Adams
Name (printed): Connie H. Phillips-Davis	Name: Brian W. Adams
	Title: CFO

Rider 1 to Lease Agreement

ADDITIONAL DEFINITIONS

“ ADA” means the Americans With Disabilities Act of 1990 (42 U.S.C. § 1201 et seq.), as amended and supplemented from time to time.

“ Affiliate” means any entity, directly or indirectly, controlling, controlled by or under common control of, Tenant (for the purposes of this definition, the concepts of control, controlling and controlled mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities or ownership interests, by contract or otherwise).

“ Agents” of a party means such party’s employees, agents, representatives, contractors, licensees or invitees.

“ Alteration” means any addition, installation, alteration or improvement to the Premises or Property, as the case may be.

“ Building Rules” means the rules and regulations attached to this Lease as Exhibit “B” as they may be reasonably amended from time to time.

“ Building Systems” means any electrical, mechanical, structural, plumbing, heating, ventilating, air conditioning, sprinkler, life safety or security systems serving the Building.

“ Business Day” means every day other than Sundays and Federal holidays.

“ Common Areas” means all areas and facilities as provided by Landlord from time to time for the use or enjoyment of all tenants in the Building or Property, including, if applicable, lobbies, hallways, restrooms, elevators, driveways, sidewalks, parking, loading and landscaped areas.

“ Environmental Laws” means all present or future federal, state or local laws, ordinances, rules or regulations (including the rules and regulations of the federal Environmental Protection Agency and comparable state agency) relating to the protection of human health or the environment, including, without limitation, the New Jersey Industrial Site Recovery Act N.J.S.A. 13:1K-6 et. seq. and its implementing regulations (“ ISRA”).

“ Event of Default” means a default described in Section 22(a) of this Lease.

“ Hazardous Materials” means pollutants, contaminants, toxic or hazardous wastes or other materials the removal of which is required or the use of which is regulated, restricted, or prohibited by any Environmental Law.

“ Interest Rate” means interest at the rate of 10% per annum.

“ Land” means the lot or plot of land on which the Property is situated or the portion thereof allocated by Landlord to the Property, as more particularly described in Rider 1-A attached hereto.

“ Laws” means all laws, ordinances, rules, orders, regulations, guidelines and other requirements of federal, state or local governmental authorities or of any private association or contained in any restrictive covenants or other declarations or agreements, now or subsequently pertaining to the Property or the use and occupation of the Property.

“ Lease Year” means the period from the Commencement Date through the succeeding 12 full calendar months (including for the first Lease Year any partial month from the Commencement Date until the first day of the first full calendar month) and each successive 12-month period thereafter during the Term.

“ Maintain” means to provide such maintenance, repair and, to the extent necessary and appropriate, replacement, as may be needed to keep the subject property in good condition and repair.

“ Monthly Rent” means the monthly installment of Base Rent plus the monthly installment of estimated Excess Operating Expenses and the monthly installment of Excess Property Taxes payable by Tenant under this Lease.

“ Mortgagee” means the holder of any Mortgage, including any ground or master lessor if Landlord’s interest is or becomes a leasehold estate.

“ Normal Business Hours” means 8:00 a.m. to 6:00 p.m., Monday through Friday, and 9:00 a.m. to 1:00 p.m. Saturday, legal holidays excepted.

“ Phase I Lease,” “ Phase II Lease” and “ Phase III Lease” are each as defined in Section 1(p).

“ Property” means the Land, the Building, all other buildings and improvements now or hereafter constructed on the Land, the Common Areas, and all appurtenances to them.

“ Taken” or “ Taking” means acquisition by a public authority having the power of eminent domain by condemnation or conveyance in lieu of condemnation.

“ Total Building Leases” is as defined in Section 1(p).

Rider 1-A

Legal Description of Property

Rider 2 to Lease Agreement

ELECTRICITY RIDER

(b) For the purposes of this Rider:

(iv) The “Electricity Standards” are described in Schedule 1 attached hereto.

(c) (i) Unless one or more check meters shall be installed to determine Tenant’s consumption of and demand for electricity within the Premises, Landlord shall supply electricity to service the Premises on a pro rata share basis, and T enant shall pay to Landlord, as Additional Rent, the sum of (y) an amount determined by applying the Electric Rate or, at Landlord’s election, the Cost per Kilowatt Hour and Cost per Kilowatt, to Tenant’s consumption of and demand for electricity within the Premises as reasonably determined by Landlord on a pro rata share basis, and (z) the actual, commercially reasonable administrative costs incurred by Landlord in supplying electricity on a pro rata share basis as reasonably determined by Landlord (such combined sum being hereinafter called “ Electric Rent”). Except as set forth in the foregoing clause (z), Landlord will not charge Tenant more than the Electric Rate or, at Landlord’s election, the Cost per Kilowatt and Cost per Kilowatt Hour for the electricity provided pursuant to this paragraph.

