Exhibit 10.2

 

 

 

CREDIT AGREEMENT AND GUARANTY

dated as of

June 30, 2018

by and among

ATHENEX, INC.,

as the Borrower,

THE SUBSIDIARY GUARANTORS FROM TIME TO TIME PARTY HERETO,

as the Guarantors,

THE LENDERS FROM TIME TO TIME PARTY HERETO

as the Lenders,

and

PERCEPTIVE CREDIT HOLDINGS II, LP,

as the Administrative Agent

U.S. $50,000,000

 

 

 

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TABLE OF CONTENTS

 

SECTION 1. DEFINITIONS

     1  

1.01

  Certain Defined Terms      1  

1.02

  Accounting Terms and Principles      25  

1.03

  Interpretation      25  

SECTION 2. THE COMMITMENT AND THE LOANS

     26  

2.01

  Loans      26  

2.02

  Borrowing Procedures      27  

2.03

  Notes      27  

2.04

  Use of Proceeds      27  

SECTION 3. PAYMENTS OF PRINCIPAL AND INTEREST, ETC.

     27  

3.01

  Scheduled Repayments and Prepayments Generally; Application      27  

3.02

  Interest      27  

3.03

  Prepayments      28  

SECTION 4. PAYMENTS, ETC.

     29  

4.01

  Payments      29  

4.02

  Computations      30  

4.03

  Set-Off      30  

SECTION 5. YIELD PROTECTION, ETC.

     31  

5.01

  Additional Costs      31  

5.02

  Illegality      32  

5.03

  Taxes      32  

SECTION 6. CONDITIONS

     36  

6.01

  Conditions to the Borrowing of the Loan      36  

SECTION 7. REPRESENTATIONS AND WARRANTIES

     39  

7.01

  Power and Authority      39  

7.02

  Authorization; Enforceability      40  

7.03

  Governmental and Other Approvals; No Conflicts      40  

7.04

  Financial Statements; Material Adverse Change      40  

7.05

  Properties      41  

7.06

  No Actions or Proceedings      43  

7.07

  Compliance with Laws and Agreements      43  

7.08

  Taxes      44  

7.09

  Full Disclosure      44  

 

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TABLE OF CONTENTS

(continued)

 

7.10

  Investment Company Act and Margin Stock Regulation      44  

7.11

  Solvency      45  

7.12

  Subsidiaries      45  

7.13

  Indebtedness and Liens      45  

7.14

  Material Agreements      45  

7.15

  Restrictive Agreements      45  

7.16

  Real Property      45  

7.17

  Pension Matters      45  

7.18

  Regulatory Approvals      46  

7.19

  Transactions with Affiliates      47  

7.20

  OFAC      47  

7.21

  Anti-Corruption      47  

7.22

  [Reserved]      48  

7.23

  Priority of Obligations      48  

7.24

  Royalty and Other Payments      48  

7.25

  Non-Competes      48  

7.26

  [Reserved]      48  

7.27

  Reimbursement from Medical Reimbursement Programs      48  

SECTION 8. AFFIRMATIVE COVENANTS

     48  

8.01

  Financial Statements and Other Information      48  

8.02

  Notices of Material Events      51  

8.03

  Existence      52  

8.04

  Payment of Obligations      53  

8.05

  Insurance      53  

8.06

  Books and Records; Inspection Rights      53  

8.07

  Compliance with Laws and Other Obligations      54  

8.08

  Maintenance of Properties, Etc.      54  

8.09

  Licenses      54  

8.10

  [Reserved]      54  

8.11

  Use of Proceeds      54  

8.12

  Certain Obligations Respecting Subsidiaries; Further Assurances      54  

8.13

  Termination of Non-Permitted Liens      56  

8.14

  [Reserved]      56  

 

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TABLE OF CONTENTS

(continued)

 

8.15

   [Reserved]      56  

8.16

   Maintenance of Regulatory Approvals, Contracts, Intellectual Property, Etc.
     56  

8.17

   ERISA Compliance      57  

8.18

   Cash Management      57  

8.19

   Post-Closing Obligations.      58  

SECTION 9. NEGATIVE COVENANTS

     59  

9.01

   Indebtedness      59  

9.02

   Liens      60  

9.03

   Fundamental Changes and Acquisitions      62  

9.04

   Lines of Business      62  

9.05

   Investments      62  

9.06

   Restricted Payments      64  

9.07

   Payments of Indebtedness      64  

9.08

   Change in Fiscal Year      64  

9.09

   Sales of Assets, Etc.      64  

9.10

   Transactions with Affiliates      65  

9.11

   Restrictive Agreements      66  

9.12

   Modifications and Terminations of Material Agreements and Organic Documents
     66  

9.13

   Outbound Licenses      66  

9.14

   Sales and Leasebacks      66  

9.15

   Hazardous Material      66  

9.16

   Accounting Changes      66  

9.17

   Compliance with ERISA      66  

9.18

   [Reserved]      67  

9.19

   Restriction of Amendments to Certain Documents      67  

9.20

   Sanctions; Anti-Corruption Use of Proceeds      67  

SECTION 10. FINANCIAL COVENANTS

     67  

10.01

   Minimum Liquidity      67  

10.02

   Minimum Revenue      67  

SECTION 11. EVENTS OF DEFAULT

     68  

11.01

   Events of Default      68  

 

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TABLE OF CONTENTS

(continued)

 

11.02

  Remedies      71  

11.03

  Additional Remedies      72  

11.04

  Payment of Prepayment Fee      72  

SECTION 12. THE ADMINISTRATIVE AGENT

     73  

12.01

  Appointment and Duties      73  

12.02

  Binding Effect      74  

12.03

  Use of Discretion      74  

12.04

  Delegation of Rights and Duties      74  

12.05

  Reliance and Liability      75  

12.06

  Administrative Agent Individually      76  

12.07

  Lender Credit Decision      76  

12.08

  Expenses; Indemnities      76  

12.09

  Resignation of the Administrative Agent      77  

12.10

  Release of Collateral or Guarantors      77  

12.11

  Additional Secured Parties      78  

SECTION 13. GUARANTEE

     78  

13.01

  The Guarantee      78  

13.02

  Obligations Unconditional      79  

13.03

  Reinstatement      80  

13.04

  Subrogation      80  

13.05

  Remedies      80  

13.06

  Instrument for the Payment of Money      80  

13.07

  Continuing Guarantee      80  

13.08

  General Limitation on Guarantee Obligations      80  

SECTION 14. MISCELLANEOUS

     81  

14.01

  No Waiver      81  

14.02

  Notices      81  

14.03

  Expenses, Indemnification, Etc.      81  

14.04

  Amendments, Etc.      82  

14.05

  Successors and Assigns      83  

14.06

  Survival      85  

14.07

  Captions      85  

14.08

  Counterparts      85  

 

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TABLE OF CONTENTS

(continued)

 

14.09

  Governing Law      85  

14.10

  Jurisdiction, Service of Process and Venue      86  

14.11

  Waiver of Jury Trial      86  

14.12

  Waiver of Immunity      86  

14.13

  Entire Agreement      86  

14.14

  Severability      87  

14.15

  No Fiduciary Relationship      87  

14.16

  Confidentiality      87  

14.17

  Interest Rate Limitation      87  

14.18

  Judgment Currency      88  

14.19

  USA PATRIOT Act      88  

14.20

  Acknowledgement and Consent to Bail-In of EEA Financial Institutions      88  

SCHEDULES AND EXHIBITS

 

Schedule 1

  -     

Commitments

Schedule 2

  -     

Products

Schedule 7.05(b)

  -     

Certain Intellectual Property

Schedule 7.08

  -     

Taxes

Schedule 7.12

  -     

Information Regarding Subsidiaries

Schedule 7.13(a)

  -     

Existing Indebtedness

Schedule 7.13(b)

  -     

Existing Liens

Schedule 7.14

  -     

Material Agreements

Schedule 7.15

  -     

Restrictive Agreements

Schedule 7.16

  -     

Real Property Owned or Leased by Obligors

Schedule 7.17

  -     

Pension Matters

Schedule 7.18(c)

  -     

Adverse Findings

Schedule 7.19

  -     

Transactions with Affiliates

Schedule 7.24

  -     

Royalties and Other Payments

Schedule 9.05

  -     

Existing Investments

Schedule 9.09

  -     

Sale of Assets

Schedule 9.14

  -     

Existing Sales and Leasebacks

Exhibit A

  -     

Form of Note

Exhibit B

  -     

Form of Borrowing Notice

Exhibit C

  -     

Form of Guarantee Assumption Agreement

Exhibit D-1

  -      Form of U.S. Tax Compliance Certificate (For Foreign Lenders That Are
Not Partnerships For U.S. Federal Income Tax Purposes)

Exhibit D-2

  -      Form of U.S. Tax Compliance Certificate (For Foreign Participants That
Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

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TABLE OF CONTENTS

(continued)

 

Exhibit D-3

  -      Form of U.S. Tax Compliance Certificate (For Foreign Participants That
Are Partnerships For U.S. Federal Income Tax Purposes)

Exhibit D-4

  -      Form of U.S. Tax Compliance Certificate (For Foreign Lenders That Are
Partnerships For U.S. Federal Income Tax Purposes)

Exhibit E

  -      Form of Compliance Certificate

Exhibit F

  -      Form of Assignment and Assumption

Exhibit G

  -      Form of Landlord Consent

Exhibit H

  -      [Reserved]

Exhibit I

  -      Form of Intercompany Subordination Agreement

Exhibit J

  -      Form of Warrant

Exhibit K

  -      Form of Solvency Certificate

 

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CREDIT AGREEMENT AND GUARANTY

CREDIT AGREEMENT AND GUARANTY, dated as of June 30, 2018 (this “Agreement”),
among ATHENEX, INC., a Delaware corporation (the “Borrower”), certain
Subsidiaries of the Borrower that may be required to provide Guarantees from
time to time hereunder (each a “Guarantor” and collectively, the “Guarantors”),
the lenders from time to time party hereto (each a “Lender” and collectively,
the “Lenders”), and PERCEPTIVE CREDIT HOLDINGS II, LP, as administrative agent
for the Lenders (in such capacity, the “Administrative Agent”).

WITNESSETH:

WHEREAS, the Borrower has requested that the Lenders provide a senior secured
term loan facility to the Borrower in an aggregate principal amount of
$50,000,000; and

WHEREAS, the Lenders are willing, on the terms and subject to the conditions set
forth herein, to provide such senior secured term loan facility.

NOW, THEREFORE, the parties hereto agree as follows:

SECTION 1.

DEFINITIONS

1.01 Certain Defined Terms. As used herein, the following terms have the
following respective meanings:

“Account Control Agreement Completion Date” has the meaning set forth in
Section 8.19(a).

“Acquisition” means any transaction, or any series of related transactions, by
which any Person (for purposes of this definition, an “acquirer”) directly or
indirectly, by means of amalgamation, merger, purchase of assets, purchase of
Equity Interests, or otherwise, (i) acquires all or substantially all of the
assets of any other Person, (ii) acquires an entire business line or unit or
division of any other Person, (iii) with respect to any other Person that is
managed or governed by a Board, acquires control of Equity Interests of such
other Person representing more than fifty percent (50%) of the ordinary voting
power (determined on a fully-diluted basis) for the election of directors of
such Person’s Board, or (iv) acquires control of more than fifty percent (50%)
of the Equity Interests in any other Person (determined on a fully-diluted
basis) that is not managed by a Board.

“Administrative Agent” has the meaning set forth in the preamble hereto.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

“Agreement” has the meaning set forth in the preamble hereto.

 

1

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“ANDA” means (i) (x) an abbreviated new drug application (as defined in the FD&C
Act) and (y) any similar application or functional equivalent relating to any
new drug application applicable to or required by any non-U.S. Governmental
Authority, and (ii) all supplements and amendments that may be filed with
respect to any of the foregoing.

“Applicable Margin” means nine percent (9%), as may be increased pursuant to
Section 3.02(b).

“Asset Sale” has the meaning set forth in Section 9.09.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee of such Lender substantially in the form of Exhibit F.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

“Bailee Letter” means a bailee letter substantially in the form of Exhibit F to
the Security Agreement.

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy.”

“Benefit Plan” means any employee benefit plan as defined in Section 3(3) of
ERISA (whether governed by the laws of the United States or otherwise) to which
any Obligor or Subsidiary thereof incurs or otherwise has any obligation or
liability, contingent or otherwise.

“BLA” means (i) (x) a biologics license application (as defined in the FD&C Act)
to introduce, or deliver for introduction, a biologic product, including
vaccines into commerce in the U.S., or any successor application or procedure
and (y) any similar application or functional equivalent relating to biologics
licensing applicable to or required by any non-U.S. Governmental Authority, and
(ii) all supplements and amendments that may be filed with respect to the
foregoing.

“Board” means, with respect to any Person, the board of directors or equivalent
management or oversight body of such Person or any committee thereof authorized
to act on behalf of such board (or equivalent body).

“Borrower” has the meaning set forth in the preamble hereto.

“Borrower Party” has the meaning set forth in Section 14.03(b).

“Borrowing” means the borrowing of the Loans on the Closing Date.

“Borrowing Notice” means a written notice substantially in the form of Exhibit
B.

 

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“Business Day” means a day (other than a Saturday or Sunday) on which commercial
banks are not authorized or required to close in New York City and, when
determined in connection with notices and determinations in respect of LIBOR or
any Loan or any funding, Interest Period or any payment in respect of Loans,
that is also a day on which dealings in dollar deposits are carried on in the
London interbank market.

“Capital Lease Obligations” means, as to any Person, the obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property, which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP and, for purposes of this Agreement, the amount
of such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP.

“Casualty Event” means the damage, destruction or condemnation, as the case may
be, of property of the Borrower or any of its Subsidiaries in excess of
$2,000,000 (or the Equivalent Amount in other currencies).

“CFC” means a Subsidiary that is a “controlled foreign corporation” within the
meaning of Section 957 of the Code.

“CFC Holding Company” means any Domestic Subsidiary that owns no material assets
(directly or indirectly) other than Equity Interests and debt of one or more
CFCs or Domestic Subsidiaries that are themselves CFC Holding Companies.

“Change of Control” means an event or series of events (i) as a result of which
any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Securities Act, but excluding any of such person or its Subsidiaries, and
any Person acting in its capacity as trustee, agent or other fiduciary or
administrator of any such Plan) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or group
shall be deemed to have “beneficial ownership” of all Equity Interests that such
person or group has the right to acquire, whether such right is exercisable
immediately or only after the passage of time (such right, an “option right”)),
directly or indirectly, of thirty-five percent (35%) or more of the Equity
Interests of the Borrower entitled to vote for members of the Board of the
Borrower on a fully-diluted basis (and taking into account all such Equity
Interests that such person or group has the right to acquire pursuant to any
option right); or (ii) as a result of which, during any period of twelve
(12) consecutive months, a majority of the members of the Board of the Borrower
cease to be composed of individuals (x) who were members of such Board on the
first day of such period, (y) whose election or nomination to such Board was
approved by individuals referred to in clause (x) above constituting at the time
of such election or nomination at least a majority of such Board or equivalent
governing body or (z) whose election or nomination to such Board was approved by
individuals referred to in clauses (x) and (y) above constituting at the time of
such election or nomination at least a majority of such Board; or (iii) that
results in the sale of all or substantially all of the assets or businesses of
the Borrower and its Subsidiaries, taken as a whole, or (iv) that results in the
Borrower’s failure to own, directly or indirectly, beneficially and of record,
one-hundred percent (100%) of all issued and outstanding Equity Interests of
each Subsidiary Guarantor.

 

3

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“Claims” means (and includes) any claim, demand, complaint, grievance, action,
application, suit, cause of action, order, charge, indictment, prosecution,
judgement or other similar process, whether in respect of assessments or
reassessments, debts, liabilities, expenses, costs, damages or losses,
contingent or otherwise, whether liquidated or unliquidated, matured or
unmatured, disputed or undisputed, contractual, legal or equitable, including
loss of value, professional fees, including fees and disbursements of legal
counsel, and all costs incurred in investigating or pursuing any of the
foregoing or any proceeding relating to any of the foregoing.

“Closing Date” means the date on which the conditions precedent specified in
Section 6.01 are satisfied (or waived in accordance with Section 14.04) and on
which the Loans are to be made to the Borrower.

“Closing Date Certificate” has the meaning set forth in Section 6.01(c).

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time.

“Collateral” means any asset or property in which a Lien is purported to be
granted under any Loan Document, including future acquired or created assets or
property (or all such assets or property, as the context may require).

“Commitment” means, with respect to each Lender, the obligation of such Lender
to make Loans to the Borrower on the Closing Date in accordance with the terms
and conditions of this Agreement, which commitment is in the amount set forth
opposite such Lender’s name on Schedule 1 under the caption “Commitment”, as
such Schedule may be amended from time to time pursuant to an Assignment and
Assumption or otherwise. The aggregate Commitments on the date of this Agreement
equal $50,000,000.

“Company Competitor” means (i) any competitor of the Borrower or any of its
Subsidiaries primarily operating in the same line of business as the Borrower or
any of its Subsidiaries and (ii) any of its Affiliates (other than any Person
that is a bona fide debt fund primarily engaged in the making, purchasing,
holding or other investing in commercial loans, notes, bonds or similar
extensions of credit or securities in the ordinary course of its business,) that
are either (x) identified by name in writing by the Borrower to the
Administrative Agent from time to time or (y) clearly identifiable on the basis
of such Affiliate’s name.

“Compliance Certificate” has the meaning set forth in Section 8.01(c).

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Contracts” means any contract, license, lease, agreement, obligation, promise,
undertaking, understanding, arrangement, document, commitment, entitlement or
engagement under which a Person has, or will have, any liability or contingent
liability (in each case, whether written or oral, express or implied, and
whether in respect of monetary or payment obligations, performance obligations
or otherwise).

 

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“Control” means, in respect of a particular Person, the possession by one or
more other Persons, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such particular Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Controlled Account” has the meaning set forth in Section 8.18(a).

“Copyright” means all copyrights, copyright registrations and applications for
copyright registrations, including all renewals and extensions thereof and all
other rights whatsoever accruing thereunder or pertaining thereto throughout the
world.

“Default” means any Event of Default and any event that, upon the giving of
notice, the lapse of time or both, would constitute an Event of Default.

“Default Rate” has the meaning set forth in Section 3.02(b).

“Designated Jurisdiction” means any country or territory to the extent that such
country or territory is the subject of country- or territory-wide Sanctions.

“Disqualified Equity Interests” means, with respect to any Person, any Equity
Interest of such Person that, by its terms (or by the terms of any security or
other Equity Interest into which it is convertible or for which it is
exchangeable), or upon the happening of any event or condition (i) matures or is
mandatorily redeemable (other than solely for Qualified Equity Interests),
including pursuant to a sinking fund obligation or otherwise, (ii) is redeemable
at the option of the holder thereof (other than solely for Qualified Equity
Interests), in whole or in part, (iii) provides for the scheduled payments of
dividends or other distributions in cash or other securities that would
constitute Disqualified Equity Interests, or (iv) is or becomes convertible into
or exchangeable for Indebtedness or any other Equity Interests that would
constitute Disqualified Equity Interests, in each case, prior to the date that
is ninety-one (91) days after the Maturity Date.

“Dollars” and “$” means lawful money of the United States of America.

“Domestic Subsidiary” means any Subsidiary that is a corporation, limited
liability company, partnership or similar business entity incorporated, formed
or organized under the laws of the United States, any state of the United States
or the District of Columbia.

“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

 

5

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“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Eligible Transferee” means and includes (i) any commercial bank, (ii) any
insurance company, (iii) any finance company, (iv) any financial institution,
(v) any Person that is a bona fide debt fund primarily engaged in the making,
purchasing, holding or other investing in commercial loans, notes, bonds or
similar extensions of credit or securities in the ordinary course of its
business, (vi) with respect to any Lender, any of its Affiliates, and (vii) any
other “accredited investor” (as defined in Regulation D of the Securities Act)
that is principally in the business of managing investments or holding assets
for investment purposes; provided that, an Eligible Transferee shall not include
(x) any Company Competitor, or (y) any Person that primarily invests in
distressed debt or other distressed financial assets; provided further that
(A) neither clause (x) or (y) above shall apply retroactively to any Person that
previously acquired an assignment or participation interest hereunder to the
extent such Person was not a Company Competitor or a Person of the type
described in clause (y) above at the time of the applicable assignment or
participation, as the case may be, and (B) with respect to both clauses (x) and
(y) above, the Administrative Agent shall not have any duty or obligation to
carry out due diligence in order to identify or determine whether a Person would
be excluded as an Eligible Transferee as a result of the application of either
such clause.

“Environmental Law” means any federal, state, provincial or local governmental
law, rule, regulation, order, writ, judgment, injunction or decree, whether U.S.
or non-U.S., relating to pollution or protection of the environment or the
treatment, storage, disposal, release, threatened release or handling of
hazardous materials, and any specific agreements entered into with any competent
Governmental Authority that include commitments related to environmental
matters.

“Equity Interests” means, with respect to any Person (for purposes of this
defined term, an “issuer”), all shares of, interests or participations in, or
other equivalents in respect of such issuer’s capital stock, including all
membership interests, partnership interests or equivalent, and all debt or other
securities directly or indirectly exchangeable, exercisable or otherwise
convertible into, such issuer’s capital stock, whether now outstanding or issued
after the Closing Date, and in each case, however designated and whether voting
or non-voting.

“Equity Transaction” means the transactions contemplated by the Share Purchase
Agreement, dated as of June 29, 2018, by and between the Borrower and Perceptive
Life Sciences Master Fund, Ltd.

“Equivalent Amount” means, with respect to an amount denominated in one
currency, the amount in another currency that could be purchased by the amount
in the first currency determined by reference to the Exchange Rate at the time
of determination.

“ERISA” means the United States Employee Retirement Income Security Act of 1974,
as amended.

 

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“ERISA Affiliate” means, collectively, any Obligor, Subsidiary thereof, and any
Person under common control, or treated as a single employer, with any Obligor
or Subsidiary thereof, within the meaning of Section 414(b), (c), (m) or (o) of
the Code.

“ERISA Event” means (i) a reportable event as defined in Section 4043 of ERISA
with respect to a Title IV Plan, excluding, however, such events as to which the
PBGC by regulation has waived the requirement of Section 4043(a) of ERISA that
it be notified within thirty (30) days of the occurrence of such event; (ii) the
applicability of the requirements of Section 4043(b) of ERISA with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, to any Title
IV Plan where an event described in paragraph (9), (10), (11), (12) or (13) of
Section 4043(c) of ERISA is reasonably expected to occur with respect to such
plan within the following thirty (30) days; (iii) a withdrawal by any Obligor or
any ERISA Affiliate thereof from a Title IV Plan or the termination of any Title
IV Plan resulting in liability under Sections 4063 or 4064 of ERISA; (iv) the
withdrawal of any Obligor or any ERISA Affiliate thereof in a complete or
partial withdrawal (within the meaning of Section 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefore, or the
receipt by any Obligor or any ERISA Affiliate thereof of notice from any
Multiemployer Plan that it is insolvent pursuant to Section 4245 of ERISA;
(v) the filing of a notice of intent to terminate, the treatment of a plan
amendment as a termination under Section 4041 or 4041A of ERISA, or the
commencement of proceedings by the PBGC to terminate a Title IV Plan or
Multiemployer Plan; (vi) the imposition of liability on any Obligor or any ERISA
Affiliate thereof pursuant to Sections 4062(e) or 4069 of ERISA or by reason of
the application of Section 4212(c) of ERISA; (vii) the failure by any Obligor or
any ERISA Affiliate thereof to make any required contribution to a Plan, or the
failure to meet the minimum funding standard of Section 412 of the Code with
respect to any Title IV Plan (whether or not waived in accordance with
Section 412(c) of the Code) or the failure to make by its due date a required
installment under Section 430 of the Code with respect to any Title IV Plan or
the failure to make any required contribution to a Multiemployer Plan;
(viii) the determination that any Title IV Plan is considered an at-risk plan or
a plan in endangered to critical status within the meaning of Sections 430, 431
and 432 of the Code or Sections 303, 304 and 305 of ERISA; (ix) an event or
condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan; (x) the imposition of any
liability under Title I or Title IV of ERISA, other than PBGC premiums due but
not delinquent under Section 4007 of ERISA, upon any Obligor or any ERISA
Affiliate thereof; (xi) an application for a funding waiver under Section 303 of
ERISA or an extension of any amortization period pursuant to Section 412 of the
Code with respect to any Title IV Plan; (xii) the occurrence of a non-exempt
prohibited transaction under Sections 406 or 407 of ERISA for which any Obligor
or any Subsidiary thereof may be directly or indirectly liable; (xiii) a
violation of the applicable requirements of Section 404 or 405 of ERISA or the
exclusive benefit rule under Section 401(a) of the Code by any fiduciary or
disqualified person for which any Obligor or any ERISA Affiliate thereof may be
directly or indirectly liable; (xiv) the occurrence of an act or omission which
could give rise to the imposition on any Obligor or any ERISA Affiliate thereof
of fines, penalties, taxes or related charges under Chapter 43 of the Code or
under Sections 409, 502(c), (i) or (1) or 4071 of ERISA; (xv) the assertion of a
material claim (other than routine claims for benefits) against any Plan or the
assets thereof, or against any Obligor or any Subsidiary thereof in connection
with any such plan; (xvi) receipt from the IRS of notice of the failure of any
Qualified Plan to qualify under Section 401(a) of the Code, or the

 

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failure of any trust forming part of any Qualified Plan to fail to qualify for
exemption from taxation under Section 501(a) of the Code; (xvii) the imposition
of any lien (or the fulfillment of the conditions for the imposition of any
lien) on any of the rights, properties or assets of any Obligor or any ERISA
Affiliate thereof, in either case pursuant to Title I or IV, including
Section 302(f) or 303(k) of ERISA or to Section 401(a)(29) or 430(k) of the
Code; or (xviii) the establishment or amendment by any Obligor or any Subsidiary
thereof of any “welfare plan”, as such term is defined in Section 3(1) of ERISA,
that provides post-employment welfare benefits in a manner that would increase
the liability of any Obligor.

“ERISA Funding Rules” means the rules regarding minimum required contributions
(including any installment payment thereof) to Title IV Plans, as set forth in
Sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and
305 of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor Person), as in effect
from time to time.

“Event of Default” has the meaning set forth in Section 11.01.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“Exchange Rate” means, as of any date, the rate at which any currency may be
exchanged into another currency, as set forth on the relevant Reuters screen at
or about 11:00 a.m. (Eastern time) on such date. In the event that such rate
does not appear on the Reuters screen, the “Exchange Rate” shall be determined
by reference to such other publicly available service for displaying exchange
rates as may be reasonably designated by the Administrative Agent.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient: (i) Taxes imposed on or measured by net income (however denominated),
franchise Taxes and branch profits Taxes, in each case, (x) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivisions thereof) or
(y) that are Other Connection Taxes, (ii) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (1) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Borrower under Section 5.03(i)) or (2) such Lender changes its lending office,
except in each case to the extent that, pursuant to Section 5.03, amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender became a party hereto or to such Lender immediately before it
changed its lending office, (iii) Taxes attributable to such Recipient’s failure
to comply with Section 5.03(f), and (iv) any U.S. federal withholding Taxes
imposed under FATCA.

 

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“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not more onerous to comply with), any current or future regulations or
official interpretations thereof, any agreements entered into pursuant to
Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules
or practices adopted pursuant to any intergovernmental agreement, treaty or
convention among Governmental Authorities and implementing such Sections of the
Code.

“FD&C Act” means the U.S. Food, Drug and Cosmetic Act of 1938, 21 U.S.C. §§ 301
et seq. (or any successor thereto), as amended from time to time, and the rules,
regulations, guidelines, guidance documents and compliance policy guides issued
or promulgated thereunder.

“FDA” means the U.S. Food and Drug Administration and any successor entity.

“Federal Funds Effective Rate” means, for any day, the rate calculated by the
Federal Reserve Bank of New York based on such day’s federal funds transactions
by depositary institutions (as determined in such manner as the Federal Reserve
Bank of New York shall set forth on its public website from time to time) and
published on the next succeeding Business Day by the Federal Reserve Bank of New
York as the federal funds effective rate; provided that if the Federal Funds
Effective Rate as so determined would be less than zero, such rate shall be
deemed to be zero for the purposes of this Agreement.

