Exhibit 10.1

CERTAIN INFORMATION IDENTIFIED WITH THE MARK “[***]” HAS BEEN EXCLUDED FROM THIS
EXHIBIT BECAUSE SUCH INFORMATION IS BOTH (I) NOT MATERIAL AND (II) WOULD BE
COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (as the same may be amended, restated,
modified, or supplemented from time to time, this “Agreement”) dated as of
March 2, 2020 (the “Effective Date”) among Solar Capital Ltd., a Maryland
corporation with an office located at 500 Park Avenue, 3rd Floor, New York, NY
10022 (“Solar”), as collateral agent (in such capacity, together with its
successors and assigns in such capacity, “Collateral Agent”), and the lenders
listed on Schedule 1.1 hereof or otherwise a party hereto from time to time
including Solar in its capacity as a Lender (each a “Lender” and collectively,
the “Lenders”), and Neuronetics, Inc., a Delaware corporation with offices
located at 3222 Phoenixville Pike, Malvern, Pennsylvania (individually and
collectively, jointly and severally, “Borrower”), provides the terms on which
the Lenders shall lend to Borrower and Borrower shall repay the Lenders. The
parties agree as follows:

 

1.

DEFINITIONS AND OTHER TERMS

1.1 Terms. Capitalized terms used herein shall have the meanings set forth in
Section 1.4 to the extent defined therein. All other capitalized terms used but
not defined herein shall have the meaning given to such terms in the Code. Any
accounting term used but not defined herein shall be construed in accordance
with GAAP and all calculations shall be made in accordance with GAAP. If at any
time any change in GAAP would affect the computation of any financial
requirement set forth in any Loan Document, and either Borrower or the
Collateral Agent shall so request, the Collateral Agent and Borrower shall
negotiate in good faith to amend such requirement to preserve the original
intent thereof in light of such change in GAAP; provided, that, until so
amended, such requirement shall continue to be computed in accordance with GAAP
prior to such change therein. For the avoidance of doubt, leases shall be
classified and accounted for on a basis consistent with GAAP as in effect on the
Effective Date (which shall include FASB ASC 842) for all purposes of this
agreement. The term “financial statements” shall include the accompanying notes
and schedules.

1.2 Section References. Any section, subsection, schedule or exhibit references
are to this Agreement unless otherwise specified.

1.3 Divisions. For all purposes under the Loan Documents, in connection with any
division or plan of division under Delaware law (or any comparable event under a
different jurisdiction’s laws): (a) if any asset, right, obligation or liability
of any Person becomes the asset, right, obligation or liability of a different
Person, then it shall be deemed to have been transferred from the original
Person to the subsequent Person, and (b) if any new Person comes into existence,
such new Person shall be deemed to have been organized on the first date of its
existence by the holders of its equity interests at such time.

1.4 Definitions. The following terms are defined in the Sections or subsections
referenced opposite such terms:

 

  “Agreement”    Preamble      “Approved Lender”    Section 12.1      “Borrower”
   Preamble      “Claims”    Section 12.2      “Collateral Agent”    Preamble   
  “Collateral Agent Report”    Exhibit B, Section 5      “Communications”   
Section 10      “Connection Income Taxes”    Exhibit C, Section 1   

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  “Default Rate”    Section 2.3(b)      “Effective Date”    Preamble      “Event
of Default”    Section 8      “Excluded Taxes”    Exhibit C, Section 1     
“FATCA”    Exhibit C, Section 1      “Indemnified Person”    Section 12.2     
“Indemnified Taxes”    Exhibit C, Section 1      “Lender” and “Lenders”   
Preamble      “Lender Transfer”    Section 12.1      “New Subsidiary”   
Section 6.10      “Non-Funding Lender”    Exhibit B, Section 10(c)(ii)     
“Open Source Licenses”    Section 5.2(f)      “Other Connection Taxes”   
Exhibit C, Section 1      “Other Lender”    Exhibit B, Section 10(c)(ii)     
“Other Taxes”    Exhibit C, Section 1      “Perfection Certificate” and
“Perfection Certificates”    Section 5.1      “Participant Register”   
Section 12.1      “Recipient”    Exhibit C, Section 1      “Register”   
Section 12.1      “Solar”    Preamble      “Term A Loan”    Section 2.2(a)(i)   
  “Term B Loan”    Section 2.2(a)(ii)      “Termination Date”    Exhibit B,
Section 8      “Term Loan” and “Term Loans”    Section 2.2(a)(ii)     
“Transfer”    Section 7.1      “U.S. Tax Compliance Certificate”    Exhibit C,
Section 7(b)(ii)(C)      “Withholding Agent”    Exhibit C, Section 1   

In addition to the terms defined elsewhere in this Agreement, the following
terms have the following meanings:

“Account” is any “account” as defined in the Code with such additions to such
term as may hereafter be made under the Code, and includes, without limitation,
all accounts receivable and other sums owing to Borrower.