(iv) From time to time during the term, the Estimated Electric Rent may be adjusted by Landlord on the basis of either Landlord’s reasonable estimate of Tenant’s electric consumption and demand (if at any time the meter(s) servicing the Premises are inoperative) or T enant’s actual consumption of and demand for electricity as recorded on the meter(s) servicing the Premises, and, in either event, the Electric Rate or Cost per Kilowatt and Cost per Kilowatt Hour then in effect.

(v) Subsequent to the end of each calendar year during the T erm, or more frequently if Landlord shall elect, Landlord shall submit to Tenant a statement of the Electric Rent for such year or shorter period together with the components thereof, as set forth in clause (i) of this paragraph (c) (“Electric Statement”). To the extent that the Estimated Electric Rent paid by Tenant for the period covered by the Electric Statement shall be less than the Electric Rent as set forth on such Electric Statement, Tenant shall pay Landlord the difference within 30 days after receipt of the Electric Statement. If the Estimated Electric Rent paid by Tenant for the period covered by the Electric Statement shall be greater than the Electric Rent as set forth on the Electric Statement, such difference shall be credited against the next required payment(s) of Estimated Electric Rent. If no Estimated Electric Rent payment(s) shall thereafter be due, Landlord shall pay such difference to Tenant.

(g) T enant’s failure or refusal, for any reason, to utilize the electrical energy provided by Landlord, shall not entitle Tenant to any abatement or diminution of Base Rent or Additional Rent, or otherwise relieve Tenant from any of its obligations under this Lease.

(h) If either the quantity or character of the electrical service is changed by the utility company supplying electrical service to the Building or is no longer available or suitable for T enant’s requirements, or if there shall be a change, interruption or termination of electrical service due to a failure or defect on the part of the utility company, no such change, unavailability, unsuitability, failure or defect shall constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any payment from Landlord for any loss, damage or expense, or to abatement or diminution of Base Rent or Additional Rent, or otherwise relieve Tenant from any of its obligations under this Lease, or impose any obligation upon Landlord or its agents. Landlord will use reasonable efforts to insure that there is no interruption in electrical service to Tenant, but in no event shall Landlord be responsible for any failures of the utility providing such service or the negligence or other acts of third parties causing any such interruption; provided, however, that .

(j) If, after Landlord’s initial installation work, (i) Tenant shall request the installation of additional risers, feeders or other equipment or service to supply its electrical requirements and Landlord shall determine that the same are necessary and will not cause damage or injury to the Building or the Premises or cause or create a dangerous or hazardous condition or entail excessive or unreasonable alterations, repairs or expense or interfere with or disturb other Tenants or occupants of the Building, or (ii) Landlord shall determine that the installation of additional risers, feeders or other equipment or service to supply T enant’s electrical requirements is necessary, then and in either of such events Landlord shall cause such installations to be made, at Tenant’s sole cost and expense and Tenant shall pay Landlord for such installations, as Additional Rent, within 30 days after submission of a statement therefor.

(l) For and with respect to each year of the Term including, without limit, the Base Year and the first calendar year included in the Term, beginning on the Commencement Date or any earlier occupancy of the Premises, in addition to all other sums and charges due hereunder, Tenant shall pay, as Additional Rent, Tenant’s Share of the cost to the Building (including applicable sales or use taxes) for utility and energy costs, including any fuel surcharges or adjustments with respect thereto, incurred for water, sewer, gas and other utilities and heating, ventilating and air conditioning for the Building, to include all leased and leasable areas (not separately billed or metered within the Building) and Common Area electric and lighting, for the Building and Property, for any Lease Year or partial Lease Year, during the Term (collectively, “Additional Utility Rent”). Tenant shall pay to Landlord, on account of the Additional Utility Rent

- END -

Schedule 1
to
Rider 2
Electricity Standards

228 Strawbridge Drive

Electric Service:

Electric Distribution:

ADDENDUM 1

TOTAL BUILDING LEASE PROVISIONS

2. Section 24 of the Lease (Liability) is supplemented by adding the following as subsection (d):

I. Within ten (10) days after request by Landlord or Tenant, the parties shall execute an amendment to this Lease adding to the Premises any Available Space which Tenant has elected to lease, as of the date specified in Section E with respect to such space, or if required by Landlord or any owner of the 224 Building or the 232 Building, a separate lease agreement, upon the terms set forth in this Section 4, and otherwise upon the terms and conditions of this Lease. Failure or refusal to execute and deliver such amendment to this Lease or separate lease agreement shall not waive or release the rights and obligations of the parties, which shall be deemed modified as of Tenant’s notice to Landlord of Tenant’s election to lease such space.