“Fee Letter” means the Fee Letter, dated as of the date of this Agreement, among
the Borrower, the Lenders and the Administrative Agent.

“Foreign Lender” means a Lender that is not a U.S. Person.

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“GAAP” means generally accepted accounting principles in the United States of
America, as in effect from time to time, set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants, in the statements and pronouncements of the
Financial Accounting Standards Board and in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession that are applicable to the circumstances as of the date of
determination. All references to “GAAP” shall be to GAAP applied consistently
with the principles used in the preparation of the financial statements
delivered pursuant to Section 6.01(e)(i).

“Governmental Approval” means any consent, authorization, approval, order,
license, franchise, permit, certification, accreditation, registration,
clearance or exemption that is issued or granted by or from (or pursuant to any
act of) any Governmental Authority, including any application or submission
related to any of the foregoing.

“Governmental Authority” means any nation, government, branch of power (whether
executive, legislative or judicial), state, province or municipality or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, monetary, regulatory or administrative functions of or pertaining to
government, including without limitation regulatory authorities, governmental
departments, agencies, commissions, bureaus, officials, ministers, courts,
bodies, boards, tribunals and dispute settlement panels, and other law-, rule-
or regulation-making organizations or entities of any state, territory, county,
city or other political subdivision of any country, in each case whether U.S. or
non-U.S.

 

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“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (ii) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (iii) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (iv) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include (x) endorsements
for collection or deposit and (y) guarantees of operating leases, in each case,
in the ordinary course of business.

“Guarantee Assumption Agreement” means a Guarantee Assumption Agreement
substantially in the form of Exhibit C by an entity that, pursuant to
Section 8.12(a), is required to become a “Subsidiary Guarantor.”

“Guaranteed Obligations” has the meaning set forth in Section 13.01.

“Hazardous Material” means any hazardous or toxic substance, element, chemical,
compound, product, solid, gas, liquid, waste, by-product, pollutant, contaminant
or material, and includes, without limitation, (i) asbestos, polychlorinated
biphenyls and petroleum (including crude oil or any fraction thereof) and
(ii) any material classified or regulated as “hazardous” or “toxic” or words of
like import pursuant to an Environmental Law.

“Healthcare Laws” means, collectively, all Laws and Product Authorizations
applicable to the business, any Product or the Product Commercialization and
Development Activities of any Obligor, whether U.S. or non-U.S., regulating the
distribution, dispensing, importation, exportation, quality, manufacturing,
labeling, promotion and provision of and payment for drugs, medical or
healthcare products, items and services, including, without limitation, 45
C.F.R. et seq. (“HIPAA”); Section 1128B(b) of the Social Security Act, as
amended; 42 U.S.C. § 1320a-7b (Criminal Penalties Involving Medicare or State
Health Care Programs), commonly referred to as the “Federal Anti-Kickback
Statute”; § 1877 of the Social Security Act, as amended; 42 U.S.C. § 1395nn
(Limitation on Certain Physician Referrals), commonly referred to as “Stark
Statute”; the FD&C Act; all applicable Good Manufacturing Practice requirements
addressed in the FDA’s Quality System Regulation (21 C.F.R. Part 820); all
rules, regulations and guidance with respect to the provision of Medicare and
Medicaid programs or services (42 C.F.R. Chapter IV et seq.); 10 U.S.C. §§1071 –
1110(b) (the “TRICARE Program”); 5 U.S.C. §§ 8901 – 8914 (“FEHB Plans”); the
PDMA; and all rules, regulations and guidance promulgated under or pursuant to
any of the foregoing, including any non-U.S. equivalents.

 

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“Hedging Agreement” means any interest rate exchange agreement, foreign currency
exchange agreement, commodity price protection agreement or other interest or
currency exchange rate or commodity price hedging arrangement.

“Immaterial Subsidiary” means any Subsidiary of the Borrower that
(i) individually constitutes or holds less than five percent (5%) of the
Borrower’s consolidated total assets or generates less than five percent (5%) of
the Borrower’s consolidated total revenue, and (ii) when taken together with all
then existing Immaterial Subsidiaries, such Subsidiary and such Immaterial
Subsidiaries, in the aggregate, would constitute or hold less than fifteen
percent (15%) of the Borrower’s consolidated total assets or generate less than
fifteen percent (15%) of the Borrower’s consolidated total revenue, in each case
as pursuant to the most recent fiscal period for which financial statements were
required to have been delivered pursuant to Sections 8.01(a) or (b).

“IND” means (i) (x) an investigational new drug application (as defined in the
FD&C Act) that is required to be filed with the FDA before beginning clinical
testing in human subjects, or any successor application or procedure and (y) any
similar application or functional equivalent relating to any investigational new
drug application applicable to or required by any non-U.S. Governmental
Authority, and (ii) all supplements and amendments that may be filed with
respect to the foregoing.

“Indebtedness” of any Person means, without duplication, (i) all obligations of
such Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes, loan agreements or similar instruments, (iii) all
obligations of such Person upon which interest charges are customarily paid,
(iv) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person, (v) all
obligations of such Person in respect of the deferred purchase price of property
or services (excluding accounts payable incurred in the ordinary course of
business not overdue by more than ninety (90) days), (vi) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (vii) all Guarantees by such Person of Indebtedness of others,
(viii) all Capital Lease Obligations of such Person, (ix) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (x) obligations under any Hedging
Agreement, currency swaps, forwards, futures or derivatives transactions,
(xi) all obligations, contingent or otherwise, of such Person in respect of
bankers’ acceptances, (xii) all guaranteed minimum payments of such Person under
any license or other agreements, (xiii) any Disqualified Equity Interests of
such Person, and (xiv) all other obligations required to be classified as
indebtedness of such Person under GAAP; provided that, notwithstanding the
foregoing, Indebtedness shall not include (x) accrued expenses, deferred rent,
deferred taxes, deferred compensation or customary obligations under employment
agreements or (y) obligations with respect to operating leases which are
subsequently reclassified as capital leases due to any changes in GAAP. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.

 

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“Indemnified Party” has the meaning set forth in Section 14.03(b).

“Indemnified Taxes” means (i) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any Obligation and (ii) to
the extent not otherwise described in clause (i), Other Taxes.

“Information Certificate” means the Information Certificate delivered pursuant
to Section 6.01(b).

“Insolvency Proceeding” means (i) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (ii) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other, similar arrangement
in respect of any Person’s creditors generally or any substantial portion of
such Person’s creditors, in each case undertaken under U.S. federal, state or
foreign law, including the Bankruptcy Code.

“Intellectual Property” means all Patents, Trademarks, Copyrights, and Technical
Information, whether U.S. or non-U.S.

“Intercompany Subordination Agreement” means a subordination agreement to be
executed and delivered by each Obligor and each of its Subsidiaries, pursuant to
which all obligations in respect of any Indebtedness owing to any such Person by
an Obligor shall be subordinated to the prior payment in full in cash of all
Obligations, such agreement to be in substantially the form attached hereto as
Exhibit I.

“Interest Period” means, with respect to any Borrowing, (i) initially, the
period commencing on (and including) the Closing Date and ending on (and
including) the last day of the calendar month in which the Loan was made, and
(ii) thereafter, the period beginning on (and including) the first day of each
succeeding calendar month and ending on the earlier of (and including) (x) the
last day of such calendar month and (y) the Maturity Date; provided that if such
last day of a calendar month is not a Business Day, then the last day of the
Interest Period applicable to such calendar month shall instead end on (and
include) the next succeeding Business Day, and the immediately succeeding
Interest Period shall instead begin on (and include) the calendar day
immediately succeeding such Business Day.

“Interest Rate” means the sum of (i) the Applicable Margin plus (ii) the greater
of (x) the Reference Rate and (y) two percent (2%).

“Invention” means any novel, inventive or useful art, apparatus, method,
process, machine (including any article or device), manufacture or composition
of matter, or any novel, inventive and useful improvement in any art, method,
process, machine (including article or device), manufacture or composition of
matter.

“Investment” means, for any Person: (i) the acquisition (whether for cash,
property, services or securities or otherwise) of any debt or Equity Interests,
bonds, notes, debentures, partnership or other ownership interests or other
securities of any other Person or any agreement to make any such acquisition
(including any “short sale” or any sale of any securities at a time

 

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when such securities are not owned by the Person entering into such sale); (ii)
the making of any deposit with, or advance, loan, assumption of debt or other
extension of credit to, or capital contribution in any other Person (including
the purchase of property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such property to such Person), but
excluding any such advance, loan or extension of credit having a term not
exceeding ninety (90) days arising in connection with the sale of inventory or
supplies by such Person in the ordinary course of business; or (iii) the
entering into of any Guarantee of, or other contingent obligation with respect
to, Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person. The amount of an Investment will be determined at the time the
Investment is made without giving effect to any subsequent changes in value.

“IRS” means the U.S. Internal Revenue Service or any successor agency, and to
the extent relevant, the U.S. Department of the Treasury.

“Landlord Consent” means a Landlord Consent substantially in the form of Exhibit
G.

“Law” means, collectively, all U.S. or non-U.S. federal, state, provincial,
territorial, municipal or local statute, treaty, rule, guideline, regulation,
ordinance, code or administrative or judicial precedent or authority, including
any interpretation or administration thereof by any Governmental Authority
charged with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“Lenders” has the meaning set forth in the preamble hereto.

“Lien” means any mortgage, lien, pledge, charge or other security interest, or
any lease, title retention agreement, mortgage, restriction, easement,
right-of-way, option or adverse claim (of ownership or possession) or other
encumbrance of any kind or character whatsoever or any preferential arrangement
that has the practical effect of creating a security interest.

“Loan” means each loan advanced by a Lender pursuant to Section 2.01.

“Loan Documents” means, collectively, this Agreement, the Notes, the Security
Documents, the Warrant, the Fee Letter, any Guarantee Assumption Agreement, the
Intercompany Subordination Agreement and any subordination agreement,
intercreditor agreement or other present or future document, instrument,
agreement or certificate delivered to the Administrative Agent (for itself or
for the benefit of any other Secured Party) in connection with this Agreement or
any of the other Loan Documents, in each case, as amended or otherwise modified.

“Loss” means judgments, debts, liabilities, expenses, costs, damages or losses,
contingent or otherwise, whether liquidated or unliquidated, matured or
unmatured, disputed or undisputed, contractual, legal or equitable, including
loss of value, professional fees, including fees and disbursements of legal
counsel on a full indemnity basis, and all costs incurred in investigating or
pursuing any Claim or any proceeding relating to any Claim.

 

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“Majority Lenders” means, at any time, Lenders having at such time in excess of
fifty percent (50%) of the aggregate Commitments (or, if such Commitments are
terminated, the outstanding principal amount of the Loans) then in effect.

“Margin Stock” means “margin stock” within the meaning of Regulations U and X.

“Material Adverse Change” and “Material Adverse Effect” mean a material adverse
change in or effect on (i) the business, financial performance, operations,
condition of the assets or liabilities of the Borrower and its Subsidiaries
taken as a whole, (ii) the ability of any Obligor to perform its obligations
under the Loan Documents, as and when due, or (iii) the legality, validity,
binding effect or enforceability of the Loan Documents or the rights, remedies
and benefits available to, or conferred upon, the Administrative Agent or the
Secured Parties under any of the Loan Documents.

“Material Agreement” means (i) any Contract listed in Schedule 7.14, (ii) any
other Contract to which any Obligor or any of its Subsidiaries is a party or a
beneficiary from time to time, or to which any assets or properties of any
Obligor or any of its Subsidiaries is bound the absence or termination of which
could reasonably be expected to result in a Material Adverse Effect, and
(iii) any other Contract to which any Obligor or any of its Subsidiaries is a
party or a guarantor (or equivalent) that (x) relates to any Product or any
Product Commercialization and Development Activity and (y) during any period of
twelve (12) consecutive months is reasonably expected to (1) result in payments
or receipts (including royalty, licensing or similar payments) made to any
Obligor or any of its Subsidiaries in an aggregate amount in excess of
$5,000,000 (or the Equivalent Amount in other currencies), or (2) require
payments or expenditures (including royalty, licensing or similar payments) made
by any Obligor or any of its Subsidiaries in an aggregate amount in excess of
$5,000,000 (or the Equivalent Amount in other currencies).

“Material Indebtedness” means, at any time, any Indebtedness of any Obligor or
Subsidiary thereof, the outstanding principal amount of which, individually or
in the aggregate, exceeds $5,000,000 (or the Equivalent Amount in other
currencies).

“Material Intellectual Property” means all Intellectual Property, whether
currently owned or licensed, or acquired, developed or otherwise licensed or
obtained after the date hereof by the Borrower or any of its Subsidiaries
(i) the loss of which could reasonably be expected to result in a Material
Adverse Effect, or (ii) that has a fair market value in excess of $5,000,000 (or
the Equivalent Amount in other currencies).

“Material Subsidiary” means any Subsidiary of the Borrower that is not an
Immaterial Subsidiary.

“Maturity Date” means the earlier to occur of (x) fifth (5th) anniversary of the
Closing Date and (y) the acceleration of the Obligations pursuant to
Section 11.02.

“Medicaid” means that government-sponsored entitlement program under Title XIX,
P.L. 89-97 of the Social Security Act, which provides federal grants to states
for medical assistance based on specific eligibility criteria, as set forth on
Section 1396, et seq. of Title 42 of the United States Code.

 

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“Medicare” means that government-sponsored insurance program under Title XVIII,
P.L. 89-97, of the Social Security Act, which provides for a health insurance
system for eligible elderly and disabled individuals, as set forth at
Section 1395, et seq. of Title 42 of the United States Code.

“Multiemployer Plan” means any multiemployer plan, as defined in
Section 400l(a)(3) of ERISA, to which any ERISA Affiliate incurs or otherwise
has any obligation or liability, contingent or otherwise.

“NDA” means (i) (x) a new drug application (as defined in the FD&C Act) and
(y) any similar application or functional equivalent relating to any new drug
application applicable to or required by any non-U.S. country, jurisdiction or
Governmental Authority, and (ii) all supplements and amendments that may be
filed with respect to any of the foregoing.

“Net Cash Proceeds” means, (i) with respect to any Casualty Event experienced or
suffered by any Obligor or any of its Subsidiaries, the amount of cash proceeds
received (directly or indirectly) from time to time by or on behalf of such
Person after deducting therefrom only (x) reasonable costs and expenses related
thereto incurred by such Obligor or such Subsidiary in connection therewith, and
(y) Taxes (including transfer Taxes or net income Taxes) paid or payable in
connection therewith; and (ii) with respect to any Asset Sale by any Obligor or
any of its Subsidiaries, the amount of cash proceeds received (directly or
indirectly) from time to time by or on behalf of such Person after deducting
therefrom only (x) reasonable costs and expenses related thereto incurred by
such Obligor or such Subsidiary in connection therewith, and (y) Taxes
(including transfer Taxes or net income Taxes) paid or payable in connection
therewith; provided that, in each case of clauses (i) and (ii), costs and
expenses shall only be deducted to the extent, that the amounts so deducted are
(x) actually paid to a Person that is not an Affiliate of any Obligor or any of
its Subsidiaries and (y) properly attributable to such Casualty Event or Asset
Sale, as the case may be.

“Note” means a promissory note, in substantially the form of Exhibit A hereto,
executed and delivered by the Borrower to any Lender in accordance with
Section 2.03.

“NY UCC” means the UCC as in effect from time to time in New York.

“Obligations” means, with respect to any Obligor, all amounts, obligations,
liabilities, covenants and duties of every type and description owing by such
Obligor to any Secured Party (including all Guaranteed Obligations and Warrant
Obligations) any other indemnitee hereunder or any participant, arising out of,
under, or in connection with, any Loan Document, whether direct or indirect
(regardless of whether acquired by assignment), absolute or contingent, due or
to become due, whether liquidated or not, now existing or hereafter arising and
however acquired, and whether or not evidenced by any instrument or for the
payment of money, including, without duplication, (i) if such Obligor is the
Borrower, all Loans, (ii) all interest, whether or not accruing after the filing
of any petition in bankruptcy or after the commencement of any insolvency,
reorganization or similar proceeding, and whether or not a claim for post-filing
or post-petition interest is allowed in any such proceeding, and (iii) all other
fees, expenses (including fees, charges and disbursement of counsel), interest,
commissions, charges, costs, disbursements, indemnities and reimbursement of
amounts paid and other sums chargeable to such Obligor under any Loan Document.

 

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“Obligors” means, collectively, the Borrower and the Subsidiary Guarantors and
their respective successors and permitted assigns.

“One-Month LIBOR” means, with respect to any applicable Interest Period
hereunder, the one-month London Interbank Offered Rate for deposits in Dollars
at approximately 11:00 a.m. (London, England time), as determined by the
Administrative Agent from the appropriate Bloomberg page (or any successor
thereto or similar source reasonably determined by the Administrative Agent from
time to time), which shall be that one-month London Interbank Offered Rate for
deposits in Dollars in effect two (2) Business Days prior to the first day of
such Interest Period rounded up to the nearest one-sixteenth (1/16) of one
percent (1%). The Administrative Agent’s determination of interest rates shall
be determinative on the Obligors and Lenders in the absence of manifest error.

“Organic Document” means, for any Person, such Person’s formation documents,
including, as applicable, its certificate of incorporation, by-laws, certificate
of partnership, partnership agreement, certificate of formation, limited
liability agreement, operating agreement and all shareholder agreements, voting
trusts and similar arrangements applicable to such Person’s Equity Interests, or
any equivalent document of any of the foregoing.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 5.03(g)).

“Participant” has the meaning set forth in Section 14.05(e).

“Participant Register” has the meaning set forth in Section 14.05(e).

“Patents” means all patents and patent applications, including (i) the
Inventions and improvements described and claimed therein, (ii) the reissues,
divisions, continuations, renewals, extensions, and continuations in part
thereof, and (iii) all rights whatsoever accruing thereunder or pertaining
thereto throughout the world.

“Patriot Act” has the meaning set forth in Section 14.19.

“Payment Date” means (i) the last day of each Interest Period and (ii) the
Maturity Date.

 

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“PBGC” means the United States Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.

“PDMA” means the Prescription Drug Marketing Act of 1987, 21 U.S.C. §§ 331 et
seq. (or any successor thereto), as amended from time to time, and the rules,
regulations, guidelines, guidance documents and compliance policy guides issued
or promulgated thereunder.

“Permitted Acquisition” means any Acquisition by the Borrower or any of its
Subsidiaries, whether by purchase, merger or otherwise; provided that:

(a) immediately prior to, and immediately after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing or could
reasonably be expected to result therefrom;

(b) such Acquisition shall comply in all material respects with all applicable
Laws and all applicable Governmental Approvals;

(c) in the case of any Acquisition of Equity Interests of another Person, after
giving effect to such Acquisition, all Equity Interests of such other Person
acquired by the Borrower or any of its Subsidiaries shall be owned, directly or
indirectly, beneficially and of record, by the Borrower or any of its
Subsidiaries, and, the Borrower shall cause such acquired Person to satisfy each
of the actions set forth in Section 8.12 as required by such Section;

(d) on a pro forma basis after giving effect to such Acquisition, the Borrower
and its Subsidiaries shall be in compliance with the financial covenants set
forth in Section 10;

(e) to the extent that the purchase price for any such Acquisition is paid in
cash, the amount thereof does not exceed $10,000,000 (or the Equivalent Amount
in other currencies) in any fiscal year;

(f) to the extent that the purchase price for any such Acquisition is paid in
Equity Interests, all such Equity Interests shall be Qualified Equity Interests;

(g) promptly upon request by the Administrative Agent in the case of any such
Acquisition that has a purchase price in excess of $35,000,000 (or the
Equivalent Amount in other currencies), the Borrower shall provide to the
Administrative Agent (i) at least ten (10) Business Day’s prior written notice
of any such Acquisition, together with summaries, prepared in reasonable detail,
of all due diligence conducted by or on behalf of the Borrower or the applicable
Subsidiary, as applicable, prior to such Acquisition, in each case subject to
customary confidentiality restrictions, (ii) subject to customary
confidentiality restrictions, a copy of the draft purchase agreement related to
the proposed Acquisition (and any related documents requested by the
Administrative Agent), (iii) pro forma financial statements of the Borrower and
its Subsidiaries (as of the last day of the most recently ended fiscal quarter
prior to the date of consummation of such Acquisition for which financial
statements are required to be delivered pursuant to Sections 8.01(a) or (b))
after giving effect to such Acquisition, and (iv) subject to customary
confidentiality restrictions, any other information reasonably requested (to the
extent available), by the Administrative Agent and available to the Obligors;
and

 

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(h) no Obligor or any of its Subsidiaries (including any acquired Person) shall,
in connection with any such Acquisition, assume or remain liable with respect to
(x) any Indebtedness of the related seller or the business, Person or assets
acquired, except to the extent permitted pursuant to Section 9.01(l), (y) any
Lien on any business, Person or assets acquired, except to the extent permitted
pursuant to Section 9.02, (z) any other liabilities (including Tax, ERISA and
environmental liabilities), except to the extent the assumption of such
liability could not reasonably be expected to result in a Material Adverse
Effect. Any other such Indebtedness, liabilities or Liens not permitted to be
assumed, continued or otherwise supported by any Obligor or Subsidiary thereof
hereunder shall be paid in full or released within sixty (60) days of the
acquisition date as to the business, Persons or properties being so acquired on
or before the consummation of such Acquisition.

“Permitted Cash Equivalent Investments” means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States or any member states
of the European Union or any agency or any state thereof having maturities of
not more than one (1) year from the date of acquisition and (ii) commercial
paper maturing no more than two hundred seventy (270) days after the date of
acquisition thereof and having the highest rating from either Standard & Poor’s
Ratings Group or Moody’s Investors Service, Inc.

“Permitted Indebtedness” means any Indebtedness permitted under Section 9.01.

“Permitted Liens” means any Liens permitted under Section 9.02.

“Permitted Refinancing” means, with respect to any Indebtedness permitted to be
refinanced, extended, renewed or replaced hereunder, any refinancings,
extensions, renewals and replacements of such Indebtedness; provided that such
refinancing, extension, renewal or replacement shall not (i) increase the
outstanding principal amount of the Indebtedness being refinanced, extended,
renewed or replaced, except by an amount equal to accrued interest and a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred in connection therewith, (ii) contain terms relating to
outstanding principal amount, amortization, maturity, collateral security (if
any) or subordination (if any), or other material terms that, taken as a whole,
are less favorable in any material respect to the Obligors and their respective
Subsidiaries or the Secured Parties than the terms of any agreement or
instrument governing such existing Indebtedness, (iii) have an applicable
interest rate which does not exceed the greater of (A) the rate of interest of
the Indebtedness being replaced and (B) the then applicable market interest
rate, (iv) contain any new requirement to grant any Lien or to give any
Guarantee that was not an existing requirement of such Indebtedness and
(v) after giving effect to such refinancing, extension, renewal or replacement,
no Default shall have occurred (or could reasonably be expected to occur) as a
result thereof.

“Person” means any individual, corporation, company, voluntary association,
partnership, limited liability company, joint venture, trust, unincorporated
organization or Governmental Authority or other entity of whatever nature.

 

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“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Pledged Entity” means (i) any Subsidiary of the Borrower, Equity Interests of
which have been or, pursuant to Section 8.19 are required to be, pledged to the
Administrative Agent pursuant to the Security Documents and (ii) Axis
Therapeutics Limited.

“Prepayment Fee” means with respect to any prepayment of all or any portion of
the Loans, whether by optional or mandatory prepayment, acceleration or
otherwise, occurring (i) on or prior to the first anniversary of the Closing
Date, an amount equal to three percent (3%) of the aggregate outstanding
principal amount of the Loans being prepaid and (ii) at any time after the first
anniversary of the Closing Date and on or prior to the third anniversary of the
Closing Date, an amount equal to two percent (2%) of the aggregate outstanding
principal amount of the Loans being prepaid.

“Prepayment Price” has the meaning set forth in Section 3.03(a)(i).

“Product” means (i) those pharmaceutical or biological products (and described
in reasonable detail) on Schedule 2 attached hereto, and (ii) any current or
future pharmaceutical or biological product developed, distributed, dispensed,
imported, exported, labeled, promoted, manufactured, licensed, marketed, sold or
otherwise commercialized by any Obligor or any of its Subsidiaries, including
any such product in development or which may be developed.

“Product Authorizations” means any and all Governmental Approvals, whether U.S.
or non-U.S. (including all applicable ANDAs, NDAs, BLAs, INDs, Product
Standards, supplements, amendments, pre- and post- approvals, governmental price
and reimbursement approvals and approvals of applications for regulatory
exclusivity) of any Regulatory Authority, in each case, necessary to be held or
maintained by, or for the benefit of, any Obligor or any of its Subsidiaries for
the ownership, use or commercialization of any Product or for any Product
Commercialization and Development Activities with respect thereto in any country
or jurisdiction.

“Product Commercialization and Development Activities” means, with respect to
any Product, any combination of research, development, manufacture, import, use,
sale, licensing, importation, exportation, shipping, storage, handling, design,
labeling, marketing, promotion, supply, distribution, testing, packaging,
purchasing or other commercialization activities, receipt of payment in respect
of any of the foregoing (including, without limitation, in respect of licensing,
royalty or similar payments), or any similar or other activities the purpose of
which is to commercially exploit such Product.

“Product Related Information” means, with respect to any Product, all books,
records, lists, ledgers, files, manuals, correspondence, reports, plans,
drawings, data and other information of every kind (in any form or medium), and
all techniques and other know-how, owned or possessed by the Obligors or any of
their respective Subsidiaries that are necessary or

 

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useful for any Product Commercialization and Development Activities relating to
such Product, including (i) brand materials and packaging, customer targeting
and other marketing, promotion and sales materials and information, referral,
customer, supplier and other contact lists and information, product, business,
marketing and sales plans, research, studies and reports, sales, maintenance and
production records, training materials and other marketing, sales and
promotional information and (ii) clinical data, information included or
supporting any Product Authorization, any regulatory filings, updates, notices
and correspondence (including adverse event and other pharmacovigilance and
other post-marketing reports and information, etc.), technical information,
product development and operational data and records, and all other documents,
records, files, data and other information, used in connection with the Product
Commercialization Development Activities for such Product.

“Product Standards” means all safety, quality and other specifications and
standards applicable to any Product, including all pharmaceutical, biological
and other standards promulgated by Standards Bodies.

“Prohibited Payment” means any bribe, rebate, payoff, influence payment,
kickback or other payment or gift of money or anything of value (including meals
or entertainment) to any officer, employee or ceremonial office holder of any
government or instrumentality thereof, political party or supra-national
organization (such as the United Nations), any political candidate, any royal
family member or any other person who is connected or associated personally with
any of the foregoing that is prohibited under any Law for the purpose of
influencing any act or decision of such payee in his official capacity, inducing
such payee to do or omit to do any act in violation of his lawful duty, securing
any improper advantage or inducing such payee to use his influence with a
government or instrumentality thereof to affect or influence any act or decision
of such government or instrumentality.

“Proportionate Share” means, with respect to any Lender, the percentage obtained
by dividing (i) the sum of the Commitment (or, if the Commitments are
terminated, the outstanding principal amount of the Loans) of such Lender then
in effect by (ii) the sum of the Commitments (or, if the Commitments are
terminated, the outstanding principal amount of the Loans) of all Lenders then
in effect.

“Proposal Letter” means the Proposal Letter, dated June 14, 2018, between the
Borrower and Perceptive Advisors LLC (as supplemented by the outline of proposed
terms and conditions attached thereto).

“Qualified Equity Interest” means, with respect to any Person, any Equity
Interest of such Person that is not a Disqualified Equity Interest.

“Qualified Plan” means an employee benefit plan (as defined in Section 3(3) of
ERISA) other than a Multiemployer Plan (i) that is or was at any time maintained
or sponsored by any Obligor or any ERISA Affiliate thereof or to which any
Obligor or any ERISA Affiliate thereof has ever made, or was ever obligated to
make, contributions, and (ii) that is intended to be tax qualified under
Section 401(a) of the Code.

“Real Property Security Documents” means any Landlord Consents or Bailee
Letters.

