Exhibit 10.1

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT is made and dated as of March 25, 2019 and is
entered into by and between Aldeyra Therapeutics, Inc., a Delaware corporation
(“Aldeyra”), Helio Vision, LLC, a Delaware limited liability company, and each
of Aldeyra’s Qualified Subsidiaries (hereinafter collectively referred to as the
“Borrower”), the several banks and other financial institutions or entities from
time to time parties to this Agreement (collectively, referred to as “Lender”)
and HERCULES CAPITAL, INC., a Maryland corporation, in its capacity as
administrative agent and collateral agent for itself and Lender (in such
capacity, the “Agent”).

RECITALS

A.    Borrower has requested Lender to make available to Borrower a loan in an
aggregate principal amount of up to Sixty Million Dollars ($60,000,000) (the
“Term Loan”); and

B.    Lender is willing to make the Term Loan on the terms and conditions set
forth in this Agreement.

AGREEMENT

NOW, THEREFORE, Borrower, Agent and Lender agree as follows:

SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION

1.1    Unless otherwise defined herein, the following capitalized terms shall
have the following meanings:

“AC (ALLEVIATE) Milestone” means receipt by Agent of evidence (including
supporting documentation) satisfactory to Agent and Lender of positive clinical
trial data with an acceptable safety profile which, which taken as a whole,
supports the further clinical advancement and development, determined by Agent
and Lender in their reasonable discretion, of the Phase 3 trial of reproxalap
ophthalmic solution for the treatment of allergic conjunctivitis
(ClinicalTrials.gov Identifier: NCT03494504).

“Account Control Agreement(s)” means any agreement entered into by and among the
Agent, Borrower and a third party Bank or other institution (including a
Securities Intermediary) in which Borrower maintains a Deposit Account or an
account holding Investment Property and which perfects Agent’s first priority
security interest in the subject account or accounts.

“ACH Authorization” means the ACH Debit Authorization Agreement in substantially
the form of Exhibit H, which account numbers shall be redacted for security
purposes if and when filed publicly by the Borrower.

“Advance(s)” means a Term Loan Advance.

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“Advance Date” means the funding date of any Advance.

“Advance Request” means a request for an Advance submitted by Borrower to Agent
in substantially the form of Exhibit A, which account numbers shall be redacted
for security purposes if and when filed publicly by the Borrower.

“Affiliate” means (a) any Person that directly or indirectly controls, is
controlled by, or is under common control with the Person in question, (b) any
Person directly or indirectly owning, controlling or holding with power to vote
twenty percent (20%) or more of the outstanding voting securities of another
Person, (c) any Person twenty percent (20%) or more of whose outstanding voting
securities are directly or indirectly owned, controlled or held by another
Person with power to vote such securities, or (d) any Person related by blood or
marriage to any Person described in subsection (a), (b) or (c) of this defined
term. As used in the definition of “Affiliate,” the term “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.

“Agent” has the meaning given to such term in the preamble to this Agreement.

“Agreement” means this Loan and Security Agreement, as amended from time to
time.

“Amortization Date” means May 1, 2021; provided however, if the Interest Only
Extension Conditions are satisfied, then May 1, 2022.

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to Borrower or any of its Affiliates from time to time
concerning or relating to bribery or corruption, including without limitation
the United States Foreign Corrupt Practices Act of 1977, as amended, the UK
Bribery Act 2010 and other similar legislation in any other jurisdictions.

“Anti-Terrorism Laws” means any laws, rules, regulations or orders relating to
terrorism or money laundering, including without limitation Executive Order
No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the laws
comprising or implementing the Bank Secrecy Act, and the laws administered by
OFAC.

“Assignee” has the meaning given to such term in Section 11.13.

“AU (SOLACE) Milestone” means receipt by Agent of evidence (including supporting
documentation) satisfactory to Agent and Lender of positive clinical trial data
with an acceptable safety profile which, which taken as a whole, supports the
further clinical advancement and development, determined by Agent and Lender in
their reasonable discretion, of the Phase 3 trial of reproxalap ophthalmic
solution for the treatment of noninfectious anterior uveitis (ClinicalTrials.gov
Identifier: NCT03131154).

 

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“Blocked Person” means any Person: (a) listed in the annex to, or is otherwise
subject to the provisions of, Executive Order No. 13224, (b) a Person owned or
controlled by, or acting for or on behalf of, any Person that is listed in the
annex to, or is otherwise subject to the provisions of, Executive Order
No. 13224, (c) a Person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law, (d) a Person
that commits, threatens or conspires to commit or supports “terrorism” as
defined in Executive Order No. 13224, or (e) a Person that is named a “specially
designated national” or “blocked person” on the most current list published by
OFAC or other similar list.

“Borrower Products” means all products, technical data or technology currently
being developed, manufactured or sold by Borrower or which Borrower intends to
sell, license, or distribute in the future including any products or service
offerings under development, collectively, together with all products, technical
data or technology that have been sold, developed, licensed or distributed by
Borrower since its incorporation.

“Business Day” means any day other than Saturday, Sunday and any other day on
which banking institutions in the State of New York are closed for business.

“Cash” means all cash, cash equivalents and liquid funds.

“Change in Control” means any reorganization, recapitalization, consolidation or
merger (or similar transaction or series of related transactions) of Borrower,
sale or exchange of outstanding shares (or similar transaction or series of
related transactions) of Borrower in which the holders of Borrower’s outstanding
shares immediately before consummation of such transaction or series of related
transactions do not, immediately after consummation of such transaction or
series of related transactions, retain shares representing more than fifty
percent (50%) of the voting power of the surviving entity of such transaction or
series of related transactions (or the parent of such surviving entity if such
surviving entity is wholly owned by such parent), in each case without regard to
whether Borrower is the surviving entity.

“Claims” has the meaning given to such term in Section 11.10.

“Clinical Milestone I” means satisfaction of each of the following events:
(a) no default or Event of Default shall have occurred and be continuing; and
(b) Borrower shall have achieved either the AU (SOLACE) Milestone or the AC
(ALLEVIATE) Milestone.

“Clinical Milestone II” means satisfaction of each of the following events:
(a) no default or Event of Default shall have occurred and be continuing; and
(b) Borrower shall have achieved at least two of the following milestones:
(i) AU (SOLACE) Milestone, (ii) the AC (ALLEVIATE) Milestone, (iii) the SLS
Milestone, and/or (iv) the DED Milestone.

“Clinical Milestone III” means satisfaction of each of the following events:
(a) no default or Event of Default shall have occurred and be continuing; and
(b) Borrower shall have achieved either (i) the DED Milestone and at least one
of the following milestones: (A) the AU (SOLACE) Milestone, (B) the AC
(ALLEVIATE) Milestone, or (C) the SLS Milestone, or (ii) all of the following
milestones: (A) the AU (SOLACE) Milestone, (B) the AC (ALLEVIATE) Milestone, and
(C) the SLS Milestone.

“Closing Date” means the date of this Agreement.

 

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“Code” has the meaning given to such term in Addendum 1.

“Collateral” means the property described in Section 3.

“Common Stock” means the common stock, $0.001 par value per share, of the
Borrower.

“Confidential Information” has the meaning given to it in Section 11.12.

“Contingent Obligation” means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to (i) any
Indebtedness, lease, dividend, letter of credit or other obligation of another,
including any such obligation directly or indirectly guaranteed, endorsed,
co-made or discounted or sold with recourse by that Person, or in respect of
which that Person is otherwise directly or indirectly liable; (ii) any
obligations with respect to undrawn letters of credit, corporate credit cards or
merchant services issued for the account of that Person; and (iii) all
obligations arising under any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; provided, however,
that the term “Contingent Obligation” shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determined amount of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith; provided, however, that such amount shall not in any event exceed the
maximum amount of the obligations under the guarantee or other support
arrangement.

“Copyright License” means any written agreement granting any right to use any
Copyright or Copyright registration, now owned or hereafter acquired by Borrower
or in which Borrower now holds or hereafter acquires any interest.

“Copyrights” means all copyrights, whether registered or unregistered, held
pursuant to the laws of the United States of America, any State thereof, or of
any other country.

“DED Milestone” means receipt by Agent of evidence (including supporting
documentation) satisfactory to Agent and Lender of positive clinical trial data
with an acceptable safety profile of the Phase 3 trial (Part 1 or Part 2), in
each case as determined by Agent and Lender in their sole discretion, of
reproxalap ophthalmic solution and ophthalmic lipid solution for the treatment
of dry eye disease (ClinicalTrials.gov Identifier: NCT03162783).

“Deposit Accounts” means any “deposit accounts,” as such term is defined in the
UCC, and includes any checking account, savings account, or certificate of
deposit.

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

 

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“Due Diligence Fee” means $25,000, which fee has been paid to Lender prior to
the Closing Date, and shall be deemed fully earned on such date regardless of
the early termination of this Agreement.

“End of Term Charge” means a charge of the aggregate amount of all Advances
multiplied by 6.95%.

“Eligible Foreign Subsidiary” means any Foreign Subsidiary whose execution of a
Joinder Agreement could not reasonably be expected to result in a material
adverse tax consequence to Borrower.

“Equity Interests” means, with respect to any Person, the capital stock,
partnership or limited liability company interest, or other equity securities or
equity ownership interests of such Person.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations promulgated thereunder.

“Event of Default” has the meaning given to such term in Section 9.

“Excluded Taxes” has the meaning given to such term in Addendum 1.

“FATCA” has the meaning given to such term in Addendum 1.

“Financial Statements” has the meaning given to such term in Section 7.1.

“Foreign Lender” has the meaning given to such term in Addendum 1.

“Foreign Subsidiary” means any Subsidiary other than a Subsidiary organized
under the laws of any state within the United States of America.

“GAAP” means generally accepted accounting principles in the United States of
America, as in effect from time to time, provided that the parties agree that
GAAP as in effect on the date of this Agreement shall be applicable for the
interpretation of “capital lease obligations” in the definition of
“Indebtedness”, unless the parties otherwise agree in writing.

“Indebtedness” means indebtedness of any kind, including (a) all indebtedness
for borrowed money or the deferred purchase price of property or services
(excluding trade credit entered into in the ordinary course of business due
within ninety (90) days), including reimbursement and other obligations with
respect to surety bonds and letters of credit, (b) all obligations evidenced by
notes, bonds, debentures or similar instruments, (c) all capital lease
obligations, and (d) all Contingent Obligations.

“Indemnified Taxes” has the meaning given to such term in Addendum 1.

“Initial Facility Charge” means Three Hundred Seventy-Five Thousand Dollars
($375,000.00), which is payable to Lender in accordance with Section 4.1(e).

 

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“Insolvency Proceeding” is any proceeding by or against any Person under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other similar relief.

“Intellectual Property” means all of Borrower’s Copyrights; Trademarks; Patents;
Licenses; trade secrets and inventions; mask works; Borrower’s applications
therefor and reissues, extensions, or renewals thereof; and Borrower’s goodwill
associated with any of the foregoing, together with Borrower’s rights to sue for
past, present and future infringement of its Intellectual Property and the
goodwill associated therewith.

“Interest Only Extension Conditions” shall mean satisfaction of each of the
following events: (a) no default or Event of Default shall have occurred and be
continuing; and (b) Clinical Milestone III.

“Inventory” means “inventory” as defined in Article 9 of the UCC.

“Investment” means any beneficial ownership (including stock, partnership or
limited liability company interests) of or in any Person, or any loan, advance
or capital contribution to any Person or the acquisition of any asset of another
Person.

“Investment Policy” is that certain investment policy of Borrower, approved by
Borrower’s Board of Directors, made available and approved by Agent prior to the
date hereof.

“IRS” has the meaning given to such term in Addendum 1.

“Joinder Agreements” means for each Qualified Subsidiary (except as provided in
Section 7.13 or with respect to Helio Vision Germany GmbH so long as its
combined assets and liabilities are less than Five Hundred Thousand Dollars
($500,000)), a completed and executed Joinder Agreement in substantially the
form attached hereto as Exhibit G.

“Lender” has the meaning given to such term in the preamble to this Agreement.

“License” means any Copyright License, Patent License, Trademark License or
other license of rights or interests.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for
security, security interest, encumbrance, levy, lien or charge of any kind,
whether voluntarily incurred or arising by operation of law or otherwise,
against any property, any conditional sale or other title retention agreement,
and any lease in the nature of a security interest.

“Loan” means the Advances made under this Agreement.

“Loan Documents” means this Agreement, the Right to Invest Agreement, the Notes
(if any), the ACH Authorization, the Account Control Agreements, the Joinder
Agreements, all UCC Financing Statements, and any other documents executed in
connection with the Secured Obligations or the transactions contemplated hereby,
as the same may from time to time be amended, modified, supplemented or
restated.

 

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“Material Adverse Effect” means a material adverse effect upon: (i) the
business, operations, properties, assets or financial condition of Borrower and
its Subsidiaries taken as a whole; or (ii) the ability of Borrower to perform or
pay the Secured Obligations in accordance with the terms of the Loan Documents,
or the ability of Agent or Lender to enforce any of its rights or remedies with
respect to the Secured Obligations; or (iii) the Collateral or Agent’s Liens on
the Collateral or the priority of such Liens.

“Maximum Term Loan Amount” means Sixty Million Dollars ($60,000,000).

“Maximum Tranche I Term Loan Amount” means Twenty Million Dollars ($20,000,000).

“Maximum Rate” has the meaning assigned to such term in Section 2.3.

“Non-Disclosure Agreement” means that certain Confidential Disclosure Agreement
by and between Borrower and Agent, dated as of December 17, 2018.

“Note(s)” means a Term Note.

“OFAC” means the U.S. Department of Treasury Office of Foreign Assets Control.

“OFAC Lists” are, collectively, the Specially Designated Nationals and Blocked
Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed.
Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other
restricted Persons maintained pursuant to any of the rules and regulations of
OFAC or pursuant to any other applicable Executive Orders.

“Other Connection Taxes” has the meaning given to such term in Addendum 1.

“Other Taxes” has the meaning given to such term in Addendum 1.

“Patent License” means any written agreement granting any right with respect to
any invention on which a Patent is in existence or a Patent application is
pending, in which agreement Borrower now holds or hereafter acquires any
interest.

“Patents” means all letters patent of, or rights corresponding thereto, in the
United States of America or in any other country, all registrations and
recordings thereof, and all applications for letters patent of, or rights
corresponding thereto, in the United States of America or any other country.

“Permitted Indebtedness” means: (i) Indebtedness of Borrower in favor of Lender
or Agent arising under this Agreement or any other Loan Document;
(ii) Indebtedness existing on the Closing Date which is disclosed in Schedule
1A; (iii) Indebtedness of up to $500,000 outstanding at any time secured by a
Lien described in clause (vii) of the defined term “Permitted Liens,” provided
such Indebtedness does not exceed the lesser of the cost or the fair market
value of the Equipment financed with such Indebtedness; (iv) Indebtedness to
trade creditors incurred in the ordinary course of business, including
Indebtedness incurred in the ordinary course of business with corporate credit
cards; (v) Indebtedness that also constitutes a Permitted

 

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Investment; (vi) Subordinated Indebtedness; (vii) reimbursement obligations in
connection with letters of credit that are secured by Cash and issued on behalf
of the Borrower or a Subsidiary thereof in an amount not to exceed $100,000 at
any time outstanding, (viii) other unsecured Indebtedness in an amount not to
exceed $250,000 at any time outstanding, (ix) intercompany Indebtedness in an
amount not to exceed $250,000 at any time outstanding as long as each of the
Subsidiary obligor and the Subsidiary obligee under such Indebtedness is a
Qualified Subsidiary that has executed a Joinder Agreement and (x) extensions,
refinancings, modifications, amendments, restatements and renewals of any items
of Permitted Indebtedness, provided that the principal amount is not increased
above the applicable limit set forth herein for such Indebtedness or the terms
modified to impose materially more burdensome terms upon Borrower or its
Subsidiary, as the case may be.

“Permitted Investment” means: (i) Investments existing on the Closing Date which
are disclosed in Schedule 1B; (ii) any Investments permitted by Borrower’s
Investment Policy, as amended from time to time, provided that such Investment
Policy (and any such amendment thereto) has been approved in writing by the
Agent; (iii) repurchases of stock from former employees, directors, or
consultants of Borrower under the terms of applicable repurchase agreements at
the original issuance price of such securities in an aggregate amount not to
exceed $250,000 in any fiscal year, provided that no Event of Default has
occurred, is continuing or would exist after giving effect to the repurchases;
(iv) Investments accepted in connection with Permitted Transfers;
(v) Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of customers, licensors or suppliers and in
settlement of delinquent obligations of, and other disputes with, customers or
suppliers arising in the ordinary course of Borrower’s business;
(vi) Investments consisting of notes receivable of, or prepaid royalties and
other credit extensions, to customers and suppliers who are not Affiliates, in
the ordinary course of business, provided that this subparagraph (vi) shall not
apply to Investments of Borrower in any Subsidiary; (vii) Investments consisting
of loans not involving the net transfer on a substantially contemporaneous basis
of cash proceeds to employees, officers or directors relating to the purchase of
capital stock of Borrower pursuant to employee stock purchase plans or other
similar agreements approved by Borrower’s Board of Directors; (viii) Investments
consisting of travel advances or moving expenses in the ordinary course of
business; (ix) Investments in existing or newly-formed Domestic Subsidiaries,
provided that each such Domestic Subsidiary enters into a Joinder Agreement
promptly after its formation by Borrower and execute such other documents as
shall be reasonably requested by Agent; (x) Investments in Foreign Subsidiaries
approved in advance in writing by Agent; (xi) joint ventures, collaboration
agreements, strategic alliances and similar arrangements in the ordinary course
of Borrower’s business consisting of the nonexclusive licensing of technology,
the development of technology or the providing of technical support, provided
that any cash Investments by Borrower do not exceed $250,000 in the aggregate in
any fiscal year; (xii) acquisitions of rights to new Borrower Products provided
(a) such rights constitute Collateral following such acquisition and (b) the sum
of the purchase price of such proposed new acquisition, computed on the basis of
total acquisition consideration paid or incurred, or to be paid or incurred, by
Borrower with respect thereto shall not be greater than $500,000 in the
aggregate for all such acquisitions during the term of this Agreement; and
(xiii) additional Investments that do not exceed $250,000 in the aggregate
outstanding at any time.