“Account Debtor” is any “account debtor” as defined in the Code with such
additions to such term as may hereafter be made under the Code.

“ACH Letter” is ACH debit authorization in the form of Exhibit I hereto.

“Affiliate” of any Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is under
common control with the Person, and each of that Person’s senior executive
officers, directors, partners and, for any Person that is a limited liability
company, that Person’s managers and members.

“Amortization Date” is March 1, 2022; provided that, subject to the occurrence
of an I/O Extension Termination Event, if Borrower satisfies the I/O Extension
Conditions, at Borrower’s election, the Amortization Date shall be March 1,
2023; provided, further, that immediately upon the occurrence of an I/O
Extension Termination Event, the Amortization Date shall be the first day of the
calendar month immediately following the occurrence of such I/O Extension
Termination Event.

 

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

“Applicable Rate” means the greater of (a) 1.66% and (b) the rate per annum rate
published by the Intercontinental Exchange Benchmark Administration Ltd. (the
“Service”) (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, as reasonably determined by
Collateral Agent) for a term of one month, which determination by Collateral
Agent shall be conclusive in the absence of manifest error; provided that if, at
any time, Lenders notify Collateral Agent that Lenders have determined that
(x) Lenders are unable to determine or ascertain such rate, (y) the applicable
regulator has made public statements to the effect that the rate published by
the Service is no longer used for determining interest rates for loans or (z) by
reason of circumstances affecting the foreign exchange and interbank markets
generally, deposits in eurodollars in the applicable amounts or for the relative
maturities are not being offered for such period, then the Applicable Rate shall
be equal to an alternate benchmark rate and spread agreed between Collateral
Agent and Borrowers (which may include SOFR, to the extent publicly available
quotes of SOFR exist at the relevant time), giving due consideration to
(i) market convention or (ii) selection, endorsement or recommendation by a
Relevant Governmental Body. Such alternative benchmark rate and spread shall be
binding unless the Required Lenders object within five (5) days following
notification of such amendment.

“Approved Fund” is any (i) investment company, fund, trust, securitization
vehicle or conduit that is (or will be) engaged in making, purchasing, holding
or otherwise investing in commercial loans and similar extensions of credit in
the ordinary course of its business or (ii) any Person (other than a natural
person) which temporarily warehouses loans for any Lender or any entity
described in the preceding clause (i) and that, with respect to each of the
preceding clauses (i) and (ii), is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) a Person (other than a natural person) or an
Affiliate of a Person (other than a natural person) that administers or manages
a Lender.

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

“Borrower’s Books” are Borrower’s or any of its Subsidiaries’ books and records
including ledgers, federal, state, local and foreign tax returns, records
regarding Borrower’s or its Subsidiaries’ assets or liabilities, the Collateral,
business operations or financial condition, and all computer programs or storage
or any equipment containing such information.

“Business Day” is any day that is not a Saturday, Sunday or a day on which
commercial banks in New York, New York are required or authorized to be closed;
provided that, when used in connection with a Loan bearing interest pursuant to
clause (b) of the definition of Applicable Rate, the term “Business Day” shall
also exclude any day on which banks are not open for dealings in deposits in the
applicable currency in the London interbank market

“Cash Equivalents” are (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or any agency or any State
thereof having maturities of not more than one (1) year from the date of
acquisition and having the highest rating from either Standard & Poor’s Ratings
Group or Moody’s Investors Service, Inc.; (b) commercial paper maturing no more
than one (1) year after its creation

 

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and having the highest rating from either Standard & Poor’s Ratings Group or
Moody’s Investors Service, Inc., (c) certificates of deposit maturing no more
than one (1) year after issue provided that the account in which any such
certificate of deposit is maintained is subject to a Control Agreement in favor
of Collateral Agent, and (d) any money market or similar funds that exclusively
hold any of the foregoing.