J. This Section 4 shall in no event constitute a covenant or guarantee by Landlord that any Available Space will be available for lease by Tenant at any time.

O. Notwithstanding anything to the contrary contained in the Lease, the Right of Offer shall inure solely to the benefit of the Tenant originally named herein (i.e., Tabula Rasa HealthCare, Inc., a Delaware corporation) and not to the benefit of any of the Tenant’s successors or assigns, whether or not permitted by Landlord. Upon the occurrence of any such assignment or transfer during the Term, the Right of Offer shall automatically terminate and become null and void without further need of any documentation with respect thereto.

EXHIBIT “A”

PLAN SHOWING PREMISES

A-1

EXHIBIT “B”

BUILDING RULES

6. Tenant shall not change any locks nor place additional locks upon any doors.

10. The use of rooms as sleeping quarters is strictly prohibited at all times.

B-1

12. Tenant and its Agents shall not smoke in the Building or at the Building entrances and exits.

16. Tenant shall use its best efforts all of Tenant’s Agents to comply with these Building Rules, and will be responsible for any non-compliance by Tenant’s Agents.

18. Tenant shall not burn candles, incense, matches or other ignitable materials in the Building.

B-2

EXHIBIT “C”

TENANT ESTOPPEL CERTIFICATE

Please refer to the documents described in Schedule 1 hereto, (the “ Lease Documents”) including the “ Lease” therein described; all defined terms in this Certificate shall have the same meanings as set forth in the Lease unless otherwise expressly set forth herein. The undersigned Tenant hereby certifies that it is the tenant under the Lease. Tenant hereby further acknowledges that it has been advised that the Lease may be collaterally assigned in connection with a proposed financing secured by the Property and/or may be assigned in connection with a sale of the Property and certifies both to Landlord and to any and all prospective mortgagees and purchasers of the Property, including any trustee on behalf of any holders of notes or other similar instruments, any holders from time to time of such notes or other instruments, and their respective successors and assigns (the “ Beneficiaries”) that as of the date hereof:

1. The information set forth in attached Schedule 1 is true and correct.

3. All conditions and agreements under the Lease to be satisfied or performed by Landlord have been satisfied and performed.

4. Tenant is not in default under the Lease Documents, Tenant has not received any notice of default under the Lease Documents, and, to Tenant’s knowledge, there are no events which have occurred that, with the giving of notice and/or the passage of time, would result in a default by Tenant under the Lease Documents.

6. To Tenant’s knowledge, there are no uncured defaults on the part of Landlord under the Lease Documents, Tenant has not sent any notice of default under the Lease Documents to Landlord, and there are no events which have occurred that, with the giving of notice and/or the passage of time, would result in a default by Landlord thereunder, and that at the present time Tenant has no claim against Landlord under the Lease Documents.

7. Except as expressly set forth in Part G of Schedule 1, there are no provisions for any, and Tenant has no, options with respect to the Premises or all or any portion of the Property.

8. No action, voluntary or involuntary, is pending against Tenant under federal or state bankruptcy or insolvency law.

10. This Certificate shall be binding upon the successors, assigns and representatives of Tenant and any party claiming through or under Tenant and shall inure to the benefit of all Beneficiaries.

IN WITNESS WHEREOF, Tenant has executed this Certificate this day of , 2 .


	Name of Tenant

	By:
	Title:

C-1

SCHEDULE 1 TO TENANT ESTOPPEL CERTIFICATE

Lease Documents, Lease Terms and Current Status

A. Date of Lease:

B. Parties:

1. Landlord:

2. Tenant:

C. Premises:

D. Modifications, Assignments, Supplements or Amendments to Lease:

E. Commencement Date:

F. Expiration of Current Term:

G. Option Rights:

H. Security Deposit Paid to Landlord: $

I. Current Base Rent: $

J. Current Excess Operating Expenses and Excess Property Taxes: $ and $

K. Current Total Rent: $

L. Square Feet Demised:

C-2

EXHIBIT “D”

CLEANING SCHEDULE

LOBBIES & ENTRANCES

Daily Cleaning

· Stone, ceramic tile, marble, terrazzo, or other stone or resilient flooring will be vacuumed or dry mopped and wet mopped.

· Waste receptacles will be emptied, and washed as necessary.

· Carpets, including walk off mats will be vacuumed.

· Wall surfaces will be spot cleaned.

· Stainless steel, chrome, brass and other brightwork will be cleaned and polished.

· Entrance door and sidelight glass will be cleaned inside and out.