 

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“Permitted Liens” means any and all of the following: (i) Liens in favor of
Agent or Lender; (ii) Liens existing on the Closing Date which are disclosed in
Schedule 1C; (iii) Liens for Taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings; provided, that Borrower maintains adequate reserves
therefor in accordance with GAAP; (iv) Liens or deposits securing claims or
demands of materialmen, artisans, mechanics, carriers, warehousemen, landlords,
suppliers, manufacturers, service providers and other like Persons arising in
the ordinary course of Borrower’s business and imposed without action of such
parties; provided, that the payment thereof is not yet required; (v) Liens
arising from judgments, decrees or attachments in circumstances which do not
constitute an Event of Default hereunder; (vi) the following deposits, to the
extent made in the ordinary course of business or as disclosed in Schedule 1C:
deposits under worker’s compensation, unemployment insurance, social security
and other similar laws, or to secure the performance of bids, tenders or
contracts (other than for the repayment of borrowed money) or to secure
indemnity, performance or other similar bonds for the performance of bids,
tenders or contracts (other than for the repayment of borrowed money) or to
secure statutory obligations (other than Liens arising under ERISA or
environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds; (vii) Liens on Equipment or software or
other intellectual property, or other capital assets, constituting purchase
money Liens and Liens in connection with capital leases securing Indebtedness
permitted in clause (iii) of “Permitted Indebtedness”; (viii) Liens incurred in
connection with Subordinated Indebtedness; (ix) leasehold interests in leases or
subleases and licenses granted in the ordinary course of business and not
interfering in any material respect with the business of the licensor; (x) Liens
in favor of customs and revenue authorities arising as a matter of law to secure
payment of custom duties that are promptly paid on or before the date they
become due; (xi) Liens on insurance proceeds securing the payment of financed
insurance premiums that are promptly paid on or before the date they become due
(provided that such Liens extend only to such insurance proceeds and not to any
other property or assets); (xii) statutory, common law and contractual rights of
set-off and other similar rights as to deposits of cash and securities in favor
of banks, other depository institutions and brokerage firms; (xiii) easements,
zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business so long as they do
not materially impair the value or marketability of the related property;
(xiv) (A) Liens on Cash securing obligations permitted under clause (vii) of the
definition of Permitted Indebtedness and (B) security deposits in connection
with real property leases, the combination of (A) and (B) in an aggregate amount
not to exceed $500,000 at any time; and (xv) Liens incurred in connection with
the extension, renewal or refinancing of the Indebtedness secured by Liens of
the type described in clauses (i) through (xiv) above; provided, that any
extension, renewal or replacement Lien shall be limited to the property
encumbered by the existing Lien and the principal amount of the Indebtedness
being extended, renewed or refinanced (as may have been reduced by any payment
thereon) does not increase.

“Permitted Transfers” means (i) sales of Inventory in the ordinary course of
business, (ii) non-exclusive licenses, joint ventures, collaboration agreements,
strategic alliances and similar arrangements for the use of Intellectual
Property in the ordinary course of business and licenses that would not result
in a legal transfer of title of the licensed property but that may be exclusive
in respects other than territory and that may be exclusive as to territory only
as to discrete geographical areas outside of the United States of America in the
ordinary course of business, (iii) dispositions of worn-out, obsolete or surplus
Equipment at fair market value in the ordinary course of business, (iv) use of
Cash in the ordinary course of business, (v) Permitted Investments,
(vi) Permitted Liens, and (vii) other Transfers of assets having a fair market
value of not more than $250,000 in the aggregate in any fiscal year.

 

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“Person” means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, other entity or government.

“Preferred Stock” means at any given time any equity security issued by Borrower
that has any rights, preferences or privileges senior to Borrower’s Common
Stock.

“Prepayment Charge” shall have the meaning assigned to such term in Section 2.5.

“Prime Rate” means the “prime rate” as reported in The Wall Street Journal or
any successor publication thereto.

“Qualified Subsidiary” means any direct or indirect Domestic Subsidiary or
Eligible Foreign Subsidiary.

“Receivables” means (i) all of Borrower’s Accounts, Instruments, Documents,
Chattel Paper, Supporting Obligations, letters of credit, proceeds of any letter
of credit, and Letter of Credit Rights, and (ii) all customer lists, software,
and business records related thereto.

“Recipient” has the meaning given to such term in Addendum 1.

“Required Lenders” means, at any time, the holders of more than fifty percent
(50%) of the aggregate unpaid principal amount of the Term Loans then
outstanding.

“Right to Invest Agreement” means that certain right to invest agreement, dated
as of the date hereof, by and between Lender and Borrower, as amended, amended
and restated, supplemented or otherwise modified from time to time.

“Sanctioned Country” shall mean, at any time, a country or territory which is
the subject or target of any Sanctions.

“Sanctioned Person” shall mean, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury or the U.S. Department of
State, or by the United Nations Security Council, the European Union or any EU
member state, (b) any Person operating, organized or resident in a Sanctioned
Country or (c) any Person controlled by any such Person.

“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including
those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, or (b) the United
Nations Security Council, the European Union or Her Majesty’s Treasury of the
United Kingdom.

 

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“SEC” means the Securities and Exchange Commission.

“Secured Obligations” means Borrower’s obligations under this Agreement and any
Loan Document, including any obligation, if any, to pay any amount now owing or
later arising.

“Securities Act” means the Securities Act of 1933, as amended.

“SLS Milestone” means receipt by Agent of evidence (including supporting
documentation) satisfactory to Agent and Lender of positive clinical trial data
with an acceptable safety profile of the Phase 3 trial (Part 1 or Part 2), in
each case as determined by Agent and Lender in their sole discretion, of
reproxalap topical dermal cream for the treatment of sjögren larsson syndrome
(ClinicalTrials.gov Identifier: NCT03445650).

“Subordinated Indebtedness” means Indebtedness subordinated to the Secured
Obligations in amounts and on terms and conditions satisfactory to Agent in its
sole discretion and subject to a subordination agreement in form and substance
satisfactory to Agent in its sole discretion.

“Subsidiary” means an entity, whether corporate, partnership, limited liability
company, joint venture or otherwise, in which Borrower owns or controls fifty
percent (50%) or more of the outstanding voting securities, including each
entity listed on Schedule 1 hereto.

“Taxes” has the meaning given to such term in Addendum 1.

“Term Commitment” means as to any Lender, the obligation of such Lender, if any,
to make a Term Loan Advance to the Borrower in a principal amount not to exceed
the amount set forth under the heading “Term Commitment” opposite such Lender’s
name on Schedule 1.1.

“Term Loan Advance” means any Term Loan funds advanced under this Agreement.

“Term Loan Interest Rate” means for any day a per annum rate of interest equal
to the greater of either (i) the Prime Rate plus 3.10%, and (ii) 9.10%.

“Term Loan Maturity Date” means October 1, 2023.

“Term Note” means a Promissory Note in substantially the form of Exhibit B.

“Trademark License” means any written agreement granting any right to use any
Trademark or Trademark registration, now owned or hereafter acquired by Borrower
or in which Borrower now holds or hereafter acquires any interest.

“Trademarks” means all trademarks (registered, common law or otherwise) and any
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States of America, any State thereof or any other
country or any political subdivision thereof.

 

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“Tranche I-A Term Loan Advance” has the meaning given to it in Section 2.2(a).

“Tranche I-A Term Loan Advance Period” means the period commencing on the
Closing Date through and including April 15, 2019.

“Tranche I-B Term Loan Advance” has the meaning given to it in Section 2.2(a).

“Tranche I-B Term Loan Advance Period” means the period commencing on the date
that Borrower has achieved Clinical Milestone I in accordance with the
definition thereof, through and including September 30, 2019.

“Tranche II Term Loan Advance” has the meaning given to it in Section 2.2(a).

“Tranche II Term Loan Advance Period” means the period commencing on the date
that Borrower has achieved Clinical Milestone II in accordance with the
definition thereof, through and including March 31, 2020.

“Tranche III Term Loan Advance” has the meaning given to it in Section 2.2(a).

“Tranche III Term Loan Advance Period” means the period commencing on the date
that Borrower has achieved Clinical Milestone III in accordance with the
definition thereof, through and including March 31, 2021.

“Tranche IV Facility Charge” means $75,000, which is payable to Lender in
accordance with Section 4.2(e).

“Tranche IV Term Loan Advance” has the meaning given to it in Section 2.2(a).

“UCC” means the Uniform Commercial Code as the same is, from time to time, in
effect in the State of New York; provided, that in the event that, by reason of
mandatory provisions of law, any or all of the attachment, perfection or
priority of, or remedies with respect to, Agent’s Lien on any Collateral is
governed by the Uniform Commercial Code as the same is, from time to time, in
effect in a jurisdiction other than the State of New York, then the term “UCC”
shall mean the Uniform Commercial Code as in effect, from time to time, in such
other jurisdiction solely for purposes of the provisions thereof relating to
such attachment, perfection, priority or remedies and for purposes of
definitions related to such provisions.

“U.S. Person” has the meaning given to such term in Addendum 1.

“Withholding Agent” has the meaning given to such term in Addendum 1.

Unless otherwise specified, all references in this Agreement or any Annex or
Schedule hereto to a “Section,” “subsection,” “Exhibit,” “Annex,” or “Schedule”
shall refer to the corresponding Section, subsection, Exhibit, Annex, or
Schedule in or to this Agreement. Unless otherwise specifically provided herein,
any accounting term used in this Agreement or the other Loan Documents shall
have the meaning customarily given such term in accordance with GAAP, and all
financial computations hereunder shall be computed in accordance with GAAP,
consistently applied. Unless otherwise defined herein or in the other Loan
Documents, terms that are used herein or in the other Loan Documents and defined
in the UCC shall have the meanings given to them in the UCC.

 

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SECTION 2. THE LOAN

2.1    [Reserved.]

2.2    Term Loan.

(a)    Advances.

(i)    Tranche I-A Term Loan. Subject to the terms and conditions of this
Agreement, during the Tranche I-A Term Loan Advance Period, Borrower may request
and Lender shall severally (and not jointly) make in an amount not to exceed its
respective Term Commitment, a Term Loan Advance in an aggregate principal amount
of up to Five Million Dollars ($5,000,000) (the “Tranche I-A Term Loan
Advance”).

(ii)    Tranche I-B Term Loan. Subject to the terms and conditions of this
Agreement, during the Tranche I-B Term Loan Advance Period, Borrower may request
and Lender shall severally (and not jointly) make in an amount not to exceed its
respective Term Commitment, additional Term Loan Advances in an aggregate
principal amount of up to Fifteen Million Dollars ($15,000,000) (each, a
“Tranche I-B Term Loan Advance”). The aggregate outstanding Tranche 1-A Term
Loan Advance and Tranche I-B Term Loan Advance shall not exceed the Maximum
Tranche I Term Loan Amount.

(iii)    Tranche II Term Loan. Subject to the terms and conditions of this
Agreement, during the Tranche II Term Loan Advance Period, Borrower may request
and Lender shall severally (and not jointly) make in an amount not to exceed its
respective Term Commitment, additional Term Loan Advances in an aggregate
principal amount of up to Fifteen Million Dollars ($15,000,000) (each, a
“Tranche II Term Loan Advance”).

(iv)    Tranche III Term Loan. Subject to the terms and conditions of this
Agreement, during the Tranche III Term Loan Advance Period, Borrower may request
and Lender shall severally (and not jointly) make in an amount not to exceed its
respective Term Commitment, additional Term Loan Advances in an aggregate
principal amount of up to Fifteen Million Dollars ($15,000,000) (each, a
“Tranche III Term Loan Advance”).

(v)    Tranche IV Term Loan. Subject to the terms and conditions of this
Agreement, and conditioned on approval by Lender’s investment committee in its
sole and unfettered discretion, on or before December 31, 2021, Borrower may
request and Lender shall severally (and not jointly) make in an amount not to
exceed its respective Term Commitment, additional Term Loan Advances in an
aggregate principal amount of up to Ten Million Dollars ($10,000,000) (each, a
“Tranche IV Term Loan Advance”).

 

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(vi)    In each case, Term Loan Advances must be in minimum increments of Five
Million Dollars ($5,000,000). The aggregate outstanding Term Loan Advances shall
not exceed the Maximum Term Loan Amount.

(b)    Advance Request. To obtain a Term Loan Advance, Borrower shall complete,
sign and deliver an Advance Request (at least three (3) Business Days before the
Advance Date other than the Closing Date, which shall be at least one
(1) Business Day) to Agent. Lender shall fund the Term Loan Advance in the
manner requested by the Advance Request provided that each of the conditions
precedent to such Term Loan Advance is satisfied as of the requested Advance
Date.

(c)    Interest. The principal balance of each Term Loan Advance shall bear
interest thereon from such Advance Date at the Term Loan Interest Rate based on
a year consisting of 360 days, with interest computed daily based on the actual
number of days elapsed. The Term Loan Interest Rate will float and change on the
day the Prime Rate changes from time to time.

(d)    Payment. Borrower will pay interest on each Term Loan Advance on the
first Business Day of each month, beginning the month after the Advance Date.
Borrower shall repay the aggregate Term Loan principal balance that is
outstanding on the day immediately preceding the Amortization Date, in equal
monthly installments of principal and interest (mortgage style) beginning on the
Amortization Date and continuing on the first Business Day of each month
thereafter until the Secured Obligations (other than inchoate indemnity
obligations) are repaid. The entire Term Loan principal balance and all accrued
but unpaid interest hereunder, shall be due and payable on Term Loan Maturity
Date. Borrower shall make all payments under this Agreement without setoff,
recoupment or deduction and regardless of any counterclaim or defense. Lender
will initiate debit entries to the Borrower’s account as authorized on the ACH
Authorization (i) on each payment date of all periodic obligations payable to
Lender under each Term Advance and (ii) reasonable and documented out-of-pocket
legal fees and costs incurred by Agent or Lender in connection with
Section 11.11 of this Agreement; provided that, with respect to clause
(i) above, in the event that Lender or Agent informs Borrower that Lender will
not initiate a debit entry to Borrower’s account for a certain amount of the
periodic obligations due on a specific payment date, Borrower shall pay to
Lender such amount of periodic obligations in full in immediately available
funds on such payment date; provided, further, that, with respect to clause
(i) above, if Lender or Agent informs Borrower that Lender will not initiate a
debit entry as described above later than the date that is three (3) Business
Days prior to such payment date, Borrower shall pay to Lender such amount of
periodic obligations in full in immediately available funds on the date that is
three (3) Business Days after the date on which Lender or Agent notifies
Borrower of such; provided, further, that, with respect to clause (ii) above, in
the event that Lender or Agent informs Borrower that Lender will not initiate a
debit entry to Borrower’s account for certain amount of such reasonable and
documented out-of-pocket legal fees and costs incurred by Agent or Lender,
Borrower shall pay to Lender such amount in full in immediately available funds
within three (3) Business Days after the date on which Lender or Agent notifies
Borrower of such.

 

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2.3    Maximum Interest. Notwithstanding any provision in this Agreement or any
other Loan Document, it is the parties’ intent not to contract for, charge or
receive interest at a rate that is greater than the maximum rate permissible by
law that a court of competent jurisdiction shall deem applicable hereto (which
under the laws of the State of New York shall be deemed to be the laws relating
to permissible rates of interest on commercial loans) (the “Maximum Rate”). If a
court of competent jurisdiction shall finally determine that Borrower has
actually paid to Lender an amount of interest in excess of the amount that would
have been payable if all of the Secured Obligations had at all times borne
interest at the Maximum Rate, then such excess interest actually paid by
Borrower shall be applied as follows: first, to the payment of the Secured
Obligations consisting of the outstanding principal of the Term Loan Advances;
second, after all principal is repaid, to the payment of Lender’s accrued
interest, costs, expenses, reasonable professional fees and any other Secured
Obligations; and third, after all Secured Obligations are repaid, the excess (if
any) shall be refunded to Borrower.

2.4    Default Interest. In the event any payment is not paid on the scheduled
payment date, an amount equal to five percent (5%) of the past due amount shall
be payable on demand. In addition, upon the occurrence and solely during the
continuation of an Event of Default hereunder, all Secured Obligations,
including principal, interest, compounded interest, and professional fees, shall
bear interest at a rate per annum equal to the rate set forth in Section 2.2(c)
plus five percent (5%) per annum. In the event any interest is not paid when due
hereunder, delinquent interest shall be added to principal and shall bear
interest on interest, compounded at the rate set forth in Section 2.2(c) or
Section 2.4, as applicable.

2.5    Prepayment. At its option upon at least five (5) Business Days prior
written notice to Agent, Borrower may prepay all, but not less than all, of the
outstanding Advances by paying the entire principal balance, all accrued and
unpaid interest thereon, plus all unpaid fees and other amounts owing under the
Loan Documents at such time (including, for the avoidance of doubt, the End of
Term Charge), together with a prepayment charge equal to the following
percentage of the Advance amount being prepaid: if such Advance amounts are
prepaid in any of the first twenty-four (24) months following the Closing Date,
3.0%; after twenty-four (24) months but prior to thirty-six (36) months, 1.5%;
and thereafter, 0.0% (each, a “Prepayment Charge”). Borrower agrees that the
Prepayment Charge is a reasonable calculation of Lender’s lost profits in view
of the difficulties and impracticality of determining actual damages resulting
from an early repayment of the Advances. Borrower shall prepay the outstanding
amount of all principal and accrued interest through the prepayment date and the
Prepayment Charge upon the occurrence of a Change in Control. Notwithstanding
the foregoing, Agent and Lender agree to waive the Prepayment Charge if Agent
and Lender (in its sole and absolute discretion) agree in writing to refinance
the Advances prior to the Maturity Date.