“Capital Lease” means, as applied to any Person, any lease of any property by
that Person as lessee which, in accordance with GAAP, is required to be
accounted for as a finance lease on the balance sheet of that Person.

“Code” is the Uniform Commercial Code, as the same may, from time to time, be
enacted and in effect in the State of New York; provided, that, to the extent
that the Code is used to define any term herein or in any Loan Document and such
term is defined differently in different Articles or Divisions of the Code, the
definition of such term contained in Article or Division 9 shall govern;
provided further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection, or priority of, or remedies with
respect to, Collateral Agent’s Lien on any Collateral is governed by the Uniform
Commercial Code in effect in a jurisdiction other than the State of New York,
the term “Code” shall mean the Uniform Commercial Code as enacted and in effect
in such other jurisdiction solely for purposes of the provisions thereof
relating to such attachment, perfection, priority, or remedies and for purposes
of definitions relating to such provisions.

“Collateral” is any and all properties, rights and assets of Borrower described
on Exhibit A.

“Collateral Account” is any Deposit Account, Securities Account, or Commodity
Account, or any other bank account maintained by Borrower or any Subsidiary at
any time.

“Collateral Agent” is Solar, not in its individual capacity, but solely in its
capacity as collateral agent on behalf of and for the ratable benefit of the
Secured Parties.

“Commitment Percentage” is, as to a Lender, the percentage set forth opposite
such Lender’s name in Schedule 1.1, as amended from time to time.

“Commodity Account” is any “commodity account” as defined in the Code with such
additions to such term as may hereafter be made under the Code.

“Compliance Certificate” is that certain certificate in substantially the form
attached hereto as Exhibit E.

“Contingent Obligation” is, for any Person, any direct or indirect liability,
contingent or not, of that Person for (a) any indebtedness, lease, dividend,
letter of credit or other obligation of another such as an obligation directly
or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by
that Person, or for which that Person is directly or indirectly liable; (b) any
obligations for undrawn letters of credit for the account of that Person; and
(c) all obligations from any interest rate, currency or commodity swap
agreement, interest rate cap or collar agreement, or other agreement or
arrangement designated to protect a Person against fluctuation in interest
rates, currency exchange rates or commodity prices; but “Contingent Obligation”
does not include endorsements in the ordinary course of business. The amount of
a Contingent Obligation is the stated or determined amount of the primary
obligation for which the Contingent Obligation is made or, if not determinable,
the maximum reasonably anticipated liability for it determined by the Person in
good faith in accordance with GAAP; but the amount may not exceed the maximum of
the obligations under any guarantee or other support arrangement.

 

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“Control Agreement” is any control agreement entered into among the depository
institution at which Borrower or any of its Subsidiaries maintains a Deposit
Account or the securities intermediary or commodity intermediary at which
Borrower or any of its Subsidiaries maintains a Securities Account or a
Commodity Account, Borrower or such Subsidiary, as applicable, and Collateral
Agent pursuant to which Collateral Agent, for the ratable benefit of the Secured
Parties, obtains “control” (within the meaning of the Code) over such Deposit
Account, Securities Account, or Commodity Account.

“Copyrights” are any and all copyright rights, copyright applications, copyright
registrations and like protections in each work or authorship and derivative
work thereof, whether published or unpublished and whether or not the same also
constitutes a trade secret.

“Deposit Account” is any “deposit account” as defined in the Code with such
additions to such term as may hereafter be made under the Code.

“Designated Deposit Account” is Borrower’s Deposit Account, account number
[***], maintained at Silicon Valley Bank.

“Dollars,” “dollars” and “$” each mean lawful money of the United States.