 

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“Recipient” means any Lender or any other recipient of any payment to be made by
or on account of any Obligation.

“Reference Rate” means One-Month LIBOR; provided that if One-Month LIBOR can no
longer be determined by the Administrative Agent (in its sole discretion) or the
Governmental Authority having jurisdiction over the quotation or determination
of London Interbank Offered Rates causes to supervise or sanction such rates for
purposes of interest rates on loans, then the Administrative Agent and the
Borrower shall endeavor, in good faith, to establish an alternate rate of
interest to One-Month LIBOR that gives due consideration to the then prevailing
market convention for determining a rate of interest for middle-market loans in
the United States at such time, and shall enter into an amendment to this
Agreement to reflect such alternate rate of interest and such other related
changes to this Agreement as may be applicable; provided further that, until
such alternate rate of interest is agreed upon by the Administrative Agent and
the Borrower, the Reference Rate for purposes hereof and of each other Loan
Document shall be the “Wall Street Journal Prime Rate” as published and defined
in The Wall Street Journal.

“Referral Source” has the meaning set forth in Section 7.07(b).

“Register” has the meaning set forth in Section 14.05(d).

“Regulation T” means Regulation T of the Board of Governors of the Federal
Reserve System, as amended.

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System, as amended.

“Regulation X” means Regulation X of the Board of Governors of the Federal
Reserve System, as amended.

“Regulatory Authority” means any Governmental Authority, whether U.S. or
non-U.S., that is concerned with or has regulatory or supervisory oversight with
respect to any Product or any Product Commercialization and Development
Activities relating to any Product, including the FDA and all equivalent
Governmental Authorities, whether U.S. or non-U.S.

“Reinvestment Period” has the meaning set forth in Section 3.03(b).

“Related Parties” has the meaning set forth in Section 14.16.

“Responsible Officer” of any Person means each of the president, chief executive
officer, chief financial officer and similar officer of such Person.

“Restricted Payment” means any dividend or other distribution (whether in cash,
Equity Interests or other property) with respect to any Equity Interests of any
Obligor or any of its Subsidiaries, or any payment (whether in cash, Equity
Interests or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interests of any Obligor or any of its
Subsidiaries, any payment of interest, principal or fees in respect of any
Indebtedness owed by any Obligor or any of its Subsidiaries to any holder of any
Equity Interests of any Obligor or any of its Subsidiaries, or any option,
warrant or other right to acquire any such Equity Interests of any Obligor or
any of its Subsidiaries.

 

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“Restrictive Agreement” means any Contract or other arrangement that prohibits,
restricts or imposes any condition upon (i) the ability of any Obligor or any of
its Subsidiaries to create, incur or permit to exist any Lien upon any of its
properties or assets (other than (x) customary provisions in Contracts
(including without limitation leases and in-bound licenses of Intellectual
Property) restricting the assignment thereof and (y) restrictions or conditions
imposed by any Contract governing secured Permitted Indebtedness permitted under
Section 9.01(j), to the extent that such restrictions or conditions apply only
to the property or assets securing such Indebtedness), or (ii) the ability of
any Obligor or any of its Subsidiaries to make Restricted Payments with respect
to any of their respective Equity Interests or to make or repay loans or
advances to any other Obligor or any of its Subsidiaries or such other Obligor
or to Guarantee Indebtedness of any other Obligor or any of its Subsidiaries
thereof or such other Obligor.

“Revenue” means, for any relevant fiscal period, the consolidated total revenues
of the Borrower and its Subsidiaries for such fiscal period, as recognized on
the income statement of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.

“Sanction” means any international economic sanction administered or enforced by
the United States Government (including, without limitation, OFAC), the United
Nations Security Council, the European Union or its Member States, Her Majesty’s
Treasury or other relevant sanctions authority where the Borrower is located or
conducts business.

“Secured Parties” means the Lenders, the Administrative Agent and any of their
respective permitted transferees or assigns.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

“Security Agreement” means the Security Agreement, delivered pursuant to
Section 6.01(h), among the Obligors and the Administrative Agent, granting a
security interest in the Obligors’ personal property in favor of the
Administrative Agent, for the benefit of the Secured Parties.

“Security Documents” means, collectively, the Security Agreement, each
Short-Form IP Security Agreement, each Real Property Security Document, and each
other security document, control agreement or financing statement required or
recommended to perfect Liens in favor of the Secured Parties for purposes of
securing the Obligations.

“Short-Form IP Security Agreements” means short-form copyright, patent or
trademark (as the case may be) security agreements, dated as of the Closing Date
and substantially in the form of Exhibit C, D and E to the Security Agreement,
entered into by one or more Obligors in favor of the Secured Parties, each in
form and substance satisfactory to the Administrative Agent (and as amended,
modified or replaced from time to time).

 

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“Solvent” means, as to any Person as of any date of determination, that on such
date (i) the fair value of the property of such Person is greater than the total
amount of liabilities, including contingent liabilities, of such Person,
(ii) the present fair saleable value of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its debts
as they become absolute and matured, (iii) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person’s
ability to pay such debts and liabilities as they mature and (iv) such Person is
not engaged in a business or transaction, and is not about to engage in a
business or transaction, for which such Person’s property would constitute an
unreasonably small capital. The amount of any contingent liability at any time
shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

“Specified Acquisition/Licensing Transactions” means the transactions
contemplated by (i) the License Agreement, dated as of June 29, 2018, by and
between Axis Therapeutics Limited and Xiangxue Life Sciences Ltd., (ii) the
License Agreement, dated as of June 29, 2018, by and between the Borrower and
Avalon Polytom (HK) Limited and (iii) the License and Supply Agreement, dated as
of June 29, 2018, by and between the Borrower and Avalon HepaPOC Limited.

“Standard Bodies” means any of the organizations that create, sponsor or
maintain safety, quality or other standards, including ISO, ANSI, CEN and SCC
and the like.

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(i) of which securities or other ownership interests representing more than
fifty percent (50%) of the equity or more than fifty percent (50%) of the
ordinary voting power or, in the case of a partnership, more than fifty percent
(50%) of the general partnership interests are, as of such date, owned,
controlled or held, directly or indirectly, or (ii) that is, as of such date,
otherwise Controlled, by the parent or one or more direct or indirect
subsidiaries of the parent or by the parent and one or more direct or indirect
subsidiaries of the parent. Unless otherwise specified, all references herein to
a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries
of the Borrower.

“Subsidiary Guarantors” means each Subsidiary of the Borrower identified under
the caption “SUBSIDIARY GUARANTORS” on the signature pages hereto and each
Subsidiary of the Borrower that becomes, or is required to become, a “Subsidiary
Guarantor” after the date hereof pursuant to Section 8.12(a) or 8.12(b).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

 

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“Technical Information” means all Product Related Information and, with respect
to any Products or Product Commercialization and Development Activities, all
related know-how, trade secrets and other proprietary or confidential
information, any information of a scientific, technical, or business nature in
any form or medium, Invention disclosures, all documented research,
developmental, demonstration or engineering work, and all other technical data
and information related thereto.

“Title IV Plan” means an employee benefit plan (as defined in Section 3(3) of
ERISA) other than a Multiemployer Plan (i) that is or was at any time maintained
or sponsored by any Obligor or any ERISA Affiliate thereof or to which any
Obligor or any ERISA Affiliate thereof has ever made, or was obligated to make,
contributions, and (ii) that is or was subject to Section 412 of the Code,
Section 302 of ERISA or Title IV of ERISA.

“Trademarks” means all trade names, trademarks and service marks, logos,
trademark and service mark registrations, and applications for trademark and
service mark registrations, including (i) all renewals of trademark and service
mark registrations and (ii) all rights whatsoever accruing thereunder or
pertaining thereto throughout the world, together, in each case, with the
goodwill of the business connected with the use thereof.

“Transactions” means the negotiation, preparation, execution, delivery and
performance by each Obligor of this Agreement and the other Loan Documents to
which such Obligor is (or is intended to be) a party, the making of the Loans
hereunder, and all other transactions contemplated pursuant to this Agreement
and the other Loan Documents.

“UCC” means, with respect to any applicable jurisdictions, the Uniform
Commercial Code as in effect in such jurisdiction, as may be modified from time
to time.

“United States” or “U.S.” means the United States of America, its fifty states
and the District of Columbia.

“U.S. Person” means a “United States Person” within the meaning of
Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning set forth in
Section 5.03(f)(ii)(B)(3).

“Warrant” means that certain Warrant, dated as of the Closing Date and delivered
pursuant to Section 6.01(k), evidenced by an instrument substantially the form
of Exhibit J hereto, as amended, replaced or otherwise modified pursuant to the
terms thereof.

“Warrant Obligations” means all Obligations of Borrower arising out of, under or
in connection with the Warrant.

“Withdrawal Liability” means, at any time, any liability incurred (whether or
not assessed) by any ERISA Affiliate and not yet satisfied or paid in full at
such time with respect to any Multiemployer Plan pursuant to Section 4201 of
ERISA.

“Withholding Agent” means the Borrower and the Administrative Agent.

 

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“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

1.02 Accounting Terms and Principles. Unless otherwise specified, all accounting
terms used in each Loan Document shall be interpreted, and all accounting
determinations and computations thereunder (including under Section 10 and any
definitions used in such calculations) shall be made, in accordance with GAAP.
Unless otherwise expressly provided, all financial covenants and defined
financial terms shall be computed on a consolidated basis for the Borrower and
its Subsidiaries, in each case without duplication. If the Borrower requests an
amendment to any provision hereof to eliminate the effect of (a) any change in
GAAP or the application thereof or (b) the issuance of any new accounting rule
or guidance or in the application thereof, in each case, occurring after the
date of this Agreement, then the Lenders and Borrower agree that they will
negotiate in good faith amendments to the provisions of this Agreement that are
directly affected by such change or issuance with the intent of having the
respective positions of the Lenders and Borrower after such change or issuance
conform as nearly as possible to their respective positions as of the date of
this Agreement and, until any such amendments have been agreed upon, (i) the
provisions in this Agreement shall be calculated as if no such change or
issuance has occurred and (ii) the Borrower shall provide to the Lenders a
written reconciliation in form and substance reasonably satisfactory to the
Lenders, between calculations of any baskets and other requirements hereunder
before and after giving effect to such change or issuance.

1.03 Interpretation. For all purposes of this Agreement, except as otherwise
expressly provided herein or unless the context otherwise requires,

(a) the terms defined in this Agreement include the plural as well as the
singular and vice versa;

(b) words importing gender include all genders;

(c) any reference to a Section, Annex, Schedule or Exhibit refers to a Section
of, or Annex, Schedule or Exhibit to, this Agreement;

(d) any reference to “this Agreement” refers to this Agreement, including all
Annexes, Schedules and Exhibits hereto, and the words herein, hereof, hereto and
hereunder and words of similar import refer to this Agreement and its Annexes,
Schedules and Exhibits as a whole and not to any particular Section, Annex,
Schedule, Exhibit or any other subdivision;

(e) references to days, months and years refer to calendar days, months and
years, respectively;

(f) all references herein to “include” or “including” shall be deemed to be
followed by the words “without limitation”;

(g) the word “from” when used in connection with a period of time means “from
and including” and the word “until” means “to but not including”;

 

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(h) the words “asset” and “property” shall be construed to have the same meaning
and effect and to refer broadly to any and all assets and properties, whether
tangible or intangible, real or personal, including cash, securities, rights
under contractual obligations and permits and any right or interest in any such
assets or property;

(i) accounting terms not specifically defined herein (other than “property” and
“asset”) shall be construed in accordance with GAAP;

(j) the word “will” shall have the same meaning as the word “shall”;

(k) where any provision in this Agreement or any other Loan Document refers to
an action to be taken by any Person, or an action which such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or, to the knowledge of such Person, indirectly; and

(l) references to any Lien granted or created hereunder or pursuant to any other
Loan Document securing any Obligations shall deemed to be a Lien for the benefit
of the Secured Parties.

Unless otherwise expressly provided herein, references to organizational
documents, agreements (including the Loan Documents) and other contractual
instruments shall be deemed to include all subsequent amendments, restatements,
extensions, supplements and other modifications thereto permitted by the Loan
Documents. Any definition or reference to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.

If any payment required to be made pursuant to the terms and conditions of any
Loan Document falls due on a day which is not a Business Day, then such required
payment date shall be extended to the immediately following Business Day. For
purposes of determining compliance with any covenant (including the computation
of any financial covenant) contained herein, Indebtedness of the Obligors and
their Subsidiaries will be deemed to be equal to 100% of the outstanding
principal amount thereof or payment obligations with respect thereto at the time
of determination thereof, or with respect to any Hedging Agreements, the amount
that would be payable if the agreement governing such Hedging Agreements were
terminated on the date of termination. For the purposes of calculations made
pursuant to the terms of this Agreement or otherwise for purposes of compliance
herewith, GAAP will be deemed to treat operating leases in a manner consistent
with their current treatment under GAAP as in effect on the date of this
Agreement, notwithstanding any modifications or interpretive changes thereto
that may occur thereafter.

SECTION 2.

THE COMMITMENT AND THE LOANS

2.01 Loans.

(a) On the terms and subject to the conditions of this Agreement, each Lender
agrees to make a Loan to the Borrower, in a single Borrowing on the Closing
Date, in a principal amount equal to the amount of such Lender’s Commitment.

 

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(b) No amounts paid or prepaid with respect to any Loan may be reborrowed.

(c) Any term or provision hereof (or of any other Loan Document) to the contrary
notwithstanding, Loans made to the Borrower will be denominated solely in
Dollars and will be repayable solely in Dollars and no other currency.

2.02 Borrowing Procedures. At least three (3) Business Days prior to the Closing
Date (or such shorter period agreed by the Administrative Agent), the Borrower
shall deliver to the Administrative Agent an irrevocable Borrowing Notice (which
notice, if received by the Administrative Agent on a day that is not a Business
Day or after 10:00 A.M. (Eastern time) on a Business Day, shall be deemed to
have been delivered on the next Business Day).

2.03 Notes. If requested by any Lender, the Loan of such Lender shall be
evidenced by one or more Notes. The Borrower shall prepare, execute and deliver
to the Lender such promissory note(s) substantially in the form attached hereto
as Exhibit A.

2.04 Use of Proceeds. The Borrower shall use the proceeds of the Loans to fund
(i) in part, the Specified Acquisition/Licensing Transaction and (ii) for
working capital and general corporate purposes, including the payment of fees
and expenses associated with this Agreement.

SECTION 3.

PAYMENTS OF PRINCIPAL AND INTEREST, ETC.

3.01 Scheduled Repayments and Prepayments Generally; Application. There will be
no scheduled repayments of principal on the Loans prior to the Maturity Date. On
the Maturity Date the Borrower shall repay the entire remaining outstanding
balance of the Loans in full and in cash. Except as otherwise provided in this
Agreement, each payment (including each repayment and prepayment) by the
Borrower (other than fees payable pursuant to the Fee Letter) will be deemed to
be made ratably in accordance with the Lenders’ Proportionate Shares.

3.02 Interest.

(a) Interest Generally. The outstanding principal amount of the Loans shall
accrue interest at the Interest Rate.

(b) Default Interest. Notwithstanding the foregoing, upon the occurrence and
during the continuance of any Event of Default, the Applicable Margin shall
increase automatically by two and a half percent (2.5%) per annum (the Interest
Rate, as increased pursuant to this Section 3.02(b), being the “Default Rate”).
If any Obligation (other than Warrant Obligations but including, without
limitation, fees, costs and expenses payable hereunder) is not paid when due
(giving effect to any applicable grace period) under any applicable Loan
Document, the amount thereof shall accrue interest at the Default Rate.

(c) Interest Payment Dates. Accrued interest on the Loans shall be payable in
arrears on each Payment Date with respect to the most recently completed
Interest Period in cash, and upon the payment or prepayment of the Loans (on the
principal amount being so paid or prepaid); provided that interest payable at
the Default Rate shall also be payable from time to time on demand by the
Administrative Agent.

 

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3.03 Prepayments.

(a) Optional Prepayments.

(i) Subject to prior written notice pursuant to clause (ii) below, the Borrower
shall have the right to optionally prepay in whole or in part the outstanding
principal amount of the Loans on any Business Day for an amount equal to the sum
of (A) the aggregate principal amount of the Loans being prepaid, (B) any
accrued but unpaid interest on the principal amount of the Loans being prepaid
and (C) any applicable Prepayment Fee (such aggregate amount, the “Prepayment
Price”).

(ii) A notice of optional prepayment shall be effective only if received by the
Administrative Agent not later than 2:00 p.m. (Eastern time) on a date not less
than three (3) (nor more than five (5)) Business Days prior to the proposed
prepayment date. Each notice of optional prepayment shall specify the proposed
prepayment date, the Prepayment Price, the principal amount to be prepaid and
any conditions to prepayment (if applicable).

(b) Mandatory Prepayments. Upon the occurrence of any Casualty Event or Asset
Sale (that is not otherwise permitted by Section 9.09), the Borrower shall make
a mandatory prepayment of the Loans in an amount equal to the sum of (i) one
hundred percent (100%) of the Net Cash Proceeds received by the Borrower or any
of its Subsidiaries with respect to such Asset Sale or insurance proceeds or
condemnation awards in respect of such Casualty Event, as the case may be,
(ii) any accrued but unpaid interest on any principal amount of the Loans being
prepaid and (iii) any applicable Prepayment Fee; provided that, so long as no
Default has occurred and is continuing or shall result therefrom, if, within
fifteen (15) Business Days following the occurrence of any such Casualty Event
or Asset Sale, a Responsible Officer of the Borrower delivers to the
Administrative Agent a notice to the effect that the Borrower or the applicable
Subsidiary intends to apply the Net Cash Proceeds from such Asset Sale or
insurance proceeds or condemnation awards in respect of such Casualty Event, to
reinvest in the business of the Borrower or any of its Subsidiaries (a
“Reinvestment”), then such Net Cash Proceeds of such Asset Sale or insurance
proceeds or condemnation awards in respect of such Casualty Event may be applied
for such purpose in lieu of such mandatory prepayment to the extent such Net
Cash Proceeds of such Asset Sale or insurance proceeds or condemnation awards in
respect of such Casualty Event are actually applied for such purpose; provided,
further, that, if such Casualty Event or Asset Sale occurs with respect to any
Obligor, such Reinvestment shall be made in the business of an Obligor;
provided, further, that, in the event that Net Cash Proceeds have not been so
applied within three hundred sixty-five (365) days (the “Reinvestment Period”)
following the occurrence of such Casualty Event or Asset Sale (or, if the
Borrower or any of its Subsidiaries has entered into a binding commitment prior
to the last day of such Reinvestment Period to reinvest such proceeds no later
than one hundred eighty (180) days following the last day of the Reinvestment
Period, one hundred eighty (180) days after the expiry of the Reinvestment
Period), the Borrower shall make a mandatory prepayment of the Loans in an
aggregate amount equal to the sum of (i) one hundred percent (100%) of the
unused balance of such Net Cash Proceeds received by any Obligor or any of its
Subsidiaries with respect to such Asset Sale or insurance proceeds or
condemnation awards in respect of such Casualty Event, (ii) any accrued but
unpaid interest on any principal amount of the Loans being prepaid and (iii) any
applicable Prepayment Fee.

 

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(c) Prepayment Fee. Without limiting the foregoing, whenever the Prepayment Fee
is in effect and payable pursuant to the terms hereof or any other Loan
Document, such Prepayment Fee shall be payable on each prepayment of all or any
portion of the Loans, whether by optional or mandatory prepayment, acceleration
or otherwise (other than any prepayment pursuant to Section 5.02).

(d) Partial Prepayments. Prepayments shall be accompanied by accrued interest to
the extent required by Section 3.02.

SECTION 4.

PAYMENTS, ETC.

4.01 Payments.

(a) Payments Generally. Each payment of principal, interest and other amounts to
be made by the Obligors under this Agreement or any other Loan Document shall be
made (i) in Dollars, in immediately available funds, without deduction, set off
or counterclaim, to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, to the deposit account of the
Administrative Agent designated by the Administrative Agent by notice to the
Borrower, and (ii) not later than 2:00 p.m. (Eastern time) on the date on which
such payment is due (each such payment made after such time on such due date
shall be deemed to have been made on the next succeeding Business Day).

(b) Application of Payments. Notwithstanding anything herein to the contrary,
following the occurrence and continuance of an Event of Default, all payments
shall be applied as follows:

(A) first, to the payment of that portion of the Obligations constituting unpaid
fees, indemnities, expenses or other amounts (including fees and disbursements
and other charges of counsel payable under Section 14.03) payable to the
Administrative Agent in its capacity as such;

(B) second, to the payment of that portion of the Obligations constituting
unpaid fees, indemnities, costs, expenses and other amounts (other than
principal and interest, but including fees and disbursements and other charges
of counsel payable under Section 14.03 and any Prepayment Fees) payable to the
Lenders arising under the Loan Documents (other than the Warrant), ratably among
them in proportion to the respective amounts described in this clause
(B) payable to them;

(C) third, to the payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans, ratably among the Lenders in
proportion to the respective amounts described in this clause (C) payable to
them;

(D) fourth, to the payment of that portion of the Obligations constituting
unpaid principal of the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause (D) payable to them;

 

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(E) fifth, in reduction of any other Obligation then due and owing, ratably
among the Administrative Agent and the Lenders based upon the respective
aggregate amount of all such Obligations owing to them in accordance with the
respective amounts thereof then due and payable; and

(F) sixth, the balance, if any, after all Obligations have been indefeasibly
paid in full, to the Borrower or such other Person as may be lawfully entitled
to or directed by the Borrower to receive the remainder.

(c) Non-Business Days. If the due date of any payment under this Agreement
(whether in respect of principal, interest, fees, costs or otherwise) would
otherwise fall on a day that is not a Business Day, such date shall be extended
to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall continue to accrue and be payable for the
period of such extension; provided that if such next succeeding Business Day
would fall after the Maturity Date, payment shall be made on the immediately
preceding Business Day.

4.02 Computations. All computations of interest and fees hereunder shall be
computed on the basis of a year of three hundred and sixty (360) days and actual
days elapsed during the period for which payable.

4.03 Set-Off.

(a) Set-Off Generally. Upon the occurrence and during the continuance of any
Event of Default, the Administrative Agent, each of the Lenders and each of
their Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by the Administrative Agent, any Lender and
any of their Affiliates to or for the credit or the account of any Obligor
against any and all of the Obligations, whether or not such Person shall have
made any demand and although such obligations may be unmatured. Any Person
exercising rights of set off hereunder agrees promptly to notify the Borrower
after any such set-off and application; provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of the Administrative Agent, the Lenders and each of their Affiliates under this
Section 4.03 are in addition to other rights and remedies (including other
rights of set-off) that such Persons may have.

(b) Exercise of Rights Not Required. Nothing contained in Section 4.03(a) shall
require the Administrative Agent, any Lender or any of their Affiliates to
exercise any such right or shall affect the right of such Persons to exercise,
and retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Obligor.

(c) Payments Set Aside. To the extent that any payment by or on behalf of any
Obligor is made to the Administrative Agent or any Lender, or the Administrative
Agent, any Lender or any Affiliate of the foregoing exercises its right of
setoff pursuant to this Section 4.03, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any

 

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settlement entered into by the Administrative Agent, such Lender or such
Affiliate in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any Insolvency Proceeding or otherwise, then (i) to
the extent of such recovery, the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such setoff had not occurred, and (ii) each
Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share (without duplication) of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Effective Rate from time to time in effect.

SECTION 5.

YIELD PROTECTION, ETC.

5.01 Additional Costs.

(a) Change in Law Generally. If, on or after the date hereof (or, with respect
to any Lender, such later date on which such Lender becomes a party to this
Agreement), the adoption of any Law, or any change in any Law, or any change in
the interpretation or administration thereof by any court or other Governmental
Authority charged with the interpretation or administration thereof, or
compliance by the Administrative Agent or any of the Lenders (or its lending
office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, shall impose, modify or deem applicable any
reserve (including any such requirement imposed by the Board of Governors of the
Federal Reserve System), special deposit, contribution, insurance assessment or
similar requirement, in each case that becomes effective after the date hereof
(or, with respect to any Lender, such later date on which such Lender becomes a
party to this Agreement), against assets of, deposits with or for the account
of, or credit extended by, a Lender (or its lending office) or shall impose on a
Lender (or its lending office) any other condition affecting the Loans or the
Commitment, and the result of any of the foregoing is to increase the cost to
such Lender of making or maintaining the Loans, or to reduce the amount of any
sum received or receivable by such Lender under this Agreement or any other Loan
Document, or subject any Lender to any Taxes on its Loan, Commitment or other
obligations, or its deposits, reserves, other liabilities or capital (if any)
attributable thereto by an amount reasonably deemed by such Lender in good faith
to be material (other than (i) Indemnified Taxes, (ii) Taxes described in
clauses (ii) through (iv) of the definition of Excluded Taxes and
(iii) Connection Income Taxes), then the Borrower shall pay to such Lender on
demand such additional amount or amounts as will compensate such Lender for such
increased cost or reduction.

(b) Change in Capital Requirements. If a Lender shall have determined that, on
or after the date hereof (or, with respect to any Lender, such later date on
which such Lender becomes a party to this Agreement), the adoption of any Law
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
Governmental Authority, in each case that becomes effective after the date
hereof (or, with respect to any Lender, such later date on which such Lender
becomes a party to this Agreement), has or would have the effect of reducing the
rate of return on capital of a Lender (or its parent) as

 

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a consequence of a Lender’s obligations hereunder or the Loans to a level below
that which a Lender (or its parent) could have achieved but for such adoption,
change, request or directive by an amount reasonably deemed by it to be
material, then the Borrower shall pay to such Lender on demand such additional
amount or amounts as will compensate such Lender (or its parent) for such
reduction.

(c) Notification by Lender. Each Lender promptly will notify the Borrower of any
event of which it has knowledge, occurring after the date hereof (or, with
respect to any Lender, such later date on which such Lender becomes a party to
this Agreement), which will entitle such Lender to compensation pursuant to this
Section 5.01. Before giving any such notice pursuant to this Section 5.01(c)
such Lender shall designate a different lending office if such designation
(x) will, in the reasonable judgment of such Lender, avoid the need for, or
reduce the amount of, such compensation and (y) will not, in the reasonable
judgment of such Lender, be materially disadvantageous to such Lender. A
certificate of such Lender claiming compensation under this Section 5.01,
setting forth the additional amount or amounts to be paid to it hereunder, shall
be conclusive and binding on the Borrower in the absence of manifest error.

(d) Notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and (y) all requests,
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to constitute a
change in Law for all purposes of this Section 5.01, regardless of the date
enacted, adopted or issued.

5.02 Illegality. Notwithstanding any other provision of this Agreement, in the
event that on or after the date hereof (or, with respect to any Lender, such
later date on which such Lender becomes a party to this Agreement) the adoption
of or any change in any Law or in the interpretation or application thereof by
any competent Governmental Authority shall make it unlawful for a Lender or its
lending office to make or maintain the Loans (and, in the opinion of such
Lender, the designation of a different lending office would either not avoid
such unlawfulness or would be disadvantageous to such Lender), then such Lender
shall promptly notify the Borrower thereof, following which if such Law shall so
mandate, the Loans shall be prepaid by the Borrower on or before such date as
shall be mandated by such Law in an amount equal to the Prepayment Price
(notwithstanding anything herein to the contrary, without any Prepayment Fee)
applicable on such prepayment date in accordance with Section 3.03(a).

5.03 Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
Obligation shall be made without deduction or withholding for any Taxes, except
as required by any Law. If any Law (as determined in the good faith discretion
of an applicable Withholding Agent) requires the deduction or withholding of any
Tax from any such payment by a Withholding Agent, then the applicable
Withholding Agent shall be entitled to make such deduction or withholding and
shall timely pay the full amount deducted or withheld to the relevant
Governmental Authority in accordance with applicable Laws and, if such Tax is an
Indemnified Tax, then the sum payable by such Obligor shall be increased as
necessary so that

 

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after such deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 5) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

(b) Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the
relevant Governmental Authority in accordance with applicable Laws, or at the
option of the Administrative Agent or each Lender, timely reimburse it for the
payment of any Other Taxes.

