Exhibit 10.1

Execution Version

 

 

 

FACILITY AGREEMENT

dated as of May 11, 2020

by and among

INTERSECT ENT, INC.,

as the Borrower,

the other Loan Parties party hereto from time to time,

the Lenders

and

DEERFIELD PARTNERS, L.P.,

as agent for itself and the Lender Parties

 

 

 

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Table of Contents

 

ARTICLE 1 DEFINITIONS

     1  

Section 1.1

  General Definitions      1  

Section 1.2

  Interpretation      21  

Section 1.3

  Business Day Adjustment      22  

Section 1.4

  Loan Records      22  

Section 1.5

  Accounting Terms and Principles      23  

Section 1.6

  Officers      23  

ARTICLE 2 AGREEMENT FOR THE LOANS

     23  

Section 2.1

  Disbursement of the Loans      23  

Section 2.2

  Payments; Prepayments; Make Whole Amount      24  

Section 2.3

  Payment Details      25  

Section 2.4

  Taxes      25  

Section 2.5

  Costs, Expenses and Losses      27  

Section 2.6

  Interest      28  

Section 2.7

  Interest on Late Payments; Default Interest      28  

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES

     28  

Section 3.1

  No Default      28  

Section 3.2

  Solvency      29  

Section 3.3

  Enforceability      29  

Section 3.4

  Existence, Qualification and Power      29  

Section 3.5

  Litigation      29  

Section 3.6

  Corporate Authorization; Conflicts      29  

Section 3.7

  Governmental Authorizations      30  

Section 3.8

  Ownership of Real Estate and Personal Property      30  

Section 3.9

  Intellectual Property      30  

Section 3.10

  Taxes      30  

Section 3.11

  Compliance with Laws      31  

Section 3.12

  SEC Documents      31  

Section 3.13

  Financial Statements; Financial Condition      31  

Section 3.14

  Accounting Controls      32  

Section 3.15

  ERISA      33  

Section 3.16

  Subsidiaries      33  

Section 3.17

  Shares of Stock      33  

Section 3.18

  Material Agreements      34  

Section 3.19

  Use of Proceeds; Margin Stock      34  

Section 3.20

  Environmental Matters      35  

Section 3.21

  Investment Company Act      35  

Section 3.22

  Labor Relations      35  

Section 3.23

  Disclosure      35  

Section 3.24

  Certain Regulations      35  

Section 3.25

  Securities Law and Principal Market Matters      36  

Section 3.26

  Application of Takeover Provisions; Rights Agreement      38  

Section 3.27

  Status as Senior Indebtedness      38  

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE LENDERS

     39  

Section 4.1

  Acquisition for Own Account      39  

Section 4.2

  Accredited Investor      39  

Section 4.3

  Exemptions      39  

Section 4.4

  Diligence      39  

Section 4.5

  No Recommendation or Endorsement      39  

 

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ARTICLE 5 CONDITIONS OF DISBURSEMENT

     40  

Section 5.1

  Facility Documents      40  

Section 5.2

  Costs and Expenses      40  

Section 5.3

  Know Your Customer Information      40  

Section 5.4

  Absence of Default or Event of Default      40  

Section 5.5

  Representations and Warranties      40  

Section 5.6

  Proceedings      40  

Section 5.7

  Solvency Certificate      40  

Section 5.8

  Conditions Precedent Certificate      40  

Section 5.9

  Legal Opinions      40  

Section 5.10

  Transfer Agent Letter      41  

ARTICLE 6 AFFIRMATIVE COVENANTS

     41  

Section 6.1

  Preservation of Existence, Etc      41  

Section 6.2

  Compliance with Laws      41  

Section 6.3

  Authorizations      41  

Section 6.4

  Maintenance of Property      41  

Section 6.5

  Insurance      41  

Section 6.6

  Payment of Taxes      41  

Section 6.7

  Notices      42  

Section 6.8

  SEC Documents; Financial Statements      42  

Section 6.9

  Disclosure      42  

Section 6.10

  Further Assurances      42  

Section 6.11

  Listing of Stock      43  

Section 6.12

  Disclosure; No Inside Information      43  

Section 6.13

  Environmental Matters      45  

Section 6.14

  Use of Proceeds      45  

Section 6.15

  ERISA Notices      45  

ARTICLE 7 NEGATIVE COVENANTS

     46  

Section 7.1

  Merger, Consolidation, Etc      46  

Section 7.2

  Liens      46  

Section 7.3

  Indebtedness      48  

Section 7.4

  Affiliate Transaction      49  

Section 7.5

  Conduct of Business      49  

Section 7.6

  Amendments to Organizational Documents      50  

Section 7.7

  Accounting Changes      50  

Section 7.8

  Payments of Qualifying Unsecured Debt      50  

Section 7.9

  Burdensome Agreements and Negative Pledges      50  

Section 7.10

  OFAC; Patriot Act; Anti-Corruption Laws      51  

Section 7.11

  Investment Company Act      51  

Section 7.12

  Restricted Payments      51  

ARTICLE 8 EVENTS OF DEFAULT

     52  

Section 8.1

  Events of Default      52  

Section 8.2

  Remedies      54  

ARTICLE 9 MISCELLANEOUS

     54  

Section 9.1

  Notices      54  

Section 9.2

  Cost and Expense Reimbursement      55  

Section 9.3

  Governing Law; Venue; Jurisdiction; Service of Process; WAIVER OF JURY TRIAL
     56  

Section 9.4

  Successors and Assigns      57  

Section 9.5

  Entire Agreement; Amendments      58  

Section 9.6

  Severability      59  

 

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Section 9.7

  Counterparts      59  

Section 9.8

  Survival of Representations and Warranties      59  

Section 9.9

  No Waiver      59  

Section 9.10

  Indemnity      59  

Section 9.11

  No Usury      60  

Section 9.12

  Specific Performance      60  

Section 9.13

  Agent      61  

Section 9.14

  USA Patriot Act      64  

Section 9.15

  Placement Agent      64  

Section 9.16

  Independent Nature of Lender Parties      64  

Section 9.17

  No Fiduciary Relationship      65  

Section 9.18

  No Third Parties Benefited      65  

Section 9.19

  Binding Effect      65  

Section 9.20

  Marshaling; Payments Set Aside      65  

Section 9.21

  Right of Setoff      65  

Section 9.22

  Sharing of Payments, Etc      66  

Section 9.23

  Certain Securities Matters      66  

 

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Annexes

 

Annex A    Convertible Loan Amount

 

Schedules

 

Schedule 2.3    Closing Date Lenders, Wire Instructions and Notice Information
Schedule 3.8    Ownership of Real Estate and Personal Property Schedule 3.9   
Intellectual Property Schedule 3.15    ERISA Schedule 3.16    Borrower’s
Subsidiaries Schedule 3.18    Material Agreements Schedule 3.19    Use of
Proceeds; Margin Stock Schedule 3.20    Environmental Matters Schedule 3.22   
Labor Relations Schedule 7.2(a)    Existing Liens Schedule 7.3(a)    Existing
Indebtedness

 

Exhibits

 

Exhibit A    Form of Convertible Note Exhibit B    Closing Checklist Exhibit C
   Form of Registration Rights Agreement Exhibit D    Form of Assignment and
Assumption Exhibit E    Form of Solvency Certificate Exhibit F-1    Form of
Portfolio Interest Certificate (Non-Partnerships) Exhibit F-2    Form of
Portfolio Interest Certificate (Partnerships) Exhibit G    Form of Certificate
of Designation Exhibit H    Form of Disbursement Request

 

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FACILITY AGREEMENT

This FACILITY AGREEMENT (this “Agreement”), dated as of May 11, 2020, is entered
into by and among INTERSECT ENT, INC., a Delaware corporation (the “Borrower”),
the other Loan Parties (as defined below) party hereto from time to time, the
lenders set forth on the signature page of this Agreement (together with their
successors and permitted assigns, the “Lenders”), DEERFIELD PARTNERS, L.P., as
agent for itself and the other Lender Parties (in such capacity, together with
its successors and assigns in such capacity, “Agent,” and, together with the
Lenders, the Borrower and the other Loan Parties party hereto, the “Parties”).

W I T N E S S E T H:

WHEREAS, the Borrower desires that the Lenders, on a several but not joint
basis, extend certain term loans to the Borrower to (i) provide funds for the
Borrower’s working capital and general corporate purposes, and (ii) pay a
portion of the costs and expenses related to the foregoing and entering into
this Agreement and obtaining the Loans contemplated hereby, in each case subject
to the terms and conditions set forth in this Agreement; and

WHEREAS, each of the Loan Parties is willing to guarantee all of the
Obligations;

NOW, THEREFORE, in consideration of the mutual agreements set forth herein, the
Parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.1 General Definitions. Wherever used in this Agreement, the Exhibits
or the Schedules attached hereto, unless the context otherwise requires, the
following terms have the following meanings:

“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business, business
line, unit of operation or division of a Person, (b) the acquisition of in
excess of fifty percent (50%) of the equity interests of any Person or otherwise
causing any Person to become a Subsidiary of a Loan Party, (c) a merger or
consolidation or any other combination with another Person or (d) the
acquisition (including through licensing) of any product, product line or
Intellectual Property of or from any other Person.

“Additional Amounts” has the meaning set forth in Section 2.4(a).

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly (a) controls, or is controlled by, or is under common control with,
such Person; or (b) is a general partner, manager or managing member of such
Person. Without limiting the foregoing, a Person shall be deemed to be
“controlled by” any other Person if such other Person possesses, directly or
indirectly, the power to vote ten percent (10%) or more of the securities (on a
fully diluted basis) having ordinary voting power for the election of directors
or managers or the power to direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise. Unless expressly
stated otherwise herein, no Lender Party shall, for the purposes of this
Agreement or any of the other Facility Documents, be deemed an Affiliate of the
Borrower, any other Loan Party or any of their respective Subsidiaries. With
respect to a Lender, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Lender shall, for
purposes hereof, be deemed to be an Affiliate of such Lender.

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“Agent” has the meaning set forth in the preamble to this Agreement.

“Agreed Disclosure Process” has the meaning set forth in Section 6.12(d).

“Agreement” has the meaning set forth in the preamble to this Agreement.

“Announcing Form 8-K” has the meaning set forth in Section 6.12(a).

“Anti-Corruption Laws” has the meaning set forth in Section 3.24(c).

“Anti-Money Laundering Laws” has the meaning set forth in Section 3.24(b).

“Applicable Laws” means, with respect to any Person, the common law and any
federal, provincial, state, territorial, local, foreign, multinational or
international laws, statutes, codes, treaties, standards, rules and regulations,
guidelines, ordinances, orders, judgments, writs, injunctions, decrees or
settlement agreements (including administrative or judicial precedents or
authorities) and the interpretation or administration thereof by, and other
determinations, directives, requirements or requests of, any Governmental
Authority, including all Health Care Laws, in each case whether or not having
the force of law and, in each case, that are applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

“Assignment and Assumption” means an assignment and assumption agreement entered
into by a Lender and an assignee, substantially in the form of Exhibit D or any
other form reasonably approved by the Agent.

“Authorizations” means, with respect to any Person, any permits, approvals,
authorizations, licenses, registrations, certificates, clearances, concessions,
grants, franchises, variances or permissions from, and any other contractual
obligations with, any Governmental Authority, in each case whether or not having
the force of law, and, in each case, and applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject (including all Health Care Permits), and any supplements or amendments
with respect to the foregoing.

“Authorized Officer” means the chief executive officer, the president or the
chief financial officer of the Borrower or any other officer having
substantially the same authority and responsibility.

“Bankruptcy Code” means Title 11 of the United States Code, as in effect from
time to time.

“Borrower” has the meaning set forth in the preamble to this Agreement.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Applicable Laws of, or are in
fact closed in, New York, New York.

“Capital Lease” means, with respect to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is or should be accounted for as a capital lease on the balance sheet
of that Person (subject to Section 1.5).

 

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“Capital Lease Obligations” means, at the time any determination thereof is to
be made, the amount of the liability of a Person in respect of a Capitalized
Lease that would at such time be required to be capitalized and reflected as a
liability on a balance sheet (excluding the footnotes thereto) of such Person
prepared in accordance with GAAP (subject to Section 1.5.

“Certificate of Designation” means the Certificate of Designation of
Preferences, Rights and Limitations of Series DF-1 Convertible Preferred Stock
of the Borrower, in the form attached hereto as Exhibit G.

“CFC” means a “controlled foreign corporation” as defined in Section 957 of the
Code.

“CHAMPVA” means, collectively, the Civilian Health and Medical Program of the
Department of Veterans Affairs, a program of medical benefits covering retirees
and dependents of former members of the armed services administered by the
United States Department of Veterans Affairs, and all Applicable Laws, rules,
regulations, manuals, orders or requirements pertaining to such program.

“Change of Control” means the occurrence of (a) any Major Transaction or (b) a
“change of control,” however so defined in any document, agreement or instrument
governing or evidencing any Indebtedness with a principal amount in excess of
$5,000,000 or, in each case, any term of similar effect.

“Closing Date” means the date of this Agreement.

“Code” means the Internal Revenue Code of 1986, as amended, and any Treasury
Regulations promulgated thereunder.

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

“Convertible Note” means a promissory note in the form attached hereto as
Exhibit A, as amended, restated, supplemented or otherwise modified from time to
time, and convertible into shares of Common Stock as provided therein.

“Convertible Securities” means any securities (other than Options) directly or
indirectly convertible into or exchangeable or exercisable for shares of Common
Stock.

“Conversion Shares” has the meaning set forth in Section 3.17(b).

“Copyrights” means, collectively, all of the following: (a) all copyrights,
rights and interests in copyrights, works protectable by copyright, unregistered
copyright rights, copyright registrations and copyright applications; (b) all
renewals of any of the foregoing; (c) all income, royalties, damages and
payments now or hereafter due and/or payable under any of the foregoing or with
respect to any of the foregoing, including damages or payments for past, present
or future infringements of any of the foregoing; (d) the right to sue for past,
present and future infringements of any of the foregoing; and (e) all rights
corresponding to any of the foregoing throughout the world.

“Covered Person” has the meaning set forth in Section 3.25(e).

“Debtor Relief Laws” means the Bankruptcy Code and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization or similar
debtor relief laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.

 

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“Default” means any event that, with the giving of notice, lapse of time or
fulfillment of any other applicable condition (or any combination of the
foregoing), would constitute an Event of Default.

“Disbursement Date” means the date on which the Loans are made.

“Disbursement Request” means a written notice substantially in the form of
Exhibit H hereto.

“Disqualification Event” has the meaning set forth in Section 3.25(e).

“Disqualified Lender” means (a) each Person that is a direct competitor of the
Borrower or any of its Subsidiaries, in each case, that is separately identified
in writing by the Borrower from time to time to the Agent or the Lenders,
(b) any controlling Affiliate (other than with respect to such Affiliate at
which sufficient customary barriers are in place at such entities to prevent the
sharing confidential information with respect to the Borrower with the
controlled direct competitor of the Borrower) or controlled Affiliate of any
such Person that is either (i) identified in writing to the Agent and the
Lenders by the Borrower from time to time or (ii) clearly identifiable on the
basis of such Affiliate’s name; provided that, in the case of clauses (a) and
(b) above, (i) no identification of a Person as a competitor or a controlling or
controlled Affiliate of a competitor shall be effective to retroactively
disqualify any Person that is, at the time of such identification, already a
Lender, and (x) no Person that operates as a brokerage, insurance business,
pension fund (or other benefit fund), hedge fund, private equity fund, other
investment fund, or investment banking, investment management, investment
advisory, lobbying or publishing business, (y) any non-profit research or
non-profit enterprise or (z) any investment fund managed by Deerfield Management
Company, L.P. or any Affiliate or related fund of any of the Lenders as of the
Closing Date, shall constitute a Disqualified Lender, whether or not such Person
owns an interest in a competitor or a controlled Affiliate of a competitor.
Notwithstanding anything to the contrary contained in this Agreement, (A) the
Agent shall not be responsible or have any liability for, or have any duty to
ascertain, inquire into, monitor or enforce, compliance with the provisions
hereof relating to Disqualified Lenders and (B) the Borrower (on behalf of
itself and the other Loan Parties) and the Lenders acknowledge and agree that no
Secured Party shall have any responsibility or obligation to determine whether
any Lender or potential Lender is a Competitor (it being understood and agreed,
however, that each potential Lender shall be required to represent and warrant
in the related Assignment and Assumption Agreement that such potential Lender is
not a Disqualified Lender) and that the Agent shall have no liability with
respect to any assignment or participation made to a Disqualified Lender.

“Disqualified Stock” means any Stock that, by its terms (or by the terms of any
security or other Stock into that it is convertible or for which it is
exchangeable), or upon the happening of any event or condition, (a) matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the date that is one year and one day following the Maturity Date
(excluding any provisions requiring redemption upon a “change of control,”
“fundamental change” or similar event that constitutes a Change of Control), (b)
is convertible into or exchangeable for (i) debt securities or (ii) any Stock
referred to in clause (a) above, in each case, at any time on or prior to the
date that is one year and one day following the Maturity Date at the time such
Stock is issued, or (c) is entitled to receive scheduled dividends or
distributions in cash prior to the date that is one year and one day following
the Maturity Date; provided that, if such Stock is issued pursuant to a plan for
the benefit of employees of the Borrower or any Subsidiary or by any such plan
to such employees, such Stock shall not constitute Disqualified Stock solely
because it may be required to be repurchased by the Borrower or its Subsidiaries
in order to satisfy applicable statutory or regulatory obligations or as a
result of such employee’s termination, death or disability.

“Division/Series Transaction” means, with respect to the Loan Parties and their
Subsidiaries, that any such Person (a) divides into two or more Persons (whether
or not the original Loan Party or Subsidiary thereof survives such division) or
(b) creates, or reorganizes into, one or more series, in each case as
contemplated under the laws of any jurisdiction.

 

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“Dollars” and the “$” sign mean the lawful currency of the United States of
America.

“DTC” has the meaning set forth in Section 3.25(k).

“Eligible Market” means the New York Stock Exchange, Inc., the NYSE American,
the Nasdaq Capital Market, the Nasdaq Global Market or the Nasdaq Global Select
Market (or, in each case, any successor thereto).

“Employee Benefit Plan” means any “employee benefit plan” within the meaning of
Section 3(3) of ERISA, and any stock purchase, stock option, stock-based
severance, employment, change-in-control, medical, disability, fringe benefit,
bonus, incentive, deferred compensation, employee loan and any other employee
benefit plan, agreement, program, policy or other arrangement, whether or not
subject to ERISA, under which (A) any current or former employee, director or
independent contractor of the Borrower or any of its Subsidiaries has any
present or future right to benefits and that is contributed to, sponsored by or
maintained by the Borrower or any of its respective Subsidiaries or (B) the
Borrower or any of its Subsidiaries has had or has or would reasonably be
expected to have any present or future obligation or liability.

“Environmental Laws” means all Applicable Laws and Authorizations relating to
(a) pollution or protection of the environment, (b) any Hazardous Materials
activity, or (c) occupational safety and health, industrial hygiene (as they
relate to exposure to Hazardous Materials), or the protection of human health or
welfare from exposure to Hazardous Materials.

“ERISA” means the US Employee Retirement Income Security Act of 1974 (or any
successor legislation thereto) and the regulations promulgated and rulings
issued thereunder.

“ERISA Affiliate” means, collectively, any Loan Party, any Subsidiary of a Loan
Party, and any Person under common control or treated as a single employer with,
any Loan Party or any Subsidiary of a Loan Party, within the meaning of
Section 414(b) or (c) of the Code, and solely with respect to Section 412 of the
Code (and other provisions of the Code significantly related thereto (e.g.,
Sections 430 through 436 of the Code)), under Section 414(m) or (o) of the Code.

“ERISA Event” means any of the following: (a) a “reportable event” described in
Section 4043(b) or (c) of ERISA (or, unless the thirty (30)-day notice
requirement has been duly waived under the applicable regulations) with respect
to a Title IV Plan; (b) the withdrawal of any ERISA Affiliate from a Title IV
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer, has the meaning set forth in Section 4001(a)(2) of ERISA;
(c) the complete or partial withdrawal of any ERISA Affiliate from any
Multiemployer Plan; (d) with respect to any Multiemployer Plan, the filing of a
notice of reorganization, insolvency or termination, or treatment of a plan
amendment as termination, under Section 4041A of ERISA; (e) the filing of a
notice of intent to terminate a Title IV Plan, or treatment of a plan amendment
as termination, under Section 4041 of ERISA; (f) the institution of Proceedings
to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (g) the failure
to make any required contribution to any Title IV Plan or Multiemployer Plan
when due; (h) the imposition of a Lien under Section 412 or 430(k) of the Code
or Section 303 or 4068 of ERISA on any property (or rights to property, whether
real or personal) of any ERISA Affiliate; (i) the failure of a Benefit Plan or
any trust thereunder intended to qualify for tax exempt status under Section 401
or 501 of the Code or other Laws to qualify thereunder; (j) a Title IV plan is
in “at risk” status within the meaning of Code Section 430(i); (k) a
Multiemployer Plan is in “endangered status” or “critical status” within the
meaning of Section

 

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432(b) of the Code; or (l) any other event or condition that constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Title IV Plan or Multiemployer Plan or for the
imposition of any liability upon any ERISA Affiliate under Title IV of ERISA
other than for contributions to Title IV Plans and Multiemployer Plans in the
ordinary course and PBGC premiums due but not delinquent.

“Event of Default” has the meaning set forth in Section 8.1.

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

“Excluded Subsidiary” means (a) any Subsidiary that is prohibited by any
applicable law or by any contractual obligation existing on the Closing Date
(or, if later, the date of acquisition of such Subsidiary) from guaranteeing the
Obligations (provided that such contractual obligation was not entered into in
order to satisfy the conditions of this definition) or any Subsidiary that would
require consent, approval, license or authorization of any Governmental
Authority in order to guarantee the Obligations unless such consent, approval,
license or authorization has been received or can be obtained by the Subsidiary
through the use of commercially reasonable efforts, (b) any Subsidiary that is a
CFC, FSHCO or a direct or indirect subsidiary of any CFC or FSHCO, in each case
only if the Borrower demonstrates to the satisfaction of the Lenders (exercised
reasonably and in good faith) that the inclusion of such Subsidiary as an
Excluded Subsidiary is necessary in order to prevent the Borrower’s inclusion of
income in the current or immediately succeeding taxable year (if such succeeding
year is within the term of the Loans) in an amount materially greater than the
income inclusion that would result for such taxable year absent such
Subsidiary’s inclusion as an Excluded Subsidiary; and (c) any Immaterial
Subsidiary; provided that no Subsidiary shall constitute an Excluded Subsidiary
if it Guarantees any Indebtedness of a Loan Party.

“Excluded Taxes” means with respect to any Lender Party, (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 Lender being
organized under the laws of, or having its principal office or 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, any withholding Tax imposed on amounts payable to or for the
account of such Lender with respect to its interest in a Loan under a law in
effect at the time such Lender becomes a party to this Agreement or changes its
lending office, except to the extent such Lender acquired its interest in the
Loans from a transferor that was entitled, immediately before such transfer, to
receive Additional Amounts with respect to such withholding Tax pursuant to
Section 2.4(a) or was itself a Lender so entitled immediately before changing
its lending office, (c) in the case of a Lender, any withholding Taxes
attributable to such Lender’s failure to comply with Section 2.4(d), or (d) any
withholding Tax imposed under FATCA.

“Facility Documents” means this Agreement, any Guaranty, the Convertible Notes,
the Certificate of Designation, the Solvency Certificate, any other solvency
certificate, any written notices from the Borrower with respect to the request
of Loans under Section 2.1, the Registration Rights Agreement, and all other
documents, agreements and instruments delivered in connection with any of the
foregoing, in each case, as amended, restated, supplemented or otherwise
modified from time to time.

“Facility Termination Date” has the meaning set forth in Section 2.2(a).

“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.

 

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“FCPA” has the meaning set forth in Section 3.24(c).

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System or any entity succeeding to any of its principal functions.

“Foreign Lender” has the meaning set forth in Section 2.4(d).

“FSHCO” means a Subsidiary that owns (directly or indirectly) no material assets
other than equity interests (or equity interests and debt interests) of one or
more CFCs.

“GAAP” means generally accepted accounting principles in the United States
consistently applied.

“Governmental Authority” means any federal, state, foreign or international
government, regulatory or administrative agency, any state or other political
subdivision thereof having jurisdiction over any Loan Party or any Subsidiary of
any Loan Party, any central bank (or similar monetary or regulatory authority)
thereof, any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any corporation or
other entity owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing. For the avoidance of doubt, Governmental
Authority shall include the SEC, the Principal Market, the Financial Industry
Regulatory Authority and any agency, branch or other governmental body, entity
or panel charged with the responsibility and/or vested with the authority to
administer and/or enforce any Health Care Laws, including any Medicare or
Medicaid administrators, contractors, intermediaries or carriers.

“Guarantee” by any Person means any obligation, contingent or otherwise, of such
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets, goods, securities
or services, to take-or-pay, or to maintain financial statement conditions or
otherwise), or (b) entered into for the purpose of assuring in any other manner
the obligee of such Indebtedness or other obligation of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term “Guarantee”
used as a verb has a corresponding meaning.

“Guarantor” means each Subsidiary of the Borrower (other than any Excluded
Subsidiary) and each other Person who provides a guaranty of any of the
Obligations under this Agreement pursuant to a Guaranty or any other Facility
Document, including pursuant to a joinder agreement thereto.

“Guaranty” means a Guaranty made by a Guarantors in favor of the Agent, for the
ratable benefit of the Lender Parties, in form and substance reasonably
acceptable to the Agent.

“Hazardous Material” means (a) any radioactive materials, asbestos-containing
materials, urea formaldehyde foam insulation, polychlorinated biphenyls, radon
gas, petroleum and petroleum by-products and derivatives and (b) any other
chemical, material or substance, waste, pollutant or contaminant that is
prohibited, limited or subject to regulation, investigation, control or
remediation by or pursuant to any Environmental Law, in each case because of its
dangerous or deleterious properties or characteristics.