· Exterior of entrance areas will be swept. Smoking urns and outside trash receptacles will be emptied. Urns will be filled with fresh sand as needed.

· Lobby areas will be maintained at all times to a superior appearance.

Weekly Cleaning

· Reachable picture frames, moldings, door and window frames will be dusted. Artwork will be returned to level position.

· Door handles, doorknobs, switch plates, kick plates, will be cleaned.

· Vinyl tile and similar types of flooring will be spray buffed.

Monthly Cleaning

· Reachable paneling, door trim, ornamental work, baseboards, entire doors, woodwork, diffusers, grills, will be dusted.

· Bases, corners, edges and carpeted areas will be detailed vacuumed.

Bi-Annually

· Vinyl tile floors will be scrubbed or stripped and recoated.

· Stone or hard floors will be machine scrubbed and rinsed.

GENERAL OFFICE AREAS

Daily Cleaning

· Waste receptacles will be emptied and liners will be replaced as needed. Trash can liners will be neatly arranged. Trash will be removed from building and deposited in designated containers or compactors.

· Furniture, workstations, fixtures, filing cabinets, will be dusted. Work surfaces will be dusted provided they have been cleared of papers and personal belongings.

· Walls, doors, windowsills, ledges will be dusted.

· Carpeting and rugs will be vacuumed and spot cleaned.

· Vinyl tile floors will be dry mopped and damp mopped.

· Interior partition glass will be spot cleaned.

· Water coolers and fountains will be cleaned and sanitized.

Monthly Cleaning

· Stiff brush or vacuum all upholstered furniture.

· Detail vacuum all edges and corners.

· Grills and diffusers will be dusted.

· Vinyl tile floors will be spray buffed.

Annually

· Vinyl tile floors will be scrubbed or stripped and recoated.

D-1

PRIVATE OFFICES & CONFERENCE ROOMS

Daily Cleaning

· Empty and clean all waste receptacles replacing liners as needed. Trash can liners will be neatly arranged. Remove all building waste to designated refuse containers outside the buildings.

· Hand dust all furniture, fixtures, filing cabinets and other dust collecting objects.

· Spot clean walls, doors, windowsills, ledges and wall areas.

· Wipe clean all metal doorknobs, light switches, kick plates and door saddles.

· Vacuum all carpeting and rugs. Spot clean to remove spillage and stains.

· Clean all “ grease boards” with appropriate cleaner (unless “ DO NOT ERASE” notation is left on board).

Weekly Cleaning

· High dust including picture frames, moldings, door and window frames, and return artwork to level position.

· Wipe clean all metal doorknobs, light switch plates, kick plates, and door saddles.

Monthly Cleaning

· Stiff brush or vacuum all upholstered furniture.

· Dust all paneling, door trim and other architectural louvers, ornamental work, baseboards, entire doors and woodwork, air diffusers and ceiling ventilation grilles.

· Detail vacuum all edges and corners.

RESTROOMS

Daily Cleaning

· Thoroughly sanitize and wipe clean all toilets and urinals.

· Clean, sanitize and polish all sinks and fixtures with a non-abrasive cleaner.

· All hand soap, paper towel, toilet paper, and sanitary napkin dispensers will be filled, sanitized and polished. Any over spray from cleaning product is to be wet mopped immediately.

· Spot clean all partitions, tiled walls and vertical surfaces.

· Empty, clean and sanitize all trash receptacles and sanitary disposal units.

· Thoroughly clean all mirrors and bright work.

· Wet mop to sanitize all floors.

Weekly Cleaning

· High dust including high moldings, door frames, ceiling ventilations grills, and diffusers.

Quarterly

· Machine scrub restroom floors.

LUNCHROOM, BREAKROOMS, & VENDING AREAS

Daily Cleaning

· Empty and clean all waste receptacles (recyclable and non-recyclables) replacing liners if needed. Remove all building waste to designated refuse containers outside the building.

· Vacuum all carpeting, moving tables and chairs as needed. Spot clean to remove spillage and stains.

· Dry and wet mop all vinyl and similar types of flooring

· Wipe clean all vending machines as needed including spot cleaning glass display.

· Clean and sanitize tables. Spot clean seating to remove spillage and stains.

· Thoroughly clean and sanitize cabinet fronts, tray slides, counter tops, microwave ovens, etc.

· Replenish hand soap and paper towels.

Weekly Cleaning

· High dust including picture frames, moldings, door and window frames, and return artwork to level position.

· Wipe clean all metal doorknobs, light switch plates, kick plates, and door saddles.

· Spray buff vinyl tile floors.

· Wash waste containers inside and out.