(c) Evidence of Payments. As soon as practicable after any payment of Taxes by
the Borrower to a Governmental Authority pursuant to this Section 5, the
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment.

(d) Indemnification by the Borrower. The Borrower shall reimburse and indemnify
each Recipient, within ten (10) days after demand therefor, for the full amount
of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section 5) payable or paid by such
Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender (with a copy
to the Administrative Agent), or by the Administrative Agent on its own behalf
or on behalf of a Lender shall be conclusive absent manifest error.

(e) Indemnification by the Lender. Each Lender shall severally indemnify the
Administrative Agent, within ten (10) days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that the
Borrower has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Borrower to do so),
and (ii) any Excluded Taxes attributable to such Lender, in each case, that are
payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this Section 5.03(e).

(f) Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
Borrower and the Administrative Agent, at the time or times reasonably requested
by the Borrower or the Administrative Agent, such properly completed and
executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments

 

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to be made without withholding or at a reduced rate of withholding; provided
that, other than in the case of U.S. federal withholding Taxes, such Lender has
received written notice from the Borrower advising it of the availability of
such exemption or reduction and containing all applicable documentation. In
addition, any Lender, if reasonably requested by the Borrower or the
Administrative Agent, shall deliver such other documentation prescribed by Law
as reasonably requested by the Borrower as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two (2) sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 5.03(f)(ii)(A), (ii)(B), and (ii)(D)) shall not be required
if in such Lender’s reasonable judgment such completion, execution or submission
would subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing, in the event that the
Borrower is a U.S. Person:

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed copies
of IRS Form W-9 (or successor form) certifying that such Lender is exempt from
U.S. federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed copies of IRS Form W-8BEN or IRS Form
W-8BEN-E as applicable (or successor forms) establishing an exemption from, or
reduction of, U.S. federal withholding Tax pursuant to the “interest” article of
such tax treaty and (y) with respect to any other applicable payments under any
Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E as applicable (or successor
forms) establishing an exemption from, or reduction of, U.S. federal withholding
Tax pursuant to the “business profits” or “other income” article of such tax
treaty;

(2) executed copies of IRS Form W-8ECI (or successor form);

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit D-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a
“10 percent shareholder” of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, or a “controlled foreign corporation” related
to the Borrower as described in Section 881(c)(3)(C) of the Code (a “U.S. Tax
Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN or IRS Form
W-8BEN-E as applicable (or successor forms); or

 

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(4) to the extent a Foreign Lender is not the beneficial owner, executed copies
of IRS Form W-8IMY (or successor form), accompanied by IRS Form W-8ECI (or
successor form), IRS Form W-8BEN or IRS Form W-8BEN-E (or successor form), a
U.S. Tax Compliance Certificate, substantially in the form of Exhibit D-2 or
D-3, IRS Form W-9 (or successor form), and/or other certification documents from
each beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit D-4 on
behalf of each such direct and indirect partner on behalf of each such direct
and indirect partner.

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed copies of any other form prescribed by applicable Laws as a
basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable Laws to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made; and

(D) if a payment made to a Foreign Lender under any Loan Document would be
subject to U.S. federal withholding Tax imposed by FATCA if such Foreign Lender
were to fail to comply with the applicable reporting requirements of FATCA
(including those contained in Section 1471(b) or 1472(b) of the Code, as
applicable), such Foreign Lender shall deliver to the Borrower and the
Administrative Agent at the time or times prescribed by law and at such time or
times reasonably requested by the Borrower or the Administrative Agent such
documentation prescribed by Applicable Law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrower or the Administrative Agent as may be
necessary for the Borrower and the Administrative Agent to comply with their
obligations under FATCA and to determine that such Foreign Lender has complied
with such Foreign Lender’s obligations under FATCA or to determine the amount,
if any, to deduct and withhold from such payment under FATCA. Solely for
purposes of this clause (D), “FATCA” shall include any amendments made to FATCA
after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.

(g) Treatment of Certain Tax Benefits. If any party to this Agreement
determines, in its sole discretion exercised in good faith, that it has received
a refund of any Taxes as to which it has been indemnified pursuant to this
Section 5 (including by the payment of additional amounts pursuant to this
Section 5), it shall pay to the indemnifying party an amount equal to such
refund (but only to the extent of indemnity payments made under this Section 5
with

 

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respect to the Taxes giving rise to such refund), net of all out-of-pocket
expenses (including Taxes) of such indemnified party and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund). Such indemnifying party, upon the request of such indemnified
party, shall repay to such indemnified party the amount paid over pursuant to
this Section 5.03(g) (plus any penalties, interest or other charges imposed by
the relevant Governmental Authority) in the event that such indemnified party is
required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this Section 5.03(g), in no event will the
indemnified party be required to pay any amount to an indemnifying party
pursuant to this Section 5.03(g) the payment of which would place the
indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the Tax subject to indemnification and
giving rise to such refund had not been deducted, withheld or otherwise imposed
and the indemnification payments or additional amounts with respect to such Tax
had never been paid. This Section 5.03(g) shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

(h) Mitigation Obligations. If the Borrower is required to pay any Indemnified
Taxes or additional amounts to any Lender or to any Governmental Authority for
the account of any Lender pursuant to Section 5.01 or this Section 5.03, then
such Lender shall (at the request of the Borrower) use commercially reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign and delegate its rights and obligations hereunder to
another of its offices, branches or Affiliates if, in the sole reasonable
judgment of such Lender, such designation or assignment and delegation would
(i) eliminate or reduce amounts payable pursuant to Section 5.01 or this
Section 5.03, as the case may be, in the future, (ii) not subject such Lender to
any unreimbursed cost or expense and (iii) not otherwise be disadvantageous to
such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment and
delegation.

(i) Survival. Each party’s obligations under this Section 5 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all Obligations under any Loan
Document.

SECTION 6.

CONDITIONS

6.01 Conditions to the Borrowing of the Loan. The obligation of each Lender to
make its Loan shall be subject to the execution and delivery of this Agreement
by the parties hereto, the delivery of a Borrowing Notice as required pursuant
to Section 2.02, and the prior or concurrent satisfaction or waiver of each of
the conditions precedent set forth below in this Section 6.01.

(a) Secretary’s Certificate, Etc. The Administrative Agent shall have received
from each Obligor (x) a copy of a good standing certificate, dated a date
reasonably close to the Closing Date, for each such Person and (y) a
certificate, dated as of the Closing Date, duly executed and delivered by such
Person’s Responsible Officer, as to:

 

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(i) resolutions of each such Person’s Board then in full force and effect
authorizing the execution, delivery and performance of each Loan Document to be
executed by such Person and the Transactions;

(ii) the incumbency and signatures of Responsible Officers authorized to execute
and deliver each Loan Document to be executed by such Person; and

(iii) the full force and validity of each Organic Document of such Person and
copies thereof;

upon which certificates shall be in form and substance reasonably satisfactory
to the Administrative Agent and upon which the Administrative Agent and the
Lenders may conclusively rely until they shall have received a further
certificate of the Responsible Officer of any such Person cancelling or amending
the prior certificate of such Person.

(b) Information Certificate. The Administrative Agent shall have received a
fully completed Information Certificate in form and substance reasonably
satisfactory to the Administrative Agent, dated as of the Closing Date, duly
executed and delivered by a Responsible Officer of the Borrower. All documents
and agreements required to be appended to the Information Certificate, shall be
in form and substance reasonably satisfactory to the Administrative Agent, shall
have been executed and delivered by the requisite parties and shall be in full
force and effect.

(c) Closing Date Certificate. The Administrative Agent shall have received a
certificate, dated as of the Closing Date and in form and substance reasonably
satisfactory to the Administrative Agent (the “Closing Date Certificate”), duly
executed and delivered by a Responsible Officer of the Borrower certifying that:
(i) both immediately before and after giving effect to the borrowing on the
Closing Date, (x) the representations and warranties set forth in each Loan
Document that are qualified by materiality, Material Adverse Effect or the like
are, in each case, true and correct, (y) the representations and warranties set
forth in each Loan Document that are not qualified by materiality, Material
Adverse Effect or the like are, in each case, true and correct in all material
respects, and (z) no Default has occurred and is continuing, or could reasonably
be expected to result from the making of the Loans being advanced, or the
consummation of any Transactions contemplated to occur on the Closing Date, and
(ii) all of the conditions set forth in Section 6.01 shall have occurred or
shall occur on the Closing Date (except to the extent waived in writing by the
Administrative Agent).

(d) Delivery of Notes. The Administrative Agent shall have received a Note to
the extent requested by any Lender pursuant to Section 2.03 for the Loans duly
executed and delivered by a Responsible Officer of the Borrower.

(e) Financial Information, Etc. The Administrative Agent shall have received:

(i) audited consolidated financial statements of the Borrower and its
Subsidiaries for each of the fiscal year ended December 31, 2017; and

(ii) unaudited consolidated balance sheets of the Borrower and its Subsidiaries
for each fiscal quarter ended after December 31, 2017 and at least ten
(10) Business Days prior to the Closing Date, together with the related
consolidated statement of operations, shareholder’s equity and cash flows for
such fiscal quarter.

 

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(f) [Reserved].

(g) Solvency. The Administrative Agent shall have received a solvency
certificate, substantially in the form of Exhibit K, duly executed and delivered
by the chief accounting officer of the Borrower, dated as of the Closing Date,
in form and substance reasonably satisfactory to the Administrative Agent.

(h) Security Documents. The Administrative Agent shall have received executed
counterparts of a Security Agreement, in form and substance reasonably
acceptable to the Administrative Agent, dated as of the Closing Date, duly
executed and delivered by each Obligor, together with:

(i) delivery of all certificates (in the case of Equity Interests that are
certificated securities (as defined in the UCC)) evidencing the issued and
outstanding capital securities owned by each Obligor that are required to be
pledged and so delivered under the Security Agreement, which certificates in
each case shall be accompanied by undated instruments of transfer duly executed
in blank, or, in the case of Equity Interests that are uncertificated securities
(as defined in the UCC), confirmation and evidence reasonably satisfactory to
the Administrative Agent and the Lenders that the security interest required to
be pledged therein under the Security Agreement has been transferred to and
perfected by the Administrative Agent and the Lenders in accordance with
Articles 8 and 9 of the NY UCC and all laws otherwise applicable to the
perfection of the pledge of such Equity Interests;

(ii) financing statements naming each Obligor as a debtor and the Administrative
Agent as the secured party, or other similar instruments or documents, in each
case suitable for filing, filed under the UCC (or equivalent law) of all
jurisdictions as may be necessary or, in the opinion of the Administrative
Agent, desirable to perfect the Liens of the Secured Parties pursuant to the
Security Agreement;

(iii) UCC-3 termination statements, if any, necessary to release all Liens and
other rights of any Person in any collateral described in the Security Agreement
previously granted by any Person; and

(iv) all applicable Short-Form IP Agreements required to be provided under the
Security Agreement, each dated as of the Closing Date, duly executed and
delivered by each applicable Obligor.

(i) [Reserved].

(j) Lien Searches. The Administrative Agent shall be satisfied with Lien
searches regarding the Borrower and the Subsidiary Guarantors made as of a date
reasonably close to the Closing Date.

(k) Warrant. The Administrative Agent shall have received an executed
counterpart of the Warrant.

 

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(l) Insurance. The Administrative Agent shall have received certified copies of
the insurance policies (or binders in respect thereof), from one or more
insurance companies satisfactory to the Administrative Agent, evidencing
coverage required to be maintained pursuant to each Loan Document.

(m) Opinions of Counsel. The Administrative Agent shall have received one or
more opinions, dated as of the Closing Date and addressed to the Administrative
Agent and the Lenders, from independent legal counsel to the Borrower and the
other Obligors, in form and substance reasonably acceptable to the
Administrative Agent.

(n) Fee Letter. The Administrative Agent shall have received an executed
counterpart of the Fee Letter, duly executed and delivered by the Borrower.

(o) Closing Fees, Expenses, Etc. Each of the Administrative Agent and each
Lender shall have received for its own account, (i) the upfront fee as set forth
in the Fee Letter, which shall be paid by way of the Administrative Agent
retaining such amount from the proceeds of the Loan and (ii) all fees, costs and
expenses due and payable to it pursuant to the Proposal Letter, the Fee Letter
and Section 14.03, including all reasonable closing costs and fees and all
unpaid reasonable expenses of the Administrative Agent and the Lenders incurred
in connection with the Transactions (including the Administrative Agent’s and
the Lenders’ legal fees and expenses) in each case, to the extent invoiced (or
as to which a good faith estimate has been provided to the Borrower) at least
two (2) Business Days prior to the Closing Date.

(p) Material Adverse Change. No Material Adverse Change shall have occurred
since December 31, 2017.

(q) Equity Transaction. The Administrative Agent shall have received evidence
that the Equity Transaction has been consummated.

(r) Anti-Terrorism Laws. The Administrative Agent shall have received, as
applicable, all documentation and other information required by bank regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including the Patriot Act.

SECTION 7.

REPRESENTATIONS AND WARRANTIES

The Borrower and each other Obligor hereby jointly and severally represents and
warrants to the Administrative Agent and each Lender on the Closing Date as set
forth below:

7.01 Power and Authority. Each Obligor and each of its Subsidiaries (i) is duly
organized and validly existing under the laws of its jurisdiction of
organization, (ii) has all requisite corporate or other power, and has all
Governmental Approvals necessary to own its assets and carry on its business as
now being or as proposed to be conducted, except to the extent that failure to
have the same could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect, (iii) is qualified to do
business and is in good standing in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary except where failure
so to qualify could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect, and (iv) has full power,
authority and legal right to enter into and perform its obligations under each
of the Loan Documents to which it is a party and, in the case of the Borrower,
to borrow the Loans hereunder.

 

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7.02 Authorization; Enforceability. Each Transaction to which an Obligor is a
party (or to which it or any of its assets or properties is subject) are within
such Obligor’s corporate or other organizational powers and have been duly
authorized by all necessary corporate or other organizational action including,
if required, approval by all necessary holders of Equity Interests. This
Agreement has been duly executed and delivered by each Obligor and constitutes,
and each of the other Loan Documents to which it is a party when executed and
delivered by such Obligor will constitute, a legal, valid and binding obligation
of such Obligor, enforceable against such Obligor in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors’ rights and (ii) the application of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

7.03 Governmental and Other Approvals; No Conflicts. None of the Transactions
(i) requires any Governmental Approval of, registration or filing with, or any
other action by, any Governmental Authority or any other Person, except for
(x) such as have been obtained or made and are in full force and effect and
(y) filings and recordings in respect of perfecting or recording the Liens
created pursuant to the Security Documents, (ii) will violate (1) any Law,
(2) any Organic Document of any Obligor or any of its Subsidiaries or (3) any
order of any Governmental Authority, that in the case of clause (ii)(1) or
clause (ii)(3), individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect, (iii) will violate or result in a
default under any Material Agreement binding upon any Obligor or any of its
Subsidiaries that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect or (iv) will result in the
creation or imposition of any Lien (other than Permitted Liens) on any asset of
any Obligor or any of its Subsidiaries.

7.04 Financial Statements; Material Adverse Change.

(a) Financial Statements. The Borrower has heretofore furnished to the
Administrative Agent (who shall forward to the Lenders) certain consolidated
financial statements as provided for in Section 6.01(e). Such financial
statements, and all other financial statements delivered by the Borrower
pursuant hereto present fairly, in all material respects, the consolidated
financial position and results of operations and cash flows of the Borrower and
its Subsidiaries as of such dates and for such periods in accordance with GAAP,
subject to year-end audit adjustments and the absence of footnotes in the case
of the statements of the type described in Section 8.01(a). Neither the Borrower
nor any of its Subsidiaries has any material contingent liabilities or unusual
forward or long-term commitments not disclosed in the aforementioned financial
statements.

(b) No Material Adverse Change. Since December 31, 2017, there has been no
Material Adverse Change.

 

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7.05 Properties.

(a) Property Generally. Each Obligor and each of its Subsidiaries has good and
marketable fee simple title to, or valid leasehold interests in, all its real
and personal property material to its business, including all properties and
assets, whether tangible or intangible, relating to its Products or Product
Commercialization and Development Activities and all Material Intellectual
Property, subject only to Permitted Liens and except for minor defects in title
that (i) do not interfere with its ability to conduct its business as currently
conducted or to utilize such properties for their intended purposes and
(ii) could not reasonably be expected to prevent or interfere with the ability
of any Obligor or any of its Subsidiaries to conduct any Product
Commercialization and Development Activities with respect to any of its Products
in any material respect.

(b) Intellectual Property.

(i) The Borrower or one of its Subsidiaries, as applicable, is the beneficial
owner of all right, title and interest in and to its Material Intellectual
Property, free and clear of any Liens or Claims other than Permitted Liens.
Without limiting the foregoing, and except as set forth in Schedule 7.05(b)(i):

(A) other than (1) customary restrictions in in-bound licenses of Intellectual
Property and non-disclosure agreements, or (2) as would have been or is
permitted by Section 9.09, there are no judgments, covenants not to sue, grants,
Liens (other than Permitted Liens), or other Claims, agreements or arrangements
relating to any Material Intellectual Property, which materially restrict any
Obligor or any of its Subsidiaries with respect to its use of any Material
Intellectual Property in connection with such Person’s Product Commercialization
and Development Activities;

(B) the use by the Borrower or any of its Subsidiaries of any of their
respective Material Intellectual Property in the ordinary course of such
Person’s businesses does not, in any material respect, violate, infringe or
constitute a misappropriation of any valid rights arising under any Intellectual
Property of any other Person;

(C) (1) there are no pending Claims, or Claims threatened in writing against
such Obligor or any of its Subsidiaries asserted by any other Person relating to
any of such Person’s Intellectual Property, including any Claims of adverse
ownership, invalidity, infringement, misappropriation, or violation with
Material Intellectual Property owned by an Obligor or any of its Subsidiaries;
and (2) no Obligor or any of its Subsidiaries has received any notice from, or
Claim by, any Person that the use of Material Intellectual Property owned by an
Obligor or any of its Subsidiaries, or any Product Commercialization and
Development Activities with respect to any Product, infringes upon, violates or
constitutes a misappropriation of, any Intellectual Property of any other Person
in any material respect;

(D) no Obligor has knowledge that any Material Intellectual Property owned,
licensed or used by such Obligor or any of its Subsidiaries is being infringed,
violated, or misappropriated by any other Person in any material respect; and
neither such Obligor nor any of its Subsidiaries has put any other Person on
notice of such actual or potential infringement, violation or misappropriation
of any such Material Intellectual Property, and such Obligor has not initiated
the enforcement of any Claim with respect to any such Material Intellectual
Property;

 

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(E) to the knowledge of the Obligor, all relevant current and former employees
and contractors that develops Material Intellectual Property on behalf of the
Obligor and each of its Subsidiaries has executed written confidentiality and
invention assignment Contracts with such Obligor or Subsidiary, as applicable,
that irrevocably assigns to such Obligor or Subsidiary, as applicable, or its
designee all rights of such employees and contractors to any such Intellectual
Property, except as would vest initially in the Obligor or its Subsidiary by
operation of Law;

(F) each Obligor and each of its Subsidiaries has taken reasonable precautions
to protect the secrecy, confidentiality and value of its Material Intellectual
Property consisting of trade secrets and confidential information; and

(ii) With respect to Material Intellectual Property consisting of Patents,
except as set forth in Schedule 7.05(b)(ii), and without limiting the
representations and warranties in Section 7.05(b)(i):

(A) each of the issued claims in such Patents is valid and enforceable;

(B) subsequent to the issuance of such Patents, no Obligor nor any of its
Subsidiaries or predecessors-in-interest, has filed any disclaimer or made or
permitted any other voluntary reduction in the scope of the Inventions claimed
in such Patents;

(C) to the knowledge of the Obligor, no allowable or allowed subject matter of
such Patents is subject to any competing conception claims of allowable or
allowed subject matter of any patent applications or patents of any third party
and have not been the subject of any interference, and are not and have not been
the subject of any re-examination, opposition or any other post-grant
proceedings, nor is any Obligor or its Subsidiaries aware of any basis for any
such interference, re-examination, opposition, inter partes review, post grant
review, or any other post-grant proceedings;

(D) no such Patents have ever been finally adjudicated to be invalid,
unpatentable or unenforceable for any reason in any administrative, arbitration,
judicial or other proceeding, and, with the exception of publicly available
documents in the applicable patent office with respect to any such Patents, no
Obligor nor any of its Subsidiaries has received any written notice asserting
that such Patents are invalid, unpatentable or unenforceable;

(E) all maintenance fees, annuities, and the like due or payable on or with
respect to any such Patents have been timely paid or the failure to so pay could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change.

(iii) The Obligors own or hold rights to use all Intellectual Property necessary
to conduct the ongoing Product Commercialization and Development Activities
relating to the Products, in all material respects (and provided that the
foregoing will not be construed as a representation or warranty with respect to
non-infringement of Intellectual Property).

 

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7.06 No Actions or Proceedings.

(a) Litigation. There is no litigation, investigation or proceeding pending or,
to the knowledge of any Obligor or any of its Subsidiaries threatened in
writing, with respect to such Obligor or any such Subsidiaries by or before any
Governmental Authority or arbitrator that, (i) if adversely determined,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect or (ii) involves this Agreement or any other Loan
Document.

(b) Environmental Matters. The operations and the real property of each Obligor
and each of its Subsidiaries comply with all applicable Environmental Laws,
except to the extent the failure to so comply (either individually or in the
aggregate) could not reasonably be expected to result in a Material Adverse
Effect.

(c) Labor Matters. No Obligor or any of its Subsidiaries has engaged in unfair
labor practices as defined in 29 U.S.C. § §152(8) and 158 of the National Labor
Relations Act and there are no pending or threatened in writing labor actions,
disputes, grievances, arbitration proceedings, or similar Claims or actions
involving the employees of any Obligor or any of its Subsidiaries, in each case
that could reasonably be expected to have a Material Adverse Effect. There are
no strike or work stoppages in existence or threatened in writing against any
Obligor ant to the knowledge of such Obligor, no union organizing activity is
taking place.

7.07 Compliance with Laws and Agreements.

(a) Each Obligor is in compliance with all Laws and all Contracts binding upon
it or its property, except where the failure to do so could not, individually or
in the aggregate, reasonably be expected to result in a Material Adverse Effect.
No Default has occurred and is continuing. The Obligors and their Subsidiaries
are, and all Product Commercialization and Development Activities of such
Persons are being conducted, in material compliance with all applicable
Healthcare Laws.

(b) To the knowledge of the Obligors and their respective Subsidiaries, any
physician, other licensed healthcare professional, or any other Person who is in
a position to refer patients or other business to the Borrower, any other
Obligor or any Subsidiaries (collectively, a “Referral Source”) who has a direct
ownership, investment, or financial interest in the Borrower, any other Obligor
or any such Subsidiary paid fair market value for such ownership, investment or
financial interest; any ownership or investment returns distributed to any
Referral Source is in proportion to such Referral Source’s ownership, investment
or financial interest; and no preferential treatment or more favorable terms
were or are offered to such Referral Source compared to investors or owners who
are not in a position to refer patients or other business. No Obligor, nor any
of its Subsidiaries, directly or indirectly, has or will guarantee a loan, make
a payment toward a loan or otherwise subsidize a loan for any Referral Source
including, without limitation, any loans related to financing the Referral
Source’s ownership, investment or financial interest in the Borrower, any other
Obligor or any such Subsidiary.

 

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(c) Without limiting the generality of the foregoing:

(i) To the knowledge of the Obligors and their respective Subsidiaries (after
due inquiry), on the one hand, and any Referral Source, on the other hand
(a) comply, in all material respects, with all applicable Healthcare Laws
including, without limitation, the Federal Anti-Kickback Statute, the Stark Law
and other applicable anti-kickback and self-referral laws, whether U.S. or
non-U.S.; (b) reflect fair market value, have commercially reasonable terms, and
were negotiated at arm’s length; and (c) do not obligate the Referral Source to
purchase, use, recommend or arrange for the use of any products or services of
any Obligor or any of its Subsidiaries; and

(ii) each Obligor and each of its Subsidiaries have implemented policies and
procedures to monitor, collect, and report any payments or transfers of value to
certain healthcare providers and teaching hospitals, in accordance, in all
material respects, with industry standards and the Affordable Care Act of 2010
and the Physician Payments Sunshine Act and their implementing regulations and
state disclosure and transparency laws.

7.08 Taxes. Except as set forth on Schedule 7.08, each Obligor and its
Subsidiaries has timely filed or caused to be filed all tax returns and reports
required to have been filed and has paid or caused to be paid all taxes required
to have been paid by it, except (a) taxes that are being contested in good faith
by appropriate proceedings and for which such Obligor or such Subsidiary, as
applicable, has set aside on its books adequate reserves with respect thereto in
accordance with GAAP or (b) to the extent that the failure to do so would not
reasonably be expected to have an Material Adverse Effect.

7.09 Full Disclosure. None of the reports, financial statements, certificates or
other written information furnished by or on behalf of the Obligors or any of
their Subsidiaries to the Administrative Agent (on behalf of itself and the
Lenders) in connection with the negotiation of this Agreement and the other Loan
Documents or delivered hereunder or thereunder (as modified or supplemented by
other information so furnished) contains any material misstatement of material
fact or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that, with respect to projected financial information, the
Borrower represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time, and it being understood
that such projected financial information and all other forward looking
information are not to be viewed as facts and that actual results during the
period or periods covered thereby may differ from such projected results and
that the differences may be material.

7.10 Investment Company Act and Margin Stock Regulation.

(a) Investment Company Act. No Obligor nor any of its Subsidiaries is an
“investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended.

(b) Margin Stock. No Obligor is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying Margin Stock, and no
part of the proceeds of the Loans will be used to buy or carry any Margin Stock
in violation of Regulation T, U or X.

 

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7.11 Solvency. The Obligors, on a consolidated basis, are and, immediately after
giving effect to the making of the Loans, the use of proceeds thereof, and the
consummation of the Transactions, will be, Solvent.

7.12 Subsidiaries. Set forth on Schedule 7.12 is a complete and correct list of
all direct and indirect Subsidiaries of the Borrower. Each such Subsidiary is
duly organized and validly existing under the jurisdiction of its organization
shown in said Schedule 7.12, and the percentage ownership by each Obligor of
each such Subsidiary thereof is as shown in said Schedule 7.12.

7.13 Indebtedness and Liens. Set forth on Schedule 7.13(a) is a complete and
correct list of all Indebtedness of each Obligor and each of its Subsidiaries
outstanding as of the Closing Date. Set forth on Schedule 7.13(b) is a complete
and correct list of all Liens granted by the Obligors and each of their
respective Subsidiaries with respect to their respective property and
outstanding as of the Closing Date.

7.14 Material Agreements. Set forth on Schedule 7.14 is a complete and correct
list, as of the Closing Date, of each Material Agreement. Accurate and complete
copies of each Contract disclosed on such schedule have been made available to
the Administrative Agent. No Obligor or any of its Subsidiaries is in material
default under any such Material Agreement, nor does any Obligor have knowledge
of (i) any Claim against it or any of its Subsidiaries for any material breach
of any such Material Agreement or (ii) any material default by any party to any
such Material Agreement.

7.15 Restrictive Agreements. Except as set forth in Schedule 7.15, as of the
Closing Date, no Obligor or any of its Subsidiaries is subject to any
Restrictive Agreement, except (i) those permitted under Section 9.11, (ii)
restrictions and conditions imposed by Law or by this Agreement, (iii) any
stockholder agreement, charter, by-laws, or other organizational documents of an
Obligor or any of its Subsidiaries as in effect on the date hereof and
(iv) limitations associated with Permitted Liens.

7.16 Real Property. Except as set forth in Schedule 7.16, no Obligor owns or
leases (as tenant thereof) any real property as of the Closing Date.