 

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“Health Care Laws” means all Applicable Laws relating to the provision and/or
administration of, and/or payment for, health care services, items and supplies
including, without limitation, including without limitation Applicable Laws
related to: (a) fraud and abuse, including, without limitation, the federal
Anti-Kickback Statute (42 U.S.C. §1320a-7b(b)), the Eliminating Kickbacks in
Recovery Act of 2018 (18 U.S.C. § 220), the Stark Law (42 U.S.C. §1395nn), the
civil False Claims Act (31 U.S.C. §§ 3729 et seq.), the criminal False Claims
Act 18 U.S.C. § 287, the False Statements Relating to Health Care Matters Act
(18 U.S.C. § 1035), the Health Care Fraud Act (18 U.S.C. § 1347), the Program
Fraud Civil Remedies Act (31 U.S.C. §§ 3801-3812), the Anti-Kickback Act of 1986
(41 U.S.C. §§ 51-58), the Laws regarding Exclusion and Civil Monetary Penalties
(42 U.S.C. §§ 1320a-7, 1320a-7a and 1320a-7b), the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (Pub. L. No. 108-173), and any state,
commonwealth or local laws similar to any of the foregoing; (b) the Patient
Protection and Affordable Care Act (Pub. L. No. 111-148) and the Health Care and
Education Reconciliation Act of 2010 (Pub. L. No. 111-152); (c) Medicare,
Medicaid, CHAMPVA, TRICARE, the State Children’s Health Insurance Program (Title
XXI of the Social Security Act), and any other Third Party Payor Programs;
(d) the licensure, permitting, registration or regulation of healthcare
providers, suppliers, professionals, facilities or payors; (e) patient health
care; (f) quality, safety certification and accreditation standards and
requirements; (g) billing, coding or the submission or payment of claims or
collection of accounts receivable or refund of overpayments; (h) HIPAA; (i) the
practice of medicine and other health care professions or the organization of
medical or professional entities; (j) state kickback, fee-splitting, false
claims, or self-referral prohibitions; (k) the Federal Controlled Substances Act
(21 U.S.C. 801 § et. seq., and all rules and regulations of the United States
Drug Enforcement Administration), the federal Food Drug and Cosmetic Act (21
U.S.C. §§ 301 et seq.), including current Good Manufacturing Practices, and
similar standards of the United States Food and Drug Administration, and any
related state laws and regulations; (l) the Clinical Laboratory Improvement
Amendments and the regulations promulgated thereunder and similar state laws;
(m) the provision of free or discounted care or services; (n) laws and
regulations regulating the generation, transportation, treatment, storage,
disposal and other handling of medical or radioactive waste, and (o) any and all
other applicable health care laws, regulations, and manual provisions, policies
and administrative guidance, each of clauses (a) through (o) as may be amended,
modified or supplemented from time to time and any successor statutes thereto
and regulations promulgated thereunder from time to time.

“HIPAA” means the (a) Health Insurance Portability and Accountability Act of
1996; (b) the Health Information Technology for Economic and Clinical Health Act
(Title XIII of the American Recovery and Reinvestment Act of 2009); and (c) any
federal, state and local laws regulating the privacy and/or security of
individually identifiable health information, including, without limitation,
state laws providing for notification of breach of privacy or security of
individually identifiable health information, in each case with respect to the
Applicable Laws described in clauses (a), (b) and (c) of this definition, as the
same may be amended, modified or supplemented from time to time, any successor
statutes thereto, any and all rules or regulations promulgated from time to time
thereunder.

“HSR Act” means the Hart-Scott Rodino Antitrust Improvements Act of 1976, as
amended and the related rules and regulations promulgated thereunder.

“Immaterial Subsidiary” means, at any date of determination, a Subsidiary of the
Borrower (a) whose total assets as of the most recent available quarterly or
year-end financial statements were less than 5% of the consolidated total assets
of the Borrower and its Subsidiaries at such date and (b) whose gross revenues
as of the most recent available quarterly or year-end financial statements were
less than 5% of the consolidated gross revenues of the Borrower and its
Subsidiaries for such period, in each case

 

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determined in accordance with GAAP; provided that, in no event shall (i) the
total assets of all Immaterial Subsidiaries in the aggregate as of the most
recent available quarterly or year-end financial statements exceed 7.5% of the
total assets of the Borrower and its Subsidiaries at such date or (ii) the gross
revenues of all Immaterial Subsidiaries in the aggregate as of the most recent
available quarterly or year-end financial statements exceed 7.5% of the
consolidated gross revenues of the Borrower and its Subsidiaries for such
period, in each case determined in accordance with GAAP.

“Indebtedness” means, with respect to any Person, (a) all indebtedness for
borrowed money of such Person; (b) the deferred purchase price of assets or
services of such Person (other than (i) trade payables entered into in the
ordinary course of business and that are not more than ninety (90) days past
due, (ii) deferred compensation and severance, pension, health and welfare
retirement and equivalent benefits to current or former employees, directors or
managers of such Person and its Subsidiaries, and (iii) any earn-outs, purchase
price adjustments, milestones or other deferred acquisition consideration,
except, in each case, to the extent, in accordance with GAAP, that such
earn-outs, purchase price adjustments, milestones or other deferred acquisition
consideration should be shown to be a liability on the balance sheet); (c) all
Guarantees of Indebtedness by such Person; (d) the face amount of all letters of
credit issued or acceptance facilities established for the account of such
Person (or for which such Person is liable), including without duplication, all
drafts drawn thereunder; (e) all Capital Lease Obligations of such Person;
(f) all indebtedness secured by any Lien on any assets or property of such
Person, whether or not such indebtedness has been assumed or is recourse (with
the amount thereof, in the case of any such indebtedness that has not been
assumed by such Person, being measured as the lower of (x) fair market value of
such property and (y) the amount of the indebtedness secured); (g) indebtedness
created or arising under any conditional sale or title retention agreement, or
incurred as financing, in either case with respect to assets or property
acquired by such Person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such assets or property); (h) all obligations of such Persons evidenced by
notes, bonds, debentures or similar instruments; (i) all obligations of such
Person, whether or not contingent, in respect of Disqualified Stock, valued at,
in the case of redeemable preferred Stock, the greater of the voluntary
liquidation preference and the involuntary liquidation preference of such Stock
plus accrued and unpaid dividends; (j) all direct or indirect liability,
contingent or otherwise, of such Person with respect to any other Indebtedness
of another Person if the primary purpose or intent of the Person incurring such
Indebtedness, or the primary effect thereof, is to provide assurance to the
obligee of such liability that such Indebtedness will be paid; (k) all direct or
indirect liability, contingent or otherwise, of such Person under Swap Contracts
(other than with respect to Permitted Equity Swaps that are classified as equity
in accordance with GAAP) and (l) royalty and revenue interest financing
obligations.

“Indemnified Person” has the meaning set forth in Section 9.10(a).

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

“Indemnity” has the meaning set forth in Section 9.10(a).

“Inside Information” means any “material non-public information” (within the
meaning of applicable U.S. securities laws, including Section 10(b) of, and Rule
10b5-1 promulgated under, the Exchange Act) in respect of, or relating to, the
Borrower or any of its Affiliates or securities or any other company with any
publicly listed or traded securities.

“Intellectual Property” means all rights, title and interests in or relating to
(a) intellectual property and industrial property arising under any Applicable
Law, including all Copyrights, Patents, Software, Trademarks, Internet Domain
Names, Trade Secrets, (b) all IP Ancillary Rights relating thereto and (c) IP
Licenses.

 

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“Interest Payment Date” has the meaning set forth in Section 2.6.

“Interest Rate” means 4.00% per annum.

“Internet Domain Name” means all right, title and interest (and all related IP
Ancillary Rights) arising under any Law in or relating to internet domain names.

“Investment Company Act” means the Investment Company Act of 1940, as amended.

“IP Ancillary Rights” means, with respect to any Intellectual Property of the
type described in clauses (a) and (c) of the definition of “Intellectual
Property,” as applicable, all foreign counterparts to, and all divisionals,
reversions, continuations, continuations-in-part, reissues, reexaminations,
renewals and extensions of, such Intellectual Property and all income,
royalties, proceeds and Liabilities at any time due or payable or asserted under
or with respect to any of the foregoing or otherwise with respect to such
Intellectual Property, including all rights to sue or recover at law or in
equity for any past, present or future infringement, misappropriation, dilution,
violation or other impairment thereof, and, in each case, all rights to obtain
any other IP Ancillary Right.

“IP License” means all contractual obligations (and all related IP Ancillary
Rights), whether written or oral, granting any right, title and interest in or
relating to any Intellectual Property of the type described in clause (a) of the
definition of Intellectual Property.

“IRS” means the United States Internal Revenue Service.

“Issuance Notice” has the meaning set forth in Section 6.15.

“Latest Balance Sheet Date” has the meaning set forth in Section 3.13(e).

“Lender Parties” means Agent, the Lenders, holders of other Obligations, holders
of Convertible Notes and all Indemnified Persons.

“Lenders” has the meaning set forth in the preamble to this Agreement.

“Liabilities” means all claims, actions, suits, judgments, damages, losses,
liabilities, obligations, responsibilities, fines, penalties, sanctions, costs,
fees, Taxes, commissions, charges, disbursements and expenses (including those
incurred upon any appeal or in connection with the preparation for and/or
response to any subpoena or request for document production relating thereto),
in each case of any kind or nature (including interest accrued thereon or as a
result thereof and fees, charges and disbursements of financial, legal and other
advisors and consultants), whether joint or several, and whether direct,
indirect, contingent, consequential, actual, punitive, treble or otherwise.

“License” has the meaning set forth in the definition of “Permitted License.”

“Lien” means any lien, pledge, preferential arrangement, mortgage, security
interest, deed of trust, charge, assignment, hypothecation, title retention or
other encumbrance on or with respect to property or interest in property having
the practical effect of constituting a security interest.

 

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“Loan” means any loan or other credit extension made available or provided from
time to time by any of the Lenders to the Borrower pursuant to this Agreement or
any other Facility Document or, as the context may require, the principal amount
thereof from time to time outstanding and shall include the Convertible Loan.

“Loan Parties” means the collective reference to the Borrower and all of the
Guarantors.

“Loss” has the meaning set forth in Section 9.10(a).

“Major Transaction” has the meaning set forth in the Convertible Notes.

“Major Transaction Redemption” has the meaning set forth in the Convertible
Notes.

“Make Whole Amount” means, on any date of prepayment, payment, redemption
(including any Major Transaction Redemption or Optional Redemption) or repayment
of all or any portion of the Loans, an amount in cash equal to (a) solely to the
extent such prepayment, payment, redemption or repayment is being made in
connection with a Proceeding under Debtor Relief Laws, in each case, the present
value, as determined by Agent and all Lenders in their sole discretion (which
shall be conclusive absent manifest error), of all required interest payments,
charges and premiums due on the Loans that are prepaid, paid, redeemed
(including pursuant to a Major Transaction Redemption or Optional Redemption) or
repaid from the date of prepayment, payment, redemption or repayment (as
applicable) through and including the Maturity Date (assuming that the interest
rate applicable to all such interest is the applicable Interest Rate for such
Loans), discounted to the date of prepayment, payment, redemption or repayment
on a quarterly basis (assuming a 360-day year and actual days elapsed) at a rate
equal to the Treasury Yield or (b) with respect to any other prepayment,
payment, redemption, or repayment that is made for a situation or scenario not
covered by clause (a) above, all required interest payments, changes and
premiums due on the Loans that are prepaid, paid, redeemed or repaid from the
date of prepayment, payment, redemption or repayment as applicable) through and
including the Maturity Date (assuming that the interest rate applicable to all
such interest is the applicable Interest Rate for such Loans), and for the
avoidance of doubt, without any discount rate applying thereto (but assuming a
360-day year and actual days elapsed).

“Margin Stock” means “margin stock” as such term is defined in Regulation T, U
or X of the Federal Reserve Board.

“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, results of operations, condition (financial or otherwise) or assets
of any Loan Party or its Subsidiaries, (b) the legality, validity, binding
effect or enforceability of any provision of any Facility Document, (c) the
ability of any Loan Party to perform its obligations under any Facility
Document, or (d) the rights and remedies of the Lender Parties under any
Facility Document.

“Material Agreements” has the meaning set forth in Section 3.18.

“Maturity Date” means May 9, 2025.

“Medicaid” means, collectively, the health care assistance program established
by Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) and any
statutes succeeding thereto, and all Applicable Laws, rules, regulations,
manuals, orders or requirements pertaining to such program, including (a) all
federal statutes affecting such program; (b) all state statutes and plans for
medical assistance enacted in connection with such program and federal rules and
regulations promulgated in connection with such program; and (c) all applicable
provisions of all rules, regulations, manuals, orders and administrative
guidance, reimbursement, and requirements of all Governmental Authorities
promulgated in connection with such program (whether or not having the force of
law), in each case as the same may be amended, restated, supplemented or
otherwise modified from time to time.

 

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“Medicare” means, collectively, the health insurance program for the aged and
disabled established by Title XVIII of the Social Security Act (42 U.S.C. 1395
et seq.) and any statutes succeeding thereto, and all Applicable Laws, rules,
regulations, manuals, orders or requirements pertaining to such program
including (a) all federal statutes (whether set forth in Title XVIII of the
Social Security Act (42 U.S.C. 1395 et seq.) or elsewhere) affecting such
program; and (b) all applicable provisions of all rules, regulations, manuals,
orders, administrative guidance, reimbursement and requirements of all
Governmental Authorities promulgated in connection with such program (whether or
not having the force of law), in each case, as the same may be amended,
restated, supplemented or otherwise modified from time to time.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Multiemployer Plan” means any multiemployer plan, as defined in Section 3(37)
or 4001(a)(3) of ERISA, as to which any Loan Party or ERISA Affiliate incurs or
otherwise has, or would reasonably be expected to have, any obligation or
Liabilities (including under Section 4212 of ERISA).

“Necessary Disclosure” has the meaning set forth in Section 6.12(d).

“Net Interest Expense” means for the Borrower and its Subsidiaries for any
period: (a) gross interest expense (including that attributable to Capital Lease
Obligations) for such period paid or required to be paid in cash (including all
commissions, discounts, fees and other charges in connection with letters of
credit and similar instruments and net amounts paid or payable and/or received
or receivable under permitted Swap Contracts in respect of interest rates) for
the Borrower and its Subsidiaries on a consolidated basis, minus (b) interest
income for such period.

“Obligations” means all Loans, any Make Whole Amount, interests, fees, expenses,
costs, liabilities, indebtedness and other obligations (monetary (including
post-petition interest, costs, fees, expenses and other amounts, whether allowed
or not) or otherwise) of (or owed by) the Borrower and the other Loan Parties
under or in connection with the Facility Documents, in each case howsoever
created, arising or evidenced, whether direct or indirect (including those
acquired by assignment), absolute or contingent, now or hereafter existing, or
due or to become due.

“OFAC” has the meaning set forth in Section 3.24(a).

“Optional Redemption” has the meaning has the set forth in the Convertible
Notes.

“Options” means any rights, warrants or options to subscribe for or purchase
shares of Common Stock or Convertible Securities.

“Organizational Documents” means (a) for any corporation, the certificate or
articles of incorporation, the bylaws, the constitution, any certificate of
designation or instrument relating to the rights of holders or preferred stock
of such corporation, and any shareholder agreement, (b) for any partnership, the
partnership agreement and, if applicable, certificate of limited partnership,
(c) for any limited liability company, the operating or limited liability
company agreement and articles or certificate of formation or (d) for any other
entity, any other document setting forth the manner of election or duties of the
officers, directors, managers or other similar or equivalent persons or Persons,
or the designation, amount or relative rights, limitations and preference of the
Stock of such entity.

 

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

“Other Taxes” means any and all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes arising from any payment made
hereunder or from the execution, issuance, delivery, registration, enforcement
or transfer of, or otherwise with respect to, any Facility Document, the
Preferred Conversion Shares or the Conversion Shares, except such Taxes that are
Other Connection Taxes imposed by a jurisdiction other than the United States.

“Parties” has the meaning set forth in the preamble to this Agreement.

“Patents” means, collectively, all of the following: (a) all patents and patent
applications and the inventions and improvements described and claimed therein,
and patentable inventions; (b) the reissues, divisions, continuations, renewals,
extensions and continuations-in-part of any of the foregoing; (c) all income,
royalties, damages and payments now or hereafter due and/or payable under any of
the foregoing or with respect to any of the foregoing, including, without
limitation, damages and payments for past, present and future infringements of
any of the foregoing; (d) the right to sue for past, present and future
infringements of any of the foregoing; and (e) all rights corresponding to any
of the foregoing throughout the world.

“PBGC” means the United States Pension Benefit Guaranty Corporation or any
successor thereto.

“Permitted Acquisition” means any Acquisition by a Loan Party, in each case, to
the extent that each of the following conditions shall have been satisfied:

(a) the Borrower shall have delivered each of the following to the Agent,
subject to Section 6.12, as soon as available, executed copies of the
Acquisition agreement and all material agreements (other than any exhibits or
schedules thereto) pursuant to which such Acquisition is to be consummated
(excluding for the avoidance of doubt, any fee letters relating to any financing
for such Acquisition); provided that, no later than the first (1st) Business Day
following the date of such Acquisition documents, the Borrower shall file a
current report on Form 8-K with the SEC describing the terms of the transaction
contemplated by such Acquisition documents, including such Acquisition documents
(other than any exhibits or schedules) as exhibits thereto;

(b) the Loan Parties (including any new Subsidiary to the extent required by
Section 6.10) shall execute and deliver the agreements, instruments and other
documents to the extent required by Section 6.10 hereof;

(c) (i) at the time of the execution of the definitive acquisition agreement for
such Acquisition, no Default or Event of Default shall have occurred and be
continuing, and (ii) at the time of consummation of such Acquisition, no Event
of Default under Section 8.1(a) or (d) shall have occurred and be continuing;

(d) all transactions in connection with such Acquisition shall be consummated in
all material respects in accordance with Applicable Laws and in conformity with
all material applicable Authorizations, and all material applicable
Authorizations shall have been obtained;

 

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(e) the assets acquired in such Acquisition are for use in a business permitted
under Section 7.5; and

(f) such Acquisition shall be on an arm’s-length basis and shall not be hostile
and, if required by the Organizational Documents of such Person or by Applicable
Laws, shall have been approved by the board of directors (or other similar body)
and/or the stockholders or other equity holders of any Person being acquired in
such Acquisition.

“Permitted Acquisition Debt” means Indebtedness of the Borrower or any of its
Subsidiaries that has been issued or incurred for solely the purpose of
financing all or a part of the consideration for, and/or is assumed in
connection with, a Permitted Acquisition (including for the purpose of
refinancing or replacing all or a portion of any pre-existing Indebtedness of
the Person(s) or assets to be acquired); provided that, (a)(i) at the time the
definitive acquisition agreement for such Permitted Acquisition is executed, no
Default or Event of Default has occurred and is continuing, and (ii) at the time
of consummation of such Acquisition, no Event of Default under Section 8.1(a) or
(d) shall have occurred and be continuing, (b) such Indebtedness is not
guaranteed by any Person that is not a Guarantor, (c) such Indebtedness shall
not prohibit (i) the incurrence or regularly scheduled payment of principal,
interest and charges under this Agreement or the repayment or redemption of the
Obligations upon the occurrence of (A) an Event of Default and an acceleration
under Section 8.2 or (B) a Major Transaction (although the definitive loan,
credit or other primary agreement governing such Indebtedness may require prior
repayment thereof), (ii) any payment, indemnity or reimbursement contemplated by
Section 9.2 or 9.10 or (iii) any amendment or modification to this Agreement or
the other Facility Documents (other than an amendment or modification that would
be adverse in any material respect to the interests of the Persons providing
such Indebtedness) (it being understood and agreed that nothing in this clause
(c) shall prohibit the conversion of any of the Obligations into Conversion
Shares as contemplated herein and in the Convertible Notes), and (d) a complete
and correct copy of (i) the definitive loan, credit or other primary agreement
governing such Indebtedness, (ii) the primary security agreement or similar
agreement or instrument, if any, pursuant to which a Lien is granted to the
Person or Persons providing such Indebtedness to secure the obligations
thereunder and (iii) any intercreditor agreement (if applicable), shall have
been publicly disclosed in a filing, and filed, with the SEC promptly after
execution and delivery thereof. For purposes hereof, the accrual of interest,
the accretion or amortization of original issue discount, the payment of
interest on any Indebtedness in the form of additional Indebtedness with the
same terms, the reclassification of preferred stock as Indebtedness due to a
change in accounting principles, and the payment of dividends on Disqualified
Stock in the form of additional shares of the same class of Disqualified Stock
will be excluded from the determination of the outstanding principal amount of
any such Indebtedness.

“Permitted Equity Swap” means any forward purchase, accelerated share purchase,
call option, warrant transaction or other equity derivative transactions
relating to the Stock of the Borrower.

“Permitted Exclusive License” means any exclusive License other than any
exclusive License to commercialize the Borrower’s current Propel® family of
products (i.e. Propel®, Propel® Mini and Propel® Contour) within the United
States and/or Canada.

“Permitted License” any license of Intellectual Property, or covenant not to
sue, granted by the Borrower or its Subsidiaries for contract manufacturing and
production and any other license of Intellectual Property, or covenant not to
sue, granted by the Borrower or its Subsidiaries (each, a “License”) so long as
such License does not result in a legal transfer of title to the licensed
property and has been granted in exchange for fair consideration and, in each
case (a) is either (i) a non-exclusive License or (ii) a Permitted Exclusive
License, (b) is entered into when no Default or Event of Default has occurred
and is continuing or would result therefrom, and (c) is (or is pursuant to) an
arm’s-length transaction.

 

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“Permitted Liens” means Liens permitted under Section 7.2.

“Person” means and includes any natural person, individual, partnership, joint
venture, corporation, trust, limited liability company, limited company, joint
stock company, unincorporated organization, government entity or any political
subdivision or agency thereof, or any other entity.

“Portfolio Interest Certificate” has the meaning set forth in Section 2.4(d).

“Preferred Conversion Shares” has the meaning set forth in Section 3.17(b).

“Preferred Stock” means the preferred stock, par value $0.001 per share, of the
Borrower (“Preferred Stock”) designated as Series DF-1 Convertible Preferred
Stock, with the preferences, rights and limitations described in the Certificate
of Designation.

“Proceeding” means any investigation, inquiry, litigation, review, hearing,
suit, claim, audit, arbitration, proceeding or action (in each case, whether
civil, criminal, administrative, investigative or informal) commenced, brought,
conducted or heard by or before, or otherwise involving, any Governmental
Authority or arbitrator.

“Product” means any item or service that is designed, developed, created,
manufactured, sold or otherwise used by or on behalf of the Loan Parties or any
of their Subsidiaries.

“Principal Market” means the Nasdaq Global Market (or successor thereto),
subject to Section 6.11.

“Pro Rata Share” means, with respect to any Lender, the percentage obtained by
dividing (a) such Lender’s outstanding Loans, by (b) the total outstanding
amount of Loans held by all Lenders.

“Put Notice” has the meaning set forth in Section 6.15.

“Qualifying Secured Debt” means, collectively, Qualifying Secured Non-Royalty
Financing Debt and Qualifying Secured Royalty Obligations.

“Qualifying Secured Debt Cap” means, at any time of determination, the lesser of
(x) $85,000,000 and (y) the positive difference, if any, between (i)
$150,000,000 and (ii) the aggregate outstanding amount of Qualifying Unsecured
Debt at such time.

“Qualifying Secured Non-Royalty Financing Debt” means Indebtedness of the
Borrower that is pari passu in right of payment with the Obligations and secured
by Liens on some or all of the assets of the Borrower in an aggregate
outstanding principal amount, together with all Qualifying Secured Royalty
Obligations then outstanding, not to exceed at any time the Qualifying Secured
Debt Cap; provided that, (a) such Indebtedness does not constitute Qualifying
Secured Royalty Financing Obligations, (b) at the time such Qualifying Secured
Non-Royalty Financing Debt is incurred, no Default or Event of Default has
occurred and is continuing or would occur as a result of such incurrence
(provided that, in the case of any such Indebtedness incurred to finance a
Permitted Acquisition, such condition, other than with respect to any Event of
Default pursuant to Section 8.1(a) or 8.1(d), shall be measured solely as of the
date of the execution of the definitive documentation for such Permitted
Acquisition), (c) such Indebtedness is not guaranteed by any Person that is not
a Guarantor, (d) such Indebtedness shall not prohibit (i) the

 

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incurrence or regularly scheduled payment of principal, interest and charges
under this Agreement or the repayment or redemption of the Obligations upon the
occurrence of (A) an Event of Default and an acceleration under Section 8.2 or
(B) a Major Transaction (although the definitive loan, credit or other primary
agreement governing such Indebtedness may require prior repayment thereof), (ii)
any payment, indemnity or reimbursement contemplated by Section 9.2 or 9.10 or
(iii) any amendment or modification to this Agreement or the other Facility
Documents (other than an amendment or modification that would be adverse in any
material respect to the interests of the Persons providing such Indebtedness)
(it being understood and agreed that nothing in this clause (d) shall prohibit
the conversion of any of the Obligations into Conversion Shares as contemplated
herein and in the Convertible Notes), and (e) a complete and correct copy of
(i) the definitive loan, credit or other primary agreement governing such
Qualifying Non-Royalty Financing Secured Debt, (ii) the primary security
agreement or similar agreement or instrument, if any, pursuant to which a Lien
is granted to the Person or Persons providing such Qualifying Secured
Non-Royalty Financing Debt to secure the obligations thereunder and (iii) any
intercreditor agreement (if applicable), shall have been publicly disclosed in a
filing, and filed, with the SEC promptly after execution and delivery thereof.
For purposes hereof, the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in the form
of additional Indebtedness with the same terms, the reclassification of
preferred stock as Indebtedness due to a change in accounting principles, and
the payment of dividends on Disqualified Stock in the form of additional shares
of the same class of Disqualified Stock will be excluded from the determination
of the outstanding principal amount of any such Indebtedness.