“Eligible Assignee” is (i) a Lender, (ii) an Affiliate of a Lender, (iii) an
Approved Fund and (iv) any commercial bank, savings and loan association or
savings bank or any other entity which is an “accredited investor” (as defined
in Regulation D under the Securities Act of 1933, as amended) and which extends
credit or buys loans as one of its businesses, including insurance companies,
mutual funds, lease financing companies and commercial finance companies, in
each case, which either (A) has a rating of BBB or higher from Standard & Poor’s
Rating Group and a rating of Baa2 or higher from Moody’s Investors Service, Inc.
at the date that it becomes a Lender or (B) has total assets in excess of One
Billion Dollars ($1,000,000,000.00); provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include, unless an Event of Default has
occurred and is continuing, (i) Borrower or any of Borrower’s Affiliates or
Subsidiaries, (ii) a then-current direct competitor of Borrower, as determined
by Collateral Agent in its reasonable discretion, (iii) vulture funds or
distressed debt funds, as determined by Collateral Agent in its reasonable
discretion, and (iv) natural persons. Notwithstanding the foregoing, (x) in
connection with any assignment by a Lender as a result of a forced divestiture
at the request of any regulatory agency, the restrictions set forth herein shall
not apply and Eligible Assignee shall mean any Person or party and (y) in
connection with a Lender’s own financing or securitization transactions, the
restrictions set forth herein shall not apply and Eligible Assignee shall mean
any Person or party providing such financing or formed to undertake such
securitization transaction and any transferee of such Person or party upon the
occurrence of a default, event of default or similar occurrence with respect to
such financing or securitization transaction; provided that no such sale,
transfer, pledge or assignment under this clause (y) shall release such Lender
from any of its obligations hereunder or substitute any such Person or party for
such Lender as a party hereto until Collateral Agent shall have received and
accepted an effective assignment agreement from such Person or party in form
satisfactory to Collateral Agent executed, delivered and fully completed by the
applicable parties thereto, and shall have received such other information
regarding such Eligible Assignee as Collateral Agent reasonably shall require.

“Equipment” is all “equipment” as defined in the Code with such additions to
such term as may hereafter be made under the Code, and includes without
limitation all machinery, fixtures, goods, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing.

“Equity Interests” means, with respect to any Person, collectively, any and all
shares, interests, participations or other equivalents (however designated) of
capital stock of a corporation, any and all equivalent ownership interests in
such Person (other than a corporation), including partnership interests and
membership interests, and any and all warrants, rights or options to purchase or
other arrangements or rights to acquire (by purchase, conversion, dividend,
distribution or otherwise) any of the foregoing (and all other rights, powers,
privileges, interests, claims and other property in any manner arising therefrom
or relating thereto).

 

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“ERISA” is the Employee Retirement Income Security Act of 1974, as amended, and
its regulations.

“Excluded Accounts” means Deposit Accounts exclusively used for payroll, payroll
Taxes and other employee wage and benefit payments to or for the benefit of
Borrower’s, or any Guarantor’s, employees and identified to Collateral Agent by
Borrower as such in the Perfection Certificate, provided that the amount
deposited therein shall not exceed the amount reasonably expected to be due and
payable for the next two (2) succeeding pay periods.

“Exigent Circumstance” means any event or circumstance that, in the reasonable
judgment of Collateral Agent, imminently threatens the ability of Collateral
Agent to realize upon all or any material portion of the Collateral, such as,
without limitation, fraudulent removal, concealment, or abscondment thereof,
destruction or material waste thereof, or failure of Borrower or any of its
Subsidiaries after reasonable demand to maintain or reinstate adequate casualty
insurance coverage, or which, in the judgment of Collateral Agent, could
reasonably be expected to result in a material diminution in value of the
Collateral.

“Exit Fee Agreement” is that certain Exit Fee Agreement, dated as of the date
hereof, by and among Collateral Agent, as agent, Borrower and the Lenders, as
amended, amended and restated, supplemented or otherwise modified from time to
time.

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

“Fee Letter” means that certain Fee Letter dated the Effective Date, between
Borrower and Solar, as amended, amended and restated, supplemented or otherwise
modified from time to time.

“Foreign Currency” means lawful money of a country other than the United States.

“Funding Date” is any date on which a Term Loan is made to or on account of
Borrower which shall be a Business Day.

“GAAP” is generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other Person as
may be approved by a significant segment of the accounting profession in the
United States, which are applicable to the circumstances as of the date of
determination, applied consistently with Borrower’s publicly filed financial
statements.

“General Intangibles” are all “general intangibles” as defined in the Code in
effect on the date hereof with such additions to such term as may hereafter be
made under the Code, and includes without limitation, all copyright rights,
copyright applications, copyright registrations and like protections in each
work of authorship and derivative work, whether published or unpublished, any
patents, trademarks, service marks and, to the extent permitted under applicable
law, any applications therefor, whether registered or not, any trade secret
rights, including any rights to unpatented inventions, payment intangibles,
royalties, contract rights, goodwill, franchise agreements, purchase orders,
customer lists, route lists, telephone numbers, domain names, claims, income and
other tax refunds, security and other deposits, options to purchase or sell real
or personal property, rights in all litigation presently or hereafter pending
(whether in contract, tort or otherwise), insurance policies (including without
limitation key man, property damage, and business interruption insurance),
payments of insurance and rights to payment of any kind.