7.17 Pension Matters. Schedule 7.17 sets forth, as of the Closing Date, a
complete and correct list of, and that separately identifies, (i) all Title IV
Plans, (ii) all Multiemployer Plans and (iii) all material Benefit Plans. Each
Benefit Plan, and each trust thereunder, intended to qualify for tax exempt
status under Section 401 or 501 of the Code or other Laws so qualifies. Except
for those that could not, in the aggregate, reasonably be expected to result in
a Material Adverse Effect, (x) each Benefit Plan is in compliance with
applicable provisions of ERISA, the Code and other Laws, (y) there are no
existing or pending (or to the knowledge of any Obligor or any of its
Subsidiaries, threatened) claims (other than routine claims for benefits in the
normal course), sanctions, actions, lawsuits or other proceedings or
investigation involving any Benefit Plan to which any Obligor or Subsidiary
thereof incurs or otherwise has or could have an obligation or any liability or
Claim and (z) no ERISA Event is reasonably expected to occur. The Borrower and
each of its ERISA Affiliates has met all applicable requirements under the ERISA
Funding Rules with respect to each Title IV Plan, and no waiver of the minimum
funding

 

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standards under the ERISA Funding Rules has been applied for or obtained. As of
the most recent valuation date for any Title IV Plan, the funding target
attainment percentage (as defined in Section 430(d)(2) of the Code) is at least
sixty percent (60%), and neither any Obligor nor any of its ERISA Affiliates
knows of any facts or circumstances that could reasonably be expected to cause
the funding target attainment percentage to fall below sixty percent (60%) as of
the most recent valuation date. As of the Closing Date, no ERISA Event has
occurred in connection with which obligations and liabilities (contingent or
otherwise) remain outstanding. No ERISA Affiliate would have any Withdrawal
Liability as a result of a complete withdrawal from any Multiemployer Plan on
the date this representation is made.

7.18 Regulatory Approvals.

(a) Each Obligor and each of its Subsidiaries holds, and will continue to hold,
either directly or through licensees and agents, all Product Authorizations
necessary or required for the Borrower and each of its Subsidiaries to conduct,
in all material respects, their respective operations and businesses in the
manner currently conducted and to conduct its Product Commercialization and
Development Activities.

(b) No Obligor or its Subsidiaries has received any written notice from the FDA
or any Governmental Authority that it is considering suspending, revoking or
materially limiting any Product Authorization. The Obligors and their
Subsidiaries have made all material required and notices, registrations and
reports (including field alerts or other reports of adverse experiences) and
other filings with respect to each such Person’s Products and Product
Commercialization and Development Activities.

(c) Except as set forth on Schedule 7.18(c), and without limiting the generality
of any other representation or warranty made by any Obligor hereunder or under
any other Loan Document: (i) no Obligor, nor any of its Subsidiaries nor, to the
knowledge of any Obligor, any of their respective agents, suppliers, licensors
or licensees have received any inspection reports, warning letters or notices or
similar documents with respect to any Product or any Product Commercialization
and Development Activities from any Regulatory Authority within the last two
(2) years that asserts material lack of compliance with any applicable
Healthcare Laws or Product Authorizations; (ii) no Obligor, nor any of its
Subsidiaries nor, to the knowledge of any Obligor, any of their respective
agents, suppliers, licensors or licensees have received any material
notification from any Regulatory Authority within the last two (2) years,
asserting that any Product or any Product Commercialization and Development
Activities lacks a required Product Authorization; (iii) there is no pending
regulatory action, investigation or inquiry (other than non-material routine or
periodic inspections or reviews) against any Obligor, any of its Subsidiaries
or, to the knowledge of any Obligor, any of their respective suppliers,
licensors or licensees with respect to any Product or any Product
Commercialization and Development Activities, and, to the knowledge of any
Obligor, there is no basis in fact for any material adverse regulatory action
against such Obligor or any of its Subsidiaries or, to the knowledge of any
Obligor, any of their respective suppliers agents, licensors or licensees with
respect to any Product or any Product Commercialization and Development
Activities; and (iv) without limiting the foregoing, (A) (1) there have been no
material product recalls, safety alerts, corrections, withdrawals, marketing
suspensions, removals or the like conducted, undertaken or issued by any Obligor
or any of its Subsidiaries, whether voluntary, at the request, demand or

 

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order of any Regulatory Authority or otherwise, with respect to any Product, any
Product Commercialization and Development Activities or any Product
Authorization within the last two (2) years, (2) no such product recall, safety
alert, correction, withdrawal, marketing suspension, removal or the like has
been requested, demanded or ordered by any Regulatory Authority within the last
two (2) years, and, to the knowledge of any Obligor, there is no basis in fact
for the issuance of any such product recall, safety alert, correction,
withdrawal, marketing suspension, removal or the like with respect to any
Product or any Product Commercialization and Development Activities, and (B) no
criminal, injunctive, seizure, detention or civil penalty action has been
commenced or threatened in writing by any Regulatory Authority within the last
two (2) years with respect to or in connection with any Product or any Product
Commercialization and Development Activities, and there are no consent decrees
(including plea agreements) that relate to any Product or any Product
Commercialization and Development Activities, and, to the knowledge of each
Obligor, there is no basis in fact for the commencement of any criminal
injunctive, seizure, detention or civil penalty action by any Regulatory
Authority relating to any Product or any Product Commercialization and
Development Activities or for the issuance of any consent decree. No Obligor nor
any of its Subsidiaries, nor, to the knowledge of any Obligor, any of their
respective agents, suppliers, licensees or licensors, is employing or utilizing
the services of any individual, in connection with Product Commercialization and
Development Activities, who has been debarred from any federal healthcare
program.

7.19 Transactions with Affiliates. Except as set forth on Schedule 7.19, no
Obligor nor any of its Subsidiaries has entered into, renewed, extended or been
a part to, any transaction (including the purchase, sale, lease, transfer or
exchange of property or assets of any kind or the rendering of services of any
kind) with any Affiliate.

7.20 OFAC. Neither the Borrower nor any of its Subsidiaries, nor, to the
knowledge of the Borrower, any of their respective directors, officers, or
employees (i) is currently the target of any Sanctions, (ii) is located,
organized or residing in any Designated Jurisdiction in violation of Sanctions,
or (iii) is or has been (within the previous five (5) years) engaged in any
transaction with, or for the benefit of, any Person who is now or was then the
target of Sanctions or who is located, organized or residing in any Designated
Jurisdiction, in violation of Sanctions. No Loan, nor the proceeds from any
Loan, has been or will be used, directly or, to the knowledge of the Borrower,
indirectly, to lend, contribute or provide to, or has been or will be otherwise
made available for the purpose of funding, any activity or business in any
Designated Jurisdiction in violation of Sanctions or for the purpose of funding
any activity or business of any Person located, organized or residing in any
Designated Jurisdiction or who is the subject of any Sanctions, in violation of
Sanctions, or in any other manner that will result in any violation by any party
to this Agreement of Sanctions.

7.21 Anti-Corruption. Neither the Borrower nor any of its Subsidiaries, nor, to
the knowledge of the Borrower, any of their respective directors, officers or
employees, directly or, to the knowledge of the Borrower, indirectly, has
(i) materially violated or is in material violation of any applicable
anti-corruption Law, or (ii) made, offered to make, promised to make or
authorized the payment or giving of, directly or, to the knowledge of the
Borrower, indirectly, any Prohibited Payment.

 

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7.22 [Reserved].

7.23 Priority of Obligations. The Obligations constitute unsubordinated
obligations of the Obligors, and except for any obligations which have priority
under applicable Law, rank at least pari passu in right of payment with all
other unsubordinated Indebtedness of the Obligors.

7.24 Royalty and Other Payments. Except as set forth on Schedule 7.24, no
Obligor, nor any of its Subsidiaries, is obligated to pay any royalty, milestone
payment, deferred payment or any other contingent payment in respect of any
Product.

7.25 Non-Competes. Neither the Borrower, any other Obligor, nor any of their
respective Subsidiaries, nor any of their respective directors, officers or
employees, is subject to a non-compete agreement that prohibits or will
interfere with any of the Product Commercialization and Development Activities,
including the development, commercialization or marketing of any Product.

7.26 [Reserved].

7.27 Reimbursement from Medical Reimbursement Programs. Each Obligor has the
requisite provider number to bill Medicare (to the extent such Person
participates in Medicare), the respective Medicaid program in the state or
states in which such Person operates (to the extent such Person participates in
the Medicaid program in such state or states), and all other commercial payor
programs currently bills. There is no investigation, audit, claim review, or
other action pending with respect to any Obligor or, to the knowledge of any
Obligor, threatened in writing which could reasonably be expected to result in a
revocation, suspension, termination, probation, restriction, limitation, or
non-renewal of any provider number issued to any Obligor or result in the
exclusion of any Obligor from Medicare or Medicaid, nor is there any action
pending or, to any Obligor’s knowledge, threatened in writing, pursuant to which
any Governmental Authority seeks to impose material sanctions with respect to
such Obligor’s business.

SECTION 8.

AFFIRMATIVE COVENANTS

Each Obligor covenants and agrees with the Administrative Agent and the Lenders
that, until the Commitments have expired or been terminated and all Obligations
(other than Warrant Obligations and inchoate indemnification and expense
reimbursement obligations for which no claim has been made) have been
indefeasibly paid in full in cash:

8.01 Financial Statements and Other Information. The Borrower will furnish to
the Administrative Agent:

(a) as soon as available and in any event within forty-five (45) days after the
end of the first three (3) fiscal quarters of each fiscal year (or sixty
(60) days, in the case of the fourth fiscal quarter) (i) the consolidated
balance sheets of the Borrower and its Subsidiaries as of the end of such fiscal
quarter and (ii) the related consolidated statements of income, shareholders’
equity and cash flows of the Borrower and its Subsidiaries for such quarter and
the portion of the fiscal year through the end of such fiscal quarter, in each
case prepared in accordance with GAAP consistently applied, all in reasonable
detail and setting forth in comparative form the figures for the corresponding
period in the preceding fiscal year, together with (iii) a certificate

 

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of a Responsible Officer of the Borrower stating that (x) such financial
statements fairly present in all material respects the financial condition of
the Borrower and its Subsidiaries as at such date and (y) the results of
operations of the Borrower and its Subsidiaries for the period ended on such
date have been prepared in accordance with GAAP consistently applied, subject to
changes resulting from normal, year-end audit adjustments and except for the
absence of notes; provided that documents required to be furnished pursuant to
this Section 8.01(a) shall be deemed furnished on the date that such documents
are publicly available on “EDGAR” (with the related certificate separately
delivered);

(b) as soon as available and in any event within ninety (90) days after the end
of each fiscal year (i) the consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such fiscal year and (ii) the related consolidated
statements of income, shareholders’ equity and cash flows of the Borrower and
its Subsidiaries for such fiscal year, in each case prepared in accordance with
GAAP consistently applied, all in reasonable detail and setting forth in
comparative form the figures for the previous fiscal year, accompanied by a
report and opinion thereon of Deloitte & Touche LLP or another firm of
independent certified public accountants of recognized national standing
reasonably acceptable to the Administrative Agent, which report and opinion
shall be prepared in accordance with generally accepted auditing standards and
shall not be subject to any “going concern” or like qualification or exception
or any qualification or exception as to the scope of such audit, and in the case
of such consolidating financial statements, certified by a Responsible Officer
of the Borrower; provided that documents required to be furnished pursuant to
this Section 8.01(b) shall be deemed furnished on the date that such documents
are publicly available on “EDGAR”;

(c) together with the financial statements required pursuant to Sections 8.01(a)
and (b), a compliance certificate signed by the chief financial or accounting
Responsible Officer of the Borrower as of the end of the applicable accounting
period (which delivery may be by electronic communication including fax or email
and shall be deemed to be an original, authentic counterpart thereof for all
purposes) substantially in the form of Exhibit E (a “Compliance Certificate”)
including details of any issues that are material that are raised by auditors
and any occurrence or existence of any event, circumstance, act or omission that
would cause any representation or warranty contained in Section 7.07,
Section 7.18 or Section 7.23 to be incorrect in any material respect (or in any
respect if such representation or warranty is qualified by materiality or by
reference to Material Adverse Effect or Materia Adverse Change) if such
representation or warranty were to be made at the time of delivery of a
Compliance Certificate. For the avoidance of doubt, no representation or
warranty contained in Section 7.07, Section 7.18 or Section 7.23 is required to
be, shall be or shall be deemed to be made in connection with a delivery of any
Compliance Certificate;

(d) after being prepared by the Borrower and approved by its Board, and promptly
following the Administrative Agent’s request therefor, a consolidated financial
forecast for the Borrower and its Subsidiaries for the fiscal year to which such
forecast relates; provided that, for each fiscal year, on or before the sixtieth
(60th) day following the beginning of such fiscal year, the Borrower shall
prepare, and its Board shall approve such consolidated financial forecast for
such fiscal year, and the Borrower shall notify the Administrative Agent
promptly after the Board has given such approval;

 

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(e) promptly after the same are released, copies of all press releases; provided
that documents required to be furnished pursuant to this Section 8.01(e) shall
be deemed furnished on the date that such documents are publicly available on
“EDGAR”;

(f) promptly, and in any event within five (5) Business Days after receipt
thereof by an Obligor thereof, copies of each notice or other correspondence
received from any securities regulator or exchange to the authority of which the
Borrower may become subject from time to time concerning any investigation or
possible investigation or other inquiry by such agency regarding financial or
other operational results of such Obligor; provided that documents required to
be furnished pursuant to this Section 8.01(f) shall be deemed furnished on the
date that such documents are publicly available on “EDGAR”;

(g) promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or communication sent to the stockholders
of each Obligor and its Subsidiaries, and copies of all annual, regular,
periodic and special reports and registration statements which any Obligor or
its Subsidiaries may file or be required to file with any securities regulator
or exchange to the authority of which such Obligor or such Subsidiary, as
applicable, may become subject from time to time; provided that documents
required to be furnished pursuant to this Section 8.01(g) shall be deemed
furnished on the date that such documents are publicly available on “EDGAR”;

(h) the information regarding insurance maintained by the Borrower and its
Subsidiaries as required under Section 8.05;

(i) as soon as possible and in any event within five (5) Business Days after the
Borrower obtains knowledge of any Claim related to any Product or inventory
involving more than $2,500,000 (or the Equivalent Amount in other currencies),
written notice thereof from a Responsible Officer of the Borrower which notice
shall include a statement setting forth details of such return, recovery,
dispute or claim;

(j) within forty-five (45) calendar days following the end of each fiscal
quarter, evidence satisfactory to the Administrative Agent, based upon the
Borrower’s bank account statements that the Borrower has met its minimum
liquidity requirement set out in Section 10.01.

(k) such other information respecting the businesses, financial performance,
operations condition of the assets or liabilities of the Obligors (including
with respect to the Collateral), taken as a whole, as the Administrative Agent
may from time to time reasonably request;

provided that, notwithstanding the foregoing, the Borrower covenants and agrees
that neither the Borrower, nor any other Person acting on its behalf, will
provide, or be obligated to provide, the Administrative Agent or any Lender or
their respective representatives and agents with any information that the
Borrower reasonably believes constitutes material non-public information, unless
prior thereto such Person shall have confirmed to the Borrower in writing that
it consents to receive such information and confirms that it shall be in
compliance with all applicable securities laws with respect to the receipt and
use of such information. The Borrower acknowledges and confirms that each
Secured Party shall be relying on the foregoing covenant in effecting
transactions in securities of the Borrower.

 

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8.02 Notices of Material Events. The Borrower will furnish to the Administrative
Agent written notice of the following (x) with respect to clause (a) below
within three (3) Business Days and (y) with respect to clause (b) through (m)
below, within fifteen (15) Business Days, in each case, after a Responsible
Officer of the Borrower first learns of or acquires knowledge with respect to:

(a) the occurrence of any Default;

(b) the occurrence of any event with respect to the property or assets of the
Borrower or any of its Subsidiaries resulting in a Loss aggregating $2,500,000
(or the Equivalent Amount in other currencies) or more;

(c) (i) any proposed acquisition of stock, assets or property by the Borrower or
any of its Subsidiaries that could reasonably be expected to result in material
environmental liability under applicable Environmental Laws, and (ii) any
spillage, leakage, discharge, disposal, leaching, migration or release of any
Hazardous Material by the Borrower or any of its Subsidiaries required to be
reported to any Governmental Authority and that could reasonably be expected to
result in material liability under applicable Environmental Laws;

(d) the assertion of any Claim under any Environmental Law by any Person
against, or with respect to the activities of, the Borrower or any of its
Subsidiaries and any alleged violation of or non-compliance with any
Environmental Laws or any permits, licenses or authorizations issued pursuant to
Environmental Laws which could reasonably be expected to involve damages in
excess of $2,500,000 (or the Equivalent Amount in other currencies) other than
any such Claim or alleged violation that, if adversely determined, could not
(either individually or in the aggregate) reasonably be expected to have a
Material Adverse Effect;

(e) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting the Borrower or
any of its Affiliates that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;

(f) (i) the intention of any ERISA Affiliate to file any notice of intent to
terminate any Title IV Plan, a copy of such notice and (ii) the filing by any
ERISA Affiliate of a request for a minimum funding waiver under Section 412 of
the Code with respect to any Title IV Plan or Multiemployer Plan, in each case
in writing and in reasonable detail (including a description of any action that
any ERISA Affiliate proposes to take with respect thereto, together with a copy
of any notice filed with the PBGC or the IRS pertaining thereto);

(g) (i) the termination of any Material Agreement other than in accordance with
its terms and not as a result of a breach or default, (ii) the receipt by the
Borrower or any of its Subsidiaries of any notice of a material breach or
default under any Material Agreement (and a copy thereof) asserting a default by
such Obligor or any of its Subsidiaries where such alleged default would permit
such counterparty to terminate such Material Agreement, (iii) the entering into
of any new Material Agreement by any Obligor (and a copy thereof) or (iv) any
material amendment to a Material Agreement that would be adverse in any material
respect to the Lenders (and a copy thereof).

 

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(h) any material change in accounting policies or financial reporting practices
by the Borrower or any of its Subsidiaries;

(i) any labor controversy resulting in or threatening to result in any strike,
work stoppage, boycott, shutdown or other material labor disruption against or
involving an Obligor;

(j) any licensing agreement or arrangement entered into by the Borrower or any
of its Subsidiaries in connection with any Claim of infringement or alleged
infringement by the Borrower or any of its Subsidiaries of any Intellectual
Property of another Person; provided that such agreement or arrangement would
otherwise qualify as a Material Agreement hereunder;

(k) the creation, development or other acquisition of any Material Intellectual
Property by the Borrower or any Subsidiary after the Closing Date that is
registered or becomes registered or the subject of an application for
registration with any Governmental Authority; provided that, with respect to any
such Material Intellectual Property created, developed or acquired in any fiscal
year, notice thereof pursuant to this Section 8.02(k) shall be made in
accordance with the timing of the financial statements for such fiscal year
required pursuant to Section 8.01(b);

(l) any change to any Obligor’s or any of its Subsidiaries’ ownership of any
Controlled Account, by delivering the Administrative Agent a notice setting
forth a complete and correct list of all such accounts as of the date of such
change; and

(m) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

Each notice delivered under this Section 8.02 shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth the details of
the event or development requiring such notice and any action taken or proposed
to be taken with respect thereto. Nothing in this Section 8.02 is intended to
waive, consent to or otherwise permit any action or omission that is otherwise
prohibited by this Agreement or any other Loan Document. Notwithstanding the
foregoing, the Borrower covenants and agrees that neither the Borrower, nor any
other Person acting on its behalf, will provide, or be obligated to provide, the
Administrative Agent or any Lender or their respective representatives and
agents with any information that the Borrower reasonably believes constitutes
material non-public information, unless prior thereto such Person shall have
confirmed to the Borrower in writing that it consents to receive such
information and confirms that it shall be in compliance with all applicable
securities laws with respect to the receipt and use of such information. The
Borrower acknowledges and confirms that each Secured Party shall be relying on
the foregoing covenant in effecting transactions in securities of the Borrower.

8.03 Existence. Such Obligor shall, and shall cause each of its Subsidiaries to,
preserve, renew and maintain in full force and effect its legal existence;
provided that the foregoing shall not prohibit any merger, amalgamation,
consolidation, liquidation or dissolution permitted under Section 9.03.

 

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8.04 Payment of Obligations. Such Obligor will, and will cause each of its
Subsidiaries to, pay and discharge its obligations, including (i) all Taxes,
fees, assessments and governmental charges or levies imposed upon it or upon its
properties or assets prior to the date on which penalties attach thereto, and
all lawful claims for labor, materials and supplies which, if unpaid, might
become a Lien upon any properties or assets of the Borrower or any of its
Subsidiaries, except to the extent such Taxes, fees, assessments or governmental
charges or levies or such claims are being contested in good faith by
appropriate proceedings and are adequately reserved against in accordance with
GAAP and (ii) all lawful claims which, if unpaid, would by law become a Lien
upon its property not constituting a Permitted Lien.

8.05 Insurance. Such Obligor will, and will cause each of its Subsidiaries to
maintain, with financially sound and reputable insurance companies, insurance in
such amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses, it being understood and agreed that
the insurance held by the Borrower and each of its Subsidiaries on the Closing
Date is deemed to fulfill this requirement on the date hereof. Upon the request
of the Administrative Agent, the Borrower shall furnish the Administrative Agent
from time to time with (i) material information as to the insurance carried by
it and, if so requested, copies of all such insurance policies and (ii) a
certificate from the Borrower’s insurance broker or other insurance specialist
stating that all premiums then due on the policies relating to insurance on the
Collateral have been paid and that such policies are in full force and effect.
Receipt of notice of termination or cancellation of any such insurance policies
or reduction of coverages or amounts thereunder shall entitle the Secured
Parties to renew any such policies, cause the coverages and amounts thereof to
be maintained at levels required pursuant to the first sentence of this
Section 8.05 or otherwise to obtain similar insurance in place of such policies,
in each case, the Borrower will be responsible for the reasonable and documented
cost of such insurance (to be payable on demand). The amount of any such
reasonable and documented expenses shall accrue interest at the Default Rate if
not paid on demand and shall constitute “Obligations.”

8.06 Books and Records; Inspection Rights. Such Obligor will, and will cause
each of its Subsidiaries to, keep proper books of record and account in which
full, true and correct (in all material respects) entries are made of all
dealings and transactions in relation to its business and activities. Such
Obligor will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or the Lenders, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition (financial or otherwise) with its officers and independent
accountants, during normal business hours (but not more often than once a year
unless an Event of Default has occurred and is continuing) as the Administrative
Agent or the Lenders may request; provided that such representative shall use
its commercially reasonable efforts to minimize disruption to the business and
affairs of the Borrower as a result of any such visit, inspection, examination
or discussion. Notwithstanding anything to the contrary contained herein, no
Obligor nor any of its Subsidiaries will be required to disclose or permit the
inspection or discussion of, any document, information or other matter (i) that
constitutes trade secrets or proprietary information, (ii) in respect of which
disclosure to any Lender (or their respective representatives or contractors) is
prohibited by any applicable Law or any binding agreement with a third party (so
long as such agreement is not entered into in contemplation of this Agreement)
or (ii) that is subject to attorney-client or similar privilege, which could
reasonably be expected to be lost or forfeited if disclosed to the
Administrative Agent or any Lender. The Borrower shall pay all reasonable and
documented costs of all such inspections.

 

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8.07 Compliance with Laws and Other Obligations. Such Obligor will, and will
cause each of its Subsidiaries to, (i) comply with all Laws (including
Environmental Laws ) applicable to it and its business activities, (ii) comply
in all material respects with all Healthcare Laws and Governmental Approvals
(including Product Authorizations) applicable to it and its business activities
and (iii) maintain in full force and effect, remain in compliance with, and
perform all obligations under all Material Agreement to which it is a party,
except, in the case of clause (i) and (iii) above, where the failure to do so
could not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect.

8.08 Maintenance of Properties, Etc. Such Obligor shall, and shall cause each of
its Subsidiaries to, maintain and preserve all of its assets and properties,
including all assets and properties, whether tangible or intangible, relating to
its Products or Product Commercialization and Development Activities, necessary
or useful in the conduct of its business in good working order and condition in
accordance with the general practice of other Persons of similar character and
size, ordinary wear and tear and damage from casualty or condemnation excepted
and except where the failure to do so, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.

8.09 Licenses. Such Obligor shall, and shall cause each of its Subsidiaries to,
obtain and maintain all Governmental Approvals necessary in connection with the
execution, delivery and performance of the Loan Documents, the consummation of
the Transactions or the operation and conduct of its business and ownership of
its properties (including its Product Commercialization and Development
Activities), except where the failure to do so could not reasonably be expected
to have a Material Adverse Effect.

8.10 [Reserved].

8.11 Use of Proceeds. The proceeds of the Loans will be used only as provided in
Section 2.04. No part of the proceeds of the Loans will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board of Governors of the Federal Reserve System, including
Regulations T, U and X.

8.12 Certain Obligations Respecting Subsidiaries; Further Assurances.

(a) Subsidiary Guarantors, etc. Subject to clauses (c) and (d) below and the
terms and provisions of the Intercompany Subordination Agreement, in the event
that the Borrower or any of its Subsidiaries shall form or acquire any new
Subsidiary, the Borrower shall promptly:

(i) cause such new Subsidiary to become a “Subsidiary Guarantor” hereunder
pursuant to a Guarantee Assumption Agreement and a “Grantor” under the Security
Agreement;

(ii) take such action or cause such Subsidiary to take such action (including
joining the Security Agreement and delivering shares of stock together with
undated transfer powers executed in blank, applicable control agreements and
other instruments) as shall be reasonably necessary or desirable or reasonably
requested by the Administrative Agent in order

 

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to create and perfect, in favor of the Administrative Agent, for the benefit of
the Secured Parties, valid and enforceable first priority Liens on substantially
all of the personal property of such new Subsidiary as collateral security for
the Obligations hereunder; provided that any such security interest or Lien
shall be subject to the relevant requirements of the Security Documents and the
Intercompany Subordination Agreement;

(iii) to the extent that the parent of such Subsidiary is not a party to the
Security Agreement or has not otherwise pledged Equity Interests in its
Subsidiaries in accordance with the terms of the Security Agreement and this
Agreement, cause the parent (if possible) of such Subsidiary to execute and
deliver a pledge agreement in favor of the Administrative Agent, for the benefit
of the Secured Parties, in respect of all outstanding issued shares of such
Subsidiary;

(iv) deliver such proof of corporate action, incumbency of officers, and other
applicable documents as is consistent with those delivered by each Obligor
pursuant to Section 6.01 or as the Administrative Agent shall reasonably
request; and

(v) cause each new Subsidiary (other than any Subsidiary that is neither an
Obligor nor a Pledged Entity) to become a party to the Intercompany
Subordination Agreement.

(b) Further Assurances. Subject to clauses (c) and (d) below and the terms and
provisions of the Intercompany Subordination Agreement:

(i) such Obligor will take such action from time to time as shall reasonably be
requested by the Administrative Agent to effectuate the purposes and objectives
of this Agreement and the Security Agreement; and

(ii) in the event that such Obligor acquires Intellectual Property during the
term of this Agreement, then the provisions of this Agreement and the Security
Agreement shall automatically apply thereto and any such Intellectual Property
shall automatically constitute part of the Collateral under the Security
Documents, without further action by any party, in each case from and after the
date of such acquisition; and

(iii) without limiting the generality of the foregoing, each Obligor will, and
will cause each Person that is required to be a Subsidiary Guarantor to, take
such action from time to time (including joining the Security Agreement and
delivering shares of stock together with undated transfer powers executed in
blank, applicable control agreements and other instruments) as shall be
reasonably requested by the Administrative Agent to create, in favor of the
Secured Parties, perfected security interests and Liens in substantially all of
the personal property (other than Excluded Assets (as defined in the Security
Agreement)) of such Obligor as collateral security for the Obligations; provided
that any such security interest or Lien shall be subject to the relevant
requirements of the Security Documents; provided, further that, without limiting
the right of the Administrative Agent to require a Lien or security interest in
any newly acquired or created Subsidiary or asset, upon the prior written
request of the Borrower, the Borrower and the Administrative Agent shall
consult, in good faith, as to whether the cost of obtaining a Lien or security
interest thereon would be unreasonably excessive relative to the benefit
thereof.