“Qualifying Secured Royalty Financing Obligations” means Indebtedness arising
from one or more financing transactions in respect of royalties on net sales of
Products, or revenue interests in respect of Products, of the Borrower that is
pari passu in right of payment with the Obligations and secured by Liens on the
Products that are the subject of such financing transaction and/or due or
payable prior to the date that is one hundred eighty-one (181) days after the
Maturity Date and the aggregate potential cash payments in respect of which
(whether in the form of milestone payments, fees or any other consideration, but
excluding royalties permitted pursuant to clause (c) below), together with the
principal amount of all Qualifying Secured Non-Royalty Financing Debt then
outstanding, do not exceed at any time the Qualifying Secured Debt Cap; provided
that (a) at the time such Qualifying Secured Royalty Obligations are incurred,
no Default or Event of Default has occurred or would occur as a result of such
incurrence (provided that, in the case of any such Indebtedness incurred to
finance a Permitted Acquisition, such condition, other than with respect to any
Event of Default pursuant to Section 8.1(a) or 8.1(d), shall be measured solely
as of the date of the execution of the definitive documentation for such
Permitted Acquisition), (b) such Indebtedness is not guaranteed by any Person
that is not a Guarantor, (c) the maximum royalty or revenue interest amount
payable in connection with any such transaction shall not exceed 7.00% of net
sales of (or net revenues attributable to) Product(s) the development of which
is financed by such transaction, (d) such Indebtedness shall not prohibit
(i) the incurrence or regularly scheduled payment of principal, interest and
charges under this Agreement or the repayment or redemption of the Obligations
upon the occurrence of (A) an Event of Default and an acceleration under
Section 8.2 or (B) a Major Transaction (although the definitive loan, credit or
other primary agreement governing such Indebtedness may require prior repayment
thereof), (ii) any payment, indemnity or reimbursement contemplated by
Section 9.2 or 9.10 or (iii) any amendment or modification to this Agreement or
the other Facility Documents (other than an amendment or modification that would
be adverse in any material respect to the interests of the Persons providing
such Indebtedness) (it being understood and agreed that nothing in this clause
(d) shall prohibit the conversion of any of the Obligations into Conversion
Shares as contemplated herein and in the Convertible Notes), and (e) a complete
and correct copy of (i) the definitive loan, credit or other primary agreement
governing such Qualifying Non-Royalty Financing Secured Debt, (ii) the primary
security agreement or similar agreement or instrument, if any, pursuant to which
a Lien is granted to the Person or Persons providing such Qualifying Secured
Non-Royalty Financing Debt to secure the obligations of the Borrower thereunder
and (iii) any intercreditor agreement (if applicable), shall have been publicly
disclosed in a filing, and filed, with the SEC promptly after execution and
delivery thereof.

 

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“Qualifying Unsecured Debt” means, collectively, Qualifying Unsecured
Non-Royalty Financing Debt and Qualifying Unsecured Royalty Financing
Obligations.

“Qualifying Unsecured Non-Royalty Financing Debt” means Indebtedness of the
Borrower that is pari passu with or junior to the Obligations in right of
payment and not secured by any Lien on any assets or property of the Borrower or
any of its Subsidiaries in an aggregate outstanding amount, together with all
Qualifying Unsecured Royalty Financing Obligations then outstanding, not to
exceed at any time the positive difference between (x) $150,000,000 and (y) the
aggregate amount of Qualifying Secured Debt outstanding at such time; provided
that, (a) at the time such Qualifying Unsecured Non-Royalty Financing Debt is
incurred, no Default or Event of Default has occurred or would occur as a result
of such incurrence (provided that, in the case of any such Indebtedness incurred
to finance a Permitted Acquisition, such condition, other than with respect to
any Event of Default pursuant to Section 8.1(a) or 8.1(d), shall be measured
solely as of the date of the execution of the definitive documentation for such
Permitted Acquisition), (b) such Indebtedness is not guaranteed by any Person
that is not a Guarantor, (c) such Indebtedness shall not mature or be
mandatorily redeemable or prepayable, in whole or in part, prior to the date
that is one hundred eighty-one (181) days after the Maturity Date (it being
understood that acceleration or mandatory repayment, prepayment, redemption or
repurchase of such Indebtedness upon the occurrence of an event of default,
asset sale, fundamental change or a change in control shall not be prohibited by
this clause (c)), (d) such Indebtedness shall not prohibit (i) the incurrence,
regularly scheduled payment or mandatory prepayment or redemption (including at
maturity, by acceleration or otherwise) of principal, interest and charges under
this Agreement, (ii) any payment, indemnity or reimbursement contemplated by
Section 9.2 or 9.10 or (iii) any amendment or modification to this Agreement or
the other Facility Documents (other than an amendment or modification that would
alter the alter the repayment or prepayment requirements of this Agreement in a
manner that would be materially adverse to the interests of the Persons
providing such Qualifying Secured Non-Royalty Financing Debt) and (e) a complete
and correct copy of the definitive loan, credit or other primary agreement
governing such Qualifying Unsecured Non-Royalty Financing Debt shall have been
publicly disclosed in a filing, and filed, with the SEC promptly after execution
and delivery thereof. For purposes hereof, the accrual of interest, the
accretion or amortization of original issue discount, the payment of interest on
any Indebtedness in the form of additional Indebtedness with the same terms, the
reclassification of preferred stock as Indebtedness due to a change in
accounting principles, and the payment of dividends on Disqualified Stock in the
form of additional shares of the same class of Disqualified Stock will be
excluded from the determination of the outstanding principal amount of any such
Indebtedness.

“Qualifying Unsecured Royalty Financing Obligations” means Indebtedness arising
from one or more financing transactions in respect of royalties on net sales of
Products, or revenue interests in respect of Products, of the Borrower that is
pari passu with or junior to the Obligations in right of payment, that is not
secured by Liens on any assets of the Borrower or any of its Subsidiaries and
the aggregate potential cash payments in respect of which (whether in the form
of milestone payments, fees or any other consideration, but excluding royalties
permitted pursuant to clause (d) below), together with all Qualifying Unsecured
Non-Royalty Financing Debt then outstanding, do not exceed at any time the
positive difference between (x) $150,000,000 and the aggregate amount of
Qualifying Secured Debt outstanding at such time; provided that (a) at the time
such Qualifying Unsecured Royalty Financing Obligations are incurred, no Default
or Event of Default has occurred or would occur as a result of such incurrence
(provided that, in the case of any such Indebtedness incurred to finance a
Permitted Acquisition, such condition, other than with respect to any Event of
Default pursuant to Section 8.1(a) or 8.1(d), shall be measured solely as of the
date of the execution of the definitive documentation for such

 

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Permitted Acquisition), (b) such Indebtedness is not guaranteed by any Person
that is not a Guarantor, (c) such Indebtedness shall not prohibit (i) the
incurrence, regularly scheduled payment or mandatory prepayment or redemption
(including at maturity, by acceleration or otherwise) of principal, interest and
charges under this Agreement, (ii) any payment, indemnity or reimbursement
contemplated by Section 9.2 or 9.10 or (iii) any amendment or modification to
this Agreement or the other Facility Documents (other than an amendment or
modification that would alter the alter the repayment or prepayment requirements
of this Agreement in a manner that would be materially adverse to the interests
of the Persons providing such Qualifying Secured Non-Royalty Financing Debt,
(d) the maximum royalty or revenue interest amount payable in connection with
any such transaction shall not exceed 7.00% of net sales of (or net revenues
attributable to) Product(s) the development of which is financed by such
transaction, (e) such Indebtedness shall not be mandatorily redeemable or
prepayable, in whole or in part, prior to the date that one hundred eighty-one
(181) days after the Maturity Date (it being understood that acceleration or
mandatory repayment, prepayment, redemption or repurchase of such Indebtedness
upon the occurrence of an event of default, asset sale, fundamental change or a
change in control shall not be prohibited by this clause (e)), and (f) a
complete and correct copy of the definitive documentation evidencing such
Qualifying Secured Royalty Obligations shall have been delivered to the Lenders
promptly after execution and delivery thereof and, on or prior to such delivery
shall have been publicly disclosed in a filing, and filed, with the SEC.

“Real Estate” means any real property owned, leased, subleased or otherwise
operated or occupied by any Loan Party or any Subsidiary of any Loan Party.

“Register” has the meaning set forth in Section 1.4(b).

“Registration Rights Agreement” means that certain Registration Rights
Agreement, dated as of the Closing Date, entered into by the Persons parties
thereto and substantially in the form of Exhibit C, as amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System as in effect from time to time and any successor to all or a
portion thereof establishing reserve requirements.

“Release” means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material into
or through the environment.

“Reporting Period” has the meaning set forth in Section 6.8.

“Required Authorizations” has the meaning set forth in Section 3.7.

“Required Lenders” means, at any time, the Lenders having Pro Rata Shares in an
aggregate amount that exceeds 50% of the outstanding Loans.

“Restricted Payments” means, with respect to any Person, (a) the declaration or
making of any dividend payment or other distribution of assets, properties,
cash, rights, obligations or securities on account of any of its Stock or
(b) the purchasing, redemption or other acquisition for value of any of its
Stock now or hereafter outstanding.

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The
McGraw-Hill Companies, Inc., and any successor thereto.

 

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“Sanctioned Country” has the meaning set forth in Section 3.24(b).

“Sanctions” has the meaning set forth in Section 3.24(a).

“Sarbanes-Oxley” has the meaning set forth in Section 3.25(a).

“SDN List” has the meaning set forth in Section 3.24(b).

“SEC” means the United States Securities and Exchange Commission.

“SEC Documents” means all reports, schedules, forms, statements and other
documents filed by any Loan Party or any of its Subsidiaries with the SEC
pursuant to the Securities Act or the Exchange Act (including all financial
statements and schedules included therein, all exhibits thereto and all
documents incorporated by reference therein).

“Securities” means the Loans, the Convertible Notes, the related guaranties set
forth in any Guaranty, the Preferred Conversion Shares and the Conversion
Shares.

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

“Solvency Certificate” means a solvency certificate in substantially the form of
Exhibit E or such other solvency certificate in form and substance reasonably
satisfactory to the Required Lenders.

“Solvent” means, with respect to any Person as of any date of determination,
that, as of such date, (a) the value of the assets of such Person (both at fair
value and present fair saleable value) is greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such Person,
(b) such Person is able to pay all liabilities of such Person as such
liabilities mature and (c) such Person does not have unreasonably small capital
in relation to such Person’s business as contemplated as of such date. In
computing the amount of contingent or unliquidated liabilities at any time, such
liabilities shall be computed at the amount that, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

“Software” means (a) all computer programs, including source code and object
code versions, (b) all data, databases and compilations of data, whether machine
readable or otherwise, and (c) all documentation, training materials and
configurations related to any of the foregoing.

“Stock” means (a) all shares of capital stock (whether denominated as common
stock or preferred stock), equity interests, beneficial, partnership or
membership interests (or units thereof), joint venture interests, participations
or other ownership or profit interests in or equivalents (regardless of how
designated) of or in a Person (other than an individual), whether voting or
non-voting; and (b) all securities convertible into or exchangeable for any
other Stock and all warrants, options or other rights to purchase, subscribe for
or otherwise acquire any other Stock, whether or not presently convertible,
exchangeable or exercisable.

“Subject Financials” has the meaning set forth in Section 3.13(a).

“Subsidiary,” with respect to any Person, any corporation, partnership, joint
venture, limited liability company, association or other entity, the management
of which is, directly or indirectly, controlled by, or of which an aggregate of
more than fifty percent (50%) of the voting Stock is, at the time, owned or
controlled directly or indirectly by, such Person or one or more Subsidiaries of
such Person.

 

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“Swap Contract” means any agreement, contract or transaction that constitutes a
“swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Tax Affiliate” means (a) the Borrower and its Subsidiaries and (b) any
Affiliate of any Loan Party with which any Loan Party files or is required to
file consolidated, combined or unitary tax returns.

“Tax Returns” has the meaning set forth in Section 3.10.

“Taxes” means all present or future taxes, levies, imposts, stamp or other
duties, deductions, charges or withholdings imposed by a Governmental Authority,
together with any interest, additions to tax, penalties or other liabilities
with respect thereto.

“Title IV Plan” means an Employee Benefit Plan subject to Title IV of ERISA,
other than a Multiemployer Plan, to which any ERISA Affiliate incurs or
otherwise has or would reasonably be expected to have any obligation or
Liabilities (including under Section 4069 of ERISA).

“Trademarks” means, collectively, all of the following: (a) all trademarks,
trade names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos, other business identifiers, prints
and labels on which any of the foregoing have appeared or appear, all
registrations and recordings thereof, and all applications in connection
therewith including; (b) all renewals thereof; (c) all income, royalties,
damages and payments now or hereafter due and/or payable under any of the
foregoing or with respect to any of the foregoing including damages and payments
for past, present and future infringements of any of the foregoing; (d) the
right to sue for past, present and future infringements of any of the foregoing;
(e) all rights corresponding to any of the foregoing throughout the world; and
(f) all goodwill associated with and symbolized by any of the foregoing.

“Trade Secrets” means all right, title and interest (and all related IP
Ancillary Rights) arising under any Law in or relating to trade secrets.

“Transactions” means (a) the funding of the Loans and (b) the payment of fees,
commissions, costs and expenses in connection with each of the foregoing.

“Treasury Yield” means a yield determined by Lender by reference to the most
recent Federal Reserve Statistical Release H.15 (519) (or any successor or
substitute publication of the Federal Reserve Board) that has become publicly
available at least two (2) Business Days prior to the date of any prepayment
hereunder that is subject to an Interest Make Whole Amount, and shall be the
most recent weekly average yield to maturity (expressed as a rate per annum)
under the caption “Treasury Constant Maturities” for the year corresponding to
the remaining average life of the Loans, as determined by Agent, through the
ninetieth (90th) day preceding the third anniversary of the Closing Date had the
Loans not been prepaid, plus 50 basis points. If no such “Treasury Constant
Maturities” shall exactly correspond to such remaining average life of the Loans
being prepaid, as determined by Agent, yields for the two most closely
corresponding published “Treasury Constant Maturities” shall be used to
interpolate a single yield on a straight-line basis (rounding, in the case of
relevant periods, to the nearest month). The Treasury Yield shall be computed to
the fifth decimal place and then rounded to the fourth decimal point.

“TRICARE” means, collectively, a program of medical benefits covering former and
active members of the uniformed services and certain of their dependents,
financed and administered by the United States Departments of Defense, Health
and Human Services and Transportation, and all Applicable Laws applicable to
such programs.

 

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“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or in any other state, the laws of which are required to be
applied in connection with the issue of perfection of security interests.

“United States” and “U.S.” each means the United States of America.

“USA Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L.
107-56, as amended from time to time.

Section 1.2 Interpretation. The division of this Agreement and the other
Facility Documents into Articles and Sections and the use of headings and
captions is for convenience of reference only and shall not modify or affect the
interpretation or construction of this Agreement or any of its provisions. The
words “herein,” “hereof,” “hereunder,” “hereinafter” and “hereto” and words of
similar import refer to this Agreement (or other applicable Facility Document).
The term “or” has, except where otherwise indicated, the inclusive meaning
represented by the phrase “and/or.” The term “documents” and “agreements”
include any and all instruments, documents, agreements, certificates,
indentures, notices and other writings, however evidenced. The use in any of the
Facility Documents of the word “include” or “including,” when following any
general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not non-limiting
language (such as “without limitation” or “but not limited to” or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter. References to a specified Article,
Exhibit, Section or Schedule shall be construed as a reference to that specified
Article, Exhibit, Section or Schedule of this Agreement (or other applicable
Facility Document). Unless specifically stated otherwise, any reference to any
of the Facility Documents means such document as the same shall be amended,
restated, supplemented or otherwise modified and from time to time in effect in
accordance with the terms hereof or thereof, as applicable. The references to
“assets” and “properties” in the Facility Documents are meant to be mean the
same and are used throughout the Facility Documents interchangeably, and such
words shall be deemed to refer to any and all tangible and intangible assets and
properties, including cash, securities, Stock, accounts and contract rights.
Terms (including uncapitalized terms) not otherwise defined herein and that are
defined in the UCC shall have the meanings therein described. The payment,
prepayment, redemption or repayment of any principal, interest, charges, amounts
and/or other Obligations under this Agreement or the other Facility Documents
shall be made in cash in Dollars unless expressly stated otherwise herein or
therein. Any reference to “payment in full,” “payment in full in cash,” “paid in
full,” “paid in full in cash,” “repaid in full,” “repaid in full in cash,”
“prepaid in full,” “prepaid in full in cash,” “redeemed in full,” “redeemed in
full in cash” or any other term or word of similar effect used in this Agreement
or any other Facility Document with respect to the Loans or the Obligations
shall mean all Obligations (including any Make Whole Amount but excluding
(y) unasserted contingent indemnification obligations and (z) those Obligations
under any Facility Document that are not due or payable at the time when all
other Obligations are paid in full in cash) have been repaid in full in cash
(and/or, as and to the extent applicable, satisfied through the issuance of
Preferred Conversion Shares and/or Conversion Shares in accordance and
compliance with the terms and provisions of the Convertible Notes, this
Agreement and the other Facility Documents, but, for the avoidance of doubt,
solely to the extent that, after giving effect to both the payment in cash and
such payment through the issuance of Preferred Conversion Shares and/or
Conversion Shares, the full amount of all such Obligations have been fully and
completely satisfied)) (excluding contingent claims for indemnification to the
extent no claim giving rise thereto has

 

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been asserted) have been repaid in full in cash (or, as applicable, partially
paid in cash and partially satisfied through the issuance of Preferred
Conversion Shares and/or Conversion Shares in accordance and compliance with the
terms and provisions of the Convertible Notes, this Agreement and the other
Facility Documents, but, for the avoidance of doubt, solely to the extent that,
after giving effect to both the payment in cash and such payment through the
issuance of Preferred Conversion Shares and/or Conversion Shares, the entire
amount of all such Obligations have been satisfied in full) and have been fully
performed.

Section 1.3 Business Day Adjustment. Except as otherwise expressly stated herein
or in any other Facility Document (and except on the Maturity Date or any date
of acceleration of any of the Obligations, in which case, such payment or
performance shall be due on or prior to such day regardless of whether such day
is a Business Day), if the day by which any payment or other performance is due
to be made is not a Business Day, that payment or performance shall be made by
the next succeeding Business Day unless that next succeeding Business Day falls
in a different calendar month, in which case that payment or other performance
shall be made by the Business Day immediately preceding the day by which such
payment or other performance is due to be made; provided that interest will
continue to accrue for each additional day in connection therewith.

Section 1.4 Loan Records.

(a) The Borrower shall record on its books and records the amount of the Loans,
the interest rate applicable thereto, all payments of principal and interest
thereon and the principal balance thereof from time to time outstanding.

(b) The Agent, acting solely for this purpose as a non-fiduciary agent (solely
for Tax purposes) shall establish and maintain at its office a record of
ownership (the “Register”) in which the Agent agrees to register by book entry
the interests (including any rights to receive payment hereunder) of each Lender
in the Loans and any assignment of any such interest or interests, and accounts
in the Register in accordance with its usual practice in which it shall record
(i) the names and addresses of the Lenders (and any change thereto pursuant to
this Agreement), (ii) the amount of the Loans and each funding of any
participation therein, (iii) the amount of any principal, interest, fee or other
amount due and payable or paid, and (iv) any other payment received by the
Lenders from the Borrower and its application to the Loans. Reasonably promptly
after making each such registration, the Agent shall provide written notice
thereof to the Borrower. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, each Lender and the Agent shall
treat each person whose name is recorded in the Register as the owner of the
Loans for all purposes of this Agreement.

(c) The Loans made by each Lender are evidenced by this Agreement. Additionally,
the Borrower shall execute and deliver to each Lender (and/or, if applicable and
if so requested by any assignee Lender pursuant to the assignment provisions of
Section 9.4) on the Closing Date (or, if such assignment is made after the
Closing Date, promptly (and, in any event, within three (3) Business Days
thereof) after such Lender’s request) a Convertible Note, payable to such Lender
in an amount equal to the unpaid principal amount of applicable Loans held by
such Lender (which, at the request of such Lender, may provide separate
Convertible Notes for separate or different parts of the Loans held by such
Lender). The ability of any Loans to convert to Preferred Conversion Shares or
Conversion Shares is set forth in the Convertible Note related to such Loans.
Notwithstanding anything to the contrary contained in this Agreement, the Loans
(including any Convertible Notes evidencing the Loans) are registered
obligations, the right, title and interest of the Lenders and their successors
and assignees in and to the Loans shall be transferable only upon notation of
such transfer in the Register and no assignment thereof shall be effective until
recorded therein. This Section 1.4 shall be construed so that the Loan is at all
times maintained in “registered form” within the meaning of Sections 163(f),
871(h)(2) and 881(c)(2) of the Code.

 

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(d) The Borrower, the Agent and the Lenders shall treat each Person whose name
is recorded in the Register as a Lender for all purposes of this Agreement.
Information contained in the Register with respect to any Lender shall be
available for access by the Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior written notice.

Section 1.5 Accounting Terms and Principles. All accounting determinations
required to be made pursuant hereto shall, unless expressly otherwise provided
herein, be made in accordance with GAAP. Notwithstanding any other provision
contained herein, all terms of an accounting or financial nature used herein
shall be construed, and all computations of amounts and ratios referred to
herein shall be made, without giving effect to (i) any election under Financial
Accounting Standards Board Accounting Standards Codification 825 (or any other
Financial Accounting Standard having a similar result or effect) to value any
Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair
value”, as defined therein, (ii) any treatment of Indebtedness in respect of
convertible debt instruments under Accounting Standards Codification 470-20 (or
any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any such Indebtedness in a reduced
or bifurcated manner as described therein, and such Indebtedness shall at all
times be valued at the full stated principal amount thereof and (iii) Accounting
Standards Codification 842, Leases (or any other Accounting Standards
Codification having similar result or effect) (and related interpretations) to
the extent any lease (or similar arrangement) would be required to be treated as
a capital lease thereunder where such lease (or arrangement) would have been
treated as an operating lease under GAAP as in effect immediately prior to the
effectiveness of such Accounting Standards Codification. No change in the
accounting principles used in the preparation of any financial statement
hereafter adopted by any Loan Party or any of its Subsidiaries shall be given
effect for purposes of measuring compliance with any provision of this Agreement
or otherwise determining any relevant ratios and baskets which govern whether
any action is permitted hereunder unless the Borrower and the Required Lenders
agree to modify such provisions to reflect such changes in GAAP, and unless such
provisions are modified, all financial statements and similar documents provided
hereunder shall be provided together with a reconciliation between the
calculations and amounts set forth therein before and after giving effect to
such change in GAAP.

Section 1.6 Officers. Any document, agreement or instrument delivered under the
Loan Documents that is signed by an Authorized Officer or another officer of a
Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership, limited liability company and/or other action
on the part of such Loan Party, and such Authorized Officer or other officer
shall be conclusively presumed to have acted on behalf of such Loan Party in
such person’s capacity as an officer of such Loan Party and not in any
individual capacity.

ARTICLE 2

AGREEMENT FOR THE LOANS

Section 2.1 Disbursement of the Loans. The Borrower shall deliver to the Agent a
fully executed Disbursement Request prior to or on the Disbursement Date.
Promptly upon receipt by the Agent of such Disbursement Request, the Agent shall
notify each Lender with an Initial Convertible Loan Commitment of the proposed
borrowing. On the terms and subject to the conditions set forth herein, each
Lender agrees, severally but not jointly, to lend to the Borrower, on the
Closing Date, the principal amount of the senior convertible term loans set
forth opposite such Lender’s name in Annex A under the heading “Convertible Loan
Amount” (the “Convertible Loans”) by making such amounts available to the

 

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Agent not later than 12:00 p.m. (New York City time) on the Disbursement Date,
by wire transfer of same day funds in Dollars, to an account designated by the
Agent from time to time. Upon receipt of requested funds, the Agent shall make
the proceeds of the Disbursement available to the Borrower by promptly wiring
such amounts to an account or accounts designated in writing by the Borrower in
the Disbursement Request. The Agent, unless it has received written notice from
the Borrower by not later than 5:00 p.m. (New York City time) on the
Disbursement Date that the Loans were not fully funded, shall deem the
Convertible Loans to be fully funded and make the appropriate recordations in
the Register. Amounts borrowed hereunder that are paid, repaid, redeemed and/or
prepaid may not be re-borrowed under any circumstance.

Section 2.2 Payments; Prepayments; Make Whole Amount.

(a) The Borrower shall pay in cash to Agent, for the ratable benefit of each of
the Lenders, the outstanding principal amount of the Loans and all other
Obligations on the earlier (such earlier date, the “Facility Termination Date”)
of (i) the Maturity Date and (ii) the date the principal amount of the
Obligations is declared to be or automatically becomes due and payable following
an Event of Default.