 

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“Governmental Approval” is any consent, authorization, approval, order, license,
franchise, permit, certificate, accreditation, registration, filing or notice,
of, issued by, from or to, or other act by or in respect of, any Governmental
Authority.

“Governmental Authority” is any federal, state, municipal, national or other
government, governmental department, commission, board, bureau, court, agency or
instrumentality or political subdivision thereof (including the FDA) or any
entity or officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state or locality of the United States, the
United States, or a foreign government.

“Guarantor” is any Person providing a Guaranty in favor of Collateral Agent for
the benefit of the Secured Parties (including without limitation pursuant to
Section 6.10).

“Guaranty” is any guarantee of all or any part of the Obligations, as the same
may from time to time be amended, restated, modified or otherwise supplemented.

“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of
property or services, such as reimbursement and other obligations for surety
bonds and letters of credit, where such deferred purchase price becomes due and
payable solely upon the passage of time or that has become due and payable and
is not satisfied within 60 days thereafter; (b) obligations evidenced by notes,
bonds, debentures or similar instruments, (c) Capital Lease obligations,
(d) non-contingent obligations of such Person to reimburse any bank or other
Person in respect of amounts paid under a letter of credit, banker’s acceptance
or similar instrument, (e) equity securities of such Person subject to
repurchase or redemption other than at the sole option of such Person,
(f) obligations secured by a Lien on any asset of such Person, whether or not
such obligation is otherwise an obligation of such Person, (g) “earnouts”,
purchase price adjustments, profit sharing arrangements, deferred purchase money
amounts and similar payment obligations or continuing obligations of any nature
of such Person arising out of purchase and sale contracts, (h) all Indebtedness
of others guaranteed by such Person, (i) off-balance sheet liabilities and/or
pension plan or multiemployer plan liabilities of such Person, (j) obligations
arising under non-compete agreements, and (k) Contingent Obligations. For the
avoidance of doubt, “Indebtedness” shall not include leases supporting
obligations related to the rental of real property and improvements thereon.

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

“Insolvent” means not Solvent.

“Intellectual Property” means all of Borrower’s or any of its Subsidiaries’
right, title and interest in and to the following:

(a) its Copyrights, Trademarks and Patents;

(b) any and all trade secrets and trade secret rights, including, without
limitation, any rights to unpatented inventions, know-how, operating manuals;

(c) any and all source code;

(d) any and all design rights which may be available to Borrower;

 

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(e) any and all claims for damages by way of past, present and future
infringement of any of the foregoing, with the right, but not the obligation, to
sue for and collect such damages for said use or infringement of the
Intellectual Property rights identified above; and

(f) all amendments, renewals and extensions of any of the Copyrights, Trademarks
or Patents.

“Intellectual Property Security Agreement” means that certain Intellectual
Property Security Agreement dated as of the Effective Date between Borrower and
Collateral Agent, as the same may from time to time be amended, restated,
modified or otherwise supplemented.

“I/O Extension Conditions” means (a) Borrower’s full compliance at all times
from the Effective Date through and including March 1, 2022 with Section 7.13(b)
and (b) no Event of Default shall have occurred.

“I/O Extension Termination Event” means, after March 1, 2022, the occurrence of
any Event of Default or an occurrence that, with the giving of notice or the
passage of time or both would result in an Event of Default.

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

“Inventory” is all “inventory” as defined in the Code in effect on the date
hereof with such additions to such term as may hereafter be made under the Code,
and includes without limitation all merchandise, raw materials, parts, supplies,
packing and shipping materials, work in process and finished products, including
without limitation such inventory as is temporarily out of any Person’s custody
or possession or in transit and including any returned goods and any documents
of title representing any of the above.

“Investment” is any beneficial ownership interest in any Person (including
stock, partnership interest or other securities), and any loan, advance or
capital contribution to any Person.

“IRS” means the United States Internal Revenue Service.

“Key Person” is each of Borrower’s (i) President and Chief Executive Officer,
who is Chris Thatcher as of the Effective Date and (ii) Chief Financial Officer,
who is Steve Furlong as of the Effective Date.