 

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(c) CFCs, etc. Any term or provision of this Section 8.12 to the contrary
notwithstanding, (x) no Subsidiary that is a (i) CFC, (ii) CFC Holding Company
or (iii) Domestic Subsidiary of either of the foregoing, shall be required to
become a Subsidiary Guarantor, and (y) the Obligors shall not be required to
pledge (or cause to be pledged) to the Administrative Agent, for the benefit of
the Secured Parties, Equity Interests of any Subsidiary representing, in the
aggregate, more than sixty-five percent (65%) of the Equity Interests of any CFC
or CFC Holding Company; provided, that the above restrictions shall apply only
to the extent the Borrower reasonably determines (after consultation with the
Administrative Agent) that the failure to impose such restrictions could
reasonably be expected to generate a material current or future income inclusion
to the Borrower or any of its Domestic Subsidiaries (as determined in good faith
from time to time).

(d) Limitations on Certain Obligations. Notwithstanding anything to the contrary
contained in this Agreement or any other Loan Document, no Obligor shall be
required to enter into or obtain any mortgage, deed of trust, leasehold mortgage
or any similar agreement in respect to any fee interest or leasehold interest in
real property.

8.13 Termination of Non-Permitted Liens. In the event that any Obligor shall
become aware of, or be notified by the Administrative Agent or any Lender of the
existence of, any outstanding Lien against any assets or property of such
Obligor or any of its Subsidiaries, which Lien is not a Permitted Lien, such
Obligor shall use its commercially reasonable efforts to promptly terminate or
cause the termination of such Lien.

8.14 [Reserved].

8.15 [Reserved].

8.16 Maintenance of Regulatory Approvals, Contracts, Intellectual Property, Etc.
With respect to the Products and all Product Commercialization and Development
Activities, such Obligor will, and will cause each of its Subsidiaries (to the
extent applicable) to, (i) maintain in full force and effect all Regulatory
Approvals, Material Agreements, Material Intellectual Property and other rights,
interests or assets (whether tangible or intangible) reasonably necessary for
the operations of such Person’s business, except as could not reasonably be
expected to have a Material Adverse Effect, (ii) promptly after obtaining
knowledge thereof, notify the Administrative Agent of any product recalls,
safety alerts, corrections, withdrawals, marketing suspensions, removals or the
like conducted, to be undertaken or issued, by such Obligor, any of its
Subsidiaries or any of their respective agents, suppliers, licensors or
licensees, as the case may be, whether voluntary or at the request, demand or
order of any Regulatory Authority or otherwise with respect to any Product or
any Product Commercialization and Development Activities, or any basis for
undertaking or issuing any such action or item, (iii) maintain in full force and
effect, and pay all costs and expenses relating to, such Regulatory Approvals,
Material Agreements and Material Intellectual Property owned, used or controlled
by such Obligor or any such Subsidiary that are used in or necessary for any
related Product Commercialization and Development Activities, except as could
not be reasonably expected to have a Material Adverse Effect, (iv) promptly
after obtaining knowledge thereof, notify the Administrative Agent of any
infringement or other violation by any Person of such Obligor’s or any such
Subsidiaries’ Material Intellectual Property, and pursue any such infringement
or other

 

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violation, except in any specific circumstance where both (x) the Borrower is
able to demonstrate to the reasonable satisfaction Administrative Agent that it
is not commercially reasonable to do so and (y) where not doing could not
reasonably be expected to have a Material Adverse Effect on any Product or the
Product Commercialization and Development Activities related to such Product,
(v) use commercially reasonable efforts to pursue and maintain in full force and
effect registrations for Material Intellectual Property created, developed or
acquired by any Obligor or any of its Subsidiaries, as the case may be, that is
used in or necessary for the operations of the business of such Person, or in
connection with any Product Commercialization and Development Activities
relating to any Product and except where not doing so could not be reasonably
expected to results in a Material Adverse Effect, and (vi) promptly after
obtaining knowledge thereof, notify the Administrative Agent of any Claim by any
Person that the conduct of the business of any Obligor or any of its
Subsidiaries, including in connection with any Product Commercialization and
Development Activities, has infringed upon any Intellectual Property of such
Person, where such Claim, if adversely determined, could reasonably be expected
to have a Material Adverse Effect.

8.17 ERISA Compliance. Such Obligor shall comply, and shall cause each of its
Subsidiaries to comply, with the provisions of ERISA with respect to any Plans
to which such Obligor or such Subsidiary is a party as an employer in all
material respects.

8.18 Cash Management. Such Obligor shall, and shall cause each of its
Subsidiaries to:

(a) maintain at all times at least 60% of the aggregate cash of the Borrower and
its Subsidiaries in deposit accounts, disbursement accounts, investment accounts
(and other similar accounts) and lockboxes with a bank or financial institution
within the U.S. that has executed and delivered to the Administrative Agent an
account control agreement, in form and substance reasonably acceptable to the
Administrative Agent (each such deposit account, disbursement account,
investment account (or similar account) and lockbox, a “Controlled Account”);
each such Controlled Account shall be a cash collateral account, with all cash,
checks and other similar items of payment in such account securing payment of
the Obligations, and each Obligor shall have granted a Lien to the
Administrative Agent, for the benefit of the Secured Parties, over such
Controlled Accounts;

(b) deposit promptly, and in any event no later than five (5) Business Days
after the date of receipt thereof, all cash, checks, drafts or other similar
items of payment relating to or constituting payments made in respect of any and
all accounts and other rights and interests into Controlled Accounts; and

(c) at any time after the occurrence and during the continuance of an Event of
Default, at the request of the Administrative Agent, each Obligor shall cause
all payments constituting proceeds of accounts to be directed into lockbox
accounts under agreements in form and substance satisfactory to the
Administrative Agent

 

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8.19 Post-Closing Obligations.

(a) Account Controlled Accounts. Within sixty (60) days following the Closing
Date (or such longer period of time as agreed by the Administrative Agent in its
sole discretion) (the “Account Control Agreement Completion Date”), the
Administrative Agent shall have received evidence that (i) all deposit accounts,
lockboxes, disbursement accounts, investment accounts or other similar accounts
of each Obligor located within the U.S. are Controlled Accounts and (ii) such
Controlled Accounts are subject to one or more account control agreements, in
favor of, and satisfactory in form and substance to, the Administrative Agent.

(b) Financial Covenant Compliance. On the Account Control Agreement Completion
Date, the Administrative Agent shall have received written evidence reasonably
satisfactory to it that, as of the Account Control Agreement Completion Date,
the Borrower is in compliance with Sections 10.01 and 8.18(a).

(c) Real Property Security Documents. Within sixty (60) days following the
Closing Date (or such longer period of time as agreed by the Administrative
Agent in its sole discretion), the Borrower shall use commercially reasonable
efforts to obtain (i) Landlord Consents with respect to (x) the lease of Athenex
Pharma Solutions, LLC for property located at 11342 Main Street, Clarence, New
York 14031 and (y) the lease of the Borrower for property located at Coventus
Building, 1001 Main Street, Suite 600, Buffalo, New York 14203 and (ii) a Bailee
Letter from Dohmen Life Science Services in respect of inventory of Athenex
Pharmaceutical Division, LLC at 4580 S. Mendenhall Road, Memphis, Tennessee
38141.

(d) Intercompany Subordination Agreement. Subject to applicable Law, within
thirty (30) days following the Closing Date (or such longer period of time as
agreed by the Administrative Agent in its sole discretion), the Obligors shall,
and shall cause its Subsidiaries to, duly execute and deliver the Intercompany
Subordination Agreement or such other subordination agreement in form and
substance reasonably satisfactory to the Administrative Agent.

(e) Insurance. Within thirty (30) days following the Closing Date (or such
longer period of time as agreed by the Administrative Agent in its sole
discretion), all such insurance policies required pursuant to Section 6.01(l)
shall name the Administrative Agent (for its benefit and the benefit of the
Lenders) loss payee or additional insured, as applicable, and provide that no
cancellation of the policies will be made without at least ten (10) days prior
written notice to the Administrative Agent.

(f) Foreign Law and Polymed Security Documents. Within sixty (60) days following
the Closing Date (or such longer period of time as agreed by the Administrative
Agent in its sole discretion), the Borrower shall (i) duly execute and deliver
foreign law Security Documents in form and substance reasonably satisfactory to
the Administrative Agent pursuant to which 65% of the Equity Interests of all
directly owned Foreign Subsidiaries of the Borrower shall be pledged to the
Administrative Agent for the benefit of the Secured Parties and (ii) cause to be
executed and delivered a Security Document in form and substance reasonably
satisfactory to the Administrative Agent pursuant to which all of the Equity
Interests of Polymed Therapeutics, Inc. shall be pledged to the Administrative
Agent for the benefit of the Secured Parties, in each case, together with proof
of corporate action, incumbency of officers, customary opinions of counsel and
other applicable documents as is consistent with those delivered by each Obligor
pursuant to Section 6.01.

 

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SECTION 9.

NEGATIVE COVENANTS

Each Obligor covenants and agrees with the Administrative Agent and the Lenders
that, until the Commitments have expired or been terminated and all Obligations
(other than Warrant Obligations and inchoate indemnification and expense
reimbursement obligations for which no claim has been made) have been
indefeasibly paid in full in cash:

9.01 Indebtedness. Such Obligor will not, and will not permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Indebtedness,
whether directly or indirectly, except:

(a) the Obligations;

(b) Indebtedness existing on the date hereof and set forth on Schedule 7.13(a)
and Permitted Refinancings thereof; provided that, if such Indebtedness is
intercompany Indebtedness, such Indebtedness shall be subject to the
Intercompany Subordination Agreement in accordance with clauses (e) to (h)
below;

(c) accounts payable to trade creditors for goods and services and current
operating liabilities (not the result of the borrowing of money) incurred in the
ordinary course of such Obligor’s or such Subsidiary’s business in accordance
with customary terms and paid within the specified time, unless contested in
good faith by appropriate proceedings and reserved for in accordance with GAAP;

(d) Indebtedness consisting of guarantees resulting from the endorsement of
negotiable instruments for collection in the ordinary course of business;

(e) Indebtedness of an Obligor owing to any other Obligor or a Pledged Entity
owing to any other Pledged Entity, in each case subject to the Intercompany
Subordination Agreement;

(f) Indebtedness of any Subsidiary that is neither an Obligor nor a Pledged
Entity owing to any other Subsidiary that is neither an Obligor nor a Pledged
Entity;

(g) Indebtedness of any Obligor or any Pledged Entity owing to any Subsidiary
that is not an Obligor, subject to the Intercompany Subordination Agreement;

(h) Indebtedness of any Subsidiary owing to any Obligor or any Pledged Entity in
connection with any Product Commercialization and Development Activities in an
aggregate outstanding principal amount not to exceed an amount (without double
counting Indebtedness pursuant to this Section 9.01(h) incurred using proceeds
of other Indebtedness incurred pursuant to this Section 9.01(h)) equal to (i)
$80,000,000, plus (ii) the amount of any net cash proceeds received by the
Borrower from the issuance of Qualified Equity Interests of the Borrower (in
each case, or the Equivalent Amount in other currencies); provided that any
Subsidiary that is neither an Obligor nor a Pledged Entity may only incur
Indebtedness pursuant to this Section 9.01(h) (without double counting
Indebtedness pursuant to this Section 9.01(h) incurred using proceeds of other
Indebtedness incurred pursuant to this Section 9.01(h)) in an aggregate
outstanding principal amount not to exceed $10,000,000 (or the Equivalent Amount
in other currencies);

 

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(i) Guarantees by any Obligor of Permitted Indebtedness of any other Obligor;

(j) ordinary course of business equipment and software financing and leasing;
provided that (i) if secured, the collateral therefor consists solely of the
assets being financed, the products and proceeds thereof and books and records
related thereto, and (ii) the aggregate outstanding principal amount of such
Indebtedness does not exceed $10,000,000 (or the Equivalent Amount in other
currencies) at any time;

(k) Indebtedness under Hedging Agreements permitted by Section 9.05(f);

(l) Indebtedness assumed pursuant to any Permitted Acquisition; provided that
(i) no such Indebtedness (individually) shall exceed 15% of the total purchase
price paid in connection with such Permitted Acquisition, (ii) the aggregate
outstanding principal amount of Indebtedness permitted pursuant to this
Section 9.01(l) shall not exceed $10,000,000 (or the Equivalent Amount in other
currencies) at any time outstanding and (iii) no such Indebtedness was created
or incurred in connection with, or in contemplation of, such Permitted
Acquisition;

(m) Indebtedness in respect of working capital facilities of the Borrower or any
of its Subsidiaries in an aggregate outstanding principal amount not to exceed
$15,000,000 (or the Equivalent Amount in other currencies); provided that the
documentation governing such Indebtedness shall be in form and substance
reasonably satisfactory to the Administrative Agent in its sole discretion; and

(n) other Indebtedness in an aggregate outstanding principal amount not to
exceed $5,000,000 (or the Equivalent Amount in other currencies).

9.02 Liens. Such Obligor will not, and will not permit any of its Subsidiaries
to, create, incur, assume or permit to exist any Lien on any property now owned
by it or such Subsidiary, except:

(a) Liens securing the Obligations;

(b) any Lien on any property or asset of such Obligor or any of its Subsidiaries
existing on the date hereof and set forth on Schedule 7.13(c) and renewals and
extensions thereof in connection with Permitted Refinancings of the Indebtedness
being secured by such Lien; provided that (i) no such Lien (including any
renewal or extension thereof) shall extend to any other property or asset of
such Obligor or any of its Subsidiaries and (ii) any such Lien shall secure only
those obligations which it secures on the date hereof and renewals, extensions
and replacements thereof in connection with Permitted Refinancings of the
Indebtedness being secured by such Lien that do not increase the outstanding
principal amount thereof;

(c) Liens securing Indebtedness permitted under Section 9.01(j); provided that
such Liens are restricted solely to the collateral described in Section 9.01(j);

(d) Liens imposed by any Law arising in the ordinary course of business,
including (but not limited to) carriers’, warehousemen’s, landlords’, and
mechanics’ liens, liens relating to leasehold improvements and other similar
Liens arising in the ordinary course of business and which (x) do not in the
aggregate materially detract from the value of the property subject thereto or
materially impair the use thereof in the operations of the business of such
Person or (y) are being contested in good faith by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or sale of the
property subject to such Liens and for which adequate reserves have been made if
required in accordance with GAAP;

 

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(e) pledges or deposits made in the ordinary course of business in connection
with bids, contract leases, appeal bonds, workers’ compensation, unemployment
insurance or other similar social security legislation;

(f) Liens securing Taxes, assessments and other governmental charges, the
payment of which is not yet due or is being contested in good faith by
appropriate proceedings promptly initiated and diligently conducted and for
which such reserve or other appropriate provisions, if any, as shall be required
by GAAP shall have been made;

(g) servitudes, easements, rights of way, restrictions and other similar
encumbrances on real property imposed by any Law and Liens consisting of zoning
or building restrictions, easements, licenses, restrictions on the use of
property or minor imperfections in title thereto which, in the aggregate, are
not material, and which do not in any case materially detract from the value of
the property subject thereto or interfere with the ordinary conduct of the
business of any of the Obligors or any of their Subsidiaries; and

(h) with respect to any real property, (i) such defects or encroachments as
might be revealed by an up-to-date survey of such real property; (ii) the
reservations, limitations, provisos and conditions expressed in the original
grant, deed or patent of such property by the original owner of such real
property pursuant to all applicable Laws; and (iii) rights of expropriation,
access or user or any similar right conferred or reserved by or in any Law,
which, in the aggregate for clauses (i), (ii) and (iii), are not material, and
which do not in any case materially detract from the value of the property
subject thereto or interfere with the ordinary conduct of the business of any of
the Obligors or its Subsidiaries;

(i) Bankers liens, rights of setoff and similar Liens incurred on deposits made
in the ordinary course of business;

(j) Liens securing Indebtedness permitted under Section 9.01(l); provided that
(i) such Lien is not created in contemplation of or in connection with such
Permitted Acquisition pursuant to which such Indebtedness was assumed, (ii) such
Lien shall not apply to any other property or assets of the Borrower or any
Subsidiary and (iii) such Lien shall secure only those obligations that it
secured immediately prior to the consummation of such Permitted Acquisition and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;

(k) [reserved];

(l) Any judgment lien or lien arising from decrees or attachments not
constituting an Event of Default;

(m) Liens arising from precautionary UCC financing statement filings regarding
leases and consignment arrangements entered into in the ordinary course of
business; and

 

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(n) other Liens, which secure obligations in an aggregate amount not to exceed
$2,500,000 (or the Equivalent Amount in other currencies) at any time
outstanding,

provided that no Lien otherwise permitted under any of the foregoing clauses
(b) through (n) shall apply to any Material Intellectual Property.

9.03 Fundamental Changes and Acquisitions. Such Obligor will not, and will not
permit any of its Subsidiaries to, (i) enter into any transaction of merger,
amalgamation or consolidation, (ii) liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), (iii) sell or issue any of its
Disqualified Equity Interests or (iv) other than Permitted Acquisitions, make
any Acquisition or otherwise acquire any business or substantially all the
property from, or Equity Interests of, or be a party to any Acquisition of, any
Person, except:

(a) the merger, amalgamation or consolidation of any (i) Subsidiary with or into
any Obligor or Pledged Entity; provided that with respect to any such
transaction involving (x) the Borrower, the Borrower must be the surviving or
successor entity of such transaction, (y) any other Obligor, such Obligor must
be the surviving or successor entity of such transaction (unless such
transaction involves more than one Obligor, then an Obligor must be the
surviving or successor entity of such transaction) and (z) any Pledged Entity
(but not a transaction involving the Borrower or another Obligor, which is
subject to clauses (x) and (y) above, respectively), such Pledged Entity must be
the surviving or successor entity of such transaction (unless such transaction
involves more than one Pledged Entity, then a Pledged Entity must be the
surviving or successor entity of such transaction) or (ii) any Subsidiary that
is not an Obligor nor a Pledged Entity with or into any other Subsidiary that is
not an Obligor nor a Pledged Entity;

(b) the sale, lease, transfer or other disposition by (i) any Subsidiary of any
or all of its property (upon voluntary liquidation or otherwise) to any Obligor,
(ii) any Subsidiary that is not an Obligor of any or all of its property (upon
voluntary liquidation or otherwise) to any Pledged Entity or (iii) any
Subsidiary that is neither an Obligor nor a Pledged Entity of any or all of its
property (upon voluntary liquidation or otherwise) to any other Subsidiary that
is neither an Obligor nor a Pledged Entity ;

(c) the sale, transfer or other disposition of the Equity Interests of (i) any
Subsidiary to any Obligor, (ii) any Subsidiary that is not an Obligor to any
Pledged Entity or (iii) any Subsidiary that is neither an Obligor nor a Pledged
Entity to any other Subsidiary that is neither an Obligor nor a Pledged Entity;
and

(d) the Specified Acquisition/Licensing Transaction.

9.04 Lines of Business. Such Obligor will not, and will not permit any of its
Subsidiaries to, engage in any business other than the business engaged in on
the date hereof by such Persons or a business reasonably related, incidental or
complimentary thereto or reasonable extensions thereof.

9.05 Investments. Such Obligor will not, and will not permit any of its
Subsidiaries to, make, directly or indirectly, or permit to remain outstanding
any Investments except:

 

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(a) Investments outstanding on the date hereof and identified in Schedule 9.05
and any renewals, amendments and replacements thereof that do not increase the
amount thereof of any such Investment or require that any additional Investment
be made (unless otherwise permitted hereunder);

(b) operating deposit accounts with banks (or similar deposit-taking
institutions) that, in the case maintained by Obligors, are Controlled Accounts;

(c) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sales of goods or services in the ordinary course of
business;

(d) Permitted Cash Equivalent Investments that, in the case maintained by
Obligors, are in Controlled Accounts;

(e) Investments by an Obligor (i) in another Obligor, (ii) in connection with a
Permitted Acquisition, or (iii) in a Subsidiary that is not an Obligor; provided
that Investments made pursuant to this clause (iii) shall not exceed an amount
permitted under Section 9.01(h);

(f) Investments by a Subsidiary that is neither an Obligor nor a Pledged Entity
in any other Subsidiary that is neither an Obligor nor a Pledged Entity;

(g) Hedging Agreements entered into in such Obligor’s ordinary course of
business for the purpose of hedging currency risks or interest rate risks (and
not for speculative purposes) and (x) with respect to hedging currency risks, in
an aggregate notional amount for all such Hedging Agreements not in excess of
$10,000,000 (or the Equivalent Amount in other currencies) and (y) with respect
to hedging interest rate risks, in an aggregate notional amount for all such
Hedging Agreements in excess of 50%, but not more than 100%, of the aggregate
principal amount of Loans outstanding at such time;

(h) Investments consisting of prepaid expenses, negotiable instruments held for
collection or deposit, security deposits with utilities, landlords and other
like Persons and deposits in connection with workers’ compensation and similar
deposits, in each case, made in the ordinary course of business;

(i) employee loans, travel advances and guarantees in accordance with the
Borrower’s usual and customary practices with respect thereto (if permitted by
applicable Laws) which in the aggregate shall not exceed $2,500,000 outstanding
at any time (or the Equivalent Amount in other currencies);

(j) Investments received in connection with any Insolvency Proceedings in
respect of any customers, suppliers or clients and in settlement of delinquent
obligations of, and other disputes with, customers, suppliers or clients;

(k) the increase in value of any Investment otherwise permitted pursuant to this
Section 9.05;

(l) other Investments in an aggregate amount not to exceed $25,000,000 (or the
Equivalent Amount in other currencies) in any fiscal year; and

 

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(m) Investments permitted under Section 9.03.

9.06 Restricted Payments. Such Obligor will not, and will not permit any of its
Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment; provided that the following Restricted
Payments shall be permitted so long as no Event of Default has occurred and is
continuing or could reasonably be expected to occur or result from such
Restricted Payment:

(a) dividends with respect to the Borrower’s Equity Interests payable solely in
shares of its Qualified Equity Interests (or the equivalent thereof);

(b) the Borrower’s purchase, redemption, retirement, or other acquisition of
shares of its Equity Interests with the proceeds received from a substantially
concurrent issue of new shares of its Qualified Equity Interests;

(c) dividends paid by any Subsidiary to any Obligor;

(d) any purchase, redemption, retirement or other acquisition of Equity
Interests of the Borrower held by officers, directors and employees or former
officers, directors or employees (or their transferees, estates, or
beneficiaries under their estates) of Borrower and its Subsidiaries not to
exceed $2,500,000 (or the Equivalent Amount in other currencies) in any fiscal
year;

(e) cashless exercises of options and warrants;

(f) cash payments made by the Borrower to redeem, purchase, repurchase or retire
its obligations under warrants issued by it (in the nature of cash payments in
lieu of fractional shares) in accordance with the terms thereof; and

(g) so long as no Default or Event of Default has occurred and is continuing (or
could reasonably be expected to occur after giving effect to the Restricted
Payment), other Restricted Payments in an aggregate amount not to exceed
$2,000,000 (or the Equivalent Amount in other currencies) in any fiscal year.

9.07 Payments of Indebtedness. Such Obligor will not, and will not permit any of
its Subsidiaries to, make any payments in respect of any Indebtedness other than
(i) payments of the Obligations, and (ii) scheduled payments of other
Indebtedness to the extent permitted pursuant to Section 9.01.

9.08 Change in Fiscal Year. Such Obligor will not, and will not permit any of
its Subsidiaries to, change the last day of its fiscal year from that in effect
on the date hereof, except to change the fiscal year of a Subsidiary acquired in
connection with an Acquisition to conform its fiscal year to that of the
Borrower.

9.09 Sales of Assets, Etc. Such Obligor will not, and will not permit any of its
Subsidiaries to, sell, lease, exclusively license (in terms of geography or
field of use), transfer, or otherwise dispose of any of its assets or property
(including accounts receivable and Equity Interests of Subsidiaries), or
forgive, release or compromise any amount owed to such Obligor or Subsidiary, in
each case, in one transaction or series of transactions (any thereof, an “Asset
Sale”), except:

 

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(a) sales, transfers and other dispositions of receivables in connection with
the compromise, settlement or collection thereof in the ordinary course of
business;

(b) sales of inventory in the ordinary course of its business on ordinary
business terms;

(c) the forgiveness, release or compromise of any amount owed to any Obligor or
Subsidiary in the ordinary course of business;

(d) outbound licenses permitted pursuant to Section 9.13;

(e) transfers of assets, rights or property by any Subsidiary Guarantor to any
other Obligor;

(f) dispositions (including by way of abandonment or cancellation) of any
assets, rights or property that is obsolete or worn out or no longer used or
useful in the Business;

(g) dispositions resulting from Casualty Events;

(h) the unwinding of any Hedging Agreements permitted by Section 9.05 pursuant
to its terms;

(i) in connection with any transaction permitted under Section 9.03 or 9.05;

(j) dispositions identified in Schedule 9.09; and

(k) so long as no Event of Default has occurred and is continuing, other Asset
Sales with a fair market value not in excess of $5,000,000 (or the Equivalent
Amount in other currencies) in the aggregate in any fiscal year.

9.10 Transactions with Affiliates. Such Obligor will not, and will not permit
any of its Subsidiaries to, sell, lease, license or otherwise transfer any
assets to, or purchase, lease, license or otherwise acquire any assets from, or
otherwise engage in any other transactions with, any of its Affiliates, unless
such arrangement or transaction (i) is on fair and reasonable terms no less
favorable to such Person than it could obtain in an arm’s-length transaction
with another Person that is not an Affiliate, (ii) is of the kind which would be
entered into by a prudent Person in the position of the Borrower with another
Person that is not an Affiliate, (iii) is between or among Obligors, (iv) is
permitted under Section 9.01, 9.03, 9.05, 9.06, 9.07 or 9.09, (v) constitutes
customary compensation and indemnification of, and other employment arrangements
with, directors, officers, and employees of any Obligor in the ordinary course
of business, (vi) constitutes payment of customary fees, reimbursement of
expenses, and payment of indemnification to officers and directors and customary
payment of insurance premiums on behalf of officers and directors by the
Obligors or their Subsidiaries, in each case, in the ordinary course of business
and (vii) are the transactions set forth on Schedule 7.19.

 

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9.11 Restrictive Agreements. Such Obligor will not, and will not permit any of
its Subsidiaries to, directly or indirectly, enter into, incur or permit to
exist any Restrictive Agreement other than (i) restrictions and conditions
imposed by applicable Laws or by the Loan Documents, (ii) Restrictive Agreements
listed on Schedule 7.15 or (iii) limitations associated with Permitted Liens.

9.12 Modifications and Terminations of Material Agreements and Organic
Documents. Such Obligor will not, and will not permit any of its Subsidiaries
to:

(a) waive, amend, terminate, replace or otherwise modify any term or provision
of any Organic Document in any way or manner adverse to the interests of the
Administrative Agent and the Lenders; or

(b) (x) take or omit to take any action that results in the termination of, or
permits any other Person to terminate, any Material Agreement or Material
Intellectual Property or (y) take any action that permits any Material Agreement
or Material Intellectual Property to be terminated by any counterparty thereto
prior to its stated date of expiration, in each such case if such action or
omission could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.

9.13 Outbound Licenses. No Obligor will, nor will it permit any of its
Subsidiaries to, enter into or become or remain bound by any outbound license of
Intellectual Property relating to U.S. rights to the Product “Oraxol”.

9.14 Sales and Leasebacks. Except as disclosed on Schedule 9.14, such Obligor
will not, and will not permit any of its Subsidiaries to, become liable,
directly or indirectly, with respect to any lease, whether an operating lease or
a Capital Lease Obligation, of any property (whether real, personal, or mixed),
whether now owned or hereafter acquired, (i) which such Person has sold or
transferred or is to sell or transfer to any other Person and (ii) which such
Obligor or Subsidiary intends to use for substantially the same purposes as
property which has been or is to be sold or transferred.

9.15 Hazardous Material. Such Obligor will not, and will not permit any of its
Subsidiaries to, use, generate, manufacture, install, treat, release, store or
dispose of any Hazardous Material, except in compliance with all applicable
Environmental Laws or where the failure to comply could not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.

9.16 Accounting Changes. Such Obligor will not, and will not permit any of its
Subsidiaries to, make any significant change in accounting treatment or
reporting practices, except as required or permitted by GAAP.