Monthly Cleaning

· Detail vacuum all edges and corners.

· Grills and diffusers will be dusted.

· Stiff brush or vacuum all upholstered furniture; wipe clean all vinyl furniture.

D-2

Bi-Annually

· Strip or scrub re-coat vinyl tile floors.

ELEVATORS

Daily Cleaning

· Vacuum all cab floors, doors, tracks, and saddles.

· Wipe clean any wood, plastic laminate or other hard finish vertical surfaces.

· Sanitize and polish all stainless steel or other metal work on control panels and throughout the elevator cabs.

ELEVATOR LOBBIES, COMMON AREAS & CORRIDORS

Daily Cleaning

· Vacuum carpeting. Dry mop and damp mop hard floors.

· Dust and wipe clean all baseboards, wood panel and trim.

· All waste receptacles will be emptied and washed.

· Dust and wipe clean all furniture, windowsills, picture frames and door frames removing smudges, fingerprints, stains, splash marks, dust, and dirt.

· Spot clean all wall surfaces.

Weekly Cleaning

· High dust including picture frames, moldings, door and window frames, and return artwork to level position.

· Clean all paneling, door trim and other architectural louvers, ornamental work, baseboards, entire doors and woodwork, air diffusers, and ceiling ventilation grilles.

· Detail vacuum all edges, baseboards, corners, and carpeted areas.

STAIR TOWERS

Daily Cleaning

· Police for debris and mop for spillage.

Weekly Cleaning

· Sweep or vacuum.

· Wet mop stairs.

· Spot clean wall surfaces within reach; dust horizontal surfaces within reach.

D-3

EXHIBIT “E”

WORK LETTER

2. From the parties’ agreement on the Final Plans, approximately 3 weeks for requests for proposals, bid review and award/selection of the general contractor.

4. From submission of application for building permit, estimate between 4 weeks and 12 weeks for the building permit for the Work to be issued.

5. From issuance of the building permit, approximately 12 weeks for Substantial Completion of the Work.

E-1

referred to as the “ Final Plans.”

E-4. Completion of Work and Commencement Date.

E-2

E-8 Allowance for Cost of Work.

E-3

Allowance shall be retained by Landlord. In no event shall Tenant be entitled to apply any unused amount of the Allowance to pay Base Rent or Additional Rent.

(c) Notwithstanding the foregoing, to the extent that the Landlord’s costs of preliminary plans and designs for the Premises and the Work (“ Cost of Test Fit”) exceed Nine Cents ($0.09) per rentable square foot of the Premises, i.e., $2,237.00 (“Test Fit Allowance”), Tenant shall pay to Landlord the Cost of Test Fit in excess of the Test Fit Allowance after accounting for any portion of the Test Fit Allowance already disbursed by Landlord or in the process of being disbursed by Landlord (the “ Excess Test Fit Cost”) as provided herein. The Excess Test Fit Cost shall be paid to Landlord in cash within 30 days of the date of this Lease. In no event shall Landlord be obligated to spend or incur more than the amount of the Test Fit Allowance for the Cost of Test Fit. Tenant shall be responsible for and shall pay for the entire Cost of Test Fit in excess of the Test Fit Allowance out of its own funds.

E-11 Other Delays. Any delay in the construction of the Work caused by “Tenant Delay” including any one or more of the following: (i) Tenant’s request for materials, finishes or installations other than the Standards, including any so-called long lead items (meaning items that are not readily available at local retailers for immediate delivery, or are unavailable at commercially reasonable cost), or (ii) Tenant’s failure to timely prepare and submit any plans, specifications and construction drawings for Landlord’s review, timely submit information and cooperate in connection with preparing plans, specifications and construction drawings, or to timely review and approve any plans, specifications and construction drawings submitted by Landlord, within the time specified in this Exhibit E (or if not specified, then within 5 days of receipt), or (iii) any delays in obtaining governmental approvals, permits or licenses with respect to any of the Work (including delays due to rejection and necessary modifications of any documents submitted for review) due to any failure of plans, specifications and construction drawings prepared or modified by Tenant or Tenant’s Agents to comply with applicable laws, codes or governmental requirements, or due to any incomplete work, alterations or improvements for which Tenant is responsible, or due to any licensing, inspection or permitting requirements relating to Tenant’s specialized equipment, improvements, alterations or betterments relating to pharmacy operations, or (iv) Tenant’s failure to timely install its furniture, trade fixtures, equipment, wiring and cabling, or any other work or improvements for which Tenant is responsible, or (v) any other delay requested or caused by Tenant or Tenant’s Agents, shall not, in any event, delay the Commencement Date, which shall occur on the date it would have occurred but for such Tenant Delay.