(b) No principal amount of the Loans shall be permitted to be voluntarily
prepaid, repaid, redeemed or paid by any Loan Party prior to Maturity Date
(other than to an Optional Redemption (as defined, and subject to the terms and
conditions, set forth in the Convertible Notes)). Notwithstanding the foregoing,
if any principal on Loans is prepaid, repaid, redeemed or paid at any time, for
any reason (such as an acceleration of the Loans following the occurrence of an
Event of Default, an exercise of any Lender Party’s rights or remedies available
under the Facility Documents, or pursuant to a Major Transaction Conversion or
any other conversion under the Convertible Notes), then in addition to the
principal amount of the Loans so prepaid, repaid, redeemed or paid, the Borrower
shall contemporaneously pay (i) any accrued and unpaid interest owed on such
principal, and (ii) solely in the case of a prepayment, repayment, redemption or
payment following the occurrence of an Event of Default or an exercise of any
Lender Party’s rights or remedies available under the Facility Documents, or in
connection with a Major Transaction Redemption or an Optional Redemption (which,
for the avoidance of doubt, does not include any conversion of the Convertible
Notes), the Make Whole Amount applicable to the principal amount of Loans so
prepaid, repaid, redeemed or paid, which Make Whole Amount shall be deemed an
Obligation and shall be fully earned as of the Closing Date. The Make Whole
Amount shall be paid by the Borrower to the Lenders based on their respective
Pro Rata Shares of the principal amount of the Loans prepaid, repaid, redeemed
or paid on the date of such prepayment, repayment, redemption or payment. The
Parties acknowledge and agree that, in light of the impracticality and extreme
difficulty of ascertaining actual damages, the Make Whole Amount is intended to
be a reasonable calculation of the actual damages that would be suffered by the
Lender Parties as a result of any such conversion. The Parties further
acknowledge and agree that Agent and the Lenders would not have entered into
this Agreement without the Loan Parties agreeing to pay the Make Whole Amount in
the aforementioned instance. The Parties hereto further acknowledge and agree
that the Make Whole Amount is not intended to act as a penalty or to punish the
Borrowers or any other Loan Party for any such prepayment, repayment, redemption
or payment.

(c) Each payment, repayment, redemption and prepayment by the Borrower or any
other Loan Party shall be applied (i) first, to all fees, costs and expenses
(including any attorneys’ fees) owed to Agent under the Facility Documents,
(ii) second, ratably to all fees, charges, costs and expenses (including any
attorneys’ fees) owed to any Lender under the Facility Documents, (iii) third,
ratably to accrued and unpaid interest owed to the Lenders under the Facility

 

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Documents, (iv) fourth, ratably to the principal amount of the Loans owed to the
Lenders (including any Make Whole Amount), and (v) fifth, to all other
Obligations owing to Agent, any Lender or any other Lender Party, and, with
respect to any such Obligations owed to the Lenders, shall be allocated among
the Lenders in accordance with and in proportion to their respective Pro Rata
Shares.

(d) Any conversions of any principal of the Loans by any Lender into Preferred
Conversion Shares or Conversion Shares shall be applied against, and reduce, and
shall otherwise for all purposes hereof be deemed a repayment of, such principal
amount. Promptly upon any such reduction in the principal of any Lender’s
Convertible Note, the Borrower shall provide written notice to the Agent of such
reduction and of the reduced principal amount of such Convertible Note. For the
avoidance of doubt, after all of the Obligations under or on account of this
Facility Agreement and other amounts at any time owed under, or on account of,
this Facility Agreement have been paid in full or converted into Common Shares
in accordance with the terms of the Convertible Notes, the obligations of the
Loan Parties under this Agreement and the other Facility Documents (other than
those obligations which by their terms expressly survive such termination) shall
automatically terminate and be of no further force or effect.

Section 2.3 Payment Details. All payments, prepayments, redemptions and
repayments of the Obligations by the Borrower or any other Loan Party hereunder
and under any of the other Facility Documents shall be made without setoff or
counterclaim. Payments, prepayments, redemptions and repayments of any amounts
and other Obligations due to Agent, the Lenders or the other Lender Parties
under this Agreement or the other Facility Documents shall be made in cash in
Dollars in immediately available funds prior to 11:00 a.m. (New York City time)
on the date that any such payment is due, using the wire information or address
for Agent or such applicable Lender that is set forth on Schedule 2.3 or at such
other bank or place as Agent or such applicable Lenders shall from time to time
designate in writing prior to the date such payment is due (or for any other
Lender Party at such bank or place as such Lender Party shall from time to time
designate in writing). Any payment received by Agent, any Lender or any other
Lender Party after such time may, in Agent’s or such applicable Lender’s or
Lender Party’s discretion, be deemed to have been made on the following Business
Day. The Borrower shall pay all and any fees, costs and expenses (administrative
or otherwise) imposed by banks, clearing houses or any other financial
institutions in connection with making any payments under any of the Facility
Documents.

Section 2.4 Taxes.

(a) Any and all payments hereunder or pursuant to any other Facility Document
shall be made free and clear of and without deduction for Taxes except as
required by Applicable Law. If any Loan Party shall be required by Applicable
Law to deduct or withhold any Taxes from or in respect of any sum payable
hereunder or pursuant to any other Facility Document, (i) such Loan Party shall
make such deductions or withholding, (ii) such Loan Party shall pay the full
amount deducted or withheld to the applicable Governmental Authority in
accordance with Applicable Law, and (iii) to the extent that the deduction or
withholding is made on account of Indemnified Taxes, the sum payable by the
applicable Loan Party shall be increased by as much as shall be necessary so
that after making all required deductions or withholdings (including deductions
or withholdings applicable to additional sums payable under this Section 2.4),
each Lender Party shall receive an amount equal to the sum it would have
received had no such deductions been made (any and all such additional amounts
payable being hereinafter referred to as “Additional Amounts”). As soon as
practicable, but in any event within thirty (30) days, after the date of any
payment of such Taxes, the applicable Loan Party shall furnish to the applicable
Lender Party the original or a certified copy of a receipt evidencing payment
thereof or other evidence of such payment reasonably satisfactory to such
Lender.

 

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(b) In addition, the Loan Parties shall pay all Other Taxes to the applicable
Governmental Authority in accordance with Applicable Law. Within thirty
(30) days after the date of any payment of Other Taxes by any Loan Party, the
Borrower shall furnish to the applicable Lender Party the original or a
certified copy of a receipt evidencing payment thereof or other evidence of such
payment reasonably satisfactory to such Lender.

(c) The Borrower shall indemnify, within ten (10) days after receipt of demand
therefor, each Lender Party for all Indemnified Taxes (including all Indemnified
Taxes imposed on amounts payable under this Section 2.4(c)) paid or payable by
such Lender Party, and any reasonable expenses arising therefrom or relating
thereto, whether or not such Indemnified Taxes were correctly or legally
asserted. A certificate of the applicable Lender Party setting forth the amounts
to be paid thereunder and delivered to the Borrower shall be absolute,
conclusive and binding, absent manifest error.

(d) (i) Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Facility 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 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 the foregoing, except for the documentation required to be
provided by such Lender pursuant to Section 2.4(d)(ii), a Lender shall not be
required to provide any information or documentation with respect to its
investors that such Lender determines to be confidential.

(ii) Without limiting the generality of the foregoing:

(A) Each Lender that is a United States person (as such term is defined in
Section 7701(a)(30) of the Code) (“U.S. Person”) shall, on or before the date on
which the Lender becomes a party to this Agreement, provide to Borrower and the
Agent a properly completed and executed IRS Form W-9 certifying that such Lender
is not subject to backup withholding tax.

(B) Each Lender that is not a U.S. Person (a “Foreign Lender”) shall, on or
before the date on which such Foreign Lender becomes a party to this Agreement,
provide Borrower and the Agent with a properly completed and executed IRS Form
W-8ECI, W-8BEN, W-8BEN-E, W-8IMY or other applicable forms (together with any
required supporting documentation), or any other applicable certificate or
document reasonably requested by the Borrower or the Agent, and, if such Foreign
Lender is relying on the portfolio interest exception of Section 871(h) or
Section 881(c) of the Code (or any successor provision thereto), shall also
provide the Borrower and the Agent with a certificate substantially in the form
of Exhibit F-1 (the “Portfolio Interest Certificate”) representing that such
Foreign Lender is not a “bank” for purposes of Section 881(c) of the Code (or
any successor provision thereto), is not a 10% holder of the Borrower described
in Section 871(h)(3)(B) of the Code (or any successor provision thereto), and is
not a controlled foreign corporation receiving interest from a related person
(within the meaning of Sections 881(c)(3)(C) and 864(d)(4) of the Code or any
successor provisions thereto); provided that, if the

 

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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 Portfolio Interest Certificate substantially in the form of
Exhibit F-2 on behalf of each such direct and indirect partner. Each Lender
shall provide new forms (or successor forms) as reasonably requested by the
Borrower or the Agent from time to time and shall notify the Borrower and the
Agent in writing within a reasonable time after becoming aware of any event
requiring a change in the most recent forms previously delivered by such Lender
to the Borrower and the Agent.

(iii) To the extent legally permissible, the Agent shall deliver a duly executed
an IRS Form W-9 (if the Agent is a U.S. Person) or the appropriate IRS Form W-8,
(if the Agent is not U.S. Person) certifying the Agent’s exemption from U.S.
withholding Taxes with respect to amounts payable hereunder on or prior to the
date the Agent becomes a party to this Agreement.

(e) If a payment to a Lender Party under this Agreement would be subject to U.S.
federal withholding tax imposed by FATCA if such Lender Party were to fail to
comply with the applicable reporting requirements of FATCA, such Lender Party
shall deliver to the Borrower, at the times prescribed by law or as reasonably
requested by Borrower, such documentation as is required in order for the
Borrower to comply with its obligations under FATCA, to determine that such
Lender Party has or has not complied with its obligations under FATCA or to
determine the amount to deduct and withhold from such payment. Solely for
purposes of this Section 2.4(e), “FATCA” shall include any amendments made to
FATCA after the date of this Agreement.

(f) Each Lender Party agrees that if any form or certification it previously
delivered becomes 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.

(g) If a Lender 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 2.4, such Lender shall promptly pay such refund (but
only to the extent of indemnity payments made or Additional Amounts paid under
this Section 2.4 with respect to the Taxes refunded) to the Borrower, net of all
out-of-pocket expense (including any Taxes imposed thereon) of such Lender
incurred in obtaining such refund or making such payment, provided that the
Borrower, upon the request of such Lender, agrees to repay the amount paid over
to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to such Lender if such Lender is required to
repay such refund to such Governmental Authority. Notwithstanding anything to
the contrary in this Section 2.4(f), in no event shall a Lender be required to
pay any amount to the Borrower pursuant to this Section 2.4(f), the payment of
which would place such Lender in a less favorable net after-Tax position than
such Lender would have been in if the Tax subject to indemnification and giving
rise to such refund had not been deducted or otherwise imposed and the
indemnification payments with respect to such Tax had never been paid. Nothing
in this Section 2.4(f) shall require any Lender to disclose any information it
deems confidential (including its tax returns) to any Person, including the
Borrower.

Section 2.5 Costs, Expenses and Losses. If, as a result of any failure by the
Borrower or any other Loan Party to pay any sums or Obligations due under this
Agreement or any other Facility Document on the due date therefor (after the
expiration of any applicable grace periods, but without giving effect to any
grace period after the occurrence of an Event of Default of the type set forth
in Section 8.1(d)), any Lender Party shall incur costs, expenses and/or losses,
by reason of the liquidation or

 

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redeployment of deposits from third parties or in connection with obtaining
funds to make or maintain the Loans, the Borrower shall pay to such Lender Party
upon request by such Lender Party, the amount of such costs, expenses and/or
losses within fifteen (15) days after receipt by the Borrower of a certificate
from such Lender Party setting forth in reasonable detail such costs, expenses
and/or losses, along with supporting documentation. For the purposes of the
preceding sentence, “costs, expenses and/or losses” shall include any interest
paid or payable to carry any unpaid amount and any loss, premium, penalty or
expense that may be incurred in obtaining, liquidating or employing deposits of
or borrowings from third parties and/or third Persons in order to make, maintain
or fund the Loans or any portion thereof.

Section 2.6 Interest. From and after the Closing Date, the outstanding principal
amount of the Loans, any overdue interest and any other amounts and Obligations
shall bear interest at the Interest Rate (calculated on the basis of the actual
number of days elapsed in each month based on a year of 360 days). Interest
shall be paid in cash quarterly in arrears commencing on July 1, 2020 and on the
first Business Day of each October, January, April and July thereafter (each, an
“Interest Payment Date”). Notwithstanding the foregoing or anything to the
contrary contained herein, on the date any principal amount of the Loans is
prepaid, repaid, redeemed, reduced or paid, or required to be prepaid, repaid,
redeemed, reduced or paid (each such date being deemed an Interest Payment
Date), for any reason hereunder (on the Maturity Date or otherwise), including a
conversion under any of the Convertible Notes, all accrued but unpaid interest
on such principal amount shall be payable in cash.

Section 2.7 Interest on Late Payments; Default Interest.

(a) Without limiting the remedies available to the Lender Parties under the
Facility Documents or otherwise, to the maximum extent permitted by Applicable
Law, if the Borrower or any other Loan Party fails to make a required payment of
principal or interest on any Loan or make a required payment of any other
Obligation when due (in each case subject to any cure period provided for in
Section 8.1(a)), the Borrower shall pay, in respect of such principal, interest
and other Obligations, interest thereon at the rate per annum equal to the
Interest Rate plus ten percent (10%) for so long as such payment remains
outstanding. Such interest shall be payable in cash on demand.

(b) At the election of the Required Lenders while any Event of Default exists
(or automatically while any Event of Default under Section 8.1(a) or 8.1(d)
exists), the Borrower shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by Applicable Law) on the Obligations
(other than Obligations on which interest is payable at the rate set forth in
Section 2.2(a)), if any, from and after the date of occurrence of such Event of
Default, at a rate per annum equal to the Interest Rate then in effect for the
Loans, plus two percent (2.0%). Such interest shall be payable in cash on
demand.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES

In order to induce the Lenders to make the Loans pursuant to this Agreement and
to induce Agent and the Lenders to enter into this Agreement, the Loan Parties,
jointly and severally, represent and warrant on (i) the Closing Date (ii) the
Disbursement Date, and (iii) each date such representation or warranty is remade
or deemed remade in any Facility Document, if any, in each case, that:

Section 3.1 No Default. No Default or Event of Default has occurred or will
result from the transactions contemplated by the Facility Documents.

 

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Section 3.2 Solvency. On the Closing Date (both before and after giving effect
to the Transactions) and on the Disbursement Date (both immediately before and
after giving effect to the funding of the Loans and the use of proceeds
thereof), each Loan Party (a) is Solvent and (b) has not taken action, and, to
the best of its knowledge, no action has been taken by a third party, for the
winding up, dissolution or liquidation or similar executory or judicial
proceeding in respect of, any Loan Party or for the appointment of a liquidator,
custodian, receiver, trustee, administrator or other similar officer for any
Loan Party or any or all of its assets or revenues.

Section 3.3 Enforceability. This Agreement and each other Facility Document
constitutes, a legal, valid and binding obligation of such Loan Party,
enforceable against each Loan Party that is party thereto in accordance with its
terms, except as the enforcement hereof or thereof may be limited by insolvency,
bankruptcy, reorganization, moratorium or other similar Applicable Laws
affecting creditors rights generally or by general equitable principles (whether
considered in a proceeding in equity or at law).

Section 3.4 Existence, Qualification and Power. Each Loan Party is validly
existing as a corporation, limited liability company or limited partnership, as
applicable, and is in good standing (to the extent such concept is applicable in
the relevant jurisdiction) under the laws of the jurisdiction of its
incorporation, organization or formation, as applicable. Each Loan Party (a) has
full power and authority to (i) own its assets and conduct its business and
(ii) to (A) issue the Securities in accordance with the Facility Documents,
(B) enter into, execute, deliver and perform its obligations under, the Facility
Documents, including the issuance of the Securities and the reservation for
issuance of the Preferred Conversion Shares and Conversion Shares and
(C) consummate the transactions contemplated under the Facility Documents, and
(b) is duly qualified as a foreign corporation, limited liability company or
limited partnership, as applicable, and licensed and in good standing, under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification or license, except, in
each case of this clause (b), where the failure to be so qualified, licensed or
in good standing would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.

Section 3.5 Litigation. No Proceeding is pending before any Governmental
Authority or, to the knowledge of the Loan Parties, threatened by any
Governmental Authority (a) to which any Loan Party is a party, (b) that purports
to affect or pertain to the Facility Documents, the Transactions or the other
transaction contemplated hereby or thereby or (c) that has as the subject
thereof any assets owned by any Loan Party or any of its Subsidiaries, in each
case, that would reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect. No injunction, writ, temporary restraining order
or any order of any nature has been issued by any court or other Governmental
Authority purporting to enjoin or restrain the execution, delivery or
performance of this Agreement or any other Facility Document or directing that
the transactions provided for herein or therein not be consummated as herein or
therein provided. None of the Loan Parties or any of the directors (or
equivalent persons) or officers of any Loan Party or any of its Subsidiaries has
been the subject of any investigation by the SEC or any other Governmental
Authority regarding securities-law matters during the past five (5) years.

Section 3.6 Corporate Authorization; Conflicts. This Agreement and the other
Facility Documents have been duly authorized, executed and delivered by each
Loan Party. The execution, delivery and performance of the Facility Documents by
each Loan Party that is a party thereto and the consummation of the transactions
contemplated herein and therein will not (a) conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any Lien upon any assets of
any such Loan Party pursuant to, any agreement, document or instrument to which
such Loan Party is a party or by which any Loan Party is bound or to which any
of the assets or property of any Loan Party is subject, except, with respect to
this clause (a), as

 

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would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, (b) result in any material violation of, or conflict in
any material respect with, any of the provisions of the Organizational
Documents, (c) result in the material violation of any Applicable Law, or
(d) result in the material violation of any judgment, order, rule, corporate
integrity agreement, regulation, determination or decree of any Governmental
Authority.

Section 3.7 Governmental Authorizations. (a) Each Loan Party holds, and is
operating in compliance in all material respects with, all franchises, grants,
Authorizations, licenses, permits, easements, consents, certificates and orders
of any Governmental Authority (collectively, “Required Authorizations”) required
for the conduct of its business as currently conducted, and all material
Required Authorizations are valid and in full force and effect, and (b) no
Authorization of, or registration, notice or filing with, any Governmental
Authority is required for (i) the execution, delivery and performance of any of
the Facility Documents, and (ii) the consummation by any Loan Party of the
Transactions or the other transactions contemplated hereby or thereby, except
for (A) such as have already been obtained or made prior to the Closing Date
that are in full force and effect, (B) other filings the failure of which to
obtain or make, individually or in the aggregate, has not had and would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, and (C) pursuant to applicable federal and state securities
laws, rules and regulations that are expressly contemplated by Section 6.8 and
by the Registration Rights Agreement.

Section 3.8 Ownership of Real Estate and Personal Property. As of the Closing
Date, the Real Estate listed in Schedule 3.8 constitutes all of the Real Estate
owned or leased by each Loan Party and each of its Subsidiaries. Each Loan Party
has good and marketable title to all of its material assets and property free
and clear of all Liens, except Permitted Liens. Except as would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect, the property held under lease by each Loan Party is held under valid,
subsisting and enforceable leases with only such exceptions with respect to any
particular lease as do not interfere in any material respect with the conduct of
the business of such Loan Party.

Section 3.9 Intellectual Property. To the knowledge of each Loan Party, each
Loan Party and its Subsidiaries owns, licenses or otherwise has the right to use
all Intellectual Property that is necessary and material for the operation of
its businesses as currently conducted. To the knowledge of each Loan Party,
(a) the conduct and operations of the businesses of each Loan Party and its
Subsidiaries do not infringe any Intellectual Property owned by any other Person
in a manner that would reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect and (b) except as set forth on Schedule 3.9,
as of the Closing Date, no other Person has contested any right, title or
interest of any Loan Party or any of its Subsidiaries in, or relating to, any
Intellectual Property owned by such Loan Party or Subsidiary, other than as
would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect. Except as set forth on Schedule 3.9, as of the Closing
Date, (x) there are no material Proceedings pending (or, to the knowledge of any
Loan Party, threatened in writing) affecting any Loan Party or any of its
Subsidiaries with respect to, (y) no judgment or order regarding any such claim
has been rendered by any competent Governmental Authority and (z) no settlement
agreement or similar agreement has been entered into by any Loan Party or any of
its Subsidiaries (that would limit, cancel or challenge the validity of any Loan
Party’s or any of its Subsidiaries’ rights in any Intellectual Property owned by
such Loan Party or Subsidiary) with respect to any such infringement, other than
as would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.

Section 3.10 Taxes. All U.S. federal, state and local income and franchise and
other material Tax returns, reports and statements (collectively, the “Tax
Returns”) required to be filed by any Tax Affiliates have been filed with the
appropriate Governmental Authorities, all such Tax Returns are true and correct
in all material respects, and all Taxes, assessments and other governmental
charges and

 

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impositions reflected therein or otherwise due and payable (including in such
Person’s capacity as a withholding agent) have been paid prior to the date on
which any material Liability may be added thereto for non-payment thereof except
for those contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves are maintained on the books of the
appropriate Tax Affiliate in accordance with GAAP. There is no current or
proposed Tax assessment, deficiency or other Tax claim against the Tax
Affiliates (or any of them) that, alone or in the aggregate, is material.

Section 3.11 Compliance with Laws. Except as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, each Loan
Party is in compliance with all Applicable Laws (including Health Care Laws) and
Authorizations.

Section 3.12 SEC Documents. The Borrower has filed, through the SEC’s Electronic
Data Gathering, Analysis, and Retrieval system (or successor thereto) (“EDGAR”),
all of the SEC Documents within the time frames prescribed by the SEC (including
any available grace periods and extensions authorized by the SEC) for the filing
of such SEC Documents such that each filing was timely filed with the SEC. As of
their respective dates, or to the extent corrected by a subsequent restatement
filed prior to the date that this representation is made, each of the SEC
Documents complied in all material respects with the requirements of the
Securities Act and/or the Exchange Act (as applicable) and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents.
None of the SEC Documents, at the time filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. Since the
filing of the SEC Documents, no event has occurred that would require an
amendment or supplement to any of the SEC Documents and as to which such an
amendment or a supplement has not been filed and made publicly available on
EDGAR on or prior to the date this representation is made. The Borrower has not
received any written comments from the SEC staff that have not been resolved, to
the knowledge of the Borrower, to the satisfaction of the SEC staff.

Section 3.13 Financial Statements; Financial Condition.

(a) As of their respective dates, the consolidated financial statements of the
Borrower and its Subsidiaries included in the most recently filed annual report
on Form 10-K and quarterly report on Form 10-Q (the “Subject Financials”)
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC (including
Regulation S-X) with respect thereto. The Subject Financials have been prepared
in accordance with GAAP (subject, in the case of unaudited quarterly financial
statements, to normal year-end adjustments that are not material individually or
in the aggregate), and fairly present in all material respects the consolidated
financial position of the Borrower and its Subsidiaries as of the dates thereof
and the consolidated results of their operations, cash flows and changes in
stockholders equity for the periods specified.

(b) There are no material off-balance sheet arrangements or any relationships
with unconsolidated entities or other Persons that (a) may have a material
current or, to any of the Loan Parties’ or any of their Subsidiaries’ knowledge,
material future effect on any Loan Party’s or any of its Subsidiaries’ financial
condition, results of operations, liquidity, capital expenditures, capital
resources or significant components of revenue or expenses or (b) that are
required to be disclosed by the Borrower in the Subject Financials that have not
been so disclosed in the Subject Financials.

 

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(c) The accounting firm that expressed its opinion with respect to the
consolidated financial statements included in the Borrower’s most recently filed
annual report on Form 10-K, and reviewed the consolidated financial statements
included in the Borrower’s most recently filed quarterly report on Form 10-Q,
was independent of the Borrower pursuant to the standards set forth in Rule 2-01
of Regulation S-X promulgated by the SEC and as required by the applicable rules
and guidance of the Public Company Accounting Oversight Board (United States),
and such firm was otherwise qualified to render such opinion under Applicable
Law and the rules and regulations of the SEC.

(d) Neither the Borrower nor any of its Subsidiaries is required to file any
agreement, note, lease, mortgage, deed or other instrument entered into prior to
the date this representation is made and to which the Borrower or any of its
Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is
bound that has not been previously filed as an exhibit (including by way of
incorporation by reference) to the Borrower’s reports filed with the SEC under
the Exchange Act.

(e) Other than (i) the liabilities assumed or created pursuant to this Agreement
and the other Facility Documents, (ii) liabilities accrued for in the latest
balance sheet included in the Borrower’s most recent periodic report (on Form
10-Q or Form 10-K) filed prior to the date this representation is made (the date
of such balance sheet, the “Latest Balance Sheet Date”) and (iii) liabilities
incurred in the ordinary course of business since the Latest Balance Sheet Date,
the Borrower and its Subsidiaries do not have any other material liabilities
(whether fixed or unfixed, known or unknown, absolute or contingent, asserted or
unasserted, choate or inchoate, liquidated or unliquidated, or secured or
unsecured, and regardless of when any Proceeding with respect thereto is
instituted).

(f) Since the Latest Balance Sheet Date, (i) there has been no Material Adverse
Effect or any event or circumstance that would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, (ii) no
Loan Party nor any of its Subsidiaries has sold any material assets, or entered
into any material transactions, outside of the ordinary course of business, and
(iii) the Borrower has not declared, paid or made any dividends or other
distributions to holders of its Stock.

Section 3.14 Accounting Controls. Each Loan Party and each of its Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (a) transactions are executed in accordance with
management’s general or specific authorizations, (b) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset and liability accountability, (c) access to assets or
incurrence of liability is permitted only in accordance with management’s
general or specific authorization and (d) the recorded accountability for assets
and liabilities is compared with the existing assets and liabilities at
reasonable intervals and appropriate action is taken with respect to any
differences. The Borrower and its Subsidiaries have (i) timely filed and made
publicly available on EDGAR all certifications, statements and documents
required by (1) Rule 13a-14 or Rule 15d-14 under the Exchange Act. The Borrower
and its Subsidiaries maintain disclosure controls and procedures required by
Rule 13a-15 or Rule 15d-15 under the Exchange Act; such controls and procedures
are effective to ensure that the information required to be disclosed by the
Borrower and its Subsidiaries in the reports that they file with or submit to
the SEC (A) is recorded, processed, summarized and reported accurately within
the time periods specified in the SEC’s rules and forms and (ii) is accumulated
and communicated to the Borrower’s (and, to the extent applicable, its
Subsidiaries’) management, including its or their principal executive officer
and principal financial officer, as appropriate to allow timely decisions
regarding required disclosure. The Borrower and its Subsidiaries maintain
internal control over financial reporting required by Rule 13a-15 or Rule 15d-15
under the Exchange Act; such internal control over financial reporting is
effective and does not contain any material weaknesses.