9.17 Compliance with ERISA. No ERISA Affiliate shall cause or suffer to exist
(i) any event that could result in the imposition of a Lien with respect to any
Title IV Plan or Multiemployer Plan or (ii) any other ERISA Event that could, in
the aggregate, reasonably be expected to result in a Material Adverse Effect. No
Obligor or any of its Subsidiaries shall cause or suffer to exist any event that
could result in the imposition of a Lien with respect to any Benefit Plan.

 

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9.18 [Reserved].

9.19 Restriction of Amendments to Certain Documents. No Obligor will, nor will
it permit any of its Subsidiaries to, amend or otherwise modify, or waive any
rights under, any other Contract if, in any case, such amendment, modification
or waiver could reasonably be expected to be materially adverse to, a Lien on
any Collateral securing the Obligations.

9.20 Sanctions; Anti-Corruption Use of Proceeds. The Borrower will not, directly
or, to the knowledge of the Borrower, indirectly, use the proceeds of the Loans,
or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other Person, (i) in furtherance of an offer, payment,
promise to pay, or authorization of the payment or giving of money, or anything
else of value, to any Person in violation of any applicable anti-corruption Law,
or (ii) (A) for the purpose of funding any activities or business of or with any
Person, or in any country or territory, that, at the time of such funding, is,
or whose government is, the subject of country- or territory-wide Sanctions, in
violation of Sanctions or (B) in any other manner that would result in a
violation of Sanctions by any party to this Agreement.

SECTION 10.

FINANCIAL COVENANTS

10.01 Minimum Liquidity. The Borrower shall at all times maintain a minimum
aggregate balance of $4,000,000 in cash in one or more Controlled Accounts that
is free and clear of all Liens, other than Liens granted hereunder in favor of
the Administrative Agent.

10.02 Minimum Revenue. As of the last day of each Fiscal Quarter set forth
below, the Borrower and its Subsidiaries shall have received Revenue for the
twelve (12) consecutive month period ending on the last day of such Fiscal
Quarter, in an amount not less than the corresponding amount set forth opposite
such Fiscal Quarter:

 

Fiscal Quarter Ending

   Revenue

December 31, 2018

   $60,000,000

March 31, 2019

   $60,000,000

June 30, 2019

   $60,000,000

September 30, 2019

   $60,000,000

December 31, 2019

   $60,000,000

March 31, 2020

   $60,000,000

June 30, 2020

   $60,000,000

September 30, 2020

   $66,000,000

 

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December 31, 2020

   $ 66,000,000  

March 31, 2021

   $ 66,000,000  

June 30, 2021

   $ 66,000,000  

September 30, 2021

   $ 72,600,000  

December 31, 2021

   $ 72,600,000  

March 31, 2022

   $ 72,600,000  

June 30, 2022

   $ 72,600,000  

September 30, 2022

   $ 79,860,000  

December 31, 2022

   $ 79,860,000  

March 31, 2023

   $ 79,860,000  

June 30, 2023

   $ 79,860,000  

SECTION 11.

EVENTS OF DEFAULT

11.01 Events of Default. Each of the following events shall constitute an “Event
of Default”:

(a) Principal or Interest Payment Default. The Borrower shall fail to pay any
principal of or interest on the Loan, when and as the same shall become due and
payable, whether at the due date thereof, at a date fixed for prepayment thereof
or otherwise.

(b) Other Payment Defaults. Any Obligor shall fail to pay any Obligation (other
than an amount referred to in Section 11.01(a)) when and as the same shall
become due and payable, and such failure shall continue unremedied for a period
of three (3) Business Days.

(c) Representations and Warranties. Any representation or warranty made or
deemed made by or on behalf of any Obligor or any of its Subsidiaries in or in
connection with this Agreement or any other Loan Document or any amendment or
modification hereof or thereof, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with this
Agreement or any other Loan Document or any amendment or modification hereof or
thereof, shall: (i) prove to have been incorrect when made or deemed made to the
extent that such representation or warranty contains any materiality or Material
Adverse Effect qualifier; or (ii) prove to have been incorrect in any material
respect when made or deemed made to the extent that such representation or
warranty does not otherwise contain any materiality or Material Adverse Effect
qualifier.

 

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(d) Certain Covenants. Any Obligor shall fail to observe or perform any
covenant, condition or agreement contained in Sections 8.02, 8.03 (with respect
to the Borrower’s existence), 8.11, 8.12, 8.16, 8.18, 8.19, Section 9 or
Section 10.

(e) Other Covenants. Any Obligor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those specified
in Section 11.01(a), (b) or (d)) or any other Loan Document, and, in the case of
any failure that is capable of cure, such failure shall continue unremedied for
a period of thirty (30) or more days.

(f) Payment Default on Other Indebtedness. Any Obligor or any of its
Subsidiaries shall fail to make any payment (whether of principal or interest
and regardless of amount) in respect of any Material Indebtedness, when and as
the same shall become due and payable after giving effect to any applicable
grace or cure period as originally provided by the terms of such Indebtedness.

(g) Other Defaults on Other Indebtedness. (i) Any material breach of, or “event
of default” or similar event under, any Contract governing any Material
Indebtedness shall occur and such breach or “event of default” or similar event
shall continue unremedied, uncured or unwaived after the expiration of any grace
or cure period thereunder, or (ii) any event or condition occurs (x) that
results in any Material Indebtedness becoming due prior to its scheduled
maturity or (y) that enables or permits (with or without the giving of notice,
the lapse of time or both) the holder or holders of such Material Indebtedness
or any trustee or agent on its or their behalf to cause such Material
Indebtedness to become due, or to require the prepayment, repurchase, redemption
or defeasance thereof, prior to its scheduled maturity; provided that this
Section 11.01(g) shall not apply to secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets securing such
Material Indebtedness.

(h) Insolvency, Bankruptcy, Etc.

(i) Any Obligor or any of its Material Subsidiaries becomes insolvent, or
generally does not or becomes unable to pay its debts or meet its liabilities as
the same become due, or admits in writing its inability to pay its debts
generally, or declares any general moratorium on its indebtedness, or proposes a
compromise or arrangement or deed of company arrangement between it and any
class of its creditors.

(ii) Any Obligor or any of its Material Subsidiaries commits an act of
bankruptcy or makes an assignment of its property for the general benefit of its
creditors or makes a proposal (or files a notice of its intention to do so).

(iii) Any Obligor or any of its Material Subsidiaries institutes any proceeding
seeking to adjudicate it an insolvent, or seeking liquidation, dissolution,
winding-up, reorganization, compromise, arrangement, adjustment, protection,
moratorium, relief, stay of proceedings of creditors generally (or any class of
creditors), or composition of it or its debts or any other relief, under any
Law, whether U.S. or non-U.S., now or hereafter in effect relating to
bankruptcy, winding-up, insolvency, reorganization, receivership, plans of
arrangement or relief or protection of debtors or at common law or in equity, or
files an answer admitting the material allegations of a petition filed against
it in any such proceeding.

 

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(iv) Any Obligor or any of its Material Subsidiaries applies for the appointment
of, or the taking of possession by, a receiver, interim receiver,
receiver/manager, sequestrator, conservator, custodian, administrator, trustee,
liquidator, voluntary administrator, receiver and manager or other similar
official for it or any substantial part of its property.

(v) Any Obligor or any of its Material Subsidiaries takes any action, corporate
or otherwise, to approve, effect, consent to or authorize any of the actions
described in this Section 11.01(h), or otherwise acts in furtherance thereof or
fails to act in a timely and appropriate manner in defense thereof.

(vi) Any petition is filed, application made or other proceeding instituted
against or in respect of any Obligor or any of its Material Subsidiaries:

(A) seeking to adjudicate it as insolvent;

(B) seeking a receiving order against it;

(C) seeking liquidation, dissolution, winding-up, reorganization, compromise,
arrangement, adjustment, protection, moratorium, relief, stay of proceedings of
creditors generally (or any class of creditors), deed of company arrangement or
composition of it or its debts or any other relief under any Law, whether U.S.
or non-U.S., now or hereafter in effect relating to bankruptcy, winding-up,
insolvency, reorganization, receivership, plans of arrangement or relief or
protection of debtors or at common law or in equity; or

(D) seeking the entry of an order for relief or the appointment of, or the
taking of possession by, a receiver, interim receiver, receiver/manager,
sequestrator, conservator, custodian, administrator, trustee, liquidator,
voluntary administrator, receiver and manager or other similar official for it
or any substantial part of its property, and such petition, application or
proceeding continues undismissed, or unstayed and in effect, for a period of
forty-five (45) days after the institution thereof; provided that if an order,
decree or judgment is granted or entered (whether or not entered or subject to
appeal) against such Obligor or such Subsidiary thereunder in the interim, such
grace period will cease to apply; provided, further, that if such Obligor or
Material Subsidiary files an answer admitting the material allegations of a
petition filed against it in any such proceeding, such grace period will cease
to apply.

(vii) Any other event occurs which, under the Laws of any applicable
jurisdiction, has an effect equivalent to any of the events referred to in
Section 11.01(h).

(i) Judgments. One or more judgments for the payment of money in an aggregate
amount in excess of $5,000,000 (or the Equivalent Amount in other currencies)
(except to the extent fully covered (other than to the extent of customary
deductibles) by insurance pursuant to which the insurer has not denied coverage)
shall be rendered against any Obligor or any of its Subsidiaries or any
combination thereof and the same shall remain undischarged for a period of
forty-five (45) calendar days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of any Obligor to enforce any such judgment.

 

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(j) ERISA. An ERISA Event shall have occurred that when taken together with all
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount in excess
of $5,000,000 (or the Equivalent Amount in other currencies).

(k) Change of Control. A Change of Control shall have occurred.

(l) Material Adverse Change. A Material Adverse Change shall have occurred.

(m) Regulatory Matters, Etc. If any of the following occurs: (i) the FDA or any
other Regulatory Authority initiates enforcement action against, or issues a
warning letter with respect to, any Obligor, any Product or any manufacturing
facilities for any Product that causes any Obligor to discontinue or withdraw,
or could reasonably be expected to cause any Obligor to discontinue or withdraw,
marketing or sales of any Product, or causes a delay in the manufacture or sale
of any Product, which discontinuance or delay could reasonably be expected to
last for more than thirty (30) days, (ii) a recall of any Product that has
generated or is expected to generate at least $5,000,000 (or the Equivalent
Amount in other currencies) in revenue for the Borrower and its Subsidiaries
over any period of twelve (12) consecutive months or (iii) any Obligor enters
into a settlement agreement with the FDA or any other Regulatory Authority that
results in aggregate liability as to any single or related series of
transactions, incidents or conditions, in excess of $5,000,000 (or the
Equivalent Amount in other currencies).

(n) [Reserved].

(o) Impairment of Security, Etc. If any of the following events occurs: (i) Any
Lien created by any of the Security Documents shall at any time not constitute a
valid and perfected Lien on the applicable Collateral in favor of the Secured
Parties, free and clear of all other Liens (other than Permitted Liens) except
due to the action or inaction of the Administrative Agent, (ii) except for
expiration in accordance with its terms, any of the Security Documents or any
Guarantee of any of the Obligations (including that contained in Section 13)
shall for whatever reason cease to be in full force and effect, (iii) any
Obligor shall, directly or indirectly, contest in any manner such effectiveness,
validity, binding nature or enforceability of any such Lien or any Loan
Document, or (iv) any injunction, whether temporary or permanent, shall be
rendered against any Obligor that prevents the Obligors from selling or
manufacturing the Products or their commercially available successors, or any of
their other material and commercially available products in the United States
for more than forty-five (45) calendar days.

11.02 Remedies.

(a) Defaults Other Than Bankruptcy Defaults. Upon the occurrence of any Event of
Default, then, and in every such event (other than an Event of Default described
in Section 11.01(h)), and at any time thereafter during the continuance of such
event, the Administrative Agent may, by notice to the Borrower, declare the
Loans then outstanding to be due and payable in whole (or in part, in which case
any principal not so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and all fees and
other Obligations, shall become due and payable immediately (in the case of the
Loans, at the Prepayment Price therefor), without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by each Obligor.

 

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(b) Bankruptcy Defaults. In case of an Event of Default described in
Section 11.01(h), the principal of the Loans then outstanding, together with
accrued interest thereon and all fees and other Obligations, shall automatically
become due and payable immediately (in the case of the Loans, at the Prepayment
Price therefor), without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Obligor.

11.03 Additional Remedies. If an Event of Default has occurred and is
continuing, if any Obligor shall be in default under a Material Agreement, the
Administrative Agent shall have the right (but not the obligation) to cause the
default or defaults under such Material Agreement to be remedied (including
without limitation by paying any unpaid amount thereunder) and otherwise
exercise any and all rights of such Obligor, as the case may be, thereunder, as
may be necessary to prevent or cure any default. Without limiting the foregoing,
upon any such default, each Obligor shall promptly execute, acknowledge and
deliver to the Administrative Agent such instruments as may reasonably be
required of such Obligor to permit the Administrative Agent to cure any default
under the applicable Material Agreement or permit the Administrative Agent to
take such other action required to enable the Administrative Agent to cure or
remedy the matter in default and preserve the interests of the Administrative
Agent. Any amounts paid by the Administrative Agent pursuant to this
Section 11.03 shall be payable in accordance with Section 14.03(a)(ii), shall
accrue interest at the Default Rate if not paid when due, and shall constitute
“Obligations.”

11.04 Payment of Prepayment Fee. For the avoidance of doubt, but subject to the
limitations contained in Section 3.03, the Prepayment Fee shall be due and
payable at any time the Loans become due and payable prior to the Maturity Date
in accordance with the terms hereof, whether due to acceleration pursuant to the
terms of this Agreement (in which case it shall be due immediately, upon the
giving of notice to Borrower in accordance with Section 11.02(a), or
automatically, in accordance with Section 11.02(b)), by operation of law or
otherwise (including, without limitation, on account of any bankruptcy filing).
In view of the impracticability and extreme difficulty of ascertaining the
actual amount of damages to the Lenders or profits lost by the Lenders as a
result of such acceleration, and by mutual agreement of the parties as to a
reasonable estimation and calculation of the lost profits or damages of the
Lenders, the Prepayment Fee shall be due and payable upon such date. Each
Obligor hereby waives any defense to payment, whether such defense may be based
in public policy, ambiguity, or otherwise. The Obligors, the Administrative
Agent and the Lenders acknowledge and agree that any Prepayment Fee due and
payable in accordance with this Agreement shall not constitute unmatured
interest, whether under Section 5.02(b)(3) of the Bankruptcy Code or otherwise.
Each Obligor further acknowledges and agrees, and waives any argument to the
contrary, that payment of such amount does not constitute a penalty or an
otherwise unenforceable or invalid obligation.

 

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SECTION 12.

THE ADMINISTRATIVE AGENT

12.01 Appointment and Duties. Subject in all cases to clause (c) below:

(a) Appointment of the Administrative Agent. Each of the Lenders hereby
irrevocably appoints Perceptive Credit Holdings II, LP (together with any
successor the Administrative Agent pursuant to Section 12.09) as the
Administrative Agent hereunder and authorizes the Administrative Agent to
(i) execute and deliver the Loan Documents and accept delivery thereof on its
behalf from any Obligor or any of its Subsidiaries, (ii) take such action on its
behalf and to exercise all rights, powers and remedies and perform the duties as
are expressly delegated to the Administrative Agent under such Loan Documents
and (iii) exercise such powers as are reasonably incidental thereto.

(b) Duties as Collateral and Disbursing Agent. Without limiting the generality
of Section 12.01(a), the Administrative Agent shall have the sole and exclusive
right and authority (to the exclusion of the Lenders), and is hereby authorized,
to (i) act as the disbursing and collecting agent for the Lenders with respect
to all payments and collections arising in connection with the Loan Documents
(including in any proceeding described in Section 11.01(h) or any other
bankruptcy, insolvency or similar proceeding), and each Person making any
payment in connection with any Loan Document to any Secured Party is hereby
authorized to make such payment to the Administrative Agent, (ii) file and prove
claims and file other documents necessary or desirable to allow the claims of
the Secured Parties with respect to any Obligation in any proceeding described
in Section 11.01(h) or any other bankruptcy, insolvency or similar proceeding
(but not to vote, consent or otherwise act on behalf of such Secured Party),
(iii) act as collateral agent for each Secured Party for purposes of the
perfection of all Liens created by such agreements and all other purposes stated
therein, (iv) manage, supervise and otherwise deal with the Collateral, (v) take
such other action as is necessary or desirable to maintain the perfection and
priority of the Liens created or purported to be created by the Loan Documents,
(vi) except as may be otherwise specified in any Loan Document, exercise all
remedies given to the Administrative Agent and the other Secured Parties with
respect to the Collateral, whether under the Loan Documents, applicable Laws or
otherwise and (vii) execute any amendment, consent or waiver under the Loan
Documents on behalf of any Lender that has consented in writing to such
amendment, consent or waiver; provided that the Administrative Agent hereby
appoints, authorizes and directs each Lender to act as collateral sub-agent for
the Administrative Agent and the Lenders for purposes of the perfection of all
Liens with respect to the Collateral, including any deposit account maintained
by a Obligor with, and cash and Cash Equivalents held by, such Lender, and may
further authorize and direct the Lenders to take further actions as collateral
sub-agents for purposes of enforcing such Liens or otherwise to transfer the
Collateral subject thereto to the Administrative Agent, and each Lender hereby
agrees to take such further actions to the extent, and only to the extent, so
authorized and directed.

(c) Limited Duties. The Lenders and the Obligors hereby each acknowledge and
agree that the Administrative Agent (i) has undertaken its role hereunder purely
as an accommodation to the parties hereto and the Transactions, (ii) is
receiving no compensation for undertaking such role and (iii) subject only to
the notice provisions set forth in Section 12.09, may resign from such role at
any time for any reason or no reason whatsoever. Without limiting the foregoing,
the parties hereto further acknowledge and agree that under the Loan Documents,
the Administrative Agent (i) is acting solely on behalf of the Lenders (except
to the limited extent provided in Section 12.11), with duties that are entirely
administrative in nature, notwithstanding the use of the defined term “the
Administrative Agent”, the terms “agent”,

 

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“administrative agent” and “collateral agent” and similar terms in any Loan
Document to refer to the Administrative Agent, which terms are used for title
purposes only, (ii) is not assuming any obligation under any Loan Document other
than as expressly set forth therein or any role as agent, fiduciary or trustee
of or for any Lender or any other Secured Party and (iii) shall have no implied
functions, responsibilities, duties, obligations or other liabilities under any
Loan Document (fiduciary or otherwise), and each Lender hereby waives and agrees
not to assert any claim against the Administrative Agent based on the roles,
duties and legal relationships expressly disclaimed in this clause (c).

12.02 Binding Effect. Each Lender agrees that (i) any action taken by the
Administrative Agent or the Majority Lenders (or, if expressly required hereby,
a greater proportion of the Lenders) in accordance with the provisions of the
Loan Documents, (ii) any action taken by the Administrative Agent in reliance
upon the instructions of the Majority Lenders (or, where so required, such
greater proportion) and (iii) the exercise by the Administrative Agent or the
Majority Lenders (or, where so required, such greater proportion) of the powers
set forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the Secured
Parties.

12.03 Use of Discretion.

(a) No Action without Instructions. The Administrative Agent shall not be
required to exercise any discretion or take, or to omit to take, any action,
including with respect to enforcement or collection, except (subject to clause
(b) below) any action it is required to take or omit to take (i) under any Loan
Document or (ii) pursuant to instructions from the Majority Lenders (or, where
expressly required by the terms of this Agreement, a greater proportion of the
Lenders).

(b) Right Not to Follow Certain Instructions. Notwithstanding Section 12.03(a)
or any other term or provision of this Section 12, the Administrative Agent
shall not be required to take, or to omit to take, any action (i) unless, upon
demand, the Administrative Agent receives an indemnification satisfactory to it
from the Lenders (or, to the extent applicable and acceptable to the
Administrative Agent, any other Secured Party) against all Liabilities that, by
reason of such action or omission, may be imposed on, incurred by or asserted
against the Administrative Agent or any Related Person thereof or (ii) that is,
in the opinion of the Administrative Agent, in its sole and absolute discretion,
contrary to any Loan Document, Law or the best interests of the Administrative
Agent or any of its Affiliates or Related Persons.

12.04 Delegation of Rights and Duties. The Administrative Agent may, upon any
term or condition it specifies, delegate or exercise any of its rights, powers
and remedies under, and delegate or perform any of its duties or any other
action with respect to, any Loan Document by or through any trustee, co-agent,
employee, attorney-in-fact and any other Person (including any Secured Party).
Any such Person shall benefit from this Section 12 to the extent provided by the
Administrative Agent.

 

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12.05 Reliance and Liability.

(a) the Administrative Agent may, without incurring any liability hereunder,
(i) consult with any of its Related Persons and, whether or not selected by it,
any other advisors, accountants and other experts (including advisors to, and
accountants and experts engaged by, any Obligor) and (ii) rely and act upon any
document and information and any telephone message or conversation, in each case
believed by it to be genuine and transmitted, signed or otherwise authenticated
by the appropriate parties.

(b) Neither the Administrative Agent nor any of its Related Persons shall be
liable for any action taken or omitted to be taken by any of them under or in
connection with any Loan Document, and each Lender and the Borrower hereby waive
and shall not assert (and the Borrower shall cause each other Obligor to waive
and agree not to assert) any right, claim or cause of action based thereon,
except to the extent of liabilities resulting primarily from the fraudulent
conduct or behavior of the Administrative Agent or, as the case may be, such
Related Person (each as determined in a final, non-appealable judgment or order
by a court of competent jurisdiction) in connection with the duties expressly
set forth herein. Without limiting the foregoing, the Administrative Agent:

(i) shall not be responsible or otherwise incur liability for any action or
omission taken in reliance upon the instructions of the Majority Lenders or for
the actions or omissions of any of its Related Persons selected with reasonable
care (other than employees, officers and directors of the Administrative Agent,
when acting on behalf of the Administrative Agent);

(ii) shall not be responsible to any Secured Party for the due execution,
legality, validity, enforceability, effectiveness, genuineness, sufficiency or
value of, or the attachment, perfection or priority of any Lien created or
purported to be created under or in connection with, any Loan Document;

(iii) makes no warranty or representation, and shall not be responsible, to any
Secured Party for any statement, document, information, representation or
warranty made or furnished by or on behalf of any Related Person, in or in
connection with any Loan Document or any transaction contemplated therein,
whether or not transmitted by the Administrative Agent, including as to
completeness, accuracy, scope or adequacy thereof, or for the scope, nature or
results of any due diligence performed by the Administrative Agent in connection
with the Loan Documents; and

(iv) shall not have any duty to ascertain or to inquire as to the performance or
observance of any provision of any Loan Document, whether any condition set
forth in any Loan Document is satisfied or waived, as to the financial condition
of any Obligor or as to the existence or continuation or possible occurrence or
continuation of any Default or Event of Default and shall not be deemed to have
notice or knowledge of such occurrence or continuation unless it has received a
notice from the Borrower, any Lender describing such Default or Event of Default
clearly labeled “notice of default” (in which case the Administrative Agent
shall promptly give notice of such receipt to all Lenders);

and, for each of the items set forth in clauses (i) through (iv) above, each
Lender and the Borrower hereby waives and agrees not to assert (and the Borrower
shall cause each other Obligor to waive and agree not to assert) any right,
claim or cause of action it might have against the Administrative Agent based
thereon.

 

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12.06 Administrative Agent Individually. The Administrative Agent and its
Affiliates may make loans and other extensions of credit to, acquire stock and
stock equivalents of, engage in any kind of business with, any Obligor or
Affiliate thereof as though it were not acting the Administrative Agent and may
receive separate fees and other payments therefor. To the extent the
Administrative Agent or any of its Affiliates makes any Loan or otherwise
becomes a Lender hereunder, it shall have and may exercise the same rights and
powers hereunder and shall be subject to the same obligations and liabilities as
any other Lender and the terms “Lender”, “Majority Lender”, and any similar
terms shall, except where otherwise expressly provided in any Loan Document,
include, without limitation, the Administrative Agent or such Affiliate, as the
case may be, in its individual capacity as Lender or as one of the Majority
Lenders, respectively.

12.07 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, any Lender or
any of their Related Persons or upon any document (including the Disclosure
Documents) solely or in part because such document was transmitted by the
Administrative Agent or any of its Related Persons, conducted its own
independent investigation of the financial condition and affairs of each Obligor
and has made and continues to make its own credit decisions in connection with
entering into, and taking or not taking any action under, any Loan Document or
with respect to any transaction contemplated in any Loan Document, in each case
based on such documents and information as it shall deem appropriate.

12.08 Expenses; Indemnities.

(a) Each Lender agrees to reimburse the Administrative Agent and each of its
Related Persons (to the extent not reimbursed by any Obligor) promptly upon
demand for such Lender’s Pro Rata Share of any costs and expenses (including
fees, charges and disbursements of financial, legal and other advisors and Other
Taxes paid in the name of, or on behalf of, any Obligor) that may be incurred by
the Administrative Agent or any of its Related Persons in connection with the
preparation, syndication, execution, delivery, administration, modification,
consent, waiver or enforcement (whether through negotiations, through any
work-out, bankruptcy, restructuring or other legal or other proceeding or
otherwise) of, or legal advice in respect of its rights or responsibilities
under, any Loan Document.

(b) Each Lender further agrees to indemnify the Administrative Agent and each of
its Related Persons (to the extent not reimbursed by any Obligor), from and
against such Lender’s aggregate Pro Rata Share of the Liabilities (including
taxes, interests and penalties imposed for not properly withholding or backup
withholding on payments made to on or for the account of any Lender) that may be
imposed on, incurred by or asserted against the Administrative Agent or any of
its Related Persons in any matter relating to or arising out of, in connection
with or as a result of any Loan Document, any Related Document or any other act,
event or transaction related, contemplated in or attendant to any such document,
or, in each case, any action taken or omitted to be taken by the Administrative
Agent or any of its Related Persons under or with respect to any of the
foregoing; provided that no Lender shall be liable to the Administrative

 

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Agent or any of its Related Persons to the extent such liability has resulted
primarily from the gross negligence or willful misconduct of the Administrative
Agent or, as the case may be, such Related Person, as determined by a court of
competent jurisdiction in a final non-appealable judgment or order.

12.09 Resignation of the Administrative Agent.

(a) At any time upon not less than 30 days prior written notice, the
Administrative Agent may resign as the “the Administrative Agent” hereunder, in
whole or in part (in the sole and absolute discretion of the Administrative
Agent). If the Administrative Agent delivers any such notice, the Majority
Lenders (with the consent of the Borrower except if an Event of Default has
occurred and is continuing) shall have the right to appoint a successor the
Administrative Agent; provided that if a successor the Administrative Agent has
not been appointed on or before the effectiveness of the resignation of the
resigning Administrative Agent, then the resigning Administrative Agent may, on
behalf of the Lenders, appoint any Person reasonably chosen by it as the
successor the Administrative Agent, notwithstanding whether the Majority Lenders
have appointed a successor or the Borrower has consented to such successor.

(b) Effective immediately upon its resignation, (i) the resigning Administrative
Agent shall be discharged from its duties and obligations under the Loan
Documents to the extent set forth in the applicable resignation notice, (ii) the
Lenders shall assume and perform all of the duties of the Administrative Agent
until a successor the Administrative Agent shall have accepted a valid
appointment hereunder, (iii) the resigning Administrative Agent and its Related
Persons shall no longer have the benefit of any provision of any Loan Document
other than with respect to (x) any actions taken or omitted to be taken while
such resigning Administrative Agent was, or because the Administrative Agent had
been, validly acting as the Administrative Agent under the Loan Documents or
(y) any continuing duties such resigning Administrative Agent will continue to
perform, and (iv) subject to its rights under Section 12.04, the resigning
Administrative Agent shall take such action as may be reasonably necessary to
assign to the successor the Administrative Agent its rights as the
Administrative Agent under the Loan Documents. Effective immediately upon its
acceptance of a valid appointment as the Administrative Agent, a successor the
Administrative Agent shall succeed to, and become vested with, all the rights,
powers, privileges and duties of the resigning Administrative Agent under the
Loan Documents.