 

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2.6    End of Term Charge. On the earliest to occur of (i) the Term Loan
Maturity Date, (ii) the date that Borrower prepays the outstanding Secured
Obligations (other than any inchoate indemnity obligations and any other
obligations which, by their terms, are to survive the termination of this
Agreement) in full, or (iii) the date that the Secured Obligations become due
and payable, Borrower shall pay Lender the End of Term Charge. Notwithstanding
the required payment date of such charge, it shall be deemed earned by Lender as
of the Closing Date.

2.7    Treatment of Prepayment Charge and End of Term Charge. Borrower agrees
that any Prepayment Charge and the End of Term Charge payable shall be presumed
to be the liquidated damages sustained by each Lender as the result of the early
termination, and Borrower agrees that it is reasonable under the circumstances
currently existing and existing as of the Closing Date. The Prepayment Charge
and the End of Term Charge shall also be payable in the event the Secured
Obligations (and/or this Agreement) are satisfied or released by foreclosure
(whether by power of judicial proceeding), deed in lieu of foreclosure, or by
any other means. Borrower expressly waives (to the fullest extent it may
lawfully do so) the provisions of any present or future statute or law that
prohibits or may prohibit the collection of the foregoing Prepayment Charge and
End of Term Charge in connection with any such acceleration. Borrower agrees (to
the fullest extent that each may lawfully do so): (a) each of the Prepayment
Charge and the End of Term Charge is reasonable and is the product of an arm’s
length transaction between sophisticated business people, ably represented by
counsel; (b) each of the Prepayment Charge and the End of Term Charge shall be
payable notwithstanding the then prevailing market rates at the time payment is
made; (c) there has been a course of conduct between Lender and Borrower giving
specific consideration in this transaction for such agreement to pay the
Prepayment Charge and the End of Term Charge as a charge (and not interest) in
the event of prepayment or acceleration; (d) Borrower shall be estopped from
claiming differently than as agreed to in this paragraph. Borrower expressly
acknowledges that their agreement to pay each of the Prepayment Charge and the
End of Term Charge to Lender as herein described was on the Closing Date and
continues to be a material inducement to Lender to provide the Term Loans.

2.8    Notes. If so requested by Lender by written notice to Borrower, then
Borrower shall execute and deliver to Lender (and/or, if applicable and if so
specified in such notice, to any Person who is an assignee of Lender pursuant to
Section 11.13) (promptly after the Borrower’s receipt of such notice) a Note or
Notes to evidence Lender’s Loans.

2.9    Pro Rata Treatment. Each payment (including prepayment) on account of any
fee and any reduction of the Term Loans shall be made pro rata according to the
Term Commitments of the relevant Lender.

2.10    Taxes. Addendum 1 to this Agreement outlines various responsibilities
and obligations of Borrower, Agent and Lender with respect to Taxes, and such
Addendum 1 is hereby incorporated in this Agreement.

 

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SECTION 3. SECURITY INTEREST

3.1    As security for the prompt and complete payment when due (whether on the
payment dates or otherwise) of all the Secured Obligations, Borrower grants to
Agent a security interest in all of Borrower’s right, title, and interest in, to
and under all of Borrower’s personal property and other assets (other than
Intellectual Property) including without limitation the following (except as set
forth herein) whether now owned or hereafter acquired (collectively, the
“Collateral”): (a) Receivables; (b) Equipment; (c) Fixtures; (d) General
Intangibles (other than Intellectual Property); (e) Inventory; (f) Investment
Property; (g) Deposit Accounts; (h) Cash; (i) Goods; and all other tangible and
intangible personal property of Borrower whether now or hereafter owned or
existing, leased, consigned by or to, or acquired by, Borrower (other than
Intellectual Property) and wherever located, and any of Borrower’s property in
the possession or under the control of Agent; and, to the extent not otherwise
included, all Proceeds of each of the foregoing and all accessions to,
substitutions and replacements for, and rents, profits and products of each of
the foregoing; provided, however, that the Collateral shall include all Accounts
and General Intangibles that consist of rights to payment and proceeds from the
sale, licensing or disposition of all or any part, or rights in, the
Intellectual Property (the “Rights to Payment”). Notwithstanding the foregoing,
if a judicial authority (including a U.S. Bankruptcy Court) holds that a
security interest in the underlying Intellectual Property is necessary to have a
security interest in the Rights to Payment, then the Collateral shall
automatically, and effective as of the date of this Agreement, include the
Intellectual Property, only to the extent necessary to permit perfection of
Agent’s security interest in the Rights to Payment.

3.2    Notwithstanding the broad grant of the security interest set forth in
Section 3.1, above, the Collateral shall not include (a) more than 65% of the
presently existing and hereafter arising issued and outstanding shares of
capital stock owned by Borrower of any Foreign Subsidiary (other than an
Eligible Foreign Subsidiary) which shares entitle the holder thereof to vote for
directors or any other matter, (b) any “intent to use” trademarks at all times
prior to the first use thereof, whether by the actual use thereof in commerce,
the recording of a statement of use with the United States Patent and Trademark
Office or otherwise, and (c) nonassignable licenses or contracts, which by their
terms require the consent of the licensor thereof or another party (but only to
the extent such prohibition on transfer is enforceable under applicable law,
including, without limitation, Sections 9406, 9407 and 9408 of the UCC).

3.3    If this Agreement is terminated in accordance with its terms, Agent’s
Lien in the Collateral shall continue until the Secured Obligations (other than
inchoate indemnity obligations) are paid in full in accordance with the terms of
this Agreement. At such time, the Collateral shall be automatically released
from the Liens created hereby, this Agreement and all obligations (other than
those expressly stated to survive such termination) of the Agent, Lender and
each Borrower hereunder shall terminate. Agent shall execute such documents,
return any Collateral held by Agent hereunder and take such other steps as are
reasonably necessary to accomplish the foregoing, all at the Borrower’s sole
cost and expense.

 

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SECTION 4. CONDITIONS PRECEDENT TO LOAN

The obligations of Lender to make the Loan hereunder are subject to the
satisfaction by Borrower of the following conditions:

4.1    Initial Advance. On or prior to the Closing Date, subject to
Section 7.22, Borrower shall have delivered to Agent the following:

(a)    executed copies of (i) the Loan Documents, including but not limited to
Account Control Agreements and landlord and bailee agreements, (ii) a legal
opinion of Borrower’s counsel and (iii) all other documents and instruments
reasonably required by Agent to effectuate the transactions contemplated hereby
or to create and perfect the Liens of Agent with respect to all Collateral, in
all cases in form and substance reasonably acceptable to Agent;

(b)    certified copy of resolutions of Borrower’s Board of Directors evidencing
approval of the Loan and other transactions evidenced by the Loan Documents;

(c)    certified copies of the Certificate of Incorporation and the bylaws, as
amended through the Closing Date, of Borrower;

(d)    a certificate of good standing for Borrower from its state of
incorporation and similar certificates from all other jurisdictions in which it
does business and where the failure to be qualified could have a Material
Adverse Effect;

(e)    payment of the Initial Facility Charge and reimbursement of Agent’s and
Lender’s current expenses reimbursable pursuant to this Agreement, which amounts
may be deducted from the initial Advance;

(f)    all certificates of insurance and endorsements, and copies of each
insurance policy, each as required hereunder; and

(g)    such other documents as Agent may reasonably request.

4.2    All Advances. On each Advance Date:

(a)    Agent shall have received (i) an Advance Request for the relevant Advance
as required by Section 2.2(b), each duly executed by Borrower’s Chief Executive
Officer or Chief Financial Officer, and (ii) any other documents Agent may
reasonably request.

(b)    The representations and warranties set forth in this Agreement shall be
true and correct in all material respects on and as of the Advance Date with the
same effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.

(c)    Borrower shall be in compliance with all the terms and provisions set
forth herein and in each other Loan Document on its part to be observed or
performed, and at the time of and immediately after such Advance no Event of
Default shall have occurred and be continuing.

 

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(d)    Each Advance Request shall be deemed to constitute a representation and
warranty by Borrower on the relevant Advance Date as to the matters specified in
paragraphs (b) and (c) of this Section 4.2 and as to the matters set forth in
the Advance Request.

(e)    with respect to the initial Tranche IV Term Loan Advance, the Loan
Parties shall have paid the Tranche IV Facility Charge;

4.3    No Default. As of the Closing Date and each Advance Date, (i) no fact or
condition exists that could (or could reasonably be expected to, with the
passage of time, the giving of notice, or both) constitute an Event of Default
and (ii) no event that has had or would reasonably be expected to have a
Material Adverse Effect has occurred and is continuing.

SECTION 5. REPRESENTATIONS AND WARRANTIES OF BORROWER

Borrower represents and warrants that:

5.1    Corporate Status. Borrower is a corporation duly organized, legally
existing and in good standing under the laws of the State of Delaware, and is
duly qualified as a foreign corporation in all jurisdictions in which the nature
of its business or location of its properties require such qualifications and
where the failure to be qualified could reasonably be expected to have a
Material Adverse Effect. Borrower’s present name, former names (if any),
locations, place of formation, Tax identification number, organizational
identification number and other information are correctly set forth in Exhibit
C, as may be updated by Borrower in a written notice (including any Compliance
Certificate) provided to Agent after the Closing Date.

5.2    Collateral. Borrower owns the Collateral and its Intellectual Property,
free of all Liens, except for Permitted Liens. Borrower has the power and
authority to grant to Agent a Lien in the Collateral as security for the Secured
Obligations.

5.3    Consents. Borrower’s execution, delivery and performance of this
Agreement and all other Loan Documents, (i) have been duly authorized by all
necessary corporate action of Borrower, (ii) will not result in the creation or
imposition of any Lien upon the Collateral, other than Permitted Liens and the
Liens created by this Agreement and the other Loan Documents, (iii) do not
violate any provisions of Borrower’s Certificate of Incorporation, bylaws, or
any material law, regulation, order, injunction, judgment, decree or writ to
which Borrower is subject and (iv) except as described on Schedule 5.3, do not
violate any material contract or agreement or require the consent or approval of
any other Person which has not already been obtained. The individual or
individuals executing the Loan Documents on behalf of Borrower are duly
authorized to do so.

5.4    Material Adverse Effect. No event that has had or could reasonably be
expected to have a Material Adverse Effect has occurred and is continuing.
Borrower is not aware of any event likely to occur that is reasonably expected
to result in a Material Adverse Effect.

 

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5.5    Actions Before Governmental Authorities. There are no actions, suits or
proceedings at law or in equity or by or before any governmental authority now
pending or, to the knowledge of Borrower, threatened against or affecting
Borrower or its property, which, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect.

5.6    Laws. Neither Borrower nor any of its Subsidiaries is in violation of any
law, rule or regulation, or in default with respect to any judgment, writ,
injunction or decree of any governmental authority, where such violation or
default is reasonably expected to result in a Material Adverse Effect. Borrower
is not in default in any material respect under any provision of any agreement
or instrument evidencing material Indebtedness, or any other material agreement
to which it is a party or by which it is bound.

Neither Borrower nor any of its Subsidiaries is an “investment company” or a
company “controlled” by an “investment company” under the Investment Company Act
of 1940, as amended. Neither Borrower nor any of its Subsidiaries is engaged as
one of its important activities in extending credit for margin stock (under
Regulations X, T and U of the Federal Reserve Board of Governors). Borrower and
each of its Subsidiaries has complied in all material respects with the Federal
Fair Labor Standards Act. Neither Borrower nor any of its Subsidiaries is a
“holding company” or an “affiliate” of a “holding company” or a “subsidiary
company” of a “holding company” as each term is defined and used in the Public
Utility Holding Company Act of 2005. Neither Borrower’s nor any of its
Subsidiaries’ properties or assets has been used by Borrower or such Subsidiary
or, to Borrower’s Knowledge, by previous Persons, in disposing, producing,
storing, treating, or transporting any hazardous substance other than in
material compliance with applicable laws. Borrower and each of its Subsidiaries
has obtained all consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all Governmental
Authorities that are necessary to continue their respective businesses as
currently conducted.

None of Borrower, any of its Subsidiaries, or, to Borrower’s knowledge, any of
Borrower’s or its Subsidiaries’ Affiliates or any of their respective agents
acting or benefiting in any capacity in connection with the transactions
contemplated by this Agreement is (i) in violation of any Anti Terrorism Law,
(ii) engaging in or conspiring to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding or attempts to violate, any of
the prohibitions set forth in any Anti Terrorism Law, or (iii) is a Blocked
Person. None of Borrower, any of its Subsidiaries, or to the knowledge of
Borrower and any of their Affiliates or agents, acting or benefiting in any
capacity in connection with the transactions contemplated by this Agreement,
(x) conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any Blocked Person, or
(y) deals in, or otherwise engages in any transaction relating to, any property
or interest in property blocked pursuant to Executive Order No. 13224, any
similar executive order or other Anti Terrorism Law. None of the

 

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funds to be provided under this Agreement will be used, directly or indirectly,
(a) for any activities in violation of any applicable anti-money laundering,
economic sanctions and anti-bribery laws and regulations laws and regulations or
(b) for any payment to any governmental official or employee, political party,
official of a political party, candidate for political office, or anyone else
acting in an official capacity, in order to obtain, retain or direct business or
obtain any improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended.

5.7    Information Correct and Current. No written information, report, Advance
Request, financial statement, exhibit or schedule furnished, by or on behalf of
Borrower to Agent in connection with any Loan Document or included therein or
delivered pursuant thereto, contained, or, when taken as a whole, contains or
will contain any material misstatement of fact or, when taken together with all
other such information or documents, omitted, omits or will omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not materially
misleading at the time such statement was made or deemed made. Additionally, any
and all financial or business projections provided by Borrower to Agent, whether
prior to or after the Closing Date, shall be (i) provided in good faith and
based on the most current data and information available to Borrower, and
(ii) the most current of such projections provided to Borrower’s Board of
Directors (it being understood that such projections are subject to significant
uncertainties, changes in circumstances and contingencies, many of which are
beyond the control of the Borrower, that no assurance is given that any
particular projections will be realized, that actual results may differ).

5.8    Tax Matters. Except as described on Schedule 5.8 and except those Taxes
being contested in good faith with adequate reserves under GAAP, (a) Borrower
has filed all material federal, state and local Tax returns that it is required
to file, (b) Borrower has duly paid or fully reserved for all Taxes or
installments thereof (including any interest or penalties) as and when due,
which have or may become due pursuant to such returns, and (c) Borrower has paid
any Tax assessment received by Borrower for the three (3) years preceding the
Closing Date; in each case, other than with respect to Taxes that do not exceed
Twenty-Five Thousand Dollars ($25,000) in the aggregate.

5.9    Intellectual Property Claims. Borrower is the sole owner of, or otherwise
has the right to use, the Intellectual Property material to Borrower’s business.
Except as described on Schedule 5.9, (i) each of the material Copyrights,
Trademarks and Patents is valid and enforceable, (ii) no material part of the
Intellectual Property of Borrower has been judged invalid or unenforceable, in
whole or in part, and (iii) no claim has been made in writing to Borrower that
any material part of the Intellectual Property of Borrower violates the rights
of any third party. Exhibit D is a true, correct and complete list of each of
Borrower’s Patents, registered Trademarks, registered Copyrights, and material
agreements under which Borrower licenses Intellectual Property from third
parties (other than shrink-wrap software licenses), together with application or
registration numbers, as applicable, owned by Borrower or any Subsidiary, in
each case as of the Closing Date. Borrower is not in material breach of, nor has
Borrower failed to perform any material obligations under, any of the foregoing
contracts, licenses or agreements and, to Borrower’s knowledge, no third party
to any such contract, license or agreement is in material breach thereof or has
failed to perform any material obligations thereunder.

 

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5.10    Intellectual Property. Except as described on Schedule 5.10, Borrower
has all material rights with respect to Intellectual Property necessary or
material in the operation or conduct of Borrower’s business as currently
conducted and proposed to be conducted by Borrower. Without limiting the
generality of the foregoing, and in the case of Licenses (other than shrink-wrap
licenses, click on license agreements, open source code and other licenses
available to the public without customization), except for restrictions that are
unenforceable under Division 9 of the UCC, Borrower has the right, to the extent
required to operate Borrower’s business, to freely transfer, license or assign
Intellectual Property necessary or material in the operation or conduct of
Borrower’s business as currently conducted and proposed to be conducted by
Borrower, without condition, restriction or payment of any kind (other than
license payments in the ordinary course of business) to any third party, and
Borrower owns or has the right to use, pursuant to valid licenses, all software
development tools, library functions, compilers and all other third-party
software and other items that are material to Borrower’s business and used in
the design, development, promotion, sale, license, manufacture, import, export,
use or distribution of Borrower Products except customary covenants or
restrictions in inbound license agreements and equipment leases where Borrower
is the licensee or lessee.

5.11    Borrower Products. Except as described on Schedule 5.11, no Intellectual
Property owned by Borrower or Borrower Product has been or is subject to any
actual or, to the knowledge of Borrower, threatened (in writing) litigation,
proceeding (including any proceeding in the United States Patent and Trademark
Office or any corresponding foreign office or agency) or outstanding decree,
order, judgment, settlement agreement or stipulation that restricts in any
manner Borrower’s use, transfer or licensing thereof or that may affect the
validity, use or enforceability thereof. There is no decree, order, judgment,
agreement, stipulation, arbitral award or other provision entered into in
connection with any litigation or proceeding that obligates Borrower to grant
licenses or ownership interest in any future Intellectual Property related to
the operation or conduct of the business of Borrower or Borrower Products.
Borrower has not received any written notice or claim, or, to the knowledge of
Borrower, oral notice or claim, challenging or questioning Borrower’s ownership
in any Intellectual Property (or written notice of any claim challenging or
questioning the ownership in any licensed Intellectual Property of the owner
thereof) or suggesting that any third party has any claim of legal or beneficial
ownership with respect thereto nor, to Borrower’s knowledge, is there a
reasonable basis for any such claim. Neither Borrower’s use of its Intellectual
Property nor the production and sale of Borrower Products infringes the
Intellectual Property or other rights of others.