 

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Section 3.15 ERISA. Except as set forth on Schedule 3.15, as of the Closing
Date, no Loan Party or any of their respective Subsidiaries maintains,
contributes to, has an obligation to contribute to or has any present intention
to contribute to, any Title IV Plan or Multiemployer Plan; nor has any Loan
Party or any of their Subsidiaries taken any steps towards adopting or amending
any Title IV Plan or contributing to or incurring liability under a
Multiemployer Plan. Except for those that would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, (a) each
Benefit Plan, and each trust thereunder, intended to qualify for tax exempt
status under Section 401 or 501 of the Code or other Laws so qualifies, (b) each
Benefit Plan is in compliance with applicable provisions of ERISA, the Code and
other Laws, (c) there are no existing or pending (or to the knowledge of any
Loan Party or any Subsidiary of a Loan Party, threatened) Proceedings (other
than routine claims for benefits in the normal course) or investigation
involving any Benefit Plan to which any Loan Party or any Subsidiary of a Loan
Party incurs or otherwise has or would reasonably be expected to have an
obligation or any Liability and (d) no ERISA Event has occurred or is reasonably
expected to occur. On the Closing Date, no ERISA Event has occurred in
connection with which material obligations or material Liabilities of a Loan
Party or a Subsidiary of a Loan Party remain outstanding.

Section 3.16 Subsidiaries. As of the Closing Date, (a) all of the Subsidiaries
of the Borrower and all joint ventures and other partnerships in which any Loan
Party or any of their Subsidiaries own Stock are identified on Schedule 3.16,
(b) the Stock of each of the Borrower’s Subsidiaries identified on Schedule 3.16
is duly authorized, validly issued, fully paid and non-assessable (to the extent
applicable thereto) and none of such Stock constitutes Margin Stock,
(c) Schedule 3.16 correctly sets forth the ownership interest of the Borrower
and each of the Borrower’s Subsidiaries in each of the Subsidiaries identified
therein and (d) all Subsidiaries of the Borrower are Immaterial Subsidiaries.
All outstanding Stock of each Subsidiary of the Borrower is owned beneficially
and of record by a Loan Party or a Subsidiary of a Loan Party, free and clear of
all Liens other than Permitted Liens.

Section 3.17 Shares of Stock.

(a) All of the issued and outstanding shares of capital stock of the Borrower
and its Subsidiaries are duly authorized and duly and validly issued, fully paid
and nonassessable, have been issued in compliance with all federal and state and
foreign securities laws and were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase securities that
have not been waived in writing.

(b) Prior to any Optional Redemption or the Borrower’s delivery of any Optional
Redemption Notice (as defined in the Convertible Notes), the Certificate of
Designation shall have been filed with the Secretary of State of the State of
the Delaware and become effective and the Borrower shall have reserved for
issuance a number of shares of Series DF-1 Convertible Preferred Stock
sufficient to cover all shares issuable upon conversion of, or otherwise
pursuant to, the Convertible Notes (the “Preferred Conversion Shares”). The
Borrower has reserved for issuance a number of shares of Common Stock sufficient
to cover all shares issuable upon conversion of, or otherwise pursuant to, the
Convertible Notes (and any Preferred Conversion Shares pursuant to the
Certificate of Designation) (the “Conversion Shares”), computed without regard
to the 4.985% Cap (as defined in the Convertible Notes) or any other limitations
on the number of shares that may be issued on conversion. Upon the issuance in
accordance with the terms of the Facility Documents, the holders of the
Convertible Notes will be entitled to the rights set forth in the Convertible
Notes. Upon filing of the Certificate of Designation with the Secretary of State
of the State of Delaware, the Preferred Conversion Shares issuable upon
conversion of the Convertible Notes will have been duly authorized and, when
issued upon any such conversion in accordance with the terms of the Convertible
Notes, will be duly and validly issued, fully paid and non-assessable and free
from all taxes and Liens with respect to the issue thereof, with the

 

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holders thereof being entitled to all rights accorded to a holder of Series DF-1
Preferred Stock, and will not be issued in violation of, or subject to, any
preemptive or similar rights of any Person that have not been waived or excluded
such that they do not apply. The Conversion Shares issuable upon conversion of
the Convertible Notes (and, as applicable, upon conversion of any Preferred
Conversion Shares pursuant to the Certificate of Designation) have been duly
authorized and, when issued upon any such conversion in accordance with the
terms of the Convertible Notes or the Certificate of Designation (as
applicable), will be duly and validly issued, fully paid and non-assessable and
free from all taxes and Liens with respect to the issue thereof, with the
holders thereof being entitled to all rights accorded to a holder of Common
Stock, and will not be issued in violation of, or subject to, any preemptive or
similar rights of any Person that have not been waived or excluded such that
they do not apply.

(c) There are no (i) stockholders’ agreements, voting agreements or similar
agreements to which Borrower or any of its Subsidiaries is a party or by which
the Borrower or any of its Subsidiaries is otherwise subject or bound,
(ii) preemptive rights or any other similar rights to which any Stock of the
Borrower or any of its Subsidiaries is subject or (iii) any restrictions upon
the voting or transfer of any Stock of the Borrower or any of its Subsidiaries
(other than restrictions on transfer imposed by U.S. federal and state
securities laws). The issuance and delivery of the Convertible Notes does not
and, assuming full conversion of the Convertible Notes, the conversion of the
Convertible Notes, will not: (A) require approval from any Governmental
Authority; (B) obligate the Borrower to offer to issue, or issue, shares of
Common Stock or other securities to any Person (other than the Lender Parties);
and (C) will not result in a right of any holder of the Borrower’s securities to
adjust the exercise, conversion, exchange or reset price under, and will not
result in any other adjustments (automatic or otherwise) under, any securities
of the Borrower.

(d) Each Loan Party has furnished to Agent and each Lender true, correct and
complete copies of each Loan Party’s Organizational Documents and any
amendments, restatements, supplements or modifications thereto, and all other
documents, agreements and instruments containing the terms of all Stock and
other securities of each Loan Party, including Stock convertible into, or
exercisable or exchangeable for, Common Stock or other Stock of any Loan Party
or any of its Subsidiaries, and the material rights of the holders thereof in
respect thereto.

Section 3.18 Material Agreements. Schedule 3.18 sets forth in true, correct and
complete detail all contracts, agreements, leases, instruments and commitments
to which any Loan Party or any of its Subsidiaries are a party or by which any
of them are bound, that has been, or the Borrower determines (or should
reasonably have determined) would be, required to be filed as an exhibit to the
SEC Documents pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K
(collectively, the “Material Agreements”). No Loan Party or any of its
Subsidiaries is in breach or default under any Material Agreement in any
material respect, and, to the knowledge of the Loan Parties, no other party to a
Material Agreement is in default or breach thereunder in any material respect.

Section 3.19 Use of Proceeds; Margin Stock. The proceeds of the Loans are
intended to be and shall be used solely for the purposes set forth in and
permitted by Section 6.14. No Loan Party and no Subsidiary of any Loan Party is
engaged principally or as one of its important activities in the business of
purchasing or selling Margin Stock or extending credit for the purpose of
purchasing or carrying Margin Stock. As of the Closing Date, except as set forth
on Schedule 3.19, no Loan Party and no Subsidiary of any Loan Party owns any
Margin Stock.

 

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Section 3.20 Environmental Matters. Except as set forth in Schedule 3.20 and
except where any failures to comply would not reasonably be expected to result,
individually or in the aggregate, to have a Material Adverse Effect, each Loan
Party and each Subsidiary of each Loan Party (a) are and have been in compliance
with all applicable Environmental Laws, including obtaining and maintaining all
Authorizations and permits required by any applicable Environmental Law, (b) is
not party to, and no Real Estate currently (or to the knowledge of any Loan
Party previously) owned, leased, subleased, operated or otherwise occupied by or
for any such Person is subject to or the subject of, any contractual obligation
or any pending or, to the knowledge of any Loan Party, threatened, Proceeding,
audit, Lien, demand, dispute or notice of violation or of potential liability or
similar notice relating in any manner to any Environmental Law, (c) has not
caused or suffered to occur a Release of Hazardous Materials at, to or from any
Real Estate, (d) does not currently (and, to the knowledge each any Loan Party,
did not at any time previously) own, lease, sublease, operate or otherwise
occupy no Real Estate that is contaminated by any Hazardous Materials and (e) is
not, and has not been, engaged in, and has not authorized or expressly permitted
any current or former tenant to engage in, operations in violation of any
Environmental Law and knows of no facts, circumstances or conditions reasonably
constituting notice of a violation of any Environmental Law, including receipt
of any information request or notice of potential responsibility under the
Comprehensive Environmental Response, Compensation and Liability Act or other
Environmental Laws.

Section 3.21 Investment Company Act. None of any Loan Party, any Person
controlling any Loan Party or any Subsidiary of any Loan Party is an “investment
company” within the meaning of the Investment Company Act, or otherwise
registered or required to be registered under, the Investment Company Act.

Section 3.22 Labor Relations. Except as set forth on Schedule 3.22, as of the
Closing Date, (a) there is no collective bargaining or similar agreement with
any union, labor organization, works council or similar representative covering
any employee of any Loan Party or any Subsidiary of any Loan Party, (b) to the
knowledge of the Loan Parties, no petition for certification or election of any
such representative is existing or pending with respect to any employee of any
Loan Party or any Subsidiary of any Loan Party and (c) to the knowledge of the
Loan Parties, no such representative has sought certification or recognition
with respect to any employee of any Loan Party or any Subsidiary of any Loan
Party. There are no strikes, picketing, work stoppages, slowdowns or lockouts
existing, pending (or, to the knowledge of any Loan Party, threatened) against
or involving any Loan Party or any Subsidiary of any Loan Party, except for
those that would not reasonably be expected, in the aggregate, to have a
Material Adverse Effect.

Section 3.23 Disclosure. None of the statements contained in any Facility
Document or exhibit, report, statement or certificate furnished by or on behalf
of any Loan Party or any of their Subsidiaries in connection with any Facility
Document and the Transactions (including the offering and disclosure materials,
if any, delivered by or on behalf of any Loan Party to any Lender Party prior to
the Closing Date, but excluding any forward-looking information), when taken as
a whole, contains any untrue statement of a material fact or omits any material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they are made, not materially
misleading as of the time when made or delivered.

Section 3.24 Certain Regulations.

(a) Each Loan Party and each Subsidiary of each Loan Party is in compliance in
all material respects with all U.S. economic sanctions laws, executive orders
and implementing regulations (“Sanctions”) as administered by the U.S. Treasury
Department’s Office of Foreign Assets Control (“OFAC”) and the U.S. State
Department.

 

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(b) No Loan Party and no Subsidiary of a Loan Party (a) is a Person on the list
of the Specially Designated Nationals and Blocked Persons (the “SDN List”), (b)
is a Person who is otherwise the target of U.S. economic sanctions laws such
that a U.S. Person cannot deal or otherwise engage in business transactions with
such Person, (c) is a Person organized or resident in a country or territory
subject to comprehensive Sanctions (a “Sanctioned Country”), or (d) is owned 50%
or more or controlled by (including by virtue of such Person being a director or
owning voting shares or interests), or the best of its knowledge, after due
inquiry, acts, directly or indirectly, for or on behalf of, any Person on the
SDN List or a government of a Sanctioned Country such that, in the case of each
of the foregoing clauses (a) through (d), the entry into, or performance under,
this Agreement or any other Facility Document would be prohibited by U.S. law.
Each Loan Party and each Subsidiary of each Loan Party is in compliance in all
material respects with all applicable laws related to terrorism or money
laundering (“Anti-Money Laundering Laws”) including: (i) all applicable
requirements of the Currency and Foreign Transactions Reporting Act of 1970 (31
U.S.C. 5311 et. seq., (the Bank Secrecy Act)), as amended by Title III of the
USA Patriot Act, (ii) the Trading with the Enemy Act, (iii) Executive Order
No. 13224 on Terrorist Financing, effective September 24, 2001 (66 Fed. Reg.
49079), and any other enabling legislation, executive order or regulations
issued pursuant or relating thereto and (iv) other applicable federal or state
laws relating to “know your customer” or anti-money laundering rules and
regulations. No Proceeding by or before any court or Governmental Authority with
respect to compliance by any Loan Party or Subsidiary with any such Anti-Money
Laundering Laws is pending or, to the knowledge of each Loan Party and each
Subsidiary of each Loan Party, threatened.

(c) Each Loan Party and each Subsidiary of each Loan Party is in compliance in
all material respects with all applicable anti-corruption laws, including the
U.S. Foreign Corrupt Practices Act of 1977 (“FCPA”) and the U.K. Bribery Act
2010 (“Anti-Corruption Laws”). None of any Loan Party or any Subsidiary of a
Loan Party, nor to the knowledge of any Loan Party or any Subsidiary thereof,
any director, officer, agent, employee or other Person acting on behalf of the
Loan Party or any Subsidiary of a Loan Party, has taken any action, directly or
indirectly, that would result in a violation of applicable Anti-Corruption Laws.

(d) The Loan Parties and their Subsidiaries maintain and implement policies and
procedures reasonably designed to ensure compliance by the Loan Parties, their
Subsidiaries and their respective directors, officers, employees and agents with
Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws.

Section 3.25 Securities Law and Principal Market Matters.

(a) The Borrower and its Subsidiaries are in compliance in all material respects
with applicable provisions of the Sarbanes-Oxley Act of 2002, as amended, and
the rules and regulations thereunder (collectively, “Sarbanes-Oxley”).

(b) Neither the Borrower nor any of its Subsidiaries nor, to the Borrower’s
knowledge, any director, officer or employee, of the Borrower or any of its
Subsidiaries, has received or otherwise obtained any material complaint,
allegation, assertion or claim, whether written or oral, regarding the
accounting or auditing practices, procedures, methodologies or methods of the
Borrower or any of its Subsidiaries or its internal accounting controls,
including any complaint, allegation, assertion or claim that the Borrower or any
of its Subsidiaries has engaged in questionable accounting or auditing
practices. There have been no internal or SEC investigations regarding
accounting or revenue recognition discussed with, reviewed by or initiated at
the direction of the chief executive officer, the principal financial officer or
the principal accounting officer (in each case, or officer holding such
equivalent position) of the Borrower or any of its Subsidiaries, the Borrower’s
or any of its Subsidiaries’ board of directors (or equivalent governing body) or
any committee thereof.

 

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(c) The Borrower is not, and never has been, a “shell company” (as defined in
Rule 12b-2 under the Exchange Act) and is not an issuer of a type identified in,
or subject to, Rule 144(i)(1) under the Securities Act. The Borrower is eligible
to register the Conversion Shares for resale by the holders thereof on a
registration statement on Form S-3 under the Securities Act. The SEC has never
issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Borrower under the Securities Act or the
Exchange Act.

(d) Assuming the accuracy of the representations and warranties made by the
Lenders in this Agreement, the offer, sale and issuance by the Loan Parties of
the Securities are exempt from registration under the Securities Act (pursuant
to Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder or otherwise)
and applicable state securities laws.

(e) None of the Loan Parties, any of its predecessors, any director, executive
officer, other officer of any Loan Party participating in the offering of the
Securities, any beneficial owner (as that term is defined in Rule 13d-3 under
the Exchange Act) of 20% or more of any Loan Party’s outstanding voting equity
securities, calculated on the basis of voting power, any “promoter” (as that
term is defined in Rule 405 under the Securities Act) connected with any Loan
Party at the time this representation is made, any placement agent or dealer
participating in the offering of the Securities and any of such agents’ or
dealer’s directors, executive officers, other officers participating in the
offering of the Securities (each, a “Covered Person”) is subject to any of the
“Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the
Securities Act (a “Disqualification Event”). The Borrower has exercised
reasonable care to determine (i) the identity of each person that is a Covered
Person and (ii) whether any Covered Person is subject to a Disqualification
Event. Each Loan Party has complied in all material respects, to the extent
applicable, with its disclosure obligations under Rule 506(e). With respect to
each Covered Person, the Borrower has established procedures reasonably designed
to ensure that the Borrower receives notice from each such Covered Person of
(A) any Disqualification Event relating to that Covered Person, and (B) any
event that would, with the passage of time, become a Disqualification Event
relating to that Covered Person, in each case occurring up to and including the
date this representation is made. No Loan Party is any other reason disqualified
from reliance upon Rule 506 of Regulation D for purposes of the offer, sale and
issuance of the Securities.

(f) Neither the Borrower, nor any of its Affiliates, nor any Person acting on
its or their behalf, has engaged or will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with the offer, sale or issuance of the
Securities.

(g) Neither the Borrower, nor any of its Affiliates, nor any Person acting on
its or their behalf has, directly or indirectly, made, or will make, any offers
or sales of any Stock or other securities, or solicited or will solicit any
offers to buy any Stock or other securities, under circumstances that would
require registration of any of the Securities under the Securities Act or cause
this offering of the Securities to be integrated with prior offerings by the
Borrower for purposes of any applicable stockholder approval provisions of the
Principal Market or any other authority.

 

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(h) The Common Stock is registered pursuant to Section 12(b) of the Exchange
Act, and neither the Borrower nor any of its Subsidiaries has taken, or will
take, any action designed to terminate, or that is likely to have the effect of
terminating, the registration of the Common Stock under the Exchange Act; nor
has the Borrower or any of its Subsidiaries received any notification that the
SEC is contemplating terminating such registration.

(i) None of the Loan Parties, or, to the knowledge of the Loan Parties, any of
their respective officers, directors or Affiliates and no one acting on any such
Person’s behalf has, (i) taken, directly or indirectly, any action designed to
cause or to result in the stabilization or manipulation of the price of the
Common Stock of any other security of any Loan Party to facilitate the sale or
resale of any of the Securities, (ii) sold, bid for, purchased, or paid any
compensation for soliciting purchases of, any of the Securities, or (iii) paid
or agreed to pay to any Person any compensation for soliciting another to
purchase any other securities of any Loan Party.

(j) Neither the Borrower nor any of its Subsidiaries is in violation of any of
the rules, regulations or requirements of the Principal Market, and, to the
knowledge of the Borrower and its Subsidiaries, there are no facts or
circumstances that would reasonably lead to delisting or suspension or
termination of trading of the Common Stock on the Principal Market. Since 2014,
(i) the Common Stock has been listed or designated for quotation, as applicable,
on the Principal Market, (ii) trading in the Common Stock has not been suspended
by the SEC or the Principal Market, and (iii) neither the Borrower nor any of
its Subsidiaries has received any communication, written or oral, from the SEC
or the Principal Market regarding the suspension or termination of trading of
the Common Stock on the Principal Market. The transactions contemplated by this
Agreement and the other Facility Documents, including the issuance and sale of
the Convertible Notes, the Preferred Conversion Shares and the Conversion Shares
hereunder and thereunder do not contravene, or require stockholder approval
pursuant to, the rules and regulations of the Principal Market. The Conversion
Shares have been approved for listing on the Principal Market.

(k) The Common Stock is eligible for clearing through The Depository Trust
Company (“DTC”), through its Deposit/Withdrawal At Custodian (DWAC) system, and
the Borrower is eligible for and participating in the Direct Registration System
(DRS) of DTC with respect to the Common Stock. The transfer agent for the Common
Stock is a participant in, and the Common Stock is eligible for transfer
pursuant to, DTC’s Fast Automated Securities Transfer Program. The Common Stock
is not, and has not at any time been, subject to any DTC “chill,” “freeze” or
similar restriction with respect to any DTC services, including the clearing of
transactions in shares of Common Stock through DTC.

Section 3.26 Application of Takeover Provisions; Rights Agreement. There are no
control share acquisition, business combination or other similar anti-takeover
provision under the Borrower’s Organizational Documents or the laws of the State
of Delaware that is or could become applicable to any of the Lender Parties as a
result of the transactions contemplated by the Facility Documents and the
Borrower’s fulfilling its obligations with respect thereto, including the
Borrower’s issuance of the Securities and any Lender Party’s ownership of the
Securities. The Borrower has not adopted a stockholders rights plan (or “poison
pill”) or similar arrangement relating to accumulations of beneficial ownership
of Common Stock or a change in control of the Borrower.

Section 3.27 Status as Senior Indebtedness. All Obligations constitute senior
Indebtedness entitled to the benefits of the subordination and/or intercreditor
provisions contained in the applicable subordination and/or intercreditor
agreements governing any subordinated Indebtedness.

 

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ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE LENDERS

Each Lender represents and warrants that:

Section 4.1 Acquisition for Own Account. Such Lender is acquiring the Securities
for its own account and not with a view towards, or for resale in connection
with, the public sale or distribution thereof, except pursuant to sales
registered under, or exempted from, the registration requirements of the
Securities Act; provided, however, that by making the representations herein
(including the representations in Section 4.3), such Lender does not agree to
hold any of the Securities for any minimum or other specific term and reserves
the right to assign, transfer or otherwise dispose of any of the Securities at
any time pursuant to an effective registration statement under, or an exemption
from the registration requirements of, the Securities Act.

Section 4.2 Accredited Investor. Such Lender is an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D under the Securities Act and has
such knowledge and experience in business and financial matters so as to be
capable of evaluating the merits and risks of its investment in the Securities.

Section 4.3 Exemptions. Such Lender understands that the Securities are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of the United States federal and state securities laws and that the
Borrower is relying in part upon the truth and accuracy of, and such Lender’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Lender set forth herein in order to determine the
availability of such exemptions. Further, such Lender understands that the
Convertible Notes, the Preferred Conversion Shares and the Conversion Shares
issued or issuable under this Agreement and the other Facility Documents are
characterized as “restricted securities” under the U.S. federal securities laws
inasmuch as they are being acquired from Borrower in a transaction not involving
a public offering and that under such laws and applicable regulations such
securities may not be resold except pursuant to an effective registration
statement under the Securities Act (including a registration statement filed
pursuant to the Registration Rights Agreement) or pursuant to an applicable
exemption from the registration requirements under the Securities Act.

Section 4.4 Diligence. Such Lender and its advisors, if any, have been furnished
with all materials relating to the business, finances and operations of the Loan
Parties and their Subsidiaries and materials relating to the offer and sale of
the Securities that have been requested by such Lender. Such Lender and its
advisors, if any, have been afforded the opportunity to ask questions of the
Loan Parties. None of any such inquiries, any other due diligence investigations
conducted by any Lender or its advisors or its representatives, if any, and the
making by such Lender or representations and warranties pursuant to this Article
4 shall modify, amend or otherwise affect such Lender’s right to rely on the
representations and warranties of the Loan Parties and their Subsidiaries
contained in Article 3 shall modify, amend or otherwise affect such Lender’s
right to rely on the representations, warranties, covenants and agreements of
the Loan Parties contained in Article 3 and elsewhere in this Agreement and the
other Facility Documents.

Section 4.5 No Recommendation or Endorsement. Such Lender understands that no
United States federal or state agency or any other government or Governmental
Authority has passed on or made any recommendation or endorsement of the
Securities or the fairness or suitability of the investment in the Securities
nor have such authorities passed upon or endorsed the merits of the offering of
the Securities.

 

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ARTICLE 5

CONDITIONS OF DISBURSEMENT

The obligation of the Lenders to make the proceeds of the Loans available on the
Disbursement Date shall be subject to the satisfaction (or written waiver) of
the following conditions in a manner satisfactory to each Lender:

Section 5.1 Facility Documents; Other Disbursement Date Deliverables. Agent and
the Lenders shall have received executed counterparts of this Agreement and each
other Facility Document, together with each other item, in each case, identified
on the closing checklist attached hereto as Exhibit B.

Section 5.2 Costs and Expenses. All costs and expenses required to be paid on
the Closing Date (including pursuant to Section 9.2) pursuant to this Agreement
and the other Facility Documents, to the extent invoiced at least two
(2) Business Days prior to the Closing Date, shall have been, or substantially
contemporaneously with the funding of the Loans shall be, paid (which amounts,
at the sole option of the Lenders, may be offset against the proceeds of the
Loans).

Section 5.3 Know Your Customer Information. At least three (3) Business Days
prior to the Closing Date, Agent and the Lenders shall have received a duly
executed W-9 (or other applicable tax form) of the Borrower and all
documentation and other information required by regulatory authorities under
applicable “know your customer” and anti-money laundering rules and regulations,
including the USA Patriot Act, that has been reasonably requested by Agent or
any Lender at least ten (10) days in advance of the Closing Date.

Section 5.4 Absence of Default or Event of Default. No Default or Event of
Default shall have occurred or would reasonably be expected to result from the
funding of the Loans or the use of the proceeds therefrom.

Section 5.5 Representations and Warranties. Immediately prior to and after
giving effect to the funding of the Loans and the use of proceeds thereof, each
representation and warranty by any Loan Party or any of its Subsidiaries
contained herein or in any other Facility Document is true, correct and complete
in all material respects (without duplication of any materiality qualifier
contained therein) as of such date, except to the extent that such
representation or warranty expressly relates to an earlier date (in which event
such representations and warranties were true, correct and complete in all
material respects (without duplication of any materiality qualifier contained
therein) as of such earlier date).

Section 5.6 Proceedings. There shall not exist any Proceeding, order, injunction
or decree of any Governmental Authority or in any court restraining or
prohibiting (or attempting to restrain or prohibit) the funding of the Loans
hereunder.

Section 5.7 Solvency Certificate. The Agent and the Lenders shall have received
a Solvency Certificate duly executed by an Authorized Officer of the Borrower.

Section 5.8 Conditions Precedent Certificate. Each Lender shall have received a
certificate from an Authorized Officer certifying that all of the conditions set
forth in this Article 5 are satisfied.