E-4

SCHEDULE 1
TO
WORK LETTER
TENANT’S PLANS AND SPECIFICATIONS

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SCHEDULE 1
TO
WORK LETTER
TENANT’S PLANS AND SPECIFICATIONS (CONTINUED)

Tenant’s Prevailing Wage Requirements: At Tenant’s request, Landlord’s construction contract with its general contractor will include a requirement that prevailing wages will be paid to construction workers of the general contractor and subcontractors, and that all contractors and subcontractors will comply with the Affirmative Action Program as set forth at N.J.A.C. 19:30-3 et seq. (“ Prevailing Wage and Affirmative Action Requirements”). For this purpose prevailing wages will be in accordance with the current publication of the Prevailing Wage Rate Determination made by the Department of Labor and Workforce Development pursuant to the New Jersey Prevailing Wage Act (N.J.S.A. 34:11-56.25 et seq.). The 2015 publication of the Prevailing Wage Rate Determination has been provided to Landlord by Tenant before the date of this Lease and will be provided by Landlord to its general contractor.

Tenant’s Pharmacy Requirement: Tenant’s Plans and Specifications for the 2nd floor space shall include Tenant’s pharmacy operation.

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SCHEDULE 2
TO
WORK LETTER
STANDARD SPECIFICATIONS FOR TENANT FIT-OUT

DEMOLITION:

CARPENTRY:

A. Blocking: To be provided for all door stops, toilet partitions, bath accessories, shelving and cabinetry, if required or as noted. Costs to be included in any unit prices.

B. Finish Carpentry: Provide and install all millwork, installation of solid core stain grade wood doors, hardware, shelving, hanger rods, as shown on individual drawings.

C. Window Sills: All windowsills to be GWB unless otherwise noted.

DOORS, FRAMES AND HARDWARE:

A. Standard interior wood office door solid particle door leaf, 1 3/4 inch thick, 3’ -0” x 8’-0”, stain grade birch veneer (2nd and 3rd floors); 3’0” x 7’0” (1st floor).

B. Interior double doors to be the same as single doors, each leaf to be 3’-0” x 7’-0”.

C. Tenant entry doors match base building standard 1-3/4 inch thick, 3’-0” x 7’-0” stain grade Oak veneer — 1 hr. rated.

D. Frames: Frames to be hollow metal 16 gauge hollow metal knock down frames, rust inhibitive primer, field painted, fire rated as required. Frames to have a minimum of 3 door silencers

E. Hardware: Obtain each type of hardware from a single manufacturer.

G. Provide passage latch set as standard for all doors except suite entry door.

H. Suite entrance doors and all tenant egress doors to be keyed to the building master.

WALL TYPES:

D. Tape and spackle all GWB where exposed or required by code. Use metal corner beads and metal “ J” beads on exposed edges.

E. All fire-rated and partition walls to be sealed against window mullions, existing walls, etc.

CEILINGS:

A. Standard - 2’ x 4’ lay-in angled tegular white mineral fiber board fissured pattern, Armstrong Cortega Second Look II, 2767 or equal. Color to be white. Ceiling grid system, exposed tee, Prelude 15/16” installed per manufacturer’s recommendations.

FLOORING:

B. Carpeting: Carpet to be Shaw Digital, or equal, upgraded carpet to be Shaw Design Series V, or equal, carpet to be

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selected from Selection Boards furnished by Landlord. Allow for proper placement of seams. Carpet installation to be direct glue down.

C. Provide vinyl cove base to all carpeted and resilient tile floor areas. Vinyl base to be 1/8” thick, Johnsonite, or equal.

D. Provide a transaction strip where carpet and VCT meet.

E. All floors to be prepared in strict accordance with manufacturers recommendations for first quality installation, by means of flash patching or leveling as required.

PAINTING:

A. Interior Gypsum Drywall two coats latex wall paint, Sherwin Williams Interior Latex Flat Finish or equivalent.

B. All trim and hollow metal doorframes to receive 2 coats of Sherwin Williams ProClassic interior waterbased acrylic-alkyd enamel or equivalent, semi gloss finish.

C. Doors to be either factory or field stained, or field painted.

D. Mechanical piping ductwork and sprinklers will not be painted.

WINDOW BLINDS:

A. If not existing Contractor to furnish and install new 1” Building Standard mini blinds to be manufactured by SWF
Contract and the color is to match existing building blinds. Install blinds inside the window mullions.

MILLWORK/ CASEWORK (Available at additional cost to Tenant):

PLUMBING:

All work to be completed in accordance with the following:

1) The most recent IBC

2) The most recent IPC

3) State and Local Health Departments

4) Local Building Codes and the requirements of applicable regulatory authorities.