5.12    Financial Accounts. Exhibit E, as may be updated by Borrower in a
written notice provided to Agent after the Closing Date, is a true, correct and
complete list of (a) all banks and other financial institutions at which
Borrower or any Subsidiary maintains Deposit Accounts and (b) all institutions
at which Borrower or any Subsidiary maintains an account holding Investment
Property, and such exhibit correctly identifies in all material respects the
name, address and telephone number of each bank or other institution, the name
in which the account is held, a description of the purpose of the account, and
the complete account number therefor.

 

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5.13    Employee Loans. Except as permitted as a Permitted Investment, Borrower
has no outstanding loans to any employee, officer or director of the Borrower
nor has Borrower guaranteed the payment of any loan made to an employee, officer
or director of the Borrower by a third party.

5.14    Capitalization and Subsidiaries. Borrower does not own any stock,
partnership interest or other securities of any Person, except for Permitted
Investments. Attached as Schedule 5.14, as may be updated by Borrower in a
written notice provided after the Closing Date, is a true, correct and complete
list of each Subsidiary.

5.15    Foreign Subsidiary Voting Rights. No decision or action in any governing
document of any Foreign Subsidiary (other than an Eligible Foreign Subsidiary)
requires a vote of greater than 50.1% of the Equity Interests or voting rights
of such Foreign Subsidiary.

SECTION 6. INSURANCE; INDEMNIFICATION

6.1    Coverage. Borrower shall cause to be carried and maintained commercial
general liability insurance, on an occurrence form, against risks customarily
insured against in Borrower’s line of business. Such risks shall include the
risks of bodily injury, including death, property damage, personal injury,
advertising injury, and contractual liability per the terms of the
indemnification agreement found in Section 6.3. Borrower must maintain a minimum
of $2,000,000 of commercial general liability insurance for each occurrence.
Borrower has and agrees to maintain a minimum of $2,000,000 of directors’ and
officers’ insurance for each occurrence and $5,000,000 in the aggregate. So long
as there are any Secured Obligations outstanding, Borrower shall also cause to
be carried and maintained insurance upon the Collateral, insuring against all
risks of physical loss or damage howsoever caused, in an amount not less than
the full replacement cost of the Collateral, provided that such insurance may be
subject to standard exceptions and deductibles.

6.2    Certificates. Borrower shall deliver to Agent certificates of insurance
that evidence Borrower’s compliance with its insurance obligations in
Section 6.1 and the obligations contained in this Section 6.2. Borrower’s
insurance certificate shall state Agent (shown as “Hercules Capital, Inc.”, as
Agent”) is an additional insured for commercial general liability, a loss payee
for all risk property damage insurance, subject to the insurer’s approval, and a
loss payee for property insurance and additional insured for liability insurance
for any future insurance that Borrower may acquire from such insurer. Attached
to the certificates of insurance will be additional insured endorsements for
liability and lender’s loss payable endorsements for all risk property damage
insurance. All certificates of insurance will provide for a minimum of thirty
(30) days advance written notice to Agent of cancellation (other than
cancellation for non-payment of premiums, for which ten (10) days’ advance
written notice shall be sufficient) or any other change adverse to Agent’s
interests. Any failure of Agent to scrutinize such insurance certificates for
compliance is not a waiver of any of Agent’s rights, all of which are reserved.
Borrower shall provide Agent with copies of each insurance policy, and upon
entering or materially amending any insurance policy required hereunder,
Borrower shall provide Agent with copies of such policies and shall promptly
deliver to Agent updated insurance certificates with respect to such policies.

 

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6.3    Indemnity. Borrower agrees to indemnify and hold Agent, Lender and their
officers, directors, employees, agents, in-house attorneys, representatives and
shareholders (each, an “Indemnified Person”) harmless from and against any and
all claims, costs, expenses, damages and liabilities (including such claims,
costs, expenses, damages and liabilities based on liability in tort, including
strict liability in tort), including reasonable attorneys’ fees and
disbursements and other costs of investigation or defense (including those
incurred upon any appeal) (collectively, “Liabilities”), that may be instituted
or asserted against or incurred by such Indemnified Person as the result of
credit having been extended, suspended or terminated under this Agreement and
the other Loan Documents or the administration of such credit, or in connection
with or arising out of the transactions contemplated hereunder and thereunder,
or any actions or failures to act in connection therewith, or arising out of the
disposition or utilization of the Collateral, excluding in all cases Liabilities
to the extent resulting solely from any Indemnified Person’s fraud, gross
negligence or willful misconduct. Borrower agrees to pay, and to save Agent and
Lender harmless from, any and all liabilities with respect to, or resulting from
any delay in paying, any and all excise, sales or other similar Taxes (excluding
Taxes imposed on or measured by the net income of Agent or Lender) that may be
payable or determined to be payable with respect to any of the Collateral or
this Agreement. This Section 6.3 shall not apply with respect to Taxes other
than any Taxes that represent losses, claims, damages, etc. arising from any
non-Tax claim. In no event shall any Indemnified Person be liable on any theory
of liability for any special, indirect, consequential or punitive damages
(including any loss of profits, business or anticipated savings). This
Section 6.3 shall survive the repayment of indebtedness under, and otherwise
shall survive the expiration or other termination of, the Loan Agreement.

SECTION 7. COVENANTS OF BORROWER

Borrower agrees as follows:

7.1    Financial Reports. Borrower shall furnish to Agent the financial
statements and reports listed hereinafter (the “Financial Statements”):

(a)    as soon as practicable (and in any event within 30 days) after the end of
each month, unaudited interim and year-to-date financial statements as of the
end of such month (prepared on a consolidated and consolidating basis, if
applicable), including balance sheet and related statements of income and cash
flows accompanied by a report detailing any material contingencies (including
the commencement of any material litigation by or against Borrower) or any other
occurrence that would reasonably be expected to have a Material Adverse Effect,
all certified by Borrower’s Chief Executive Officer or Chief Financial Officer
to the effect that they have been prepared in accordance with GAAP, except
(i) for the absence of footnotes, (ii) that they are subject to normal year-end
adjustments, and (iii) they do not contain certain non-cash items that are
customarily included in quarterly and annual financial statements;

 

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(b)    as soon as practicable (and in any event within 45 days) after the end of
each calendar quarter, unaudited interim and year-to-date financial statements
as of the end of such calendar quarter (prepared on a consolidated and
consolidating basis, if applicable), including balance sheet and related
statements of income and cash flows accompanied by a report detailing any
material contingencies (including the commencement of any material litigation by
or against Borrower) or any other occurrence that would reasonably be expected
to have a Material Adverse Effect, certified by Borrower’s Chief Executive
Officer or Chief Financial Officer to the effect that they have been prepared in
accordance with GAAP, except (i) for the absence of footnotes, and (ii) that
they are subject to normal year-end adjustments; as well as the most recent
capitalization table for Borrower, including the weighted average exercise price
of employee stock options;

(c)    as soon as practicable (and in any event within ninety (90) days) after
the end of each fiscal year, audited financial statements as of the end of such
year (prepared on a consolidated and consolidating basis, if applicable),
including balance sheet and related statements of income and cash flows, and
setting forth in comparative form the corresponding figures for the preceding
fiscal year, accompanied by an audit report that is unqualified as to scope of
audit, and without any going concern or similar limitations (other than going
concern qualifications solely with respect to the maturity of any outstanding
Term Loan Advance or Permitted Indebtedness), from BDO USA, LLP or another firm
of certified public accountants selected by Borrower and reasonably acceptable
to Agent;

(d)    concurrently with the delivery of any item in Sections 7.1 (a), (b) or
(c),, a Compliance Certificate in the form of Exhibit F;

(e)    concurrently with the delivery of any item in Sections 7.1 (a), (b) or
(c), a report showing agings of accounts receivable and accounts payable;

(f)    promptly after the sending or filing thereof, as the case may be, copies
of any proxy statements, financial statements or reports that Borrower has made
available to holders of its Preferred Stock and copies of any regular, periodic
and special reports or registration statements that Borrower files with the
Securities and Exchange Commission or any governmental authority that may be
substituted therefor, or any national securities exchange;

(g)    at the same time and in the same manner as it gives to its directors,
copies of all notices, minutes, consents and other materials that Borrower
provides to its directors in connection with meetings of the Board of Directors,
and within 30 days after each such meeting, minutes of such meeting; provided
that in all cases Borrower may exclude any information or materials related to
executive compensation, confidential information, any attorney-client privileged
information and any information that would raise a conflict of interest with
Agent or Lender;

 

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(h)    financial and business projections and budgets promptly following their
review by Borrower’s Board of Directors, and in any event, within 30 days after
the end of Borrower’s fiscal year, as well as budgets, operating plans and other
financial information reasonably requested by Agent (provided that Borrower
shall not be obligated to disclosure pursuant to this Section 7.1(f) any
privileged attorney-client communication or any information that would raise a
conflict of interest with Agent or Lender); and

(i)    immediate notice if Borrower or any Subsidiary has knowledge that
Borrower, or any Subsidiary or Affiliate of Borrower, is listed on the OFAC
Lists or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on,
or (d) is arraigned and held over on charges involving money laundering or
predicate crimes to money laundering.

Borrower shall not (without the consent of Agent, such consent not to be
unreasonably withheld or delayed), make any change in its (a) accounting
policies or reporting practices, except as required by applicable law, GAAP or
accounting guidance; or (b) fiscal years or fiscal quarters. The fiscal year of
Borrower shall end on December 31.

The executed Compliance Certificate may be sent via email to Agent at
legal@herculestech.com. All Financial Statements required to be delivered
pursuant to clauses (a), (b) and (c) shall be sent via e-mail to
financialstatements@herculestech.com with a copy to legal@herculestech.com
provided, that if e-mail is not available or sending such Financial Statements
via e-mail is not possible, they shall be faxed to Agent at: (650) 473-9194,
attention Account Manager: Aldeyra Therapeutics, Inc.

Notwithstanding the foregoing, documents required to be delivered under Sections
7.1(a), (b), (c) or (e) (to the extent any such documents are included in
materials otherwise filed with the SEC) may be delivered electronically and if
so delivered, shall be deemed to have been delivered on the date on which
Borrower emails a link thereto to Agent; provided that Borrower shall directly
provide Agent all Financial Statements required to be delivered pursuant to
Section 7.1(b) and (c) hereunder.

7.2    Management Rights. Borrower shall permit any representative that Agent or
Lender authorizes (provided that such representative agrees in writing to be
bound by the confidentiality provisions of Section 11.12 hereof), including its
attorneys and accountants, to inspect the Collateral and examine and make copies
and abstracts of the books of account and records of Borrower at reasonable
times and upon reasonable notice during normal business hours; provided,
however, that so long as no Event of Default has occurred and is continuing,
such examinations shall be limited to no more often than twice in any twelve
month period. In addition, any such representative shall have the right to meet
with management and officers of Borrower to discuss such books of account and
records. In addition, Agent or Lender shall be entitled at reasonable times and
intervals to consult with and advise the management and officers of Borrower
concerning significant business issues affecting Borrower. Such consultations
shall not unreasonably interfere with Borrower’s business operations. The
parties intend that the rights granted Agent and Lender shall constitute
“management rights” within the meaning of 29 C.F.R.
Section 2510.3-101(d)(3)(ii), but that any advice, recommendations or
participation by Agent or Lender with respect to any business issues shall not
be deemed to give Agent or Lender, nor be deemed an exercise by Agent or Lender
of, control over Borrower’s management or policies.

 

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7.3    Further Assurances. Borrower shall from time to time execute, deliver and
file, alone or with Agent, any financing statements, security agreements,
collateral assignments, notices, control agreements, or other documents
reasonably requested to perfect or give the highest priority to Agent’s Lien on
the Collateral. Borrower shall from time to time procure any instruments or
documents as may be reasonably requested by Agent, and take all further action
that may be necessary, or that Agent may reasonably request, to perfect and
protect the Liens granted hereby and thereby. In addition, and for such purposes
only, Borrower hereby authorizes Agent to execute and deliver on behalf of
Borrower and to file such financing statements (including an indication that the
financing statement covers “all assets or all personal property” of Borrower in
accordance with Section 9-504 of the UCC), collateral assignments, notices,
control agreements, security agreements and other documents without the
signature of Borrower either in Agent’s name or in the name of Agent as agent
and attorney-in-fact for Borrower. Borrower shall protect and defend Borrower’s
title to the Collateral and Agent’s Lien thereon against all Persons claiming
any interest adverse to Borrower or Agent other than Permitted Liens.

7.4    Indebtedness. Borrower shall not create, incur, assume, guarantee or be
or remain liable with respect to any Indebtedness, or permit any Subsidiary so
to do, other than Permitted Indebtedness, or prepay any Indebtedness or take any
actions which impose on Borrower an obligation to prepay any Indebtedness,
except for (a) the conversion of Indebtedness into equity securities and the
payment of cash in lieu of fractional shares in connection with such conversion,
(b) purchase money Indebtedness pursuant to its then applicable payment
schedule, (c) prepayment by any Subsidiary of (i) inter-company Indebtedness
owed by such Subsidiary to any Borrower, or (ii) if such Subsidiary is not a
Borrower, intercompany Indebtedness owed by such Subsidiary to another
Subsidiary that is not a Borrower or (d) as otherwise permitted hereunder or
approved in writing by Agent.

7.5    Collateral. Borrower shall at all times keep the Collateral, the
Intellectual Property and all other property and assets used in Borrower’s
business or in which Borrower now or hereafter holds any interest free and clear
from any legal process or Liens whatsoever (except for Permitted Liens), and
shall give Agent prompt written notice of any legal process affecting the
Collateral, the Intellectual Property, such other property and assets, or any
Liens thereon, provided however, that the Collateral and such other property and
assets may be subject to Permitted Liens, except that there shall be no Liens
whatsoever on Intellectual Property. Borrower shall not agree with any Person
other than Agent or Lender not to encumber its property. Borrower shall not
enter into or suffer to exist or become effective any agreement that prohibits
or limits the ability of any Borrower to create, incur, assume or suffer to
exist any Lien upon any of its Intellectual Property, whether now owned or
hereafter acquired, to secure its obligations under the Loan Documents to which
it is a party other than (a) this Agreement and the other Loan Documents,
(b) any agreements governing any purchase money Liens or capital lease

 

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obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby) and
(c) customary restrictions on the assignment of leases, licenses and other
agreements. Borrower shall cause its Subsidiaries to protect and defend such
Subsidiary’s title to its assets from and against all Persons claiming any
interest adverse to such Subsidiary, and Borrower shall cause its Subsidiaries
at all times to keep such Subsidiary’s property and assets free and clear from
any legal process or Liens whatsoever (except for Permitted Liens, provided
however, that there shall be no Liens whatsoever on Intellectual Property), and
shall give Agent prompt written notice of any legal process affecting such
Subsidiary’s assets.

7.6    Investments. Borrower shall not directly or indirectly acquire or own, or
make any Investment in or to any Person, or permit any of its Subsidiaries so to
do, other than Permitted Investments.

7.7    Distributions. Borrower shall not, and shall not allow any Subsidiary to,
(a) repurchase or redeem any class of stock or other Equity Interest other than
pursuant to employee, director or consultant repurchase plans or other similar
agreements, provided, however, in each case the repurchase or redemption price
does not exceed the original consideration paid for such stock or Equity
Interest, or (b) declare or pay any cash dividend or make a cash distribution on
any class of stock or other Equity Interest, except that a Subsidiary may pay
dividends or make distributions to Borrower, or (c) lend money to any employees,
officers or directors or guarantee the payment of any such loans granted by a
third party in excess of $100,000 in the aggregate or (d) waive, release or
forgive any Indebtedness owed by any employees, officers or directors in excess
of $100,000 in the aggregate in any given year.

7.8    Transfers. Except for Permitted Transfers, Permitted Investments and
Permitted Liens, Borrower shall not, and shall not allow any Subsidiary to,
voluntarily or involuntarily transfer, sell, lease, license, lend or in any
other manner convey any equitable, beneficial or legal interest in any material
portion of its assets.

7.9    Mergers or Acquisitions. Borrower shall not merge or consolidate, or
permit any of its Subsidiaries to merge or consolidate, with or into any other
business organization (other than mergers or consolidations of (a) a Subsidiary
which is not a Borrower into another Subsidiary or into Borrower or (b) a
Borrower into another Borrower), or acquire, or permit any of its Subsidiaries
to acquire, all or substantially all of the capital stock or property of another
Person (other than acquisitions constituting Permitted Investments with
aggregate consideration not exceeding $500,000). Borrower may dissolve any
Subsidiary (that is not a party to this Agreement) as long as the assets of the
Subsidiary are distributed to Borrower, and Borrower provides prompt notice to
Agent.

7.10    Taxes. Borrower and its Subsidiaries shall pay when due all material
Taxes, fees or other charges of any nature whatsoever (together with any related
interest or penalties) now or hereafter imposed or assessed against Borrower,
Agent, Lender or the Collateral or upon Borrower’s ownership, possession, use,
operation or disposition thereof or upon Borrower’s rents, receipts or earnings
arising therefrom. Borrower shall file on or before the due date therefor all
personal property Tax returns in respect of the Collateral (taking into account
applicable extensions of time to file). Notwithstanding the foregoing, Borrower
may contest, in good faith and by appropriate proceedings, Taxes for which
Borrower maintains adequate reserves therefor in accordance with GAAP.