Section 5.9 Legal Opinions. The Agent and the Lenders shall have received an
opinion letter from Cooley LLP, counsel to the Borrower, in form and substance
reasonably satisfactory to the Lenders.

 

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Section 5.10 Transfer Agent Letter. The Borrower shall have delivered to the
Lender Parties a letter from the transfer agent for the Common Stock certifying
the number of shares of Common Stock outstanding as of a date within two
(2) Business Days prior to the Disbursement Date.

ARTICLE 6

AFFIRMATIVE COVENANTS

Section 6.1 Preservation of Existence, Etc. The Loan Parties shall and shall
cause their Subsidiaries to (a) preserve and maintain in full force and effect
their organizational existence and good standing (to the extent such concept is
applicable) under the Applicable Laws of its jurisdiction of incorporation,
organization or formation, as applicable, except in connection with a
transaction permitted under Section 7.1 or any liquidation of any Subsidiary
into any other Subsidiary or the Borrower (provided that if such Subsidiary is a
Loan Party, such liquidation shall be into a Loan Party) and (b) preserve and
maintain all qualifications to do business in each other jurisdiction not
covered by clause (b) above in which the failure to be so qualified would
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.

Section 6.2 Compliance with Laws. The Loan Parties shall, and shall cause their
Subsidiaries to, (a) comply in all respects with all Applicable Laws (including
Health Care Laws), except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings or where the failure to so
comply would not reasonably be expected to have a Material Adverse Effect, and
(b) maintain in effect and enforce policies and procedures designed to ensure
compliance by the Loan Parties, their Subsidiaries and their respective
directors, officers, employees and agents with Anti-Corruption Laws, Anti-Money
Laundering Laws and applicable Sanctions.

Section 6.3 Authorizations. The Loan Parties shall, and shall cause their
Subsidiaries to, obtain, make and keep in full force and effect all licenses,
certificates, approvals, registrations, clearances, and Authorizations material
to the conduct of their businesses, except as would not reasonably be expected
to have a Material Adverse Effect.

Section 6.4 Maintenance of Property. Each Loan Party shall, except as otherwise
permitted by this Agreement, maintain, and shall cause each of its Subsidiaries
to maintain, and preserve all its assets and property that are material to its
businesses in good working order and condition, ordinary wear and tear and
casualty and condemnation excepted and shall make all necessary repairs thereto
and renewals and replacements thereof in the ordinary course of business
consistent with past practices.

Section 6.5 Insurance. The Loan Parties shall, and shall cause each of their
Subsidiaries to, maintain with financially sound and reputable insurance
companies insurance with respect to their assets, properties and businesses,
against such hazards and liabilities, of such types and in such amounts, as is
customarily maintained by companies in the same or similar businesses similarly
situated. A true and complete listing of such insurance, including issuers,
coverages and deductibles, shall be provided to Agent and the applicable
Lender(s) promptly following Agent’s or any Lender’s request.

Section 6.6 Payment of Taxes. Each Loan Party shall, and shall cause each of its
Subsidiaries to, pay all material Taxes, assessments, levies and other
governmental charges imposed upon it or any of its properties or assets or in
respect of any of its income, businesses or franchises before any penalty
accrues thereon, and all other material claims (including claims for labor,
services, materials and supplies) for sums that have become due and payable and
that by law have or may become a Lien upon any of its properties or assets,
prior to the time when any penalty or fine shall be incurred with respect
thereto; provided, that no such Tax, assessment, levy, charge or claim need be
paid if it is being contested in good faith by appropriate Proceedings promptly
instituted and diligently conducted, so long as adequate reserves or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor.

 

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Section 6.7 Notices. The Loan Parties shall promptly (and, in any event, within
two (2) Business Days) notify the Agent in writing of the occurrence of (i) any
Default or Event of Default; (ii) any default or event of default under any
Qualifying Secured Debt or Qualifying Unsecured Debt, or (iii) any event or
occurrence or series of related events or occurrences that has had a Material
Adverse Effect.

Section 6.8 SEC Documents; Financial Statements. The Borrower shall comply in
all respects with its filing requirements under Section 13 or 15(d) of the
Exchange Act, as applicable. From the Closing Date until the first date on which
no Convertible Notes remain outstanding (the period ending on such date, the
“Reporting Period”), the Borrower shall timely (without giving effect to any
extensions pursuant to Rule 12b-25 of the Exchange Act) file (or furnish, as
applicable) all SEC Documents required to be filed with (or furnished to) the
SEC pursuant to the Exchange Act, and the Borrower and its Subsidiaries shall
not terminate the registration of the Common Stock under the Exchange Act or
otherwise terminate its status as an issuer required to file reports under the
Exchange Act, even if the securities laws would otherwise permit any such
termination. None of such SEC Documents, when filed or furnished, shall contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
materially misleading. All financial statements included in any such SEC
Documents shall fairly present in all material respects the consolidated
financial position of the Borrower and its Subsidiaries as of the dates thereof
and the consolidated results of their operations and cash flows for the periods
presented and shall have been prepared in accordance with GAAP, consistently
applied (subject, in the case of unaudited quarterly financial statements, to
normal year-end adjustments that are not material individually or in the
aggregate and lack of footnote disclosures). Any audit or report of the
Borrower’s independent certified public accountants on any financial statements
included in any such SEC Document shall (i) contain an unqualified opinion
stating that such consolidated financial statements present fairly in all
material respects the consolidated financial position and results of operations
and cash flows of the Borrower and its Subsidiaries as of the dates thereof and
for the periods presented and have been prepared in conformity with GAAP applied
on a basis consistent with prior years, and (ii) not include any explanatory
paragraph expressing substantial doubt as to going concern status. No financial
statements included in any such SEC Document shall include any statement in the
footnotes thereto that indicates there is substantial doubt about the Borrower’s
ability to continue as a going concern (or any statement to similar effect)
(except as a result of the impending Maturity Date).

Section 6.9 Disclosure. Each Loan Party shall, and shall cause each of its
Subsidiaries to, ensure that all written information, exhibits and reports
furnished to any Lender Party, when taken as a whole, do not and will not (or
does not, as applicable) contain any untrue statement of a material fact and do
not and will not omit to state any material fact or any fact necessary to make
the statements contained therein not materially misleading in light of the
circumstances in which made, and will promptly disclose to Agent and the Lenders
and correct any defect or error that may be discovered therein or in any
Facility Document or in the execution, acknowledgement or recordation thereof.

Section 6.10 Further Assurances. Promptly upon (but, in any event, within five
(5) Business Days after) the request of the Required Lenders (or the Agent
acting at the direction of the Required Lenders), the Loan Parties shall (and,
subject to the limitations set forth herein and in the other Facility Documents,
shall cause each of their Subsidiaries to) take such additional actions and
execute such documents as the Required Lenders (or the Agent acting at the
direction of the Required Lenders) may reasonably require from time to time in
order (a) to carry out more effectively the purposes of this Agreement or any
other Facility Document, and (b) to better assure, grant, preserve, protect and
confirm to the Lender Parties the rights granted or now or hereafter intended to
be granted to the Lender Parties

 

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under any Facility Document. The Loan Parties shall cause each Subsidiary of a
Loan Party (other than an Excluded Subsidiary), promptly (and in any event
within twenty-five (25) Business Days (or such later date as agreed by the
Required Lenders in their sole discretion) after the formation or acquisition
thereof, to (i) guarantee the Obligations by executing a Guaranty, and
(ii) deliver, or cause to be delivered, to Agent, appropriate resolutions,
secretary certificates, certified Organizational Documents and legal opinions
(which opinions shall be in form and substance reasonably acceptable to the
Required Lenders and, to the extent applicable, substantially similar to the
opinions delivered on the Closing Date).

Section 6.11 Listing of Stock. The Borrower shall take all actions necessary to
cause the Common Stock to remain listed on the Principal Market during the
Reporting Period, unless the Common Stock is, upon delisting from the Principal
Market, immediately relisted on another Eligible Market (whereupon such other
Eligible Market shall be deemed the Principal Market for purposes of this
Agreement and the other Facility Documents). During the Reporting Period, the
Borrower shall not, and shall cause each of the Subsidiaries not to, take any
action that would be reasonably expected to result in the delisting or
suspension or termination of trading of the Common Stock on the Principal
Market. The Loan Parties shall pay all fees, costs and expenses in connection
with satisfying its obligations under this Section 6.11. At all times during the
Reporting Period, (a) the Common Stock shall be eligible for clearing through
DTC, through its Deposit/Withdrawal At Custodian (DWAC) system; (b) the Borrower
shall be eligible and participating in the Direct Registration System (DRS) of
DTC with respect to the Common Stock; (c) the transfer agent for the Common
Stock is a participant in, and the Common Stock shall be eligible for transfer
pursuant to, DTC’s Fast Automated Securities Transfer Program (or successor
thereto); and (d) the Borrower shall use its reasonable best efforts to cause
the Common Stock to not at any time be subject to any DTC “chill,” “freeze” or
similar restriction with respect to any DTC services, including the clearing of
shares of Common Stock through DTC, and, in the event the Common Stock becomes
subject to any DTC “chill,” “freeze” or similar restriction with respect to any
DTC services, the Borrower shall use its reasonable best efforts to cause any
such “chill,” “freeze” or similar restriction to be removed at the earliest
possible time.

Section 6.12 Disclosure; No Inside Information.

(a) At or prior to 8:00 a.m. (New York City time) on the first Business Day
following the Closing Date, the Borrower shall file with the SEC one or more
Forms 8-K describing the terms of the Transactions and the other transactions
contemplated by the Facility Documents, disclosing any other Inside Information
(if any) provided or made available to any Lender Party (or any such Lender
Party’s Affiliates, agents or representatives) on or prior to the Closing Date,
and including as exhibits to such Form(s) 8-K this Agreement, the form of
Convertible Note, the form of Certificate of Designations and the Registration
Rights Agreement, in each case without any redactions (such Form or Forms 8-K,
collectively, the “Announcing Form 8-K”). Subject to the foregoing, no Loan
Party shall (and no Loan Party shall permit any of its Affiliates to) issue any
press releases or any other public statements with respect to the transactions
contemplated by any Facility Document or disclosing the name of any Lender Party
or any of its Affiliates; provided, however, that the Borrower shall be
entitled, without the prior approval of any Lender Party, to make any press
release or other public disclosure with respect to such transactions (i) in
substantial conformity with the Announcing Form 8-K and contemporaneously
therewith, (ii) in its SEC Documents for the purpose of describing such
transactions and the accounting thereof, and (iii) as is required by Applicable
Law and regulations (provided that each Lender Party shall be consulted by the
Borrower in connection with its initial press release regarding such
transactions prior to its release and shall be provided with a copy thereof).

 

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(b) Upon the filing of the Announcing Form 8-K, the Borrower and its
Subsidiaries shall have disclosed all Inside Information provided or made
available to any Lender Party or any of its Affiliates, attorneys, agents or
representatives by any Loan Party or any of its employees, officers, directors
(or equivalent persons), attorneys, agents or representatives on or prior to the
Closing Date. Each Loan Party shall not, and shall cause each of its employees,
officers, directors (or equivalent persons), Affiliates, attorneys, agents and
representatives to not, provide any Lender Party or any of its Affiliates,
attorneys, agents or representatives with any Inside Information from and after
the filing of the Announcing Form 8-K with the SEC without the express prior
written consent of such Lender Party. Each Loan Party hereby acknowledges and
agrees that, notwithstanding the provisions of this Section 6.12, no Lender
Party (nor any of such Lender Party’s Affiliates, attorneys, agents or
representatives) shall have any duty of trust or confidence (including any
obligation under any confidentiality or non-disclosure agreement entered into by
such Lender Party) with respect to, or any obligation not to trade in any
securities while aware of, any Inside Information (i) provided by, or on behalf
of, any Loan Party, any of its Affiliates or any of its officers, directors (or
equivalent persons), employees, attorneys, agents or representatives in
violation of any of the representations, covenants, provisions or agreements set
forth in this Section 6.12 or (ii) otherwise possessed (or continued to be
possessed) by any Lender Party (or any Affiliate, agent or representative
thereof) as a result of any breach or violation of any representation, covenant,
provision or agreement set forth in this Section 6.12. The Loan Parties
understand and acknowledge that the Lender Parties, their Affiliates and Persons
acting on their behalf will rely on the provisions of this Section 6.12 in
effecting transactions in the Securities and other securities of the Borrower
and of other Persons.

(c) Notwithstanding anything to the contrary herein, in the event that any Loan
Party believes that a notice or communication to any Lender Party or any of its
Affiliates, attorneys, agents or representatives contains Inside Information,
the Borrower shall (i) so indicate to such Lender Party prior to delivery of
such notice or communication, and such indication shall provide the Lender Party
the means to refuse in writing to receive such notice or communication (and in
the absence of any such indication, the Lender Parties, the other holders of the
Securities and their respective Affiliates, agents and representatives shall be
allowed to presume that all matters relating to such notice or communication do
not constitute Inside Information), and (ii) provide such notice or
communication to counsel to such Lender Party (which shall be Katten Muchin
Rosenman LLP (Attn: Mark D. Wood) or such other counsel as shall have been
designated in writing by such Lender Party). In the event that, in compliance
with the foregoing, the Borrower indicates to a Lender Party that a notice or
other communication contains Inside Information and such Lender Party then
refuses to accept such notice or other communication, the Borrower shall be
excused from any obligation hereunder to provide such notice or other
communication to such Lender Party (subject to the Borrower’s obligation to
provide such notice or communication to counsel for such Lender Party). In the
event that the Borrower either (A) fails to indicate that a notice or
communication to a Lender Party contains Inside Information or otherwise
provides any Lender Party with Inside Information without such Lender Party’s
prior written consent or (B) provides such notice or communication to the Lender
Parties notwithstanding the Lender Parties’ refusal in writing to receive such
notice or communication, the Lender Parties shall have the right to make a
public disclosure in the form of a press release, public advertisement or
otherwise, of the applicable Inside Information without the prior approval by
any Loan Party, its Subsidiaries or Affiliates, or any of its or their
respective officers, directors (or equivalent persons), employees, attorneys,
representatives or agents, and no Lender Party shall have any liability to any
Loan Party, any of its Subsidiaries or Affiliates or any of its or their
respective officers, directors (or equivalent persons), employees, stockholders,
attorneys, representatives or agents for any such disclosure; provided, however,
that, prior to making any such disclosure, the applicable Lender Party shall
provide written notice to the Borrower of its intent to do so and shall not make

 

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such disclosure if the Borrower makes public disclosure (in the form of a widely
disseminated press release, a public filing with the SEC or other manner
compliant with Regulation FD) of the applicable Inside Information within one
(1) Business Day after the delivery of such notice to the Borrower; provided,
further, however, that the applicable Lender Party shall not be entitled to make
such disclosure in the event that (X) within one (1) Business Day after the
delivery of such notice to the Borrower, the Borrower disputes in good faith
that the applicable information constitutes Inside Information and communicates
that in writing to the applicable Lender Party, (Y) the Borrower (at its sole
expense) within three (3) Business Days following the delivery of such notice to
the Borrower submits the matter to Cooley LLP or another nationally recognized
law firm with expertise in securities laws selected by the Borrower for a
determination as to whether such information constitutes Inside Information, and
(Z) within three (3) Business Days following the delivery of such notice to the
Borrower, such law firm advises the Borrower and such Lender Party in writing
that the applicable information does not constitute Inside Information.

(d) Notwithstanding the foregoing, to the extent the Borrower reasonably and in
good faith determines that it is necessary to disclose Inside Information to a
Lender Party for purposes relating to any of the Facility Documents (a
“Necessary Disclosure”), the Borrower shall inform counsel to such Lender Party
(which shall be Katten Muchin Rosenman LLP (Attn: Mark D. Wood) or such other
counsel as shall have been designated in writing by such Lender Party) of such
determination without disclosing the applicable Inside Information, and the
Borrower and such counsel on behalf of the applicable Lender Party shall
endeavor to agree upon a process for making such Necessary Disclosure to the
applicable Lender Party or its representatives that is mutually acceptable to
such Lender Party and the Borrower (an “Agreed Disclosure Process”). Thereafter,
the Borrower shall be permitted to make such Necessary Disclosure (only) in
accordance with the Agreed Disclosure Process.

(e) The Borrower shall not (shall cause its Affiliates not to) assert that any
Lender or any Affiliate of any Lender is in possession of any Inside Information
merely because such Inside Information was provided to the Agent or any attorney
or agent of any Lender.

Section 6.13 Environmental Matters. Each Loan Party shall, and shall cause each
of its Subsidiaries to, comply with, and maintain its Real Estate, whether
owned, leased, subleased or otherwise operated or occupied, in compliance with
all applicable Environmental Laws or as is required by orders and directives of
any Governmental Authority except where the failure to comply would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.

Section 6.14 Use of Proceeds. The proceeds of the Loans will be used solely
(a) for working capital and for general corporate purposes of the Borrower and
(b) to pay fees, commissions, costs and expenses in connection with the
Transactions.

Section 6.15 ERISA Notices. Promptly upon becoming aware that any of the
following has occurred, the Borrower will provide written notice to the Lenders
specifying the nature of such event, what action the Loan Party or any ERISA
Affiliates has taken, is taking or proposes to take with respect thereto and,
when known, if applicable, any action taken or threatened by the IRS, the
Department of Labor or the PBGC with respect thereto: (a) any ERISA Event, or
(b) a “prohibited transaction” as defined under Section 406 of ERISA or
Section 4975 of the Code that is not exempt under ERISA Section 408 or
Section 4975 of the Code, under any applicable regulations and published
interpretations thereunder or under any applicable prohibited transaction,
individual or class exemption issued by the Department of Labor, with respect to
any Employee Benefit Plan.

 

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ARTICLE 7

NEGATIVE COVENANTS

Section 7.1 Merger, Consolidation, Etc. No Loan Party will, nor will it permit
any Subsidiary to, directly or indirectly consolidate or merge with or into any
other Person other than (i) consolidations or mergers among the Borrower and its
Subsidiaries (provided that, in any merger involving the Borrower, the Borrower
shall be the surviving entity and in any merger involving a Loan Party other
than the Borrower, such Loan Party shall be the surviving entity),
(ii) consolidations or mergers in connection with any acquisition (provided
that, in any merger involving the Borrower, the Borrower shall be the surviving
entity and, in any merger involving a Loan Party other than the Borrower, the
surviving entity shall be or become a Loan Party) and (iii) consolidations or
mergers of a Subsidiary of the Borrower in connection with any disposition of
such Subsidiary permitted hereunder. Notwithstanding the foregoing, nothing in
this Section 7.1 shall prevent the consummation of (or entry of the Borrower
into an agreement with respect to) a Major Transaction (as defined in the
Convertible Notes), subject to compliance with the provisions relating thereto
in the Convertible Notes.

Section 7.2 Liens. No Loan Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer
to exist any Lien upon or with respect to any of its assets or property, except:

(a) Liens existing on the Closing Date and set forth on Schedule 7.2(a);

(b) carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s,
repairmen’s or other similar Liens arising in the ordinary course of business
that secure obligations that are not delinquent or remain payable without
penalty or that are being contested in good faith and by appropriate
Proceedings, which Proceedings have the effect of preventing the forfeiture or
sale of the assets or property subject thereto and for which adequate reserves
in accordance with GAAP are being maintained;

(c) Liens for Taxes, assessments or governmental charges or levies, in each case
imposed by law or arising in the ordinary course of business for amounts that
are not past due or payable or that are being contested in good faith by
appropriate Proceedings, which Proceedings have the effect of preventing the
forfeiture or sale of the property subject thereto, and for which adequate
reserves in accordance with GAAP are being maintained;

(d) (i) Liens arising from judgments, decrees or attachments in circumstances
not constituting an Event of Default and (ii) pledges or cash deposits made in
lieu of, or to secure the performance of, judgment or appeal bonds in respect to
such judgments and Proceedings described in the foregoing clause (i);

(e) banker’s liens, rights of setoff or similar rights and remedies as to
deposit accounts or other funds maintained with depository institutions and
payment processors; provided that such deposit accounts or funds are not
established or deposited for the purpose of providing collateral for any
Indebtedness;

(f) Liens (other than any Lien imposed by ERISA) (i) consisting of pledges or
deposits required in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation or to
secure the performance of tenders, statutory obligations, surety, stay, customs
and appeals bonds, bids, leases (other than Capital Leases), governmental
contracts, trade contracts, performance and return of money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed money
or

 

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other funded Indebtedness) or to secure liability to insurance carriers and
(ii) in respect of letters of credit, bank guarantees or similar instruments
issued for the account of Borrower or any Subsidiary in the ordinary course of
business supporting obligations of the types described in the foregoing clause
(i);

(g) easements, rights of way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
do not affect the value or marketability of such real property and which do not
in any case materially interfere with the conduct of the business of any Loan
Party or its Subsidiaries;

(h) (i) any interest or title of a lessor or sublessor under any lease permitted
by this Agreement and entered into in the ordinary course of business or
(ii) non-exclusive licenses and non-exclusive sublicenses granted by a Loan
Party or any Subsidiary of a Loan Party and leases and subleases (by a Loan
Party or any Subsidiary of a Loan Party as lessor or sublessor) to third parties
in the ordinary course of business not interfering with the business of the Loan
Parties or any of their Subsidiaries;

(i) Liens of a collection bank arising under Section 4-210 of the UCC (or
equivalent in foreign jurisdictions) on items in the course of collection;

(j) Liens on any assets or property acquired or held by any Loan Party or any
Subsidiary of any Loan Party securing Indebtedness incurred or assumed for the
purpose of financing (or refinancing) all or any part of the cost of acquiring
such assets or property and permitted under Section 7.3(c); provided that
(i) such Lien attaches solely to the assets or property so acquired in such
transaction and the proceeds thereof within one hundred twenty (120) days of
such acquisition and (ii) the principal amount of the Indebtedness secured
thereby does not exceed 100% of the cost of such assets or property;

(k) Liens securing Capital Lease Obligations permitted under Section 7.3(c), to
the extent such Lien attaches solely to the property financed in such
transaction and the proceeds thereof;

(l) Liens arising from the filing of precautionary UCC financing statements with
respect to any lease not prohibited by this Agreement;

(m) Liens arising out of consignment or similar arrangements for the sale of
goods entered into by the Borrower or any Subsidiary of the Borrower in the
ordinary course of business consistent with past practices;

(n) Liens in favor of customs and revenue authorities arising as a matter of law
which secure payment of customs duties in connection with the importation of
goods in the ordinary course of business consistent with past practices;

(o) Liens on unearned insurance premiums securing the financing thereof to the
extent permitted under Section 7.3(k);

(p) Liens solely on cash earnest money deposits made by the Borrower or any of
its Subsidiaries in connection with any letter of intent or purchase agreement
in the ordinary course of business; and

(q) Permitted Licenses;

 

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(r) leases and subleases of Real Estate entered into in the ordinary course of
business that do not materially interfere with the conduct of business of the
Borrower and its Subsidiaries;

(s) any interest or title of a lessor or licensor under any lease, sublease,
license or sublicense granted to the Borrower or any Subsidiary;

(t) Liens securing Qualifying Secured Debt and Permitted Acquisition Debt;

(u) Liens in the nature of the right of setoff in favor of counterparties to
contractual agreements with any Loan Party in the ordinary course of business;

(v) cash collateral securing letters of credit permitted under Section 7.3(o);
and

(w) Liens incurred in the extension, renewal or refinancing of any Indebtedness
secured by Liens described in clauses (a), (j), (k), (t) and (v) above; provided
that any extension, renewal or replacement Lien must be limited to the property
encumbered by the existing Lien and the principal amount of any such
Indebtedness may not increase.

Section 7.3 Indebtedness. No Loan Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
permit to exist or be liable with respect to any Indebtedness, other than:

(a) Indebtedness existing as of the Closing Date and set forth on Schedule
7.3(a) attached hereto;

(b) the Obligations;

(c) Indebtedness not to exceed $2,500,000 in the aggregate at any time
outstanding, consisting of Capital Lease Obligations, vendor financing or
Indebtedness secured by Liens permitted by Sections 7.2(j) and (k);

(d) Indebtedness in respect of treasury, depository, and cash management
services, including netting services, overdraft protections, controlled
disbursement services, ACH and electronic funds transfer, credit cards, merchant
cards, purchase cards and debit cards (including procurement cards or p-cards),
non-card e-payables services, lockbox services, stop payment services, wire
transfer services, arrangements in respect of pooled deposit or sweep accounts,
check endorsement guarantees, and other similar and customary services in
connection with deposit accounts incurred in the ordinary course of business;

(e) Indebtedness to employees in respect of benefit plans and employment and
severance arrangements;

(f) Indebtedness with respect to performance bonds, surety and appeal bonds and
similar instruments incurred in the ordinary course of business;

(g) Indebtedness arising under Guarantees made in the ordinary course of
business of obligations of any Loan Party that are otherwise expressly permitted
hereunder; provided that if such obligation is subordinated to the Obligations,
such Guarantee shall be subordinated to the Obligations to the same extent;

 

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(h) Indebtedness consisting of unsecured intercompany loans among the Borrower
and its Subsidiaries;

(i) Indebtedness arising with respect to customary indemnification obligations
and purchase price adjustments in favor of (i) sellers in connection with
acquisitions or similar investments and (ii) purchasers in connection with
dispositions of assets;

(j) endorsements for collection or deposit in the ordinary course of business;

(k) Indebtedness consisting of the financing of insurance premiums in the
ordinary course of business;

(l) Qualifying Secured Debt;

(m) Qualifying Unsecured Debt;

(n) Swap Contracts entered into in the ordinary course of business for bona fide
hedging purposes and not for speculation;

(o) Indebtedness in respect of letters of credit (including trade letters of
credit), bank guarantees or similar instruments issued or incurred in the
ordinary course of business in an aggregate outstanding face amount not to
exceed $2,500,000; and

(p) Permitted Acquisition Debt (and any renewals, extensions, refinancings and
replacements thereof) in an aggregate amount not to exceed $75,000,000 at any
time outstanding.