“Knowledge” means the actual knowledge, after reasonable investigation, of the
Responsible Officers.

“Lender” is any one of the Lenders.

“Lenders” are the Persons identified on Schedule 1.1 hereto and each assignee
that becomes a party to this Agreement pursuant to Section 12.1.

“Lenders’ Expenses” are (a) all reasonable audit fees and expenses, costs, and
expenses (including reasonable and invoiced out-of-pocket attorneys’ fees and
expenses, as well as appraisal fees, fees incurred on account of lien searches,
inspection fees, and filing fees) for preparing, amending, negotiating and
administering the Loan Documents, and (b) all fees and expenses (including
reasonable and invoiced out-of-pocket attorneys’ fees and expenses, as well as
appraisal fees, fees incurred on account of lien searches, inspection fees, and
filing fees) for defending and enforcing the Loan Documents (including, without
limitation, those incurred in connection with appeals or Insolvency Proceedings)
or otherwise incurred by Collateral Agent and/or the Lenders in connection with
the Loan Documents.

 

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“Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security
interest, or other encumbrance of any kind, whether voluntarily incurred or
arising by operation of law or otherwise against any property.

“Loan Documents” are, collectively, this Agreement, the Fee Letter, each Control
Agreement, the Exit Fee Agreement, the Intellectual Property Security Agreement,
the Perfection Certificates, each Compliance Certificate, the ACH Letter, each
Loan Payment Request Form, any Guarantees, any subordination agreements, any
note, or notes or guaranties executed by Borrower or any other Person, any
agreements creating or perfecting rights in the Collateral (including all
insurance certificates and endorsements, landlord consents and bailee consents)
and any other present or future agreement entered into by Borrower, any
Guarantor or any other Person for the benefit of the Lenders and Collateral
Agent, as applicable, in connection with this Agreement; all as amended,
restated, or otherwise modified.

“Loan Payment Request Form” is that certain form attached hereto as Exhibit D.

“Loan Party” means, individually, and “Loan Parties” means, collectively,
Borrower and any Guarantors.

“London Banking Day” means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market.

“Material Adverse Change” is (a) a material adverse change in the business,
operations or condition (financial or otherwise) of Borrower and its
Subsidiaries, when taken as a whole; or (b) a material impairment of (i) the
prospect of repayment of any portion of the Obligations, (ii) the legality,
validity or enforceability of any Loan Document, (iii) the rights and remedies
of Collateral Agent or Lenders under any Loan Document except as the result of
the action or inaction of the Collateral Agent or Lenders or (iv) the validity,
perfection or priority of any Lien in favor of Collateral Agent for the benefit
of the Secured Parties on any of the Collateral except as the result of the
action or inaction of the Collateral Agent or Lenders.

“Material Agreement” is any license, agreement or other contractual arrangement
whereby Borrower or any of its Subsidiaries is reasonably likely to be required
to transfer, either in-kind or in cash, prior to the Maturity Date, assets or
property valued (book or market) at more than One Million Dollars
($1,000,000.00) in the aggregate per year.

“Maturity Date” is, for each Term Loan, February 28, 2025.

“Net Product Revenue” means, with respect to Borrower and its Subsidiaries who
are Guarantors (including Subsidiaries acquired by Borrower who become
Guarantors in connection with a Permitted Investment), product revenue
(determined under GAAP) of Borrower’s and such Subsidiaries’ sale (either
directly or through a lease or distribution arrangement and solely to the extent
reported as revenue on Borrower’s consolidated financial statements) to
non-Affiliates in the ordinary course of business of its products and related
services directly sold in connection with such products, including, for the
avoidance of doubt revenue in connection with NeuroStar® Advanced Therapy
Systems and upgrades thereto, NeuroStar Treatment Sessions (whether on a “per
click” or capitated basis), TrakStar Cloud and service contracts, but excluding,
in each case, revenue (a) in connection with any one time or extraordinary
transactions, (b) attributable to licensing, collaboration or similar
arrangements (including for the avoidance of doubt Permitted Licenses), (c)
related to the sale of assets other than products in the ordinary course of
business, (d) any revenue related to the leasing or distribution of products and
services other than in each

 

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case the sale of inventory and related services through leasing or distribution
arrangements that would otherwise constitute ordinary course of