 

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7.11    Corporate Changes. Neither Borrower nor any Subsidiary shall change its
corporate name, legal form or jurisdiction of formation without twenty
(20) days’ prior written notice to Agent. Neither Borrower nor any Subsidiary
shall suffer a Change in Control. Neither Borrower nor any Subsidiary shall
relocate its chief executive office or its principal place of business unless:
(i) it has provided prior written notice to Agent; and (ii) such relocation
shall be within the continental United States of America. Neither Borrower nor
any Qualified Subsidiary shall relocate any item of Collateral (other than
(u) Borrower Products, including compounds and raw materials used to manufacture
biopharmaceuticals or which are used for preclinical testing or clinical trials,
in the ordinary course of business, (v) Permitted Transfers, (w) sales of
Inventory in the ordinary course of business, (x) relocations of Equipment
located outside of the United States of America having an aggregate value of up
to $200,000, (y) relocations of Equipment located within the continental United
States of America having an aggregate value of up to $200,000 in any fiscal
year, and (z) relocations of Collateral from a location described on Exhibit C
to another location described on Exhibit C), unless (A) it has provided prompt
written notice to Agent, (B) such relocation is within the continental United
States of America and, (C) if such relocation is to a third party bailee, and
the Collateral has an aggregate value in excess of $200,000, it has delivered a
bailee agreement in form and substance reasonably acceptable to Agent.

7.12    Deposit Accounts. Neither Borrower nor any Qualified Subsidiary shall
maintain any Deposit Accounts, or accounts holding Investment Property, except
with respect to which Agent has an Account Control Agreement.

7.13    Formation of Subsidiaries. Borrower shall notify Agent of each
Subsidiary formed subsequent to the Closing Date and, within 15 Business Days of
formation, shall cause any such Qualified Subsidiary (other than Eligible
Foreign Subsidiaries with combined assets and liabilities less than Five Hundred
Thousand Dollars ($500,000) in any individual Eligible Foreign Subsidiary and
One Million Dollars ($1,000,000) in the aggregate across all such excluded
Eligible Foreign Subsidiaries) to execute and deliver to Agent a Joinder
Agreement.

7.14    [Reserved.]

7.15    Notification of Event of Default. Borrower shall notify Agent promptly
within two (2) Business Days of the occurrence of any Event of Default.

7.16    [Reserved.]

7.17    Use of Proceeds. Borrower agrees that the proceeds of the Loans shall be
used solely to refinance existing indebtedness, to pay related fees and expenses
in connection with this Agreement and for working capital and general corporate
purposes. The proceeds of the Loans will not be used in violation of
Anti-Corruption Laws or applicable Sanctions.

 

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7.18    Foreign Subsidiary Voting Rights. Borrower shall not, and shall not
permit any Subsidiary, to amend or modify any governing document of any Foreign
Subsidiary of Borrower (other than an Eligible Foreign Subsidiary) the effect of
which is to require a vote of greater than 50.1% of the Equity Interests or
voting rights of such entity for any decision or action of such entity.

7.19    [Reserved.]

7.20    Compliance with Laws.

Borrower shall maintain, and shall cause its Subsidiaries to maintain,
compliance in all material respect with all applicable laws, rules or
regulations (including any law, rule or regulation with respect to the making or
brokering of loans or financial accommodations), and shall, or cause its
Subsidiaries to, obtain and maintain all required governmental authorizations,
approvals, licenses, franchises, permits or registrations reasonably necessary
in connection with the conduct of Borrower’s business.

Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or any of
its Subsidiaries permit, any Affiliate to, directly or indirectly, knowingly
enter into any documents, instruments, agreements or contracts with any Person
listed on the OFAC Lists. Neither Borrower nor any of its Subsidiaries shall,
nor shall Borrower or any of its Subsidiaries, permit, any Affiliate to,
directly or indirectly, (i) conduct any business or engage in any transaction or
dealing with any Blocked Person, including, without limitation, the making or
receiving of any contribution of funds, goods or services to or for the benefit
of any Blocked Person, (ii) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to Executive
Order No. 13224 or any similar executive order or other Anti-Terrorism Law, or
(iii) engage in or conspire to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism Law.

Borrower has implemented and maintains in effect policies and procedures
designed to ensure compliance by the Borrower, its Subsidiaries and their
respective directors, officers, employees and agents with Anti-Corruption Laws
and applicable Sanctions, and Borrower, its Subsidiaries and their respective
officers and employees and to the knowledge of Borrower its directors and
agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in
all material respects.

None of Borrower, any of its Subsidiaries or any of their respective directors,
officers or employees, or to the knowledge of Borrower, any agent for Borrower
or its Subsidiaries that will act in any capacity in connection with or benefit
from the credit facility established hereby, is a Sanctioned Person. No Loan,
use of proceeds or other transaction contemplated by this Agreement will violate
Anti-Corruption Laws or applicable Sanctions.

 

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7.21    Transactions with Affiliates. Borrower shall not and shall not permit
any Subsidiary to, directly or indirectly, enter into or permit to exist any
transaction of any kind with any Affiliate of Borrower or such Subsidiary on
terms that are less favorable to Borrower or such Subsidiary, as the case may
be, than those that might be obtained in an arm’s length transaction from a
Person who is not an Affiliate of Borrower or such Subsidiary, except:
(i) transactions between or among Borrowers (or any entity that becomes a
Borrower as a result of such transaction) not involving any other Affiliate;
(ii) loans or advances to employees, officers and directors otherwise
constituting a Permitted Investment; (iii) transactions set forth on Schedule
7.21, as those agreements and instruments may be amended, modified,
supplemented, extended, renewed or refinanced from time to time in accordance
with the other terms of this covenant or to the extent not more disadvantageous
to the Agent and Lender in any material respect.

7.22    Post-Closing Obligations. Notwithstanding any provision herein or in any
other Loan Document to the contrary, to the extent not actually delivered on or
prior to the Closing Date, Borrower shall:

(a)    within thirty (30) days of the Closing Date (or such later date as Agent
may agree to in its sole discretion), deliver to Agent all insurance
endorsements, in form and substance reasonably satisfactory to Agent in its
reasonable discretion, required hereunder; and

(b)    within forty-five (45) days of the Closing Date (or such later date as
Agent may agree to in its sole discretion), a fully-executed landlord waiver, in
form and substance reasonably satisfactory to Agent, for Borrower’s location at:
131 Hartwell Avenue, Suite 320, Lexington, MA 02421.

SECTION 8. [RESERVED]

SECTION 9. EVENTS OF DEFAULT

The occurrence of any one or more of the following events shall be an Event of
Default:

9.1    Payments. Borrower fails to pay any amount due under this Agreement or
any of the other Loan Documents on the due date; provided, however, that an
Event of Default shall not occur on account of a failure to pay due solely to an
administrative or operational error of Agent or Lender or Borrower’s bank if
Borrower had the funds to make the payment when due and makes the payment within
three (3) Business Days following Borrower’s knowledge of such failure to pay;
or

9.2    Covenants. Borrower breaches or defaults in the performance of any
covenant or Secured Obligation under this Agreement, or any of the other Loan
Documents or any other agreement among Borrower, Agent and Lender, and (a) with
respect to a default under any covenant under this Agreement (other than under
Sections 6.1, 6.3, 7.5, 7.6, 7.7, 7.8, 7.9, 7.15, 7.17, 7.18, 7.20, 7.21, and
7.22), any other Loan Document or any other agreement among Borrower, Agent and
Lender, such default continues for more than ten (10) days after the earlier of
the date on which (i) Agent or Lender has given notice of such default to
Borrower and (ii) Borrower has actual knowledge of such default or (b) with
respect to a default under any of Sections 6.1, 6.3, 7.5, 7.6, 7.7, 7.8, 7.9,
7.15, 7.17 7.18, 7.20, 7.21, and 7.22 the occurrence of such default; or

 

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9.3    Material Adverse Effect. A circumstance has occurred that could
reasonably be expected to have a Material Adverse Effect; provided that solely
for purposes of this Section 9.3, the failure to achieve Clinical Milestone I,
Clinical Milestone II, or Clinical Milestone III, in each case in and of itself,
shall not constitute a Material Adverse Effect; or

9.4    Representations. Any representation or warranty made by Borrower in any
Loan Document shall have been false or misleading in any material respect when
made or when deemed made; or

9.5    Insolvency. Borrower (A) (i) shall make an assignment for the benefit of
creditors; or (ii) shall be unable to pay its debts as they become due, or be
unable to pay or perform under the Loan Documents, or shall become insolvent; or
(iii) shall file a voluntary petition in bankruptcy; or (iv) shall file any
petition, answer, or document seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation pertinent to such
circumstances; or (v) shall seek or consent to or acquiesce in the appointment
of any trustee, receiver, or liquidator of Borrower or of all or any substantial
part (i.e., 33-1/3% or more) of the assets or property of Borrower; or
(vi) shall cease operations of its business as its business has normally been
conducted, or terminate substantially all of its employees; or (vii) Borrower or
its directors or majority shareholders shall take any action initiating any of
the foregoing actions described in clauses (i) through (vi); or (B) either
(i) forty-five (45) days shall have expired after the commencement of an
involuntary action against Borrower seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, without such action being
dismissed or all orders or proceedings thereunder affecting the operations or
the business of Borrower being stayed; or (ii) a stay of any such order or
proceedings shall thereafter be set aside and the action setting it aside shall
not be timely appealed; or (iii) Borrower shall file any answer admitting or not
contesting the material allegations of a petition filed against Borrower in any
such proceedings; or (iv) the court in which such proceedings are pending shall
enter a decree or order granting the relief sought in any such proceedings; or
(v) forty-five (45) days shall have expired after the appointment, without the
consent or acquiescence of Borrower, of any trustee, receiver or liquidator of
Borrower or of all or any substantial part of the properties of Borrower without
such appointment being vacated; or

9.6    Attachments; Judgments. Any portion of Borrower’s assets is attached or
seized, or a levy is filed against any such assets, or a judgment or judgments
is/are entered for the payment of money (not covered by independent third party
insurance as to which liability has not been rejected by such insurance
carrier), individually or in the aggregate, of at least $250,000), and remains
unstayed, unbonded and unsatisfied for more than ten (10) days, or Borrower is
enjoined or in any way prevented by court order from conducting any material
part of its business; or

 

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9.7    Other Obligations. The occurrence of any default under any agreement or
obligation of Borrower involving any Indebtedness in excess of $100,000.

9.8     Stop Trade. At any time, an SEC stop trade order or The Nasdaq Stock
Market trading suspension of the Common Stock shall be in effect for five
(5) consecutive days or five (5) days during a period of ten (10) consecutive
days, excluding in all cases a suspension of all trading on a public market,
provided that Borrower shall not have been able to cure such trading suspension
within thirty (30) days of the notice thereof or list the Common Stock on
another public market within sixty (60) days of such notice.

SECTION 10. REMEDIES

10.1    General. Upon and during the continuance of any one or more Events of
Default, (i) Agent may, and at the direction of the Required Lenders shall,
accelerate and demand payment of all or any part of the Secured Obligations
together with a Prepayment Charge and declare them to be immediately due and
payable (provided, that upon the occurrence of an Event of Default of the type
described in Section 9.5, all of the Secured Obligations (including, without
limitation, the Prepayment Charge and the End of Term Charge) shall
automatically be accelerated and made due and payable, in each case without any
further notice or act), (ii) Agent may, at its option, sign and file in
Borrower’s name any and all collateral assignments, notices, control agreements,
security agreements and other documents it deems necessary or appropriate to
perfect or protect the repayment of the Secured Obligations, and in furtherance
thereof, Borrower hereby grants Agent an irrevocable power of attorney coupled
with an interest, and (iii) Agent may notify any of Borrower’s account debtors
to make payment directly to Agent, compromise the amount of any such account on
Borrower’s behalf and endorse Agent’s name without recourse on any such payment
for deposit directly to Agent’s account. Agent may, and at the direction of the
Required Lenders shall, exercise all rights and remedies with respect to the
Collateral under the Loan Documents or otherwise available to it under the UCC
and other applicable law, including the right to release, hold, sell, lease,
liquidate, collect, realize upon, or otherwise dispose of all or any part of the
Collateral and the right to occupy, utilize, process and commingle the
Collateral. All Agent’s rights and remedies shall be cumulative and not
exclusive.

10.2    Collection; Foreclosure. Upon the occurrence and during the continuance
of any Event of Default, Agent may, and at the direction of the Required Lenders
shall, at any time or from time to time, apply, collect, liquidate, sell in one
or more sales, lease or otherwise dispose of, any or all of the Collateral, in
its then condition or following any commercially reasonable preparation or
processing, in such order as Agent may elect. Any such sale may be made either
at public or private sale at its place of business or elsewhere. Borrower agrees
that any such public or private sale may occur upon ten (10) calendar days’
prior written notice to Borrower. Agent may require Borrower to assemble the
Collateral and make it available to Agent at a place designated by Agent that is
reasonably convenient to Agent and Borrower. The proceeds of any sale,
disposition or other realization upon all or any part of the Collateral shall be
applied by Agent in the following order of priorities:

First, to Agent and Lender in an amount sufficient to pay in full Agent’s and
Lender’s reasonable costs and professionals’ and advisors’ fees and expenses as
described in Section 11.11;

 

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Second, to Lender in an amount equal to the then unpaid amount of the Secured
Obligations (including principal, interest, and the default rate interest), in
such order and priority as Agent may choose in its sole discretion; and

Finally, after the full and final payment in Cash of all of the Secured
Obligations (other than inchoate obligations), to any creditor holding a junior
Lien on the Collateral, or to Borrower or its representatives or as a court of
competent jurisdiction may direct.

Agent shall be deemed to have acted reasonably in the custody, preservation and
disposition of any of the Collateral if it complies with the obligations of a
secured party under the UCC.

10.3    No Waiver. Agent shall be under no obligation to marshal any of the
Collateral for the benefit of Borrower or any other Person, and Borrower
expressly waives all rights, if any, to require Agent to marshal any Collateral.

10.4    Cumulative Remedies. The rights, powers and remedies of Agent hereunder
shall be in addition to all rights, powers and remedies given by statute or rule
of law and are cumulative. The exercise of any one or more of the rights, powers
and remedies provided herein shall not be construed as a waiver of or election
of remedies with respect to any other rights, powers and remedies of Agent.

SECTION 11. MISCELLANEOUS

11.1    Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective only to the extent and duration of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

11.2    Notice. Except as otherwise provided herein, any notice, demand,
request, consent, approval, declaration, service of process or other
communication (including the delivery of Financial Statements) that is required,
contemplated, or permitted under the Loan Documents or with respect to the
subject matter hereof shall be in writing, and shall be deemed to have been
validly served, given, delivered, and received upon the earlier of: (i) the day
of transmission by electronic mail or hand delivery or delivery by an overnight
express service or overnight mail delivery service; or (ii) the third calendar
day after deposit in the United States of America mails, with proper first class
postage prepaid, in each case addressed to the party to be notified as follows:

 

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(a)    If to Agent:

HERCULES CAPITAL, INC.

Legal Department

Attention: Chief Legal Officer, Lake McGuire, and Nim Shah

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

email: legal@herculestech.com; lmcguire@htgc.com; nshah@htgc.com

Telephone: 650-289-3060

(b)    If to Lender:

HERCULES CAPITAL, INC.

Legal Department

Attention: Chief Legal Officer, Lake McGuire, and Nim Shah

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

email: legal@herculestech.com; lmcguire@htgc.com; nshah@htgc.com

Telephone: 650-289-3060

(c)    If to Borrower:

ALDEYRA THERAPEUTICS, INC.

Attention: Chief Financial Officer

131 Hartwell Avenue

Lexington, MA 02421

email: jreed@aldeyra.com

Telephone: (781) 761-4904

with a copy (which shall not constitute notice) to:

        Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP

        One Marina Park Drive, Suite 900

        Boston, MA 02210

        Attention: Jay K. Hachigian and Keith J. Scherer

        Telephone: (617) 648-9100

        Email: hach@gunder.com

                    kscherer@gunder.com

or to such other address as each party may designate for itself by like notice.

11.3    Entire Agreement; Amendments.

(a)    This Agreement and the other Loan Documents constitute the entire
agreement and understanding of the parties hereto in respect of the subject
matter hereof and thereof, and supersede and replace in their entirety any prior
proposals, term sheets, non-disclosure or confidentiality agreements, letters,
negotiations or other documents or agreements, whether written or oral, with
respect to the subject matter hereof or thereof (including Agent’s proposal
letter dated January 31, 2019 and the Non-Disclosure Agreement).

 

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(b)    Neither this Agreement, any other Loan Document, nor any terms hereof or
thereof may be amended, supplemented or modified except in accordance with the
provisions of this Section 11.3(b). The Required Lenders and Borrower party to
the relevant Loan Document may, or, with the written consent of the Required
Lenders, the Agent and the Borrower party to the relevant Loan Document may,
from time to time, (i) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of Lender or of the Borrower hereunder or thereunder or
(ii) waive, on such terms and conditions as the Required Lenders or the Agent,
as the case may be, may specify in such instrument, any of the requirements of
this Agreement or the other Loan Documents or any default or Event of Default
and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (A) forgive the principal amount or
extend the final scheduled date of maturity of any Loan, extend the scheduled
date of any amortization payment in respect of any Term Loan, reduce the stated
rate of any interest or fee payable hereunder) or extend the scheduled date of
any payment thereof, without the written consent of each Lender directly
affected thereby; (B) eliminate or reduce the voting rights of any Lender under
this Section 11.3(b) without the written consent of such Lender; (C) reduce any
percentage specified in the definition of Required Lenders, consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, release all or substantially
all of the Collateral or release a Borrower from its obligations under the Loan
Documents, in each case without the written consent of each and every Lender; or
(D) amend, modify or waive any provision of Section 11.17 without the written
consent of the Agent. Any such waiver and any such amendment, supplement or
modification shall apply equally to each Lender and shall be binding upon
Borrower, Lender, the Agent and all future holders of the Loans.