Notwithstanding anything to the contrary herein, the accrual of interest, the
accretion or amortization of original issue discount, the payment of interest on
any Indebtedness in the form of additional Indebtedness with the same terms, the
reclassification of preferred stock as Indebtedness due to a change in
accounting principles, and the payment of dividends on Disqualified Stock in the
form of additional shares of the same class of Disqualified Stock will not be
deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock
for purposes of this definition.

Section 7.4 Affiliate Transactions. No Loan Party shall, and no Loan Party shall
suffer or permit any of its Subsidiaries to, directly or indirectly, (a) enter
into any transaction with any Affiliate of a Loan Party (other than transactions
between or among Loan Parties and their Subsidiaries; provided that, if a Loan
Party is a party to such transaction, such transaction shall be on an
arm’s-length basis or the terms of such transaction shall be at least as
favorable, taken as a whole, to such Loan Party as they are to such Subsidiary
that is a party to such transaction), (b) pay any management, consulting or
similar fees to any of the foregoing, (c) pay or reimburse any of the foregoing
for any costs, expenses and similar items, or (d) make any indemnification
payments to any such Person, except in each case of the foregoing clauses
(a) through (e), (i) in the ordinary course of business and pursuant to the
reasonable requirements of the business of such Loan Party or such Subsidiary
upon fair and reasonable terms no less favorable to such Loan Party or such
Subsidiary than would be obtained in a comparable arm’s length transaction with
a Person that is not an Affiliate of Borrower or such Subsidiary, (ii) customary
compensation and indemnification of, and other employment arrangements with,
directors, officers and employees of the Borrower or any Subsidiary in the
ordinary course of business and (iii) transactions in connection with any bona
fide equity financing transaction not prohibited hereunder.

Section 7.5 Conduct of Business. No Loan Party shall, and no Loan Party shall
permit any of its Subsidiaries to, directly or indirectly, engage in any line of
business materially different from those lines of business carried on by it on
the Closing Date other than any business reasonably related, complementary,
ancillary, supplemental or incidental thereto or any reasonable extension
thereof.

 

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Section 7.6 Amendments to Organizational Documents. No Loan Party shall, and no
Loan Party shall permit any of its Subsidiaries to, directly or indirectly,
amend, restate, supplement, change, replace or otherwise modify (or waive or
consent to any diversions from, or actions or inactions affecting) any of its
Organizational Documents, in each case other than (a) amendments or other
modifications to a Loan Party’s or Subsidiary’s Organizational Documents
required under this Agreement and (b) such amendments or modifications to a Loan
Party’s or Subsidiary’s Organizational Documents that would not adversely affect
the rights or remedies of Agent or Lenders in any material respect.

Section 7.7 Accounting Changes. No Loan Party shall, and no Loan Party shall
suffer or permit any of its Subsidiaries to, (a) make any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
(b) change the fiscal year or method for determining the fiscal quarters of any
Loan Party or of any Subsidiary of any Loan Party (other than for the purpose of
conforming the fiscal year of any Subsidiary to that of the Borrower).

Section 7.8 Payments of Qualifying Unsecured Debt. No Loan Party shall, nor
shall it permit any of its Affiliates to, directly or indirectly, purchase,
redeem or defease earlier than scheduled or prepay any principal of, premium, if
any, interest or other amount payable in respect of any Qualifying Unsecured
Debt, except (i) upon any exchange or conversion of any such Indebtedness by the
holders thereof pursuant to its terms, the Borrower may pay or prepay the
principal on such Indebtedness subject to such conversion, and interest with
respect thereto, but only in Stock (other than Disqualified Stock) of the
Borrower (or cash in lieu of fractional shares of Stock of the Borrower), (ii)
in connection with any refinancing thereof with the proceeds of Qualifying
Unsecured Debt, (iii) in connection with the settlement, repayment, redemption,
retirement or acquisition for value of any such Indebtedness in exchange for
shares of Stock of the Borrower (other than Disqualified Stock), together with
cash in lieu of fractional shares and cash payments in respect of any current
accrued and unpaid cash interest on any such Indebtedness, and (iv) in
connection with the repurchase, redemption, retirement or acquisition for value
of any such Indebtedness with the proceeds of any substantially concurrent
offering of Stock of the Borrower (other than Disqualified Stock).

Section 7.9 Burdensome Agreements and Negative Pledges. No Loan Party shall, and
no Loan Party shall permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any consensual
restriction or encumbrance of any kind on the ability of any Loan Party or
Subsidiary to pay dividends or make any other distribution on any of such Loan
Party’s or Subsidiary’s Stock or to pay fees or make other payments and
distributions to any Loan Party or any of its Subsidiaries, except for (a) those
in the Facility Documents; (b) those imposed by Applicable law; (c) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest, or sublicensing or assignment of any licenses, of a
Subsidiary; (d) customary provisions restricting assignment of any agreement
entered into by a Subsidiary in the ordinary course of business (provided that
such provision was not implemented for the purposes of avoiding the limitations
set forth in this Section 7.9); (e) any Lien permitted by Section 7.2
restricting the transfer or encumbrance of the property subject thereto;
(f) customary restrictions and conditions contained in any agreement relating to
any transaction permitted under Section 7.1 (provided that such restrictions and
conditions were not implemented for the purposes of avoiding the limitations set
forth in this Section 7.9); (g) any agreement in effect at the time such
Subsidiary becomes a Subsidiary of Borrower, so long as such agreement was not
entered into in connection with or in contemplation of such person becoming a
Subsidiary of Borrower; (h) customary provisions in partnership agreements,
limited liability company organizational governance documents, asset sale and
stock sale agreements and other similar agreements entered into in the ordinary
course of business that restrict the transfer of ownership interests in such
partnership, limited

 

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liability company or similar person (provided that such provision was not
implemented for the purposes of avoiding the limitations set forth in this
Section 7.9); (i) restrictions on cash or other deposits or net worth imposed by
suppliers or landlords under contracts entered into in the ordinary course of
business; (j) any instrument governing any Qualified Secured Debt or Permitted
Acquisition Debt; and (k) any encumbrances or restrictions imposed by any
amendments or refinancings that are otherwise permitted by the Facility
Documents or the contracts, instruments or obligations referred to in clauses
(a), (e), (g), (j) or (k) above; provided that such amendments or refinancings
are no more restrictive in any material respect with respect to such
encumbrances and restrictions than those in effect prior to such amendment or
refinancing. No Loan Party shall, and no Loan Party shall permit any of its
Subsidiaries to, directly or indirectly, enter into, assume or become subject to
any obligation prohibiting or otherwise restricting the ability of the Borrower
and the other Loan Parties to make all payments of Obligations under the
Facility Documents as and when due and payable or otherwise permitted to be
paid.

Section 7.10 OFAC; Patriot Act; Anti-Corruption Laws. No Loan Party shall, and
no Loan Party shall permit any of its Subsidiaries to, directly or indirectly,
violate in any material respect the laws, regulations and executive orders
referred to in Section 3.24. No Loan Party or Subsidiary of a Loan Party, nor to
the knowledge of any Loan Party or any of its Subsidiaries, any director,
officer, agent, employee or other Person acting on behalf of any Loan Party or
any such Subsidiary, will request or use the proceeds of any Loan, directly or
indirectly, (a) for any payments to any Person, including any government
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, or otherwise
take any action, directly or indirectly, that would result in a violation of any
Anti-Corruption Laws, (b) for the purpose of funding, financing or facilitating
any activities, business or transaction of or with any Person on the SDN List or
a government of a Sanctioned Country, to the extent such activities, business or
transaction would be prohibited by applicable Sanctions, or (c) in any manner
that would result in the violation of any Sanctions applicable to any party
hereto. Furthermore, the Loan Parties will not, and will not permit their
Subsidiaries to, directly or indirectly, use the proceeds of the transaction, or
lend, contribute or otherwise make available such proceeds to any Subsidiary,
Affiliate, joint venture partner or other Person, to fund any activities of, or
business with, any Person, or in any country or territory, that, in each case,
at the time of such funding, is the subject of Sanctions prohibiting such
funding, or in any other manner that will result in a violation by any Person
participating in the transaction of any Sanctions.

Section 7.11 Investment Company Act. No Loan Party shall, and no Loan Party
shall permit any of its Subsidiaries to, directly or indirectly, be an
“investment company” as such term is defined in the Investment Company Act, or
to otherwise be registered under or required to be registered under the
Investment Company Act.

Section 7.12 Restricted Payments. No Loan Party shall, nor shall it permit any
of its Subsidiaries to, directly or indirectly, make any Restricted Payments,
except that:

(a) (i) the Borrower may declare and make dividend payments or other
distributions payable solely in its Stock and (ii) any Subsidiary of a Borrower
may declare and pay dividends to a Borrower or any other Subsidiary of a
Borrower;

(b) (i) repurchases of Stock deemed to occur upon the exercise of stock options,
warrants or other convertible or exchangeable securities if such Stock
represents a portion of the exercise, conversion or exchange price thereof, and
(ii) repurchases of Stock deemed to occur upon the withholding of a portion of
the Stock granted or awarded to a current or former officer, director, employee
or consultant to pay for the taxes payable by such person upon such grant or
award (or upon vesting thereof);

 

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(c) Restricted Payments with the proceeds received from the substantially
concurrent issuance of Stock of the Borrower (other than Disqualified Stock);

(d) Permitted Equity Swaps relating to any convertible note issuance of the
Borrower permitted under Section 7.3;

(e) dividends on Disqualified Stock constituting Indebtedness so long as such
Indebtedness is permitted under Section 7.3; and

(f) so long as no Default or Event of Default has occurred and is continuing,
the Borrower may repurchase its Stock from current or former officers, employees
or directors of the Borrower and its Subsidiaries (or their permitted
transferees or estates) upon their death, disability or termination of
employment in an aggregate amount not to exceed $1,000,000 in any fiscal year of
the Borrower.

ARTICLE 8

EVENTS OF DEFAULT

Section 8.1 Events of Default. Any of the following events, conditions or other
occurrences shall constitute an “Event of Default”:

(a) The Borrower or any other Loan Party shall have failed (i) to pay when and
as required to be paid herein or in any other Facility Document, any amount of
principal of any Loan, including upon maturity of the Loans, or (ii) to pay
within five (5) Business Days after the same shall become due, interest on any
Loan, or any fee or any other amount or Obligation payable hereunder or pursuant
to any other Facility Document.

(b) Any Loan Party shall have failed to comply with or observe (i) Section 6.1
(with respect to the Borrower), 6.7, 6.12, 6.14 or Article 7, or (ii) any
covenant contained in any Facility Document (other than the covenants described
in Section 8.1(a) or 8.1(b)(i) above), and such failure, with respect to this
Section 8.1(b)(ii) only, shall not have been cured within thirty (30) days after
the earlier to occur of (A) the date upon which any officer of any Loan Party or
any of its Subsidiaries becomes aware of such failure and (B) the date upon
which written notice thereof is given to any Loan Party or any of its
Subsidiaries by any Lender Party.

(c) Any representation or warranty made or deemed made by any Loan Party in any
Facility Document shall have been incorrect, false or misleading in any material
respect (except to the extent that such representation or warranty is qualified
by reference to materiality or Material Adverse Effect, to which extent it shall
have been incorrect, false or misleading in any respect) as of the date it was
made or deemed made.

(d) (i) Any Loan Party or any of its Subsidiaries shall generally be unable to
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts as they come due, or shall make a general assignment for the
benefit of creditors or shall declare in writing a moratorium on the payment of
its debts in general; (ii) the commencement by any Loan Party or any of its
Subsidiaries of proceedings to be adjudicated bankrupt or insolvent, or the
consent by it to the commencement of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or consent seeking
reorganization, intervention or other similar relief under any Applicable Law,
or the consent by it to the filing of any such petition or to the appointment of
an intervenor, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of all or substantially all of its assets; (iii) the
commencement against any Loan Party or

 

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any of its Subsidiaries of a proceeding in any court of competent jurisdiction
under any bankruptcy or other Applicable Law (as now or hereafter in effect)
seeking its liquidation, winding up, dissolution, reorganization, arrangement or
adjustment, or the appointment of an intervenor, receiver, liquidator, assignee,
trustee, sequestrator or other similar official, and any such proceeding shall
continue undismissed, or any order, judgment or decree approving or ordering any
of the foregoing shall continue unstayed or otherwise in effect, for a period of
sixty (60) days; (iv) the making by any Loan Party or any of its Subsidiaries of
an assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debt generally as they become due; or (v) any other
event shall have occurred that, under any Applicable Law, would have an effect
analogous to any of those events listed above in this subsection.

(e) (i) One or more judgments, orders, decrees, arbitration awards or
settlements shall be entered or rendered against any Loan Party or any
Subsidiary of a Loan Party for the payment of money in an aggregate amount
exceeding $2,500,000 that is not covered by insurance payable by an independent
third-party, non-affiliated insurance company that has been notified of such
judgment, order, decree, arbitration aware or settlement and has not denied
coverage therefor, and either, (A) enforcement proceedings shall have been
commenced by any creditor upon any such judgment, order, decree, arbitration
award or settlement or (B) such judgment, order, decree, arbitration award or
settlement shall not have been satisfied, vacated or discharged within thirty
(30) days after the entry or providing thereof or there shall not be in effect
(by reason of a pending appeal) any stay of enforcement thereof within thirty
(30) days after the entry or providing thereof, or (ii) one or more non-monetary
judgments, orders, decrees, arbitration awards or settlements shall be entered
or rendered against any Loan Party or any Subsidiary of a Loan Party that would
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, and, with respect to this clause (ii), there shall be any period
of thirty (30) days during which such a stay of enforcement of such judgment,
order, decree, arbitration award or settlement, by pending appeal or otherwise,
shall not be in effect.

(f) Any Loan Party or any Subsidiary of any Loan Party (i) shall fail to make
any payment in respect of any Indebtedness (other than the Obligations) having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than $2,500,000 when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure continues after the applicable grace or notice period, if any, specified
in the documents relating thereto on the date of such failure; or (ii) shall
fail to perform or observe any other condition or covenant, or any other event
shall occur or condition exist, under any agreement or instrument relating to
any such Indebtedness or more than $2,500,000, if the effect of such failure,
event or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, such Indebtedness to be declared to be due and payable (or otherwise
required immediately to be prepaid, redeemed, purchased or defeased) prior to
its stated maturity (without regard to any subordination terms with respect
thereto) or cash collateral in respect thereof to be demanded; provided that
this clause (g) shall not apply to (w) secured Indebtedness that becomes due as
a result of the voluntary sale or transfer of the property or assets securing
such Indebtedness, (x) any conversion or exchange of any convertible
Indebtedness pursuant to its terms unless such conversion or exchange results
from a default thereunder or an event of the type that constitutes an Event of
Default, (y) any early payment requirement or unwinding or termination with
respect to any Swap Agreement (other than any such payment requirement or
termination resulting from a default by any Loan Party or any Subsidiary), or
(z) any Indebtedness acquired or assumed in connection with an acquisition that
has become due or payable as a result of such acquisition.

 

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(g) (A) Any material provision of any Facility Document shall for any reason
cease to be valid and binding on or enforceable against any Loan Party or any
Subsidiary of any Loan Party that is a party thereto or (B) any Loan Party or
any Subsidiary of any Loan Party shall announce or state in writing that it will
not honor, or shall bring an action to limit, any of its obligations or
liabilities under any Facility Document (including obligations to issue
Preferred Conversion Shares and Conversion Shares upon conversion of the
Convertible Notes).

(h) (i) The occurrence of any ERISA Event that would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect or (ii) the
imposition of a Lien on any asset of a Loan Party or a Subsidiary of a Loan
Party with respect to any Title IV Plan or Multiemployer Plan.

(i) The occurrence of a “Conversion Failure” (as defined in the Convertible
Notes).

(j) Any Loan Party is convicted in any criminal proceedings by any Governmental
Authority.

(k) The occurrence of any Change of Control.

Section 8.2 Remedies. Upon the occurrence and during the continuance of any
Event of Default the Required Lenders may direct Agent to:

(a) declare all or any portion of the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Facility Document to be immediately due and
payable; without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by each Loan Party;

(b) declare all or any portion of any one or more of the Commitments of each
Lender to make Loans to be suspended or terminated, whereupon all or such
portion of such Commitments shall forthwith be suspended or terminated; and/or

(c) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Facility Documents or applicable law;

provided, however, upon the occurrence of any event specified in Section 8.1(d)
above, the obligation of each Lender to make Loans shall automatically terminate
and the unpaid principal amount of all outstanding Loans and all interest and
other amounts as aforesaid shall automatically become due and payable without
further act of Agent or any Lender.

ARTICLE 9

MISCELLANEOUS

Section 9.1 Notices. Any notices or other information (including an financial
information) required or permitted to be given under the terms hereof shall be
sent by certified or registered mail (return receipt requested) or delivered
personally or by courier (including a recognized overnight delivery service) or
by email and shall be effective five (5) days after being placed in the mail, if
mailed by regular United States mail, or upon receipt, if delivered personally
or by courier (including a recognized overnight delivery service), or when
received by email in each case addressed to a party as follows (or such other
address or email address provided by such party to such other parties pursuant
to the below (or such later address or email address provided in accordance
herewith):

 

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If to the Borrower or any other Loan Party:

Intersect ENT, Inc.

1555 Adams Drive

Menlo Park, CA 94025

E-mail: dlehman@intersectent.com

Attn: David Lehman

With a copy to (which shall not be deemed to constitute notice):

Cooley LLP

101 California Street, 5th Floor

San Francisco, CA 94111

E-mail: gmamarca@cooley.com

Attn: Mischi a Marca

If to Agent:

Deerfield Partners, L.P.

780 Third Avenue, 37th Floor

New York, NY 10017

E-mail: dclark@deerfield.com

Attn: David J. Clark

With a copy to (which shall not be deemed to constitute notice):

Katten Muchin Rosenman LLP

575 Madison Avenue

New York, NY 10022

Email: mark.ramsey@katten.com

Attn: Mark P. Ramsey, Esq.

and

Katten Muchin Rosenman LLP

525 West Monroe Street

Chicago, Il 60661

Email: mark.wood@katten.com

    Attn: Mark D. Wood, Esq.

If to any Lender, the information for notices included on Schedule 2.3 or
pursuant to any assignment agreement assigning any Obligations to any new
Lender.

Section 9.2 Cost and Expense Reimbursement. The Loan Parties agree to pay on or
prior to the Closing Date and, within ten (10) Business Days after delivery of
an invoice therefor, after the Closing Date, (a) all costs and expenses of the
Lender Parties of negotiation, preparation, execution, delivery, filing and
administration of the Facility Documents and any consents, amendments, waivers
or other modifications thereto, (b) all fees, costs and expenses of legal
counsel to each Lender Party in connection with the negotiation, preparation,
execution and administration of the Facility Documents and any consents,
amendments, waivers or other modifications thereto and any other documents or
matters

 

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requested by the Borrower or any other Loan Party related thereto, (c) all fees,
costs, expenses and disbursements of counsel to each Lender Party and of counsel
providing any opinions that any Lender Party may request in respect of any
Facility Documents, Preferred Conversion Shares or Conversion Shares, (d) all
costs and expenses, including fees, costs and expenses of legal counsel to each
Lender Party and all fees, costs and expenses of accountants, advisors and
consultants and costs of settlement, incurred by each Lender Party in enforcing
any of the Facility Documents or any Obligations of, or in collecting any
payments due from, any Loan Party hereunder or under the other Facility
Documents or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a “work-out” or
pursuant to any proceeding or event of the type set forth in Section 8.1(d), (e)
the cost of purchasing insurance that the Loan Parties fail to obtain as
required by the Facility Documents, and (f) all fees, costs and expenses
(including costs and expenses of counsel) incurred by any Lender Party in
connection with the enforcement of its rights or remedies under the Facility
Documents after the occurrence or during the continuance of an Event of Default;
provided that the Loan Parties’ obligation to reimburse any such fees, costs and
expenses incurred prior to the Closing Date shall be limited to $250,000.
Without limiting any of the foregoing provisions of this Section 9.2, any action
taken by any Loan Party under or with respect to any Facility Document, even if
required under any Facility Document or at the request of Agent or any other
Lender Party, shall be at the sole expense of such Loan Party, and neither Agent
nor any other Lender Party shall be required under any Facility Document to
reimburse any Loan Party or any Subsidiary of any Loan Party therefor. The
obligations and provisions contained in this Section 9.2 shall survive the
termination of this Agreement and the repayment of the Obligations.

Section 9.3 Governing Law; Venue; Jurisdiction; Service of Process; WAIVER OF
JURY TRIAL.

(a) This Agreement and the other Facility Documents (unless otherwise expressly
stated therein) shall be governed by and construed and enforced in accordance
with the laws of the State of New York.

(b) Each Party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and,
unless otherwise expressly stated therein, the other Facility Documents (whether
brought against a party hereto or its respective Affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York, borough of
Manhattan (and, in each case, the applicable state and federal appeals courts
sitting in the City of New York or, if not available or applicable, the State of
New York). Each Party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the City of New York, borough of
Manhattan for the adjudication of any dispute hereunder or under the other
Facility Documents or in connection herewith or with the other Facility
Documents or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, or that such suit, action or proceeding is improper or is an
inconvenient venue for such proceeding; provided that nothing in this Agreement
or in any other Facility Document shall limit the right of any Lender Party to
commence any suit, action or proceeding in federal, state or other court of any
other jurisdiction to the extent such Lender Party determines that such suit,
action or proceeding is necessary or appropriate to exercise its rights or
remedies under this Agreement or any of the other Facility Documents.

 

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(c) Each Party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such Party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.

(d) THE PARTIES HERETO, TO THE EXTENT PERMITTED BY APPLICABLE LAW, HEREBY WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING ARISING OUT OF, IN
CONNECTION WITH OR RELATING TO, THIS AGREEMENT, THE OTHER FACILITY DOCUMENTS AND
ANY OTHER TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY. THIS WAIVER APPLIES TO
ANY ACTION, SUIT OR PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE.
EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER PARTY AND NO AGENT, REPRESENTATIVE
OR OTHER PERSON AFFILIATED WITH OR RELATED TO ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THE FACILITY
DOCUMENTS, AS APPLICABLE, BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9.3. EACH OF THE PARTIES HERETO REPRESENT AND WARRANT THAT IT HAS HAD
THE OPPORTUNITY TO REVIEW THE JURY WAIVER CONTAINED IN THIS SECTION 9.3 WITH
LEGAL COUNSEL.

Section 9.4 Successors and Assigns.

(a) This Agreement shall bind and inure to the respective successors and
permitted assigns of the Parties, except that no Loan Party may assign or
otherwise transfer all or any part of its rights or obligations (including the
Obligations) under the Facility Documents without the prior written consent of
all of the Lenders, and any prohibited assignment by any of the Loan Parties
shall be absolutely void ab initio.

(b) Any Lender may assign or transfer its rights or the Obligations owing to it
under the Facility Documents without the consent of any Party; provided,
however, that (y) unless an Event of Default under Section 8.1(a) or (d) has
occurred and is continuing, the consent of the Borrower shall be required if the
assignee or transferee is a Disqualified Lender. Upon a Lender’s assignment of
any of the Loans held by it (in accordance with this Section 9.4(b)), the Agent
shall record the identity of the transferee and other relevant information in
the Register, and the transferee shall (to the extent of the interests
transferred to such transferee) have all the rights and obligations of, and
shall be deemed, a Lender with respect to such Loan hereunder or under the other
Facility Documents. For the avoidance of doubt, each assignment or transfer of
the rights or Obligations of any Lender shall be subject only to the following
conditions: (i) the parties to each assignment or transfer shall execute and
deliver to Agent an Assignment and Assumption and, (ii) upon the reasonable
request by Agent, the assignee or transferee shall provide all documentation and
other information reasonably determined by Agent to be required by applicable
regulatory authorities required under applicable “know your customer” and
anti-money laundering rules and regulations, including the USA Patriot Act.

(c) In addition to the other rights provided in this Section 9.4, each Lender
Party may grant a security interest in, or otherwise assign as collateral, any
of its rights under the Facility Documents, whether now owned or hereafter
acquired (including rights to payments of principal or interest on the Loans),
to any holder of, or trustee for the benefit of the holders of, such Lender
Party’s Indebtedness or equity securities.

 

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(d) Each Loan Party acknowledges and agrees that the Securities may be pledged
by a holder thereof in connection with a bona fide margin agreement or other
loan, financing or Indebtedness secured by the Securities. The pledge of
Securities shall not be deemed to be a transfer, sale or assignment of the
Securities under the Facility Documents, and no such holder effecting any such
pledge of Securities shall be required to provide any Loan Party or any of its
Subsidiaries with any notice thereof or otherwise make any delivery to any Loan
Party pursuant to any Facility Document. Each Loan Party hereby agrees, and
agrees to cause each of its Subsidiaries, to execute and deliver such
documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by a holder of
Securities.

Section 9.5 Entire Agreement; Amendments.

(a) The Facility Documents contain the entire understanding of the Parties with
respect to the matters covered thereby and supersede any and all other written
and oral communications, negotiations, commitments and writings with respect
thereto.