5) In cases of a conflict between the Contract Documents and the requirements of the local jurisdiction, the more stringent requirements shall apply.

6) Standard for tenant of 10,000 s.f. or more, (1) sink at kitchen/pantry area with 6’ of countertop and a total of 3’ of base cabinets.

FIRE PROTECTION:

A. Provide one each 5 lb. ABC fire extinguisher with semi- recessed cabinet per 4000 SF or as required to meet local code, and at kitchen/pantries.

B. Furnish and install branch and distribution sprinkler piping from building sprinkler mains. Size piping based on hydraulic calculations or pipe schedule if applicable.

C. Provide semi recessed sprinkler heads spaced to meet building requirement coverage in accordance with NFPA13, upright heads in open ceiling areas.

D. Furnish and install tampers and flows switch, as required by code.

HVAC:

A. Furnish and install duct work, flex, and diffusers from base building main duct work for all tenant office areas.

C. Additional tonnage for computer rooms, IT server rooms, conference rooms, and copy rooms is an additional cost to the tenant.

ELECTRICAL SYSTEM:

A. All installation per local code and the most recent update of the NEC.

C. Typical workstation to have 2 - 20 amp circuits per 4 workstations fed from walls, column or junction box above ceiling.

D. Duplex outlets to be provided as follows;

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· Private offices to have 3 standard 20 amp outlets on interior walls only.

· Meeting/Conference rooms: 1 standard 20 amp duplex each wall, except exterior wall.

· General corridors/ Public Space: 1 standard 20-amp duplex spaced at a maximum distance of 40’ or as required by local code.

E. Dedicated outlets: 2 will be provided for each tenant space.

F. Light switches will be provided as per code.

G. TeleData: All teledata work is to be provided by tenant. Tenant’s telecom contractor to provide any fire rated backboard required.

H. Provide additional fire alarm devices as required by the fit-out to meet the requirements of local code, NFPA, IBC and IFC. Same system will be utilized as the base building system.

I. Security system is the responsibility of the tenant for their space.

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EXHIBIT “F”

EXTENSION OPTION

4. If the Extension Option is effectively exercised, all the terms and conditions contained in this Lease shall continue to apply during the applicable Extension Term except that:

(a) There shall be no further right of extension beyond the Extension Option for the Extension Term specified in this Exhibit “F”;

(e) The Base Rent applicable to the Premises shall be equal to ninety-five percent (95%) of the Market Base Rental Rate determined in accordance with the following provisions:

F-1

(2) If clause (1) does not apply, then the Market Base Rental Rate shall be deemed to be the average of the middle determination and the determination closest in amount to such middle determination.

F-2

EXHIBIT “G”

SNDA

SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT

228 Strawbridge Associates LLC, a New Jersey limited liability company, whose address is c/o Keystone Property Group, L.P., One Presidential Boulevard, Suite 300, Bala Cynwyd, PA 19004 (the “ Landlord”), owns fee simple title to the real property described in Exhibit “ A” attached hereto (the “ Property”).

Mortgagee has made a loan to Landlord in the original principal amount of $22,000,000.00 (the “ Loan”), which is secured by a certain mortgage (the “ Mortgage”) encumbering the Property.

Pursuant to those three (3) certain Lease Agreements each for a separate floor of the building located at the Property and each dated as of the date hereof (individually and collectively, the “ Lease”), Landlord has demised to Tenant the entire building located at the Property (the “ Leased Premises”).

Tenant and Mortgagee desire to agree upon the relative priorities of their interests in the Property and their rights and obligations if certain events occur.

NOW, THEREFORE, for good and sufficient consideration, Tenant and Mortgagee agree:

1. Definitions. The following terms shall have the following meanings for purposes of this Agreement.

(a) Foreclosure Event. A “ Foreclosure Event” means: (i) foreclosure under the Mortgage; (ii) any other exercise by Mortgagee of rights and remedies (whether under the Mortgage or under applicable law, including bankruptcy law) as holder of the Loan and/or the Mortgage, as a result of which a Successor Landlord becomes owner of the Property; or (iii) delivery by Landlord to Mortgagee (or its designee or nominee) of a deed or other conveyance of Landlord’s interest in the Property in lieu of any of the foregoing.

(d) Rent. The “ Rent” means any fixed rent, base rent or additional rent under the Lease.

(e) Successor Landlord. A “ Successor Landlord” means any party that becomes owner of the Property as the result of a Foreclosure Event.

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3. Nondisturbance, Recognition and Attornment.

4. Protection of Successor Landlord. Notwithstanding anything to the contrary in the Lease or the Mortgage, Successor Landlord shall not be liable for or bound by any of the following matters:

(d) Modification, Amendment or Waiver. Any material modification or amendment of the Lease, or any waiver of the terms of the Lease, made without Mortgagee’s written consent.