11.4    No Strict Construction. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.

11.5    No Waiver. The powers conferred upon Agent and Lender by this Agreement
are solely to protect its rights hereunder and under the other Loan Documents
and its interest in the Collateral and shall not impose any duty upon Agent or
Lender to exercise any such powers. No omission or delay by Agent or Lender at
any time to enforce any right or remedy reserved to it, or to require
performance of any of the terms, covenants or provisions hereof by Borrower at
any time designated, shall be a waiver of any such right or remedy to which
Agent or Lender is entitled, nor shall it in any way affect the right of Agent
or Lender to enforce such provisions thereafter.

 

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11.6    Survival. All agreements, representations and warranties contained in
this Agreement and the other Loan Documents or in any document delivered
pursuant hereto or thereto shall be for the benefit of Agent and Lender and
shall survive the execution and delivery of this Agreement. This Agreement shall
terminate upon the indefeasible payment in full of the Secured Obligations;
provided, however, Section 6.3 shall survive the termination of this Agreement.

11.7    Successors and Assigns.

(a)    The provisions of this Agreement and the other Loan Documents shall inure
to the benefit of and be binding on Borrower and its permitted assigns (if any).
Borrower shall not assign its obligations under this Agreement or any of the
other Loan Documents without Agent’s express prior written consent, and any such
attempted assignment shall be void and of no effect. Agent and Lender may
assign, transfer, or endorse its rights hereunder and under the other Loan
Documents without prior notice to Borrower, and all of such rights shall inure
to the benefit of Agent’s and Lender’s successors and assigns; provided that as
long as no Event of Default has occurred and is continuing, neither Agent nor
any Lender may assign, transfer or endorse its rights hereunder or under the
Loan Documents to any party that is a direct competitor of Borrower (as
reasonably determined by Agent), it being acknowledged that in all cases, any
transfer to an Affiliate of any Lender or Agent shall be allowed.
Notwithstanding the foregoing, (x) in connection with any assignment by a Lender
as a result of a forced divestiture at the request of any regulatory agency, the
restrictions set forth herein shall not apply and Agent and Lender may assign,
transfer or indorse its rights hereunder and under the other Loan Documents to
any Person or party and (y) in connection with a Lender’s own financing or
securitization transactions, the restrictions set forth herein shall not apply
and Agent and Lender may assign, transfer or indorse its rights hereunder and
under the other Loan Documents to any Person or party providing such financing
or formed to undertake such securitization transaction and any transferee of
such Person or party upon the occurrence of a default, event of default or
similar occurrence with respect to such financing or securitization transaction;
provided that no such sale, transfer, pledge or assignment under this clause
(y) shall release such Lender from any of its obligations hereunder or
substitute any such Person or party for such Lender as a party hereto until
Agent shall have received and accepted an effective assignment agreement from
such Person or party in form satisfactory to Agent executed, delivered and fully
completed by the applicable parties thereto, and shall have received such other
information regarding such assignee as Agent reasonably shall require.

(b)    The Agent, acting solely for this purpose as an agent of the Borrower,
shall maintain a copy of each assignment and assumption delivered to it and a
register for the recordation of the names and addresses of Lender, and the
commitments of, and principal amounts (and stated interest) of the Term 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 Agent and Lender shall treat each Person whose name
is recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of the Loan Documents. 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.

 

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11.8    Governing Law. This Agreement and the other Loan Documents have been
negotiated and delivered to Agent and Lender in the State of New York, and shall
have been accepted by Agent and Lender in the State of New York. Payment to
Agent and Lender by Borrower of the Secured Obligations is due in the State of
New York. This Agreement and the other Loan Documents shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
excluding conflict of laws principles that would cause the application of laws
of any other jurisdiction.

11.9    Consent to Jurisdiction and Venue. All judicial proceedings (to the
extent that the reference requirement of Section 11.10 is not applicable)
arising in or under or related to this Agreement or any of the other Loan
Documents shall be brought in any state or federal court located in the State of
New York. By execution and delivery of this Agreement, each party hereto
generally and unconditionally: (a) consents to nonexclusive personal
jurisdiction in New York County, State of New York; (b) waives any objection as
to jurisdiction or venue in New York County, State of New York; (c) agrees not
to assert any defense based on lack of jurisdiction or venue in the aforesaid
courts; and (d) irrevocably agrees to be bound by any judgment rendered thereby
in connection with this Agreement or the other Loan Documents. Service of
process on any party hereto in any action arising out of or relating to this
Agreement shall be effective if given in accordance with the requirements for
notice set forth in Section 11.2, and shall be deemed effective and received as
set forth in Section 11.2. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the right of either
party to bring proceedings in the courts of any other jurisdiction.

11.10    Mutual Waiver of Jury Trial / Judicial Reference.

(a)    Because disputes arising in connection with complex financial
transactions are most quickly and economically resolved by an experienced and
expert Person and the parties wish applicable state and federal laws to apply
(rather than arbitration rules), the parties desire that their disputes be
resolved by a judge applying such applicable laws. EACH OF BORROWER, AGENT AND
LENDER SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE
OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER
CLAIM (COLLECTIVELY, “CLAIMS”) ASSERTED BY BORROWER AGAINST AGENT, LENDER OR
THEIR RESPECTIVE ASSIGNEE OR BY AGENT, LENDER OR THEIR RESPECTIVE ASSIGNEE
AGAINST BORROWER. This waiver extends to all such Claims, including Claims that
involve Persons other than Agent, Borrower and Lender; Claims that arise out of
or are in any way connected to the relationship among Borrower, Agent and
Lender; and any Claims for damages, breach of contract, tort, specific
performance, or any equitable or legal relief of any kind, arising out of this
Agreement, any other Loan Document.

 

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(b)    If the waiver of jury trial set forth in Section 11.10(a) is ineffective
or unenforceable, the parties agree that all Claims shall be resolved by
reference to a private judge sitting without a jury, pursuant to Code of Civil
Procedure Section 638, before a mutually acceptable referee or, if the parties
cannot agree, a referee selected by the Presiding Judge in New York City, New
York. Such proceeding shall be conducted in New York City, New York, with New
York rules of evidence and discovery applicable to such proceeding.

(c)    In the event Claims are to be resolved by judicial reference, either
party may seek from a court identified in Section 11.9, any prejudgment order,
writ or other relief and have such prejudgment order, writ or other relief
enforced to the fullest extent permitted by law notwithstanding that all Claims
are otherwise subject to resolution by judicial reference.

11.11    Professional Fees. Borrower promises to pay Agent’s and Lender’s
documented fees and expenses necessary to finalize the loan documentation,
including but not limited to reasonable attorneys’ fees, UCC searches, filing
costs, and other miscellaneous expenses. In addition, Borrower promises to pay
any and all reasonable attorneys’ and other professionals’ fees and expenses
incurred by Agent and Lender after the Closing Date in connection with or
related to: (a) the Loan; (b) the administration, collection, or enforcement of
the Loan; (c) the amendment or modification of the Loan Documents; (d) any
waiver, consent, release, or termination under the Loan Documents; (e) the
protection, preservation, audit, field exam, sale, lease, liquidation, or
disposition of Collateral or the exercise of remedies with respect to the
Collateral; (f) any legal, litigation, administrative, arbitration, or out of
court proceeding in connection with or related to Borrower or the Collateral,
and any appeal or review thereof; and (g) any bankruptcy, restructuring,
reorganization, assignment for the benefit of creditors, workout, foreclosure,
or other action related to Borrower, the Collateral, the Loan Documents,
including representing Agent or Lender in any adversary proceeding or contested
matter commenced or continued by or on behalf of Borrower’s estate, and any
appeal or review thereof.

11.12    Confidentiality. Agent and Lender acknowledge that certain items of
Collateral and information provided to Agent and Lender by Borrower are
confidential and proprietary information of Borrower, if and to the extent such
information either (x) is marked as confidential by Borrower at the time of
disclosure, or (y) should reasonably be understood to be confidential (the
“Confidential Information”). Accordingly, Agent and Lender agree that any
Confidential Information it may obtain in the course of acquiring,
administering, or perfecting Agent’s security interest in the Collateral shall
not be disclosed to any other Person or entity in any manner whatsoever, in
whole or in part, without the prior written consent of Borrower, except that
Agent and Lender may disclose any such information: (a) to its own directors,
officers, employees, accountants, counsel and other professional advisors and to
its Affiliates if Agent or Lender in their sole reasonable discretion determines
that any such party should have access to such information in connection with
such party’s responsibilities in connection with the Loan or this Agreement and,
provided that such recipient of such Confidential Information either (i) agrees
to be bound by the confidentiality provisions of this paragraph or (ii) is
otherwise subject to confidentiality restrictions that reasonably protect
against the disclosure of Confidential Information; (b) if such information is
generally available to the public, other

 

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than as a result of disclosure by Lender, Agent or any of their respective
directors, officers, employees, accountants, counsel, other professional
advisors or affiliates in violation of this Section 11.12; (c) to the extent
required in any report, statement or testimony submitted to any governmental
authority having or claiming to have jurisdiction over Agent or Lender; (d) to
the extent required, advisable or appropriate in response to any summons or
subpoena or in connection with any litigation, to the extent permitted or deemed
required or advisable by Agent’s or Lender’s counsel; (e) to comply with any
legal requirement or law applicable to Agent or Lender; (f) to the extent
reasonably necessary in connection with the exercise of any right or remedy
under any Loan Document, including Agent’s sale, lease, or other disposition of
Collateral after default and during the continuation of an Event of Default;
(g) to any participant or assignee of Agent or Lender or any prospective
participant or assignee; provided, that such participant or assignee or
prospective participant or assignee agrees in writing to be bound by this
Section prior to disclosure; or (h) otherwise with the prior consent of
Borrower; provided, that any disclosure made in violation of this Agreement
shall not affect the obligations of Borrower or any of its Affiliates or any
guarantor under this Agreement or the other Loan Documents. Agent’s and Lender’s
obligations under this Section 11.12 shall supersede all of their respective
obligations under the Non-Disclosure Agreement.

11.13    Assignment of Rights. Borrower acknowledges and understands that Agent
or Lender may, subject to Section 11.7, sell and assign all or part of its
interest hereunder and under the Loan Documents to any Person or entity (an
“Assignee”). After such assignment the term “Agent” or “Lender” as used in the
Loan Documents shall mean and include such Assignee, and such Assignee shall be
vested with all rights, powers and remedies of Agent and Lender hereunder with
respect to the interest so assigned; but with respect to any such interest not
so transferred, Agent and Lender shall retain all rights, powers and remedies
hereby given. No such assignment by Agent or Lender shall relieve Borrower of
any of its obligations hereunder. Lender agrees that in the event of any
transfer by it of the Note(s)(if any), it will endorse thereon a notation as to
the portion of the principal of the Note(s), which shall have been paid at the
time of such transfer and as to the date to which interest shall have been last
paid thereon.

11.14    Revival of Secured Obligations. This Agreement and the Loan Documents
shall remain in full force and effect and continue to be effective if any
petition is filed by or against Borrower for liquidation or reorganization, if
Borrower becomes insolvent or makes an assignment for the benefit of creditors,
if a receiver or trustee is appointed for all or any significant part of
Borrower’s assets, or if any payment or transfer of Collateral is recovered from
Agent or Lender. The Loan Documents and the Secured Obligations and Collateral
security shall continue to be effective, or shall be revived or reinstated, as
the case may be, if at any time payment and performance of the Secured
Obligations or any transfer of Collateral to Agent, or any part thereof is
rescinded, avoided or avoidable, reduced in amount, or must otherwise be
restored or returned by, or is recovered from, Agent, Lender or by any obligee
of the Secured Obligations, whether as a “voidable preference,” “fraudulent
conveyance,” or otherwise, all as though such payment, performance, or transfer
of Collateral had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, avoided, avoidable, restored, returned, or
recovered, the Loan Documents and the Secured Obligations shall be deemed,
without any further action or documentation, to have been revived and reinstated
except to the extent of the full, final, and indefeasible payment to Agent or
Lender in Cash.

 

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11.15    Counterparts. This Agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which when so
delivered shall be deemed an original, but all of which counterparts shall
constitute but one and the same instrument.

11.16    No Third Party Beneficiaries. No provisions of the Loan Documents are
intended, nor will be interpreted, to provide or create any third-party
beneficiary rights or any other rights of any kind in any Person other than
Agent, Lender and Borrower unless specifically provided otherwise herein, and,
except as otherwise so provided, all provisions of the Loan Documents will be
personal and solely among Agent, Lender and the Borrower.

11.17    Agency.

(a)    Lender hereby irrevocably appoints Hercules Capital, Inc. to act on its
behalf as the Agent hereunder and under the other Loan Documents and authorizes
the Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Agent by the terms hereof or thereof, together with such
actions and powers as are reasonably incidental thereto.

(b)    Lender agrees to indemnify the Agent in its capacity as such (to the
extent not reimbursed by Borrower and without limiting the obligation of
Borrower to do so), according to its respective Term Commitment percentage
(based upon the total outstanding Term Loan Commitments) in effect on the date
on which indemnification is sought under this Section 11.17, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever that
may at any time be imposed on, incurred by or asserted against the Agent in any
way relating to or arising out of, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.

(c)    Agent in Its Individual Capacity. The Person serving as the Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the Agent and
the term “Lender” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include each such Person serving as Agent hereunder
in its individual capacity.

 

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(d)    Exculpatory Provisions. The Agent shall have no duties or obligations
except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, the Agent shall not:

 

  (i)

be subject to any fiduciary or other implied duties, regardless of whether any
default or any Event of Default has occurred and is continuing;

 

  (ii)

have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that the Agent is required to exercise as directed
in writing by Lender, provided that the Agent shall not be required to take any
action that, in its opinion or the opinion of its counsel, may expose the Agent
to liability or that is contrary to any Loan Document or applicable law; and

 

  (iii)

except as expressly set forth herein and in the other Loan Documents, have any
duty to disclose, and the Agent shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its Affiliates that is
communicated to or obtained by any Person serving as the Agent or any of its
Affiliates in any capacity.

(e)    The Agent shall not be liable for any action taken or not taken by it
(i) with the consent or at the request of the Required Lenders or as the Agent
shall believe in good faith shall be necessary, under the circumstances or
(ii) in the absence of its own gross negligence or willful misconduct.

(f)    The Agent shall not be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any default or Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Section 4 or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the Agent.

(g)    Reliance by Agent. Agent may rely, and shall be fully protected in
acting, or refraining to act, upon, any resolution, statement, certificate,
instrument, opinion, report, notice, request, consent, order, bond or other
paper or document that it has no reason to believe to be other than genuine and
to have been signed or presented by the proper party or parties or, in the case
of cables, telecopies and telexes, to have been sent by the proper party or
parties. In the absence of its gross negligence or willful misconduct, Agent may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to Agent
and conforming to the requirements of the Loan Agreement or any of the other
Loan Documents. Agent may consult with counsel, and any opinion or legal advice
of such counsel shall be full and complete authorization and protection in
respect of any action taken, not taken or suffered by Agent hereunder or under
any Loan Documents in accordance therewith. Agent shall have the right at any
time to seek instructions concerning the administration of the Collateral from
any court of competent jurisdiction. Agent shall not be under any obligation to
exercise any of the rights or powers granted to Agent by this Agreement, the
Loan Agreement and the other Loan Documents at the request or direction of
Lender unless Agent shall have been provided by Lender with adequate security
and indemnity against the costs, expenses and liabilities that may be incurred
by it in compliance with such request or direction.

 

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11.18    Publicity. None of the parties hereto nor any of its respective member
businesses and Affiliates shall, without the other parties’ prior written
consent (which shall not be unreasonably withheld or delayed), publicize or use
(a) the other party’s name (including a brief description of the relationship
among the parties hereto), logo or hyperlink to such other parties’ web site,
separately or together, in written and oral presentations, advertising,
promotional and marketing materials, client lists, public relations materials or
on its web site (together, the “Publicity Materials”); (b) the names of officers
of such other parties in the Publicity Materials; and (c) such other parties’
name, trademarks, servicemarks in any news or press release concerning such
party; provided however, notwithstanding anything to the contrary herein, no
such consent shall be required (i) to the extent necessary to comply with the
requests of any regulators, legal requirements or laws applicable to such party,
including pursuant to any listing agreement with any national securities
exchange (so long as such party provides prior notice to the other party hereto
to the extent reasonably practicable) and (ii) to comply with Section 11.12.

11.19    Multiple Borrowers. Each Borrower hereby agrees to the terms and
conditions set forth on Addendum 2 attached hereto.

(SIGNATURES TO FOLLOW)

 

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IN WITNESS WHEREOF, Borrower, Agent and Lender have duly executed and delivered
this Loan and Security Agreement as of the day and year first above written.