12.10 Release of Collateral or Guarantors. Each Lender hereby consents to the
release and hereby directs the Administrative Agent to release (or, in the case
of Section 12.10(b)(ii), release or subordinate) the following:

(a) any Subsidiary of the Borrower from its guaranty of any Obligation of any
Obligor (i) if all of the Equity Interests in such Subsidiary owned by any
Obligor or any of its Subsidiaries are disposed of in an Asset Sale permitted
under the Loan Documents (including pursuant to a waiver or consent), to the
extent that, after giving effect to such Asset Sale, such Subsidiary would not
be required to guaranty any Obligations pursuant to Section 8.12(a) and
(ii) upon (x) termination of the Commitments and (y) payment and satisfaction in
full of all Loans and all other Obligations that the Administrative Agent has
been notified in writing are then due and payable (other than Warrant
Obligations and inchoate indemnification and expense reimbursement obligations
for which no claim has been made); and

 

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(b) any Lien held by the Administrative Agent for the benefit of the Secured
Parties against (i) any Collateral that is disposed of by an Obligor in an Asset
Sale permitted by the Loan Documents (including pursuant to a valid waiver or
consent), (ii) any property subject to a Lien described in Section 9.02(c) and
(iii) all of the Collateral and all Obligors, upon (x) termination of the
Commitments and (y) payment and satisfaction in full of all Loans and all other
Obligations that the Administrative Agent has been notified in writing are then
due and payable (other than Warrant Obligations and inchoate indemnification and
expense reimbursement obligations for which no claim has been made).

Each Lender hereby directs the Administrative Agent, and the Administrative
Agent hereby agrees, upon receipt of reasonable advance notice from the
Borrower, to execute and deliver or file such documents and to perform other
actions reasonably necessary to release the guarantees and Liens when and as
directed in this Section 12.10.

12.11 Additional Secured Parties. The benefit of the provisions of the Loan
Documents directly relating to the Collateral or any Lien granted thereunder
shall extend to and be available to any Secured Party that is not a Lender as
long as, by accepting such benefits, such Secured Party agrees, as among the
Administrative Agent and all other Secured Parties, that such Secured Party is
bound by (and, if requested by the Administrative Agent, shall confirm such
agreement in a writing in form and substance acceptable to the Administrative
Agent) this Section 12 and the decisions and actions of the Administrative Agent
and the Majority Lenders (or, where expressly required by the terms of this
Agreement, a greater proportion of the Lenders) to the same extent a Lender is
bound; provided that, notwithstanding the foregoing, (i) such Secured Party
shall be bound by Section 12.08 only to the extent of Liabilities, costs and
expenses with respect to or otherwise relating to the Collateral held for the
benefit of such Secured Party, in which case the obligations of such Secured
Party thereunder shall not be limited by any concept of Pro Rata Share or
similar concept, (ii) each of the Administrative Agent and each Lender shall be
entitled to act at its sole discretion, without regard to the interest of such
Secured Party, regardless of whether any Obligation to such Secured Party
thereafter remains outstanding, is deprived of the benefit of the Collateral,
becomes unsecured or is otherwise affected or put in jeopardy thereby, and
without any duty or liability to such Secured Party or any such Obligation and
(iii) such Secured Party shall not have any right to be notified of, consent to,
direct, require or be heard with respect to, any action taken or omitted in
respect of the Collateral or under any Loan Document.

SECTION 13.

GUARANTEE

13.01 The Guarantee. The Subsidiary Guarantors hereby jointly and severally
guarantee to the Administrative Agent and the Lenders, and their successors and
assigns, the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the principal of and interest on the Loans, all
fees and other amounts and Obligations from time to time owing to the
Administrative Agent and the Lenders by the Borrower and each other Obligor
under this Agreement or under any other Loan Document, in each case strictly in
accordance with the terms

 

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hereof and thereof (such obligations being herein collectively called the
“Guaranteed Obligations”). The Subsidiary Guarantors hereby further jointly and
severally agree that if the Borrower or any other Obligor shall fail to pay in
full when due (whether at stated maturity, by acceleration or otherwise) any of
the Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the
same, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
by acceleration or otherwise) in accordance with the terms of such extension or
renewal.

13.02 Obligations Unconditional. The obligations of the Subsidiary Guarantors
under Section 13.01 are absolute and unconditional, joint and several,
irrespective of the value, genuineness, validity, regularity or enforceability
of the obligations of the Borrower or any other Subsidiary Guarantor under this
Agreement or any other agreement or instrument referred to herein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by all
applicable Laws, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 13.02 that the obligations of the
Subsidiary Guarantors hereunder shall be absolute and unconditional, joint and
several, under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Subsidiary Guarantors hereunder,
which shall remain absolute and unconditional as described above:

(a) at any time or from time to time, without notice to the Subsidiary
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;

(b) any of the acts mentioned in any of the provisions of this Agreement or any
other agreement or instrument referred to herein shall be done or omitted;

(c) the maturity of any of the Guaranteed Obligations shall be accelerated, or
any of the Guaranteed Obligations shall be modified, supplemented or amended in
any respect, or any right under this Agreement or any other agreement or
instrument referred to herein shall be waived or any other guarantee of any of
the Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or

(d) any lien or security interest granted to, or in favor of, the Secured
Parties as security for any of the Guaranteed Obligations shall fail to be
perfected.

The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that the
Administrative Agent or any Lender exhaust any right, power or remedy or proceed
against the Borrower or any other Subsidiary Guarantor under this Agreement or
any other agreement or instrument referred to herein, or against any other
Person under any other guarantee of, or security for, any of the Guaranteed
Obligations.

 

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13.03 Reinstatement. The obligations of the Subsidiary Guarantors under this
Section 13 shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of the Borrower in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise, and the Subsidiary Guarantors jointly and
severally agree that they will indemnify the Secured Parties on demand for all
reasonable costs and expenses (including fees of counsel) incurred by such
Persons in connection with such rescission or restoration, including any such
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law.

13.04 Subrogation. The Subsidiary Guarantors hereby jointly and severally agree
that, until the payment and satisfaction in full of all Guaranteed Obligations
and the expiration and termination of the Commitments, they shall not exercise
any right or remedy arising by reason of any performance by them of their
guarantee in Section 13.01, whether by subrogation or otherwise, against the
Borrower or any other guarantor of any of the Guaranteed Obligations or any
security for any of the Guaranteed Obligations.

13.05 Remedies. The Subsidiary Guarantors jointly and severally agree that, as
between the Subsidiary Guarantors, on one hand, and the Administrative Agent and
the Lenders, on the other hand, the obligations of the Borrower under this
Agreement and under the other Loan Documents may be declared to be forthwith due
and payable as provided in Section 11 (and shall be deemed to have become
automatically due and payable in the circumstances provided in Section 11) for
purposes of Section 13.01 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Borrower and that, in the event of
such declaration (or such obligations being deemed to have become automatically
due and payable), such obligations (whether or not due and payable by the
Borrower) shall forthwith become due and payable by the Subsidiary Guarantors
for purposes of Section 13.01.

13.06 Instrument for the Payment of Money. Each Subsidiary Guarantor hereby
acknowledges that the guarantee in this Section 13 constitutes an instrument for
the payment of money, and consents and agrees that the Administrative Agent and
the Lenders, at their sole option, in the event of a dispute by such Subsidiary
Guarantor in the payment of any moneys due hereunder, shall have the right to
proceed by motion for summary judgment in lieu of complaint pursuant to N.Y.
Civ. Prac. L&R § 3213.

13.07 Continuing Guarantee. The guarantee in this Section 13 is a continuing
guarantee, and shall apply to all Guaranteed Obligations whenever arising.

13.08 General Limitation on Guarantee Obligations. In any action or proceeding
involving any provincial, territorial or state corporate law, or any state or
federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Subsidiary Guarantor under
Section 13.01 would otherwise be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under Section 13.01, then, notwithstanding any
other provision hereof to the contrary, the amount of such liability shall,
without any further action by such Subsidiary Guarantor, the Administrative
Agent, any Lender or any other Person, be automatically limited and reduced to
the highest amount that is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or proceeding.

 

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SECTION 14.

MISCELLANEOUS

14.01 No Waiver. No failure on the part of the Administrative Agent or the
Lenders to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under any Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege under any Loan Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.

14.02 Notices. All notices, requests, instructions, directions and other
communications provided for herein (including any modifications of, or waivers,
requests or consents under, this Agreement) or in the other Loan Documents shall
be given or made in writing (including by telecopy or email) delivered, if to
the Borrower, another Obligor, the Administrative Agent or any Lender, to its
address specified on the signature pages hereto or its Guarantee Assumption
Agreement, as the case may be, or at such other address as shall be designated
by such party in a written notice to the other parties. Except as otherwise
provided in this Agreement or therein, all such communications shall be deemed
to have been duly given upon receipt of a legible copy thereof, in each case
given or addressed as aforesaid. All such communications provided for herein by
telecopy shall be confirmed in writing promptly after the delivery of such
communication (it being understood that non-receipt of written confirmation of
such communication shall not invalidate such communication).

14.03 Expenses, Indemnification, Etc.

(a) Expenses. Each Obligor, jointly and severally, agrees to pay or reimburse
(i) the Administrative Agent and the Lenders for all of their reasonable and
documented out of pocket costs and expenses (including the reasonable and
documented out of pocket fees and expenses of Morrison & Foerster LLP, special
counsel to the Administrative Agent, and any sales, goods and services or other
similar taxes applicable thereto, and reasonable and documented printing,
reproduction, document delivery, communication and travel costs) in connection
with (x) the negotiation, preparation, execution and delivery of this Agreement
and the other Loan Documents and the making of the Loans (exclusive of
post-closing costs), (y) post-closing costs and (z) the negotiation or
preparation of any modification, supplement or waiver of any of the terms of
this Agreement or any of the other Loan Documents (whether or not consummated)
and (ii) the Administrative Agent and the Lenders for all of their documented
out of pocket costs and expenses (including the fees and expenses of legal
counsel) in connection with any enforcement or collection proceedings resulting
from the occurrence and continuation of an Event of Default.

(b) Indemnification. Each Obligor, jointly and severally, hereby indemnifies the
Administrative Agent, the Lenders and their respective Affiliates, directors,
officers, employees, attorneys, agents, advisors and controlling parties (each,
an “Indemnified Party”) from and against, and agrees to hold them harmless
against, any and all Claims and Losses of any kind including reasonable and
documented out of pocket fees and disbursements of counsel for the

 

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Lenders (unless an Event of Default has occurred and is continuing, limited to
one legal counsel of the Lenders, taken as a whole), joint or several, that may
be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or relating to any investigation,
litigation or proceeding or the preparation of any defense with respect thereto
arising out of or in connection with or relating to this Agreement or any of the
other Loan Documents or the Transactions or any use made or proposed to be made
with the proceeds of the Loans, whether or not such investigation, litigation or
proceeding is brought by any Obligor, any of its Subsidiaries, shareholders or
creditors, an Indemnified Party or any other Person, or an Indemnified Party is
otherwise a party thereto, and whether or not any of the conditions precedent
set forth in Section 6 are satisfied or the other transactions contemplated by
this Agreement are consummated, except to the extent such Claim or Loss is found
in a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence or willful misconduct.
No Obligor shall assert any claim against any Indemnified Party, on any theory
of liability, for consequential, indirect, special or punitive damages arising
out of or otherwise relating to this Agreement or any of the other Loan
Documents or any of the Transactions or the actual or proposed use of the
proceeds of the Loans. The Borrower, its Subsidiaries and Affiliates and their
respective directors, officers, employees, attorneys, agents, advisors and
controlling parties are each sometimes referred to in this Agreement as a
“Borrower Party”. No Lender shall assert any claim against any Borrower Party,
on any theory of liability, for consequential, indirect, special or punitive
damages arising out of or otherwise relating to this Agreement or any of the
other Loan Documents or any of the Transactions or the actual or proposed use of
the proceeds of the Loans. This Section shall not apply to Taxes other than
Taxes relating to a non-Tax Claim or Loss governed by this Section 14.03(b).

14.04 Amendments, Etc. Except as otherwise expressly provided in this Agreement,
any provision of this Agreement and any other Loan Document (except for the
Warrant, which may be amended, waived or supplemented in accordance with the
terms thereof) may be modified or supplemented only by an instrument in writing
signed by the Borrower, the Administrative Agent and the Majority Lenders;
provided that:

(a) any such modification or supplement that is disproportionately adverse to
any Lender as compared to other Lenders or subjects any Lender to any additional
obligation shall not be effective without the consent of such affected Lender;

(b) the consent of all of the Lenders shall be required to:

(i) amend, modify, discharge, terminate or waive any of the terms of this
Agreement or any other Loan Agreement if such amendment, modification,
discharge, termination or waiver would increase the amount of the Loans or
Commitment, reduce the fees payable hereunder, reduce interest rates or other
amounts payable with respect to the Loans, extend any date fixed for payment of
principal (it being understood that the waiver of any prepayment of Loans shall
not constitute an extension of any date fixed for payment of principal),
interest or other amounts payable relating to the Loans or extend the repayment
dates of the Loans;

 

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(ii) amend, modify, discharge, terminate or waive any Security Document if the
effect is to release all or substantially all of the Collateral subject thereto
other than pursuant to the terms hereof or thereof; or

(iii) amend this Section 14.04 or the definition of “Majority Lenders”.

14.05 Successors and Assigns.

(a) General. The provisions of this Agreement and the other Loan Documents shall
be binding upon and inure to the benefit of the parties hereto or thereto and
their respective successors and assigns permitted hereby or thereby, except that
no Obligor may assign or otherwise transfer any of its rights or obligations
hereunder (except in connection with an event permitted under Section 9.03)
without the prior written consent of the Administrative Agent. Any Lender may
assign or otherwise transfer any of its rights or obligations hereunder or under
any of the other Loan Documents (i) to an assignee in accordance with the
provisions of Section 14.05(b), (ii) by way of participation in accordance with
the provisions of Section 14.05(e), or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of Section 14.05(f). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in Section 14.05(e) and,
to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

(b) Assignments by Lender. Any Lender may at any time assign to one or more
Eligible Transferees (or, if an Event of Default has occurred and is continuing,
to any Person) all or a portion of its rights and obligations under this
Agreement (including all or a portion of the Loans at the time owing to it) and
the other Loan Documents; provided that (i) no such assignment shall be made to
any Obligor, any Affiliate of any Obligor, any employees or directors of any
Obligor at any time and (ii) no such assignment shall be made without the prior
written consent of the Administrative Agent. Subject to the recording thereof by
the Lender pursuant to Section 14.05(d), from and after the effective date
specified in each Assignment and Assumption, the assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of the Lender under
this Agreement and the other Loan Documents, and correspondingly the assigning
Lender shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto)
and the other Loan Documents but shall continue to be entitled to the benefits
of Section 5 and Section 14.03. Any assignment or transfer by the Lender of
rights or obligations under this Agreement that does not comply with this
Section 14.05(b) shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
Section 14.05(e).

(c) Amendments to Loan Documents. Each of the Administrative Agent, the Lenders
and the Obligors agrees to enter into such amendments to the Loan Documents, and
such additional Security Documents and other instruments and agreements, in each
case in form and substance reasonably acceptable to the Administrative Agent,
the Lenders and the Obligors, as shall reasonably be necessary to implement and
give effect to any assignment made under this Section 14.05.

 

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(d) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in the United States
a copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts (and stated interest) of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive absent manifest error, and the Borrower, the
Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.

(e) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower, sell participations to any Eligible Transferee (other
than a natural person or any Obligor or any of its Affiliates or Subsidiaries)
(each, a “Participant”) in all or a portion of the Lender’s rights and/or
obligations under this Agreement (including all or a portion of the Commitment
and/or the Loans owing to it); provided that (i) such Lender’s obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower shall continue to deal solely and directly with such
Lender in connection therewith. Any agreement or instrument pursuant to which
any Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce the Loan Documents and to approve any
amendment, modification or waiver of any provision of the Loan Documents;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver that would (i) increase or extend the term of such
Lender’s Commitment, (ii) extend the date fixed for the payment of principal of
or interest on the Loans or any portion of any fee hereunder payable to the
Participant, (iii) reduce the amount of any such payment of principal, or
(iv) reduce the rate at which interest is payable thereon to a level below the
rate at which the Participant is entitled to receive such interest. Subject to
Section 14.05(f), the Borrower agrees that each Participant shall be entitled to
the benefits of Section 5.01 or 5.03 (subject to the requirements and
limitations therein, including the requirements under Section 5.03(f) (it being
understood that the documentation required under Section 5.03(f) shall be
delivered to the participating Lender)) to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 14.05(b);
provided that such Participant agrees to be subject to the provisions of
Section 5.03(h) as if it were an assignee under Section 14.05(b). To the extent
permitted by Law, each Participant also shall be entitled to the benefits of
Section 4.03(a) as though it were a Lender. Each Lender that sells a
participation shall, acting solely for this purpose as a non-fiduciary agent of
the Borrower, maintain a register on which it enters the name and address of
each Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any Participant or any information relating to a Participant’s
interest in any commitments, loans or its other obligations under any Loan
Document) to any Person except to the extent that such

 

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disclosure is necessary to establish that such commitment, loan or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.
For the avoidance of doubt, the Administrative Agent (in its capacity as
Administrative Agent) shall have no responsibility for maintaining a Participant
Register.

(f) Limitations on Rights of Participants. A Participant shall not be entitled
to receive any greater payment under Section 5.01 or 5.03 than such Lender would
have been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower’s prior written consent.

(g) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under the Loan Documents to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

14.06 Survival. The obligations of the Borrower under Sections 5.01, 5.02, 5.03,
14.03, 14.05, 14.06, 14.09, 14.10, 14.11, 14.12, 14.13, 14.14 and the
obligations of the Subsidiary Guarantors under Section 13 (solely to the extent
guaranteeing any of the obligations under the foregoing Sections) shall survive
the repayment of the Obligations and the termination of the Commitment and, in
the case of the Lenders’ assignment of any interest in the Commitment or the
Loans hereunder, shall survive, in the case of any event or circumstance that
occurred prior to the effective date of such assignment, the making of such
assignment, notwithstanding that the Lenders may cease to be “Lenders”
hereunder. In addition, each representation and warranty made, or deemed to be
made by a Borrowing Notice, herein or pursuant hereto shall survive the making
of such representation and warranty.

14.07 Captions. The table of contents and captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.

14.08 Counterparts, Effectiveness. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart. Delivery of an executed signature page of this Agreement
by facsimile transmission or electronic transmission (in PDF format) shall be
effective as delivery of a manually executed counterpart hereof. This Agreement
shall become effective when counterparts hereof executed on behalf of the
Obligors, the Administrative Agent and the Lender shall have been received by
the Administrative Agent.

14.09 Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and construed in accordance with, the
law of the State of New York.

 

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14.10 Jurisdiction, Service of Process and Venue .

(a) Submission to Jurisdiction. Each party hereby irremovably and
unconditionally agrees that it will not commence any action, litigation or
proceeding of any kind or description, whether in law or equity, whether in
contract or tort or otherwise, against such other party in any way relating to
this Agreement or any Loan Document or the transactions relating hereto or
thereto, in any forum other than the courts of the State of New York sitting in
New York County, and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, and each of the
parties hereto irrevocably and unconditionally submits to the jurisdiction of
such courts and agrees that all claims in respect of any such action, litigation
or proceeding may be heard and determined in such New York State court or, to
the fullest extent permitted by applicable Law, in such federal court. Each of
the parties hereto agrees that a final judgment in any such action, litigation
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.

(b) [Reserved].

(c) Waiver of Venue, Etc. Each party hereto irrevocably waives to the fullest
extent permitted by law any objection that it may now or hereafter have to the
laying of the venue of any suit, action or proceeding arising out of or relating
to this Agreement or any other Loan Document and hereby further irrevocably
waives to the fullest extent permitted by law any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. A final judgment (in respect of which time for all appeals
has elapsed) in any such suit, action or proceeding shall be conclusive and may
be enforced in any court to the jurisdiction of which such party is or may be
subject, by suit upon judgment.

14.11 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

14.12 Waiver of Immunity. To the extent that any Obligor may be or become
entitled to claim for itself or its property or revenues any immunity on the
ground of sovereignty or the like from suit, court jurisdiction, attachment
prior to judgment, attachment in aid of execution of a judgment or execution of
a judgment, and to the extent that in any such jurisdiction there may be
attributed such an immunity (whether or not claimed), such Obligor hereby
irrevocably agrees not to claim and hereby irrevocably waives such immunity with
respect to its obligations under this Agreement and the other Loan Documents.

14.13 Entire Agreement. This Agreement and the other Loan Documents constitute
the entire agreement among the parties with respect to the subject matter hereof
and thereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof, including any
confidentiality (or similar) agreements. EACH OBLIGOR ACKNOWLEDGES, REPRESENTS
AND WARRANTS THAT IN DECIDING TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS OR IN TAKING OR NOT TAKING ANY ACTION HEREUNDER OR THEREUNDER, IT HAS
NOT RELIED, AND WILL NOT RELY, ON ANY STATEMENT, REPRESENTATION, WARRANTY,
COVENANT, AGREEMENT OR UNDERSTANDING, WHETHER WRITTEN OR ORAL, OF OR WITH
ADMINISTRATIVE AGENT OR THE LENDERS OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

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14.14 Severability. If any provision hereof is found by a court to be invalid or
unenforceable, to the fullest extent permitted by any Law the parties agree that
such invalidity or unenforceability shall not impair the validity or
enforceability of any other provision hereof.

14.15 No Fiduciary Relationship. The Borrower acknowledges that the
Administrative Agent and the Lenders have no fiduciary relationship with, or
fiduciary duty to, the Borrower arising out of or in connection with this
Agreement or the other Loan Documents, and the relationship between the Lenders
and the Borrower is solely that of creditor and debtor. This Agreement and the
other Loan Documents do not create a joint venture among the parties.

14.16 Confidentiality. The Administrative Agent and each Lender agree to keep
confidential all non-public information provided to them by any Obligor pursuant
to this Agreement that is designated by such Obligor as confidential in
accordance with its customary procedures for handling its own confidential
information; provided that nothing herein shall prevent the Administrative Agent
or any Lender from disclosing any such information (i) to the Administrative
Agent, any other Lender, any Affiliate of a Lender or any Eligible Transferee or
other assignee permitted under Section 14.05(b), (ii) subject to an agreement to
comply with the provisions of this Section, to any actual or prospective direct
or indirect counterparty to any Hedging Agreement (or any professional advisor
to such counterparty), (iii) to its employees, officers, directors, agents,
attorneys, accountants, trustees and other professional advisors or those of any
of its affiliates (collectively, its “Related Parties”), (iv) upon the request
or demand of any Governmental Authority or any Regulatory Authority purporting
to have jurisdiction over such Person or its Related Parties (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (v) in response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any Law, (vi) if requested
or required to do so in connection with any litigation or similar proceeding,
(vii) that has been publicly disclosed (other than as a result of a disclosure
in violation of this Section 14.16), (viii) to the National Association of
Insurance Commissioners or any similar organization or any nationally recognized
rating agency that requires access to information about a Lender’s investment
portfolio in connection with ratings issued with respect to such Lender, (ix) in
connection with the exercise of any remedy hereunder or under any other Loan
Document, (x) on a confidential basis to (A) any rating agency in connection
with rating the Borrower or its Subsidiaries or the Loans or (B) the CUSIP
Service Bureau or any similar agency in connection with the issuance and
monitoring of CUSIP numbers of other market identifiers with respect to the
Loans or (xi) to any other party hereto; provided that, in the case of
disclosure pursuant to clause (iv), (v) and (vi) above, the Administrative Agent
or applicable Lender, as applicable, shall promptly provide notice to the
Borrower to the extent reasonable and not prohibited by Law or any applicable
Governmental Authority.

14.17 Interest Rate Limitation. Notwithstanding anything herein to the contrary,
if at any time the interest rate applicable to any Loan, together with all fees,
charges and other amounts that are treated as interest on such Loan under
applicable Law (collectively, “charges”), shall exceed the maximum lawful rate
(the “Maximum Rate”) that may be contracted for, charged, taken,

 

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received or reserved by the Administrative Agent and the Lender holding such
Loan in accordance with applicable Law, the rate of interest payable in respect
of such Loan hereunder, together with all charges payable in respect thereof,
shall be limited to the Maximum Rate. To the extent lawful, the interest and
charges that would have been paid in respect of such Loan but were not paid as a
result of the operation of this Section shall be cumulated and the interest and
charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the amount collectible at the Maximum Rate therefor)
until such cumulated amount, together with interest thereon at the Federal Funds
Effective Rate for each day to the date of repayment, shall have been received
by such Lender. Any amount collected by such Lender that exceeds the maximum
amount collectible at the Maximum Rate shall be applied to the reduction of the
principal balance of such Loan so that at no time shall the interest and charges
paid or payable in respect of such Loan exceed the maximum amount collectible at
the Maximum Rate.

14.18 Judgment Currency.

(a) If, for the purposes of obtaining judgment in any court, it is necessary to
convert a sum due hereunder in Dollars into another currency, the parties hereto
agree, to the fullest extent permitted by Law, that the rate of exchange used
shall be that at which, in accordance with normal banking procedures, the
Administrative Agent could purchase Dollars with such other currency at the
buying spot rate of exchange in the New York foreign exchange market on the
Business Day immediately preceding that on which any such judgment, or any
relevant part thereof, is given.

(b) The obligations of the Obligors in respect of any sum due to the
Administrative Agent hereunder and under the other Loan Documents shall,
notwithstanding any judgment in a currency other than Dollars, be discharged
only to the extent that on the Business Day following receipt by the
Administrative Agent of any sum adjudged to be so due in such other currency the
Administrative Agent may, in accordance with normal banking procedures, purchase
Dollars with such other currency. If the amount of Dollars so purchased is less
than the sum originally due to the Administrative Agent in Dollars, the Borrower
agrees, to the fullest extent that it may effectively do so, as a separate
obligation and notwithstanding any such judgment, to indemnify the
Administrative Agent against such loss. If the amount of Dollars so purchased
exceeds the sum originally due to the Administrative Agent in Dollars, the
Administrative Agent shall remit such excess to the Borrower.

14.19 USA PATRIOT Act. The Administrative Agent and the Lenders hereby notify
the Obligors that pursuant to the requirements of the USA PATRIOT Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), they
are required to obtain, verify and record information that identifies the
Obligors, which information includes the name and address of each Obligor and
other information that will allow such Person to identify such Obligor in
accordance with the Patriot Act.

14.20 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.
Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Loan Document, to the extent such liability is unsecured, may be
subject to the Write-Down and Conversion Powers of an EEA Resolution Authority
and agrees and consents to, and acknowledges and agrees to be bound by:

 

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(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if
applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the
exercise of the Write-Down and Conversion Powers of any EEA Resolution
Authority.

[Signature Pages Follow]

 

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

 

BORROWER: ATHENEX, INC.

By  

     

  Name:   Title:

Address for Notices: [                ] [                ] Attn:  
[                ] Tel.:   [                ] Fax:   [                ] Email:  
[                ] SUBSIDIARY GUARANTORS: [INSERT NAME OF GUARANTOR]

By  

     

  Name:   Title:

Address for Notices: [                ]   [                ]  

Attn:   [                ] Tel.:   [                ] Fax:   [                ]
Email:   [                ]

 

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ADMINISTRATIVE AGENT: PERCEPTIVE CREDIT HOLDINGS II, LP

By: PERCEPTIVE CREDIT

OPPORTUNITIES GP, LLC, its general partner

By  

     

  Name: Sandeep Dixit   Title: Chief Credit Officer By  

                                                                       

  Name: Sam Chawla   Title: Portfolio Manager Address for Notices:

Perceptive Credit Holdings II, LP

c/o Perceptive Advisors LLC

51 Astor Place, 10th Floor

New York, NY 10003 Attn:   Sandeep Dixit Email: Sandeep@perceptivelife.com
LENDERS: PERCEPTIVE CREDIT HOLDINGS II, LP By: PERCEPTIVE CREDIT OPPORTUNITIES
GP, LLC, its general partner By  

                                                                       

  Name: Sandeep Dixit   Title: Chief Credit Officer By  

                                                                   

  Name: Sam Chawla   Title: Portfolio Manager Address for Notices: Perceptive
Credit Holdings II, LP c/o Perceptive Advisors LLC 51 Astor Place, 10th Floor
New York, NY 10003 Attn:   Sandeep Dixit Email: Sandeep@perceptivelife.com

 

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