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5. Exculpation of Successor Landlord. Notwithstanding anything to the contrary in this Agreement or the Lease, upon any attornment pursuant to this Agreement, the Lease shall be deemed to have been automatically amended to provide that Successor Landlord’s obligations and liability under the Lease shall never extend beyond Successor Landlord’s (or its successors’ or assigns’) interest, if any, in the Leased Premises from time to time, including insurance and condemnation proceeds, security deposits, escrows, Successor Landlord’s interest in the Lease, and the proceeds from any sale, lease or other disposition of the Property (or any portion thereof) by Successor Landlord (collectively, the “ Successor Landlord’s Interest”). Tenant shall look exclusively to Successor Landlord’s Interest (or that of its successors and assigns) for payment or discharge of any obligations of Successor Landlord under the Lease as affected by this Agreement. If Tenant obtains any money judgment against Successor Landlord with respect to the Lease or the relationship between Successor Landlord and Tenant, then Tenant shall look solely to Successor Landlord’s Interest (or that of its successors and assigns) to collect such judgment. Tenant shall not collect or attempt to collect any such judgment out of any other assets of Successor Landlord.

7. Miscellaneous.

If to the Mortgagee, at: 399 Park Avenue

18th Floor

New York, New York 10022

Attention: Dan Gilbert

Facsimile No.: (212) 547-2780

Email: gilbert@nrfc.com

and

433 East Las Colinas Blvd.

Suite 100

Irving, Texas 75039

Attention: Robert S. Riggs

Facsimile No.: (972) 869-6521

G-3

Email: riggs@nrfc.com

With a copy to:

Haynes & Boone LLP

30 Rockefeller Plaza, 26th Floor

New York, New York, 10112

Attention: Steven Koch

Telecopier: (212) 884-8205

Email: steven.koch@haynesboone.com

If to the Tenant, at: Tabula Rasa HealthCare, Inc.

228 Strawbridge Drive

West Route 38

Moorestown, NJ 08057

Attention: CFO

(b) Successors and Assigns. This Agreement shall bind and benefit the parties, their successors and assigns, any Successor Landlord, and its successors and assigns. If Mortgagee assigns the Mortgage, then upon delivery to Tenant of written notice thereof accompanied by the assignee’s written assumption of all obligations under this Agreement, all liability of the assignor shall terminate. If Tenant consists of more than one person or entity, the representations, warranties, covenants and obligations of such persons and entities hereunder shall be joint and several. A separate action may be brought or prosecuted against any such person or entity comprising Tenant, regardless of whether the action is brought or prosecuted against the other persons or entities comprising Tenant, or whether such persons or entities are joined in the action. Mortgagee may compromise or settle with any one or more of the persons or entities comprising Tenant for such sums, if any, as it may see fit and may in its discretion release any one or more of such persons or entities from any further liability to Mortgagee without impairing, affecting or releasing the right of Mortgagee to proceed against any one or more of the persons or entities not so released.

(f) Interpretation; Governing Law. The interpretation, validity and enforcement of this Agreement shall be governed by and construed under the internal laws of the State of New York, excluding such State’s principles of conflict of laws.

(g) Amendments. This Agreement may be amended, discharged or terminated, or any of its provisions waived, only by a written instrument executed by the party to be charged.

(i) Execution. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

[THIS SPACE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the Mortgagee and Tenant have caused this Agreement to be executed as of the date first above written.

MORTGAGEE:

U.S. BANK NATIONAL ASSOCIATION, as trustee for the Beneficial Owner of the NorthStar 2013-1 Grantor Trust, Series A

By:	NS Servicing II, LLC, a Delaware limited
	liability company, as attorney-in-fact and Special Servicer

	By:	NRFC Sub-REIT Corp., a Maryland
		corporation, as sole managing member

		By:
		Name:
		Title:


TENANT:

Tabula Rasa HealthCare, Inc., a Delaware corporation


BY:
Name:
Title:

G-5

STATE OF )

) ss.:

COUNTY OF )


Notary Public

STATE OF )

) ss.:

COUNTY OF )


Notary Public

G-6

LANDLORD’S CONSENT

	LANDLORD:

	228 STRAWBRIDGE ASSOCIATES L.L.C.,
	a New Jersey limited liability company


	By:
		Name:
		Title:

STATE OF )

) ss.:

COUNTY OF )


Notary Public

CareKinesis, Inc.

CareKinesis,Inc.

/s/ Brian Adams

/s/ Orsula V. Knowlton

Brian Adams Secretary

Orsula Knowlton President