 

BORROWER: ALDEYRA THERAPEUTICS, INC. Signature:  

/s/ Joshua Reed

Print Name:  

Joshua Reed

Title:  

Chief Financial Officer

 

[Signature Page to Loan and Security Agreement (Hercules/Aldeyra)]

--------------------------------------------------------------------------------

BORROWER: HELIO VISION, LLC Signature:  

/s/ Joshua Reed

Print Name:  

Joshua Reed

Title:  

Treasurer

 

[Signature Page to Loan and Security Agreement (Hercules/Aldeyra)]

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Accepted in Palo Alto, California:

 

AGENT: HERCULES CAPITAL, INC. Signature:  

/s/ Jennifer Choe

Print Name:  

Jennifer Choe

Title:  

Assistant General Counsel

LENDER: HERCULES CAPITAL, INC. Signature:  

/s/ Jennifer Choe

Print Name:  

Jennifer Choe

Title:  

Assistant General Counsel

 

[Signature Page to Loan and Security Agreement (Hercules/Aldeyra)]

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Table of Exhibits and Schedules

 

Addendum 1:    Taxes Addendum 2:    Multiple Borrower Terms Exhibit A:   

Advance Request

Attachment to Advance Request

Exhibit B:    Term Note Exhibit C:    Name, Locations, and Other Information for
Borrower Exhibit D:    Borrower’s Patents, Trademarks, Copyrights and Licenses
Exhibit E:    Borrower’s Deposit Accounts and Investment Accounts Exhibit F:   
Compliance Certificate Exhibit G:    Joinder Agreement Exhibit H:    ACH Debit
Authorization Agreement Exhibit I-1:   

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

Exhibit I-2:    Form of U.S. Tax Compliance Certificate (For Foreign
Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Exhibit I-3:    Form of U.S. Tax Compliance Certificate (For Foreign
Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
Exhibit I-4:    Form of U.S. Tax Compliance Certificate (For Foreign Lenders
That Are Partnerships For U.S. Federal Income Tax Purposes) Schedule 1   
Subsidiaries Schedule 1.1    Commitments Schedule 1A    Existing Permitted
Indebtedness Schedule 1B    Existing Permitted Investments Schedule 1C   
Existing Permitted Liens Schedule 5.3    Consents, Etc. Schedule 5.8    Tax
Matters Schedule 5.9    Intellectual Property Claims Schedule 5.10   
Intellectual Property Schedule 5.11    Borrower Products Schedule 5.14   
Capitalization Schedule 7.21    Transactions with Affiliates

 

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ADDENDUM 1 to LOAN AND SECURITY AGREEMENT

Taxes

(a)    Unless otherwise defined herein, the following capitalized terms shall
have the following meanings. For purposes of this Addendum, the term “applicable
law” includes FATCA.

“Code” means the Internal Revenue Code of 1986, as amended.

“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, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) 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 subdivision thereof) or
(ii) that are Other Connection Taxes, (b) 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 Term Commitment
pursuant to a law in effect on the date on which (i) such Lender acquires such
interest in the Loan or Term Commitment or (ii) such Lender changes its lending
office, except in each case to the extent that, pursuant to this Addendum 1,
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, (c) Taxes attributable to such
Recipient’s failure to comply with Section (g) of this Addendum 1 and (d) any
U.S. federal withholding Taxes imposed under FATCA.

“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 materially 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.

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

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrower under any Loan Document and (b) to the extent not otherwise described
in clause (a), Other Taxes.

“IRS” means the United States Internal Revenue Service.

“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).

 

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“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.

“Recipient” means (a) the Agent, or (b) any Lender.

“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.

“U.S. Person” means any Person that is a “United States person” as defined in
Section 7701(a)(30) of the Code.

“Withholding Agent” means the Borrower and the Agent.

(b)    Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If
any applicable 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 law and, if such Tax is an Indemnified Tax, then the sum payable
by the Borrower shall be increased as necessary so that after such deduction or
withholding has been made (including such deductions and withholdings applicable
to additional sums payable under this Section) the applicable Recipient receives
an amount equal to the sum it would have received had no such deduction or
withholding been made.

(c)    Payment of Other Taxes by Borrower. The Borrower shall timely pay to the
relevant governmental authority in accordance with applicable law, or at the
option of the Agent timely reimburse it for the payment of, any Other Taxes.

(d)    Indemnification by Borrower. The Borrower shall indemnify each Recipient,
within 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) 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 Agent),
or by the Agent on its own behalf or on behalf of a Lender, shall be conclusive
absent manifest error.

 

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(e)    Indemnification by Lender. Each Lender shall severally indemnify the
Agent, within 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 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 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 Agent shall be conclusive absent manifest error. Each Lender
hereby authorizes the 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 Agent
to Lender from any other source against any amount due to the Agent under this
paragraph (e).

(f)    Evidence of Payments. As soon as practicable after any payment of Taxes
by the Borrower to a governmental authority pursuant to this Section, the
Borrower shall deliver to the Agent the original or a certified copy of a
receipt issued by such governmental authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Agent.

(g)    Status of Lender.

(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 Agent, at the time or times reasonably requested
by the Borrower or the Agent, such properly completed and executed documentation
reasonably requested by the Borrower or the Agent as will permit such payments
to be made without withholding or at a reduced rate of withholding. In addition,
any Lender, if reasonably requested by the Borrower or the Agent, shall deliver
such other documentation prescribed by applicable law or reasonably requested by
the Borrower or the Agent as will enable the Borrower or the 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 sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in paragraphs (g)(ii)(1),
(ii)(2) and (iv) of this Section) shall not be required if in 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.

 

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

 

  1.

any Lender that is a U.S. Person shall deliver to the Borrower and the 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 Agent), executed copies of IRS Form W-9 certifying that such Lender is
exempt from U.S. federal backup withholding Tax;

 

  2.

any Foreign Lender shall, to the extent it is legally entitled to do so, deliver
to the Borrower and the 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 Agent), whichever of the following is
applicable:

A.    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 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 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;

B.    executed copies of IRS Form W-8ECI;

C.    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 I-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; or

D.    to the extent a Foreign Lender is not the beneficial owner, executed
copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS
Form W 8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of
Exhibit I-2 or

Exhibit I-3, IRS Form W-9, 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 I-4 on
behalf of each such direct and indirect partner;

 

51

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(iii)    any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to the Borrower and the 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 Agent), executed copies of any other
form prescribed by applicable law 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 law to permit the
Borrower or the Agent to determine the withholding or deduction required to be
made; and

(iv)    if a payment made to a Lender under any Loan Document would be subject
to U.S. federal withholding Tax imposed by FATCA if such 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 Lender
shall deliver to the Borrower and the Agent at the time or times prescribed by
law and at such time or times reasonably requested by the Borrower or the 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 Agent as may be necessary for the
Borrower and the Agent to comply with their obligations under FATCA and to
determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount, if any, to deduct and withhold from such
payment. Solely for purposes of this clause (iv), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement.

(h)    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 Agent
in writing of its legal inability to do so.

 

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(i)    Treatment of Certain Refunds. If any party 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 (including by the
payment of additional amounts pursuant to this Section), 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 with 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 paragraph (i) (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 paragraph (i), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (i) 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 paragraph 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.

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

 

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Exhibit 10.1

ADDENDUM 2 to LOAN AND SECURITY AGREEMENT

Multiple Borrower Terms

(a)    Borrowers’ Agent. Each of the Borrowers hereby irrevocably appoints
Aldeyra as its agent, attorney-in-fact and legal representative for all
purposes, including requesting disbursement of the Term Loan and receiving
account statements and other notices and communications to Borrowers (or any of
them) from the Agent or any Lender. The Agent may rely, and shall be fully
protected in relying, on any request for the Term Loan, disbursement
instruction, report, information or any other notice or communication made or
given by Aldeyra, whether in its own name or on behalf of one or more of the
other Borrowers, and the Agent shall not have any obligation to make any inquiry
or request any confirmation from or on behalf of any other Borrower as to the
binding effect on it of any such request, instruction, report, information,
other notice or communication, nor shall the joint and several character of the
Borrowers’ obligations hereunder be affected thereby.

(b)    Waivers. Each Borrower hereby waives: (i) any right to require the Agent
to institute suit against, or to exhaust its rights and remedies against, any
other Borrower or any other person, or to proceed against any property of any
kind which secures all or any part of the Secured Obligations, or to exercise
any right of offset or other right with respect to any reserves, credits or
deposit accounts held by or maintained with the Agent or any Indebtedness of the
Agent or any Lender to any other Borrower, or to exercise any other right or
power, or pursue any other remedy the Agent or any Lender may have under this
Agreement; (ii) any defense arising by reason of any disability or other defense
of any other Borrower or any guarantor or any endorser, co-maker or other
person, or by reason of the cessation from any cause whatsoever of any liability
of any other Borrower or any guarantor or any endorser, co-maker or other
person, with respect to all or any part of the Secured Obligations, or by reason
of any act or omission of the Agent or others which directly or indirectly
results in the discharge or release of any other Borrower or any guarantor or
any other person or any Secured Obligations or any security therefor, whether by
operation of law or otherwise; (iii) any defense arising by reason of any
failure of the Agent to obtain, perfect, maintain or keep in force any Lien on,
any property of any Borrower or any other person; and (iv) any defense based
upon or arising out of any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding commenced by or
against any other Borrower or any guarantor or any endorser, co-maker or other
person, including without limitation any discharge of, or bar against
collecting, any of the Secured Obligations (including without limitation any
interest thereon), in or as a result of any such proceeding. Until all of the
Secured Obligations have been paid, performed, and discharged in full, nothing
shall discharge or satisfy the liability of any Borrower hereunder except the
full performance and payment of all of the Secured Obligations. If any claim is
ever made upon the Agent for repayment or recovery of any amount or amounts
received by the Agent in payment of or on account of any of the Secured
Obligations, because of any claim that any such payment constituted a
preferential transfer or fraudulent conveyance, or for any other reason
whatsoever, and the Agent repays all or part of said amount by reason of any

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judgment, decree or order of any court or administrative body having
jurisdiction over the Agent or any of its property, or by reason of any
settlement or compromise of any such claim effected by the Agent with any such
claimant (including without limitation the any other Borrower), then and in any
such event, each Borrower agrees that any such judgment, decree, order,
settlement and compromise shall be binding upon such Borrower, notwithstanding
any revocation or release of this Agreement or the cancellation of any note or
other instrument evidencing any of the Secured Obligations, or any release of
any of the Secured Obligations, and each Borrower shall be and remain liable to
the Agent and Lender under this Agreement for the amount so repaid or recovered,
to the same extent as if such amount had never originally been received by the
Agent or any Lender, and the provisions of this sentence shall survive, and
continue in effect, notwithstanding any revocation or release of this Agreement.
Each Borrower hereby expressly and unconditionally waives all rights of
subrogation, reimbursement and indemnity of every kind against any other
Borrower, and all rights of recourse to any assets or property of any other
Borrower, and all rights to any collateral or security held for the payment and
performance of any Secured Obligations, including (but not limited to) any of
the foregoing rights which Borrower may have under any present or future
document or agreement with any other Borrower or other person, and including
(but not limited to) any of the foregoing rights which any Borrower may have
under any equitable doctrine of subrogation, implied contract, or unjust
enrichment, or any other equitable or legal doctrine.

(c)    Consents. Each Borrower hereby consents and agrees that, without notice
to or by Borrower and without affecting or impairing in any way the obligations
or liability of Borrower hereunder, the Agent may, from time to time before or
after revocation of this Agreement, do any one or more of the following in its
sole and absolute discretion: (i) accept partial payments of, compromise or
settle, renew, extend the time for the payment, discharge, or performance of,
refuse to enforce, and release all or any parties to, any or all of the Secured
Obligations; (ii) grant any other indulgence to any Borrower or any other Person
in respect of any or all of the Secured Obligations or any other matter;
(iii) accept, release, waive, surrender, enforce, exchange, modify, impair, or
extend the time for the performance, discharge, or payment of, any and all
property of any kind securing any or all of the Secured Obligations or any
guaranty of any or all of the Secured Obligations, or on which the Agent at any
time may have a Lien, or refuse to enforce its rights or make any compromise or
settlement or agreement therefor in respect of any or all of such property;
(iv) substitute or add, or take any action or omit to take any action which
results in the release of, any one or more other Borrowers or any endorsers or
guarantors of all or any part of the Secured Obligations, including, without
limitation one or more parties to this Agreement, regardless of any destruction
or impairment of any right of contribution or other right of Borrower; (v) apply
any sums received from any other Borrower, any guarantor, endorser, or
co-signer, or from the disposition of any Collateral or security, to any
Indebtedness whatsoever owing from such person or secured by such Collateral or
security, in such manner and order as the Agent determines in its sole
discretion, and regardless of whether such Indebtedness is part of the Secured
Obligations, is secured, or is due and payable. Each Borrower consents and
agrees that the Agent shall be under no obligation to marshal any assets in
favor of Borrower, or against or in payment of any or all of the Secured
Obligations. Each Borrower further consents and agrees that the Agent shall have
no duties or responsibilities whatsoever with respect to any property securing
any or all of the Secured Obligations. Without limiting the generality of the
foregoing, the Agent shall have no obligation to monitor, verify, audit,
examine, or obtain or maintain any insurance with respect to, any property
securing any or all of the Secured Obligations.

 

2

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(d)    Independent Liability. Each Borrower hereby agrees that one or more
successive or concurrent actions may be brought hereon against such Borrower, in
the same action in which any other Borrower may be sued or in separate actions,
as often as deemed advisable by Agent. Each Borrower is fully aware of the
financial condition of each other Borrower and is executing and delivering this
Agreement based solely upon its own independent investigation of all matters
pertinent hereto, and such Borrower is not relying in any manner upon any
representation or statement of the Agent or any Lender with respect thereto.
Each Borrower represents and warrants that it is in a position to obtain, and
each Borrower hereby assumes full responsibility for obtaining, any additional
information concerning any other Borrower’s financial condition and any other
matter pertinent hereto as such Borrower may desire, and such Borrower is not
relying upon or expecting the Agent to furnish to it any information now or
hereafter in the Agent’s possession concerning the same or any other matter.

(e)    Subordination. All Indebtedness of a Borrower now or hereafter arising
held by another Borrower is subordinated to the Secured Obligations and the
Borrower holding the Indebtedness shall take all actions reasonably requested by
Agent to effect, to enforce and to give notice of such subordination.

 

3

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EXHIBIT A

ADVANCE REQUEST

 

To:           Agent:    Date:        __________, 20[__]  

Hercules Capital, Inc. (the “Agent”)

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

email: legal@herculestech.com; lmcguire@htgc.com

Attn: Chief Legal Officer and Lake McGuire

  

[Aldeyra Therapeutics, Inc.] [Helio Vision, LLC] (“Borrower”) hereby requests
from Hercules Capital, Inc. (“Lender”) an Advance in the amount of
_____________________ Dollars ($________________) on ______________, _____ (the
“Advance Date”) pursuant to the Loan and Security Agreement among Borrower,
Agent and Lender (the “Agreement”). Capitalized words and other terms used but
not otherwise defined herein are used with the same meanings as defined in the
Agreement.

Please:

           (a)    Issue a check payable to Borrower    _________________   or   
  (b)    Wire Funds to Borrower’s account    _________________      [IF FILED
PUBLICLY, ACCOUNT INFO REDACTED FOR SECURITY PURPOSES]

  Bank:           Address:                     ABA Number:           Account
Number:           Account Name:           Contact Person:          

Phone Number

To Verify Wire Info:

          Email address:        

Borrower represents that the conditions precedent to the Advance set forth in
the Agreement are satisfied and shall be satisfied upon the making of such
Advance, including but not limited to: (i) that no event that has had or could
reasonably be expected to have a Material Adverse Effect has occurred and is
continuing; (ii) that the representations and warranties set forth in the
Agreement are and shall be true and correct in all material respects on and as
of the Advance Date with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate to an
earlier date; (iii) that Borrower is in compliance in all material respects with
all the terms and provisions set forth in each Loan

--------------------------------------------------------------------------------

Document on its part to be observed or performed; and (iv) that as of the
Advance Date, no fact or condition exists that could (or could, with the passage
of time, the giving of notice, or both) constitute an Event of Default under the
Loan Documents. Borrower understands and acknowledges that Agent has the right
to review the financial information supporting this representation and, based
upon such review in its sole discretion, Lender may decline to fund the
requested Advance.

Borrower hereby represents that Borrower’s corporate status and locations have
not changed since the date of the Agreement or, if the Attachment to this
Advance Request is completed, are as set forth in the Attachment to this Advance
Request.

Borrower agrees to notify Agent promptly before the funding of the Loan if any
of the matters which have been represented above shall not be true and correct
on the Borrowing Date and if Agent has received no such notice before the
Advance Date then the statements set forth above shall be deemed to have been
made and shall be deemed to be true and correct as of the Advance Date.

Executed as of [                ], 20[    ].

 

BORROWER: [Aldeyra Therapeutics, Inc.]

                         [Helio Vision, LLC]

SIGNATURE:    

TITLE:    

PRINT NAME:    

 

2

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ATTACHMENT TO ADVANCE REQUEST

Dated: _______________________

Borrower hereby represents and warrants to Agent that Borrower’s current name
and organizational status is as follows:

 

                Name:    [Aldeyra Therapeutics, Inc.] [Helio Vision, LLC]
                Type of organization:    [ 🌑 ]                 State of
organization:    [ 🌑 ]                 Organization file number:    [ 🌑 ]

Borrower hereby represents and warrants to Agent that the street addresses,
cities, states and postal codes of its current locations are as follows:

[131 Hartwell Avenue

Lexington, MA 02421]

 

3

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EXHIBIT B

SECURED TERM PROMISSORY NOTE

 

$[ ],000,000

   Advance Date: ______ ____, 20[ ]    Maturity Date: ______ ____, 20[ ]

FOR VALUE RECEIVED, Aldeyra Therapeutics, Inc., a Delaware corporation
(“Aldeyra”), Helio Vision, LLC, a Delaware limited liability company, and each
of its Qualified Subsidiaries (collectively, the “Borrower”) hereby promises to
pay to the order of Hercules Capital, Inc., a Maryland corporation or the holder
of this Note (the “Lender”) at 400 Hamilton Avenue, Suite 310, Palo Alto, CA
94301 or such other place of payment as the holder of this Secured Term
Promissory Note (this “Promissory Note”) may specify from time to time in
writing, in lawful money of the United States of America, the principal amount
of [ ] Million Dollars ($[ ],000,000) or such other principal amount as Lender
has advanced to Borrower, together with interest at a rate as set forth in
Section 2.2(c) of the Loan Agreement based upon a year consisting of 360 days,
with interest computed daily based on the actual number of days in each month.