(b) Subject to the provisions of Section 9.5(c), no amendment, restatement,
modification, supplement, change, termination or waiver of any provision of this
Agreement or the other Facility Documents, and no consent to any departure by
any Loan Party therefrom shall in any event be effective without the written
concurrence of the Borrower and the Required Lenders (with a copy to the Agent);
provided that no such amendment, restatement, modification, change, termination,
waiver or consent shall, without the consent of each Lender with Obligations
directly and adversely affected thereby, do any of the following: (i) reduce the
principal amount of any Loan; (ii) postpone the Maturity Date or other scheduled
final maturity date of any Loan, or postpone the date or reduce the amount of
any scheduled payment (but not mandatory prepayment) of principal of any Loan;
(iii) postpone the date on which any interest, premium or any fees are payable
(other than default interest charged pursuant to Section 2.7(b)); (iv) decrease
the interest rate borne by any Loan (other than any waiver of any increase in
the interest rate applicable to any of the Loans pursuant to Section 2.7(b)) or
the amount of any premium or fees payable hereunder (including, without
limitation, the Make Whole Amount); (v) amend this Section 9.5 or any provision
of this Agreement or any other Facility Documents providing for consent or other
action by all Lenders; (vi) amend, modify, change or waive the provisions
contained in (A) this Section 9.5 in a manner that would further restrict the
rights of any Lender to assign all or any portion of its rights and obligations
under this Agreement or (B) Section 9.5(d); provided, further, that no such
amendment, restatement, modification, change, termination, waiver or consent
shall, without the consent of each Lender, do any of the following: (x) change
in any manner any provision of this Agreement that by its terms, expressly
requires the approval or consent of all Lenders; (y) release all or
substantially all of the value of the guarantees of the Obligations provided by
the Guarantors, in each case, other than in accordance with the terms of the
Facility Documents; or (z)(A) change or have the effect of changing the pro rata
treatment of any payments (including voluntary and mandatory prepayments), or
(B) advance the date fixed for, or increase, any scheduled installment of
principal due to any of the Lenders under any Facility Document.

(c) No amendment, restatement, supplement, modification, change, termination,
waiver or consent of any provision of any Facility Document shall, unless in
writing and signed by Agent, (i) amend, restate, supplemented, modify, change,
terminate or waive (or consent to any diversion from) any provision of this
Section 9.5(c) or of any other provision of this

 

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Agreement or any other Facility Document that, by its terms, expressly requires
the approval or concurrence of Agent, (ii) reduce the amount or postpone the due
date of or waives any fees, expenses and/or indemnities payable to Agent
hereunder or under the other Facility Documents or (iii) or otherwise affect the
rights, benefits, liabilities or duties of Agent under this Agreement or any
other Facility Document. Notwithstanding anything to the contrary in
Section 9.5(b), Agent and the Borrower may amend or modify this Agreement and
any other Facility Document to cure any ambiguity, omission, defect or
inconsistency therein.

(d) No consideration shall be offered or paid (in any form, whether cash, Stock,
other property or otherwise) to any Lender to amend, restate, supplement, modify
or change or consent to a waiver of (or a diversion from) any provision of any
of the Facility Documents unless the same consideration also is offered to all
of the Lenders under the Facility Documents.

Section 9.6 Severability. If any provision of this Agreement or any of the other
Facility Documents shall be invalid, illegal or unenforceable in any respect
under any law, the validity, legality and enforceability of the remaining
provisions hereof or thereof shall not in any way be affected or impaired
thereby. The Parties shall endeavor in good faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provision.

Section 9.7 Counterparts. This Agreement may be executed in several
counterparts, and by each Party on separate counterparts, each of which and any
photocopies, facsimile copies and other electronic methods of transmission
thereof shall be deemed an original, but all of which together shall constitute
one and the same agreement.

Section 9.8 Survival of Representations and Warranties. All representations and
warranties made in the Facility Documents, and in any document, certificate or
statement delivered pursuant thereto or in connection therewith shall survive
the execution and delivery of this Agreement and the other Facility Documents
and the making of the Loans hereunder or thereunder (and shall continue to be
made in accordance with the terms hereof and thereof after) regardless of any
investigation made by any such other Party or on its behalf.

Section 9.9 No Waiver; Remedies Cumulative. No failure or delay on the part of
the Agent or any Lender in the exercise of any power, right or privilege
hereunder or under any other Facility Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement and the other
Facility Documents are cumulative to, and not exclusive of, any rights or
remedies otherwise available.

Section 9.10 Indemnity.

(a) The Loan Parties shall, at all times, indemnify and hold harmless (the
“Indemnity”) Agent, each Lender, each other Lender Party, each of their
respective Affiliates, and each of their respective directors, partners,
officers, employees, agents, counsel and advisors (each, an “Indemnified
Person”) in connection with any claims or proceedings (including the reasonable
and documented attorneys’ fees incurred in defending against such claims or
proceedings) arising out of, or relating to, the Facility Documents, the
extension of credit under the Facility Documents or the Loans or the other
Obligations, the use or intended use of the Loans or the other Obligations and
the issuance of the Securities (including any transactions or assets financed in
whole or in part, directly or indirectly, therewith), any disclosure made
pursuant to

 

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Section 6.12, or the status of a Lender or other holder of Securities as an
investor in any Loan Party, that an Indemnified Person may incur or to which an
Indemnified Person may become subject (each, a “Loss”). The Indemnity shall not
be available to any Indemnified Person to the extent that a court or arbitral
tribunal of competent jurisdiction issues a final and non-appealable judgment
that such Loss resulted from the gross negligence or willful misconduct of such
Indemnified Person. The Indemnity is independent of, and in addition to, any
other agreement of any Party under the Registration Rights Agreement or any
other Facility Document to indemnify or any amount to the any of the Lender
Parties, and any exclusion of any obligation to pay any amount under this
Section 9.10(a) shall not affect the requirement to pay such amount under any
other section or provision hereof or under any other agreement, instrument or
document. For the avoidance of doubt, this Section 9.10 shall not apply to
Taxes, other than Indemnified Taxes and any Taxes arising from any non-Tax
claim.

(b) An Indemnified Person shall have the right to retain its own legal counsel
with the fees, costs and expenses of such legal counsel and of such Indemnified
Person to be paid by the Loan Parties. The indemnification required by this
Section 9.10 shall be made and paid by such Loan Parties as Losses are incurred
within ten (10) Business Days of written demand by such Indemnified Person.

(c) No settlement of (or any other agreement or arrangement related to) any Loss
shall be entered into by any Loan Party or any of its Subsidiaries without the
prior written consent of the applicable Indemnified Person.

(d) No Loan Party shall, nor shall it permit any of its Subsidiaries to, assert,
and each Loan Party on behalf of itself and its Subsidiaries, hereby waives, any
claim, loss or amount against any Indemnified Person with respect to any
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any of the other Facility Documents or any undertaking or
transaction contemplated hereby or thereby. No Indemnified Person shall be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or any of the other Facility Documents or the transactions
contemplated hereby or thereby.

Section 9.11 No Usury. Notwithstanding any other provision herein, the aggregate
interest rate charged with respect to any of the Obligations, including all
charges or fees in connection therewith deemed in the nature of interest under
applicable law shall not exceed the highest rate permitted by Applicable Law. If
the rate of interest (determined without regard to the preceding sentence) under
this Agreement at any time exceeds the highest lawful rate permitted by
Applicable Law, the outstanding amount of the Loans made hereunder shall bear
interest at the highest lawful rate permitted by Applicable Law until the total
amount of interest due hereunder equals the amount of interest that would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect. Accordingly, if any Lender contracts for,
charges, or receives any consideration that constitutes interest in excess of
the highest lawful rate permitted by Applicable Law, then any such excess shall
be cancelled automatically and, if previously paid, shall at such Lender’s
option be applied to the outstanding amount of the Loans made hereunder or be
refunded to the Loan Parties.

Section 9.12 Specific Performance. The Loan Parties agree (and agree on behalf
of their Subsidiaries) that irreparable damage, for which monetary relief, even
if available, would not be an adequate remedy, would occur in the event that any
provision of the Facility Documents is not performed in accordance with its
specific terms or is otherwise breached. In light of the foregoing, the Loan
Parties

 

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hereby agree that the Lender Parties shall be entitled to an injunction,
specific performance or other equitable relief to prevent breaches of the
Facility Documents and to enforce specifically the terms and provisions hereof
and thereof without proof of damages or otherwise and without any obligation to
post a bond or other security.

Section 9.13 Agent.

(a) Each Lender hereby irrevocably appoints Deerfield Partners, L.P. (together
with any successor Agent appointed by Deerfield Partners, L.P. or any successor
Agent that was appointed by the Required Lenders), as Agent hereunder and under
the other Facility Documents and authorizes Agent to (i) execute and deliver the
Facility Documents to which it is a party and accept delivery thereof on its
behalf from any Loan Party, (ii) take such other actions on its behalf and to
exercise all rights, powers and remedies and perform the duties as are expressly
delegated to Agent under the Facility Documents and (iii) exercise such powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary contained elsewhere in this Agreement or in any other Facility
Document, Agent shall not have any duty or responsibility except those expressly
set forth herein; nor shall Agent have or be deemed to have any fiduciary
relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Facility Document or otherwise exist against
Agent. Without limiting the generality of the foregoing sentence, the use of the
term “agent” herein and in other Facility Documents with reference to Agent is
not intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any Applicable Law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties. The
provisions of this Section 9.13 are solely for the benefit of Agent and the
Lenders and none of the Borrowers or the other Loan Parties shall have any
rights as a third party beneficiary of any of the provisions in this
Section 9.13. In performing its functions and duties under this Agreement and
the other Facility Documents, Agent shall act solely as agent of Lenders and
does not assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any Borrower or any other Loan
Party. Agent may perform any of its duties hereunder, or under the Facility
Documents, by or through its agents, subagents, servicers, trustees, investment
managers or employees and any such Person shall benefit from this Section 9.13
to the extent provided by Agent. Agent shall have the same rights and powers
under the Facility Documents as any other Lender and may exercise or refrain
from exercising the same as though it were not Agent, and Agent and its
Affiliates may lend money to, invest in and generally engage in any kind of
business with each Loan Party, Affiliate of any Loan Party as if it were not
Agent hereunder. The duties of Agent shall be mechanical and administrative in
nature. Agent shall not have by reason of this Agreement or the other Facility
Documents a fiduciary relationship in respect of any Lender. Nothing in this
Agreement or any of the other Facility Documents is intended to or shall be
construed to impose upon Agent any obligations in respect of this Agreement or
any of the other Facility Documents except as expressly set forth herein or
therein.

(b) Agent may execute any of its duties under this Agreement or any other
Facility Document by or through agents, subagents, employees or attorneys in
fact, and shall be entitled to advice of counsel and other consultants or
experts concerning all matters pertaining to such duties. Agent shall not be
responsible for the negligence or misconduct of any agent, subagent or attorney
in fact that it selects in the absence of gross negligence or willful misconduct
as determined by a final, non-appealable judgment of a court of competent
jurisdiction.

 

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(c) Neither Agent nor any of its directors, officers, employees, attorneys,
advisors, representatives or agents shall (i) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement or
any other Facility Document or the Transactions or the transactions contemplated
hereby or thereby (except to the extent resulting from its own gross negligence
or willful misconduct in connection with its duties expressly set forth herein
as determined by a final, non-appealable judgment of a court of competent
jurisdiction), or (ii) be responsible in any manner to any Lender or participant
for any recital, statement, representation or warranty made by any Loan Party or
Affiliate of any Loan Party, or any officer thereof, contained in this Agreement
or in any other Facility Document, or in any certificate, report, statement or
other document referred to or provided for in, or received by Agent under or in
connection with, this Agreement or any other Facility Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Facility Document, or for any failure of any Loan Party or any other
party to any Facility Document to perform its obligations (including the
Obligations) hereunder or thereunder. Agent shall not be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement or any other
Facility Document, or to inspect the properties, books or records of any Loan
Party or any Loan Party’s Affiliates.

(d) Agent shall be entitled to rely, and shall be fully protected in relying,
upon any communication believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to any Loan Party), independent
accountants and other experts selected by Agent. Agent shall be fully justified
in failing or refusing to take any action under this Agreement or any other
Facility Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate and, if it so requests,
confirmation from the Lenders of their obligation to indemnify Agent against any
and all liabilities and expenses (including any fees and expenses of counsel to
Agent) that may be incurred by it by reason of taking or continuing to take any
such action. Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Facility Document in
accordance with a request or consent of the Required Lenders and such request
and any action taken or failure to act pursuant thereto shall be binding upon
each Lender.

(e) Agent shall not be deemed to have knowledge or notice of the occurrence of
any Event of Default or Default, unless Agent shall have received written notice
from a Lender or any Loan Party referring to this Agreement and the other
Facility Documents, describing such Event of Default or Default and stating that
such notice is a “notice of default.” Agent shall take such action with respect
to such Event of Default or Default as the Required Lenders may direct; provided
that, unless and until Agent has received any such request, Agent shall not take
any such action, or refrain from taking any such action, with respect to such
Event of Default or Default.

(f) Each Lender acknowledges that Agent has not made any representation or
warranty to it, and that no act by Agent hereafter taken, including any consent
and acceptance of any assignment or review of the affairs of the Loan Parties or
any of their Subsidiaries, shall be deemed to constitute any representation or
warranty by Agent to any Lender as to any matter, including whether Agent has
disclosed material information in its possession. Each Lender represents to
Agent that it has, independently and without reliance upon Agent and based on
such documents and information as it has deemed appropriate, made its own
appraisal of, and investigation into, the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrower and the
other Loan Parties, and made its own decision to enter into this Agreement and
the other Facility Documents and to extend credit to Borrower hereunder and

 

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under the other Facility Documents. Each Lender also represents that it will,
independently and without reliance upon Agent and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Facility Documents, and to make such investigations
as it deems necessary or appropriate to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrower and the other Loan Parties. Except for notices,
reports and other documents expressly herein required to be furnished to the
Lenders by Agent, Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial or other condition or creditworthiness of
Borrower or any other Loan Party that may come into the possession of Agent.

(g) Other than with respect to the matters described in clause (i) below, which
shall be governed by such clause, whether or not the transactions contemplated
hereby are consummated, each Lender shall severally indemnify upon demand Agent
and its directors, officers, partners, employees, attorneys, advisors,
representatives and agents (to the extent not reimbursed by or on behalf of any
Loan Party and without limiting the obligation of the Loan Parties to do so),
according to its applicable pro rata share, from and against any and all losses,
claims (including the reasonable attorneys’ fees incurred in defending against
such claims), damages, liabilities, penalties or other expenses arising out of,
or relating to, any of Agent’s duties, responsibilities or actions set forth in
or that taken pursuant to the Facility Documents; provided that no Lender shall
be liable for any payment to any such Person of any portion of the foregoing to
the extent determined by a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from the applicable Person’s gross
negligence or willful misconduct. No action taken in accordance with the
directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section 9.13(g). Without
limitation of the foregoing, each Lender shall reimburse Agent upon demand for
such Lender’s ratable share of any costs or out of pocket expenses incurred by
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Facility Document or any
document contemplated by or referred to herein or therein, to the extent that
Agent is not reimbursed for such fees, costs and expenses by or on behalf of the
Loan Parties. The undertaking in this Section 9.13(g) shall survive repayment of
the Loans and the other Obligations, any modification, release or discharge of,
any or all of the Facility Documents, termination of this Agreement or the other
Facility Documents and the resignation or replacement of Agent.

(h) Agent may resign as Agent upon thirty (30) days’ notice to the Lenders, and
the Required Lenders have the right, at their sole election, to remove the
Person serving as Agent upon ten (10) days’ notice to Agent (or immediately upon
any material breach of Agent of its obligations under the Facility Documents).
If Agent resigns under this Agreement or the Required Lenders remove the Person
serving as Agent, the Required Lenders shall appoint from among the Lenders a
successor Agent for such successor Agent and the Lenders. If no successor Agent
is appointed prior to the effective date of the resignation or removal of Agent,
Agent may appoint, after consulting with the Lenders, a successor Agent from
among the Lenders. Upon the acceptance of its appointment as successor Agent
hereunder, such successor Agent shall succeed to all the rights, powers and
duties of the retiring or removed Agent, and the term “Agent” shall mean such
successor Agent, and the retiring or removed Agent’s appointment, powers and
duties as Agent shall be immediately and automatically terminated at such time.
After any retiring Agent’s resignation or removal hereunder as Agent, the
provisions of this Section 9.13 shall inure to its benefit (in its capacity as
Agent) as to any actions taken or omitted to be taken by it while it

 

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was Agent under this Agreement and the other Facility Documents. If no successor
Agent has accepted appointment as Agent by the date that is thirty (30) days
following a retiring Agent’s notice of resignation (or at the time of removal of
a Person as Agent), the retiring Agent’s resignation or removal shall
nevertheless thereupon become effective, and the Lenders shall perform all of
the duties of Agent hereunder until such time, if any, as the Required Lenders
appoint a successor Agent as provided for above.

(i) Each Lender further agrees to indemnify Agent, its Affiliates and each of
its and their employees, advisors, attorneys, representatives and agents (to the
extent not reimbursed by any Loan Party), severally and ratably, from and
against Liabilities (including Taxes, interests and penalties imposed for not
properly withholding or backup withholding on payments made to or for the
account of any Lender) that may be imposed on, incurred by or asserted against
Agent, its Affiliates or any of its or their employees, advisors, attorneys,
representatives or agents in any matter relating to or arising out of, in
connection with or as a result of any Facility Document or any other act, event
or transaction related, contemplated in or attendant to any such document, or,
in each case, any action taken or omitted to be taken by Agent, its Affiliates
or any of its or their employees, advisors, attorneys, representatives or agents
under or with respect to any of the foregoing.

Section 9.14 USA Patriot Act. Each Lender that is subject to the USA Patriot Act
and Agent (for itself and not on behalf of any Lender) hereby notifies the Loan
Parties that pursuant to the requirements of the USA Patriot Act, it is required
to obtain, verify and record information that identifies each Loan Party, which
information includes the name and address of each Loan Party and other
information that will allow such Lender or Agent to identify each Loan Party in
accordance with the USA Patriot Act.

Section 9.15 Placement Agent. The Borrower and the other Loan Parties shall be
solely responsible for the payment of any fees, costs, expenses and commissions
of any placement agent, broker or financial adviser relating to or arising out
of the transactions contemplated by the Facility Documents, including the offer,
sale and issuance of the Securities. The Borrower and the other Loan Parties
shall pay, and hold each of the Lender Parties harmless against, any liability,
loss or expense (including attorneys’ fees, costs and expenses) arising in
connection with any claim for any such payment.

Section 9.16 Independent Nature of Lender Parties. The obligations of each
Lender Party under the Facility Documents are several and not joint with the
obligations of any other Lender Party, and no Lender Party shall be responsible
in any way for the performance of the obligations of any other Lender Party
under the Facility Documents. Each Lender Party shall be responsible only for
its own representations, warranties, agreements and covenants under the Facility
Documents. The decision of each Lender Party to acquire the Securities pursuant
to the Facility Documents has been made by such Lender Party independently of
any other Lender Party and independently of any information, materials,
statements or opinions as to the business, affairs, operations, assets,
properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Borrower or any of its Subsidiaries that may have
been made or given by any other Lender Party or by any agent, attorney, advisor,
representative or employee of any other Lender Party, and no Lender Party or any
of its agents, attorneys, advisors, representatives or employees shall have any
liability to any other Lender Party (or any other Person) relating to or arising
from any such information, materials, statements or opinions. Nothing contained
in the Facility Documents, and no action taken by any Lender Party pursuant
hereto or thereto (including a Lender Party’s acquisition of Obligations,
Convertible Notes, or any other Securities at the same time as any other Lender
Party), shall be deemed to constitute the Lender Parties as, and each of the
Loan Parties acknowledges and agrees that the Lender Parties do not thereby
constitute, a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Lender Parties are in any way acting in
concert or as a group with respect to such Obligations or the transactions
contemplated by any of the Facility Documents, and none of the Loan Parties
shall assert any contrary position.

 

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Section 9.17 No Fiduciary Relationship. Each of the Loan Parties acknowledges
and agrees that (a) each Lender Party is acting at arm’s length from the Loan
Parties with respect to this Agreement and the other Facility Documents and the
transactions contemplated hereby and thereby; (b) no Lender Party will, by
virtue of this Agreement or any of the other Facility Documents or any
transaction contemplated hereby or thereby, be (nor, to the Loan Parties’
knowledge, otherwise is) an Affiliate of, or have any agency, tenancy or joint
venture relationship with, any Loan Party; (c) no Lender Party has acted, or is
or will be acting, as a financial advisor to, or fiduciary (or in any similar
capacity) of, or has any fiduciary or similar duty to, any Loan Party with
respect to, or in connection with, this Agreement and the other Facility
Documents and the transactions contemplated hereby and thereby, and each of the
Loan Parties agreed not to assert, and hereby waives, to the fullest extent
permitted under Applicable Law, any claim that any Lender Party has any
fiduciary duty to such Loan Party; (d) any advice given by a Lender Party or any
of its representatives or agents in connection with this Agreement and the other
Facility Documents and the transactions contemplated hereby and thereby is
merely incidental to such Lender Party’s performance of its obligations
hereunder and thereunder (including, in the case of each of the Lenders, its
acquisition of the Securities); and (e) the Loan Parties’ decision to enter into
the Facility Documents has been based solely on the independent evaluation by
the Loan Parties and their representatives.

Section 9.18 No Third Parties Benefited. This Agreement is made and entered into
for the sole protection and legal benefit of the Loan Parties and the Lender
Parties and their successors and permitted assigns, and no other Person shall be
a direct or indirect legal beneficiary of, or have any direct or indirect cause
of action or claim in connection with, this Agreement or any of the other
Facility Documents. No Lender Party shall have any obligation to any Person not
a party to this Agreement or the other Facility Documents.

Section 9.19 Binding Effect. This Agreement shall become effective when it shall
have been executed by each of the Loan Parties party hereto, each Lender party
hereto and Agent and such executed counterparts have been delivered to Agent and
the Lenders pursuant to the terms of this Agreement.

Section 9.20 Marshaling; Payments Set Aside. No Lender Party shall be under any
obligation to marshal any property in favor of any Loan Party or any other
Person or against or in payment of any Obligation. To the extent that any Lender
Party receives a payment from the Borrower, from any other Loan Party, from the
exercise of its rights of setoff, from any enforcement action or otherwise, and
such payment is subsequently, in whole or in part, invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party, then to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all rights and remedies
therefor shall be revived and continued in full force and effect as if such
payment had not occurred.

Section 9.21 Right of Setoff. Each Lender Party and each of its Affiliates is
hereby authorized, without notice or demand (each of which is hereby waived by
each Loan Party), at any time and from time to time during the continuance of
any Event of Default and to the fullest extent permitted by Applicable Law, to
set off and apply any and all deposits (whether general or special, time or
demand, provisional or final) at any time held and other Indebtedness, claims or
other obligations at any time owing by any Lender Party or any of its Affiliates
to or for the credit or the account of the Borrower or any other Loan Party
against any Obligation of any Loan Party now or hereafter existing, whether or
not any demand was made under any Facility Document with respect to such
Obligation and even though such Obligation may be unmatured. No Lender shall
exercise any such right of setoff without the prior consent of the Required
Lenders. The rights under this Section 9.21 are in addition to any other rights
and remedies (including other rights of setoff) that any Lender Party or any of
its Affiliates may have.

 

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Section 9.22 Sharing of Payments, Etc. If any Lender, directly or through any of
its Affiliates, obtains any payment of any Obligation of any Loan Party (whether
voluntary, involuntary or through the exercise of any right of setoff) (and
other than pursuant to Section 9.4) and such payment exceeds the amount such
Lender would have been entitled to receive if all payments had gone to, and been
distributed in accordance with the provisions of the Facility Documents, such
Lender shall purchase for cash from other Lenders such participations in their
Obligations as necessary for such Lender to share such excess payment with such
Lenders to ensure such payment is applied as though it had been applied in
accordance with this Agreement; provided, however, that (i) if such payment is
rescinded or otherwise recovered from such Lender in whole or in part, such
purchase shall be rescinded and the purchase price therefor shall be returned to
such Lender without interest and (ii) such Lender shall, to the fullest extent
permitted by Applicable Law, be able to exercise all its rights of payment
(including the right of setoff) with respect to such participation as fully as
if such Lender were the direct creditor of the applicable Loan Party in the
amount of such participation.

Section 9.23 Certain Securities Matters. Each of the Loan Parties acknowledges
and agrees that none of the Lender Parties or holders of the Securities has been
asked to agree, nor has any Lender Party agreed, to desist from purchasing or
selling, long and/or short, Stock or other securities of the Borrower, or
“derivative” securities or Stock based on Stock or other securities issued by
the Borrower or to hold the Securities for any specified term; and no Lender
Party nor holder of Securities shall be deemed to have any affiliation with or
control over any arm’s length counterparty in any “derivative” transaction. Each
of the Loan Parties further acknowledges and agrees that (a) one or more Lender
Parties or holders of Securities may engage in hedging and/or trading activities
at various times during the period that the Securities are outstanding, (b) such
hedging and/or trading activities, if any, can reduce the value of the Common
Stock or other Stock held by the existing holders of Common Stock or other Stock
of the Borrower, both at and after the time the hedging and/or trading
activities are being conducted; (c) any such hedging and/or trading activities
shall not constitute a breach of any Facility Document or affect any of the
rights of any Lender Party or holder of Securities under any Facility Document;
(d) the issuance of any Conversion Shares may result in dilution of the
outstanding shares of Common Stock, which dilution may be substantial under
certain market conditions; and (e) the Obligations, including the Borrower’s
obligation to issue the Conversion Shares upon conversion of the Convertible
Notes, are unconditional and absolute and not subject to any right of set off,
counterclaim, delay or reduction, regardless of the effect of any such dilution
or any claim any Loan Party may have against any of the Lender Parties and
regardless of the dilutive effect that such issuance may have on the ownership
of the other stockholders of the Borrower.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement, including the jury
waiver contained herein, to be duly executed as of the first day written above.

 

BORROWER:

INTERSECT ENT, INC.,

a Delaware corporation

By:  

/s/ Thomas A. West

Name:   Thomas A. West Title:   President and Chief Executive Officer

 

 

[SIGNATURE PAGE TO FACILITY AGREEMENT]

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AGENT AND LENDER: DEERFIELD PARTNERS, L.P. By: Deerfield Mgmt IV, L.P., its
General Partner By: J.E. Flynn Capital, IV, LLC, its General Partner By:  

/s/ David J. Clark

Name: David J. Clark Title: Authorized Signatory

 

 

[SIGNATURE PAGE TO FACILITY AGREEMENT]