This Promissory Note is the Note referred to in, and is executed and delivered
in connection with, that certain Loan and Security Agreement dated March [●],
2019, by and among Borrower, Hercules Capital, Inc., a Maryland corporation (the
“Agent”) and the several banks and other financial institutions or entities from
time to time party thereto as lender (as the same may from time to time be
amended, modified or supplemented in accordance with its terms, the “Loan
Agreement”), and is entitled to the benefit and security of the Loan Agreement
and the other Loan Documents (as defined in the Loan Agreement), to which
reference is made for a statement of all of the terms and conditions thereof.
All payments shall be made in accordance with the Loan Agreement. All terms
defined in the Loan Agreement shall have the same definitions when used herein,
unless otherwise defined herein. An Event of Default under the Loan Agreement
shall constitute a default under this Promissory Note.

Borrower waives presentment and demand for payment, notice of dishonor, protest
and notice of protest under the UCC or any applicable law. Borrower agrees to
make all payments under this Promissory Note without setoff, recoupment or
deduction and regardless of any counterclaim or defense. This Promissory Note
has been negotiated and delivered to Lender and is payable in the State of New
York. This Promissory Note shall be governed by and construed and enforced in
accordance with, the laws of the State of New York, excluding any conflicts of
law rules or principles that would cause the application of the laws of any
other jurisdiction.

 

ALDEYRA FOR ITSELF AND

ON BEHALF OF BORROWER:

    Aldeyra Therapeutics, Inc.

    By:         Title:  

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EXHIBIT C

NAME, LOCATIONS, AND OTHER INFORMATION FOR BORROWER

1. Borrower represents and warrants to Agent that Borrower’s current name and
organizational status as of the Closing Date is as follows:

 

Name:    Aldeyra Therapeutics, Inc. Type of organization:    Corporation State
of organization:    Delaware Organization file number:    3842157 Name:    Helio
Vision, LLC Type of organization:    Limited Liability Company State of
organization:    Delaware Organization file number:   

2. Borrower represents and warrants to Agent that for five (5) years prior to
the Closing Date, Borrower did not do business under any other name or
organization or form except the following:

Name: Aldexa Therapeutics, Inc.

Used during dates of: December 20, 2012 – March 17, 2014

Type of Organization: Corporation

State of organization: Delaware

Organization file Number: 3842157

Borrower’s fiscal year ends on December 31

Borrower’s federal employer tax identification number is:

Name: Helio Vision, Inc.

Used during dates of:    

Type of Organization: Corporation

State of organization: Delaware

Organization file Number:

Borrower’s fiscal year ends on December 31

Borrower’s federal employer tax identification number is:

3. Borrower represents and warrants to Agent that its chief executive office is
located at

131 Hartwell Avenue, Lexington, MA 02421.

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EXHIBIT D

BORROWER’S PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES

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EXHIBIT E

BORROWER’S DEPOSIT ACCOUNTS AND INVESTMENT ACCOUNTS

 

Bank Name        

  Account         Number   Branch Address   Entity  

Purpose of        

Account

                      Aldeyra                               Aldeyra        

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EXHIBIT F

COMPLIANCE CERTIFICATE

Hercules Capital, Inc. (as “Agent”)

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

Reference is made to that certain Loan and Security Agreement dated March 25,
2019 and the Loan Documents (as defined therein) entered into in connection with
such Loan and Security Agreement all as may be amended from time to time
(hereinafter referred to collectively as the “Loan Agreement”) by and among the
several banks and other financial institutions or entities from time to time
party thereto (collectively, “Lender”), Hercules Capital, Inc., as agent for
Lender (the “Agent”), Aldeyra Therapeutics, Inc. (“Aldeyra”) and Helio Vision,
LLC, each as borrower (collectively, the “Borrower”). All capitalized terms not
defined herein shall have the same meaning as defined in the Loan Agreement.

The undersigned is an Officer of Aldeyra, knowledgeable of all Borrower
financial matters, and is authorized to provide certification of information
regarding Borrower; hereby certifies, in such capacity, that in accordance with
the terms and conditions of the Loan Agreement, Borrower is in compliance for
the period ending ___________ of all covenants, conditions and terms and hereby
reaffirms that all representations and warranties contained therein are true and
correct on and as of the date of this Compliance Certificate with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date, after giving
effect in all cases to any standard(s) of materiality contained in the Loan
Agreement as to such representations and warranties. Attached are the required
documents supporting the above certification. The undersigned further certifies
that these are prepared in accordance with GAAP (except for the absence of
footnotes with respect to unaudited financial statement and subject to normal
year-end adjustments) and are consistent from one period to the next except as
explained below.

 

REPORTING REQUIREMENT            

  

REQUIRED

  

CHECK IF ATTACHED

Interim Financial Statements

  

Monthly within 30 days

  

Interim Financial Statements

  

Quarterly within 45 days

  

Audited Financial Statements

  

FYE within 90 days

  

The undersigned hereby also confirms the below disclosed accounts represent all
depository accounts and securities accounts presently open in the name of each
Borrower or Borrower Subsidiary/Affiliate, as applicable.

--------------------------------------------------------------------------------

BORROWER Name and Address:

 

     Account Number   Financial
Institution   Account Type
(Depository /
Securities)  

Last Month

Ending Account
Balance

 

Purpose of

Account

  Disclosed on last
Compliance
Certificate?

1.  

                       

2.

                       

3.

                       

4.

                       

5.

                       

SUBSIDIARY/AFFILIATE Name and Address:

 

     Account Number   Financial
Institution   Account Type
(Depository /
Securities)  

Last Month

Ending Account
Balance

 

Purpose of

Account

  Disclosed on last
Compliance
Certificate?

1.  

                       

2.

                       

3.

                       

4.

                       

5.

                       

Explanations/Exceptions (which, for the avoidance of doubt, cannot be used to
cure any default): [ 🌑 ]

 

Very Truly Yours, ALDEYRA THERAPEUTICS, INC.

By:     Name:     Its:    

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EXHIBIT G

FORM OF JOINDER AGREEMENT

This Joinder Agreement (the “Joinder Agreement”) is made and dated as of
[                ], 20[ ], and is entered into by and
between__________________., a ___________ corporation (“Subsidiary”), and
HERCULES CAPITAL, INC., a Maryland corporation (as “Agent”).

RECITALS

A. Subsidiary’s Affiliates, Aldeyra Therapeutics, Inc. (“Aldeyra”) and Helio
Vision, LLC (collectively with Aldeyra, “Borrower”) has entered into that
certain Loan and Security Agreement dated March 25, 2019, with the several banks
and other financial institutions or entities from time to time party thereto as
lender (collectively, the “Lender”) and the Agent, as such agreement may be
amended (the “Loan Agreement”), together with the other agreements executed and
delivered in connection therewith; and

B. Subsidiary acknowledges and agrees that it will benefit both directly and
indirectly from Borrower’s execution of the Loan Agreement and the other
agreements executed and delivered in connection therewith.

AGREEMENT

NOW THEREFORE, Subsidiary and Agent agree as follows:

 

1.

The recitals set forth above are incorporated into and made part of this Joinder
Agreement. Capitalized terms not defined herein shall have the meaning provided
in the Loan Agreement.

 

2.

By signing this Joinder Agreement, Subsidiary shall be bound by the terms and
conditions of the Loan Agreement the same as if it were the Borrower (as defined
in the Loan Agreement) under the Loan Agreement, mutatis mutandis, provided
however, that (a) with respect to (i) Section 5.1 of the Loan Agreement,
Subsidiary represents that it is an entity duly organized, legally existing and
in good standing under the laws of [                ], (b) neither Agent nor
Lender shall have any duties, responsibilities or obligations to Subsidiary
arising under or related to the Loan Agreement or the other Loan Documents,
(c) that if Subsidiary is covered by Borrower’s insurance, Subsidiary shall not
be required to maintain separate insurance or comply with the provisions of
Sections 6.1 and 6.2 of the Loan Agreement, and (d) that as long as Borrower
satisfies the requirements of Section 7.1 of the Loan Agreement, Subsidiary
shall not have to provide Agent separate Financial Statements. To the extent
that Agent or Lender has any duties, responsibilities or obligations arising
under or related to the Loan Agreement or the other Loan Documents, those
duties, responsibilities or obligations shall flow only to Borrower and not to
Subsidiary or any other Person or entity. By way of example (and not an
exclusive list): (i) Agent’s providing notice to Borrower in accordance with the
Loan Agreement or as otherwise agreed among Borrower, Agent and Lender shall be
deemed provided to Subsidiary; (ii) a Lender’s providing an Advance to Borrower
shall be deemed an Advance to Subsidiary; and (iii) Subsidiary shall have no
right to request an Advance or make any other demand on Lender.

 

3.

Subsidiary agrees not to certificate its equity securities without Agent’s prior
written consent, which consent may be conditioned on the delivery of such equity
securities to Agent in order to perfect Agent’s security interest in such equity
securities.

--------------------------------------------------------------------------------

4.

Subsidiary acknowledges that it benefits, both directly and indirectly, from the
Loan Agreement, and hereby waives, for itself and on behalf on any and all
successors in interest (including without limitation any assignee for the
benefit of creditors, receiver, bankruptcy trustee or itself as
debtor-in-possession under any bankruptcy proceeding) to the fullest extent
provided by law, any and all claims, rights or defenses to the enforcement of
this Joinder Agreement on the basis that (a) it failed to receive adequate
consideration for the execution and delivery of this Joinder Agreement or
(b) its obligations under this Joinder Agreement are avoidable as a fraudulent
conveyance.

 

5.

As security for the prompt, complete and indefeasible payment when due (whether
on the payment dates or otherwise) of all the Secured Obligations, Subsidiary
grants to Agent a security interest in all of Subsidiary’s right, title, and
interest in and to the Collateral.

SUBSIDIARY:

______________________________

By:

Name:

Title:

Address:

Telephone: ___________

email: ____________

AGENT:

HERCULES CAPITAL, INC.

By:____________________________________

Name:__________________________________

Title: ___________________________________

Address:

400 Hamilton Ave., Suite 310

Palo Alto, CA 94301

email: legal@herculestech.com

Telephone: 650-289-3060

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EXHIBIT H

ACH DEBIT AUTHORIZATION AGREEMENT

Hercules Capital, Inc.

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

Re: Loan and Security Agreement dated March 25, 2019 (the “Agreement”) by and
among Aldeyra Therapeutics, Inc. (“Borrower”) and Hercules Capital, Inc., as
agent (“Company”) and the lenders party thereto (collectively, the “Lender”)

In connection with the above referenced Agreement, the Borrower hereby
authorizes the Company to initiate debit entries for (i) the periodic payments
due under the Agreement and (ii) reasonable and documented out-of-pocket legal
fees and costs incurred by Agent or Lender pursuant to Section 11.11 of the
Agreement to the Borrower’s account indicated below. The Borrower authorizes the
depository institution named below to debit to such account.

[IF FILED PUBLICLY, ACCOUNT INFO REDACTED FOR SECURITY PURPOSES]

 

DEPOSITORY NAME

 

 

BRANCH

 

CITY

 

 

STATE AND ZIP CODE

 

TRANSIT/ABA NUMBER

 

 

ACCOUNT NUMBER

 

This authority will remain in full force and effect so long as any amounts are
due under the Agreement.

Aldeyra Therapeutics, Inc.

By: _________________________________________

Date: ________________________________________

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EXHIBIT I-1

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to Loan and Security Agreement dated as of March 25,
2019 (as amended, supplemented or otherwise modified from time to time, the
“Loan Agreement”) by and between Aldeyra Therapeutics, Inc., a Delaware
corporation (“Aldeyra”), Helio Vision, LLC, a Delaware limited liability
company, and each of Aldeyra’s Qualified Subsidiaries (hereinafter collectively
referred to as the “Borrower”), the several banks and other financial
institutions or entities from time to time parties to the Loan Agreement
(collectively, referred to as “Lender”), and HERCULES CAPITAL, INC., a Maryland
corporation, in its capacity as administrative agent and collateral agent for
itself and Lender (in such capacity, the “Agent”).

Pursuant to the provisions of Addendum 1 of the Loan Agreement, the undersigned
hereby certifies that (i) it is the sole record and beneficial owner of the
Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it
is providing this certificate, (ii) it is not a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, (iii) it is not a “ten percent shareholder” of
the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it
is not a “controlled foreign corporation” related to the Borrower as described
in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Agent and the Borrower with a certificate of
its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing
this certificate, the undersigned agrees that (1) if the information provided in
this certificate changes, the undersigned shall promptly so inform the Borrower
and the Agent, and (2) the undersigned shall have at all times furnished the
Borrower and the Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

Date: _____________ ___, 20___     [NAME OF LENDER]     By:         Name:      
  Title:    

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EXHIBIT I-2

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to Loan and Security Agreement dated as of March 25,
2019 (as amended, supplemented or otherwise modified from time to time, the
“Loan Agreement”) by and between Aldeyra Therapeutics, Inc., a Delaware
corporation (“Aldeyra”), Helio Vision, LLC, a Delaware limited liability
company, and each of Aldeyra’s Qualified Subsidiaries (hereinafter collectively
referred to as the “Borrower”), the several banks and other financial
institutions or entities from time to time parties to the Loan Agreement
(collectively, referred to as “Lender”), and HERCULES CAPITAL, INC., a Maryland
corporation, in its capacity as administrative agent and collateral agent for
itself and Lender (in such capacity, the “Agent”).

Pursuant to the provisions of Addendum 1 of the Loan Agreement, the undersigned
hereby certifies that (i) it is the sole record and beneficial owner of the
participation in respect of which it is providing this certificate, (ii) it is
not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is
not a “ten percent shareholder” of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code and (iv) it is not a “controlled foreign
corporation” related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing
this certificate, the undersigned agrees that (1) if the information provided in
this certificate changes, the undersigned shall promptly so inform such Lender
in writing, and (2) the undersigned shall have at all times furnished such
Lender with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

Date: _____________ ___, 20___     [NAME OF PARTICIPANT]

    By:         Name:         Title:    

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EXHIBIT I-3

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to Loan and Security Agreement dated as of March 25,
2019 (as amended, supplemented or otherwise modified from time to time, the
“Loan Agreement”) by and between Aldeyra Therapeutics, Inc., a Delaware
corporation (“Aldeyra”), Helio Vision, LLC, a Delaware limited liability
company, and each of Aldeyra’s Qualified Subsidiaries (hereinafter collectively
referred to as the “Borrower”), the several banks and other financial
institutions or entities from time to time parties to the Loan Agreement
(collectively, referred to as “Lender”), and HERCULES CAPITAL, INC., a Maryland
corporation, in its capacity as administrative agent and collateral agent for
itself and Lender (in such capacity, the “Agent”).

Pursuant to the provisions of Addendum 1 of the Loan Agreement, the undersigned
hereby certifies that (i) it is the sole record owner of the participation in
respect of which it is providing this certificate, (ii) its direct or indirect
partners/members are the sole beneficial owners of such participation,
(iii) with respect such participation, neither the undersigned nor any of its
direct or indirect partners/members is a “bank” extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a “ten percent shareholder” of the Borrower
within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its
direct or indirect partners/members is a “controlled foreign corporation”
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form
W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS
Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is
claiming the portfolio interest exemption. By executing this certificate, the
undersigned agrees that (1) if the information provided in this certificate
changes, the undersigned shall promptly so inform such Lender and (2) the
undersigned shall have at all times furnished such Lender with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either of the two
calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

Date: _____________ ___, 20___     [NAME OF PARTICIPANT]

    By:         Name:         Title:    

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EXHIBIT I-4

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to Loan and Security Agreement dated as of March 25,
2019 (as amended, supplemented or otherwise modified from time to time, the
“Loan Agreement”) by and between Aldeyra Therapeutics, Inc., a Delaware
corporation (“Aldeyra”), Helio Vision, LLC, a Delaware limited liability
company, and each of Aldeyra’s Qualified Subsidiaries (hereinafter collectively
referred to as the “Borrower”), the several banks and other financial
institutions or entities from time to time parties to the Loan Agreement
(collectively, referred to as “Lender”), and HERCULES CAPITAL, INC., a Maryland
corporation, in its capacity as administrative agent and collateral agent for
itself and Lender (in such capacity, the “Agent”).

Pursuant to the provisions of Addendum 1 of the Loan Agreement, the undersigned
hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as
any Note(s) evidencing such Loan(s)) in respect of which it is providing this
certificate, (ii) its direct or indirect partners/members are the sole
beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Loan
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a “bank” extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a “ten percent shareholder” of the Borrower
within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its
direct or indirect partners/members is a “controlled foreign corporation”
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Agent and the Borrower with IRS Form W- 8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form
W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS
Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is
claiming the portfolio interest exemption. By executing this certificate, the
undersigned agrees that (1) if the information provided in this certificate
changes, the undersigned shall promptly so inform the Borrower and the Agent,
and (2) the undersigned shall have at all times furnished the Borrower and the
Agent with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

Date: _____________ ___, 20___     [NAME OF LENDER]     By:         Name:      
  Title:    

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SCHEDULE 1.1

COMMITMENTS

 

LENDER   TRANCHE   TERM COMMITMENT

Hercules Capital, Inc.

 

  Tranche I-A   $5,000,000

Hercules Capital, Inc.

 

  Tranche I-B   $15,000,000

Hercules Capital, Inc.

 

  Tranche II   $15,000,000

Hercules Capital, Inc.

 

  Tranche III   $15,000,000

Hercules Capital, Inc.

 

  Tranche IV   $10,000,000*

TOTAL COMMITMENTS

 

      $60,000,000*

* Funding of Tranche IV is subject to approval by Lender’s investment committee
in its sole and unfettered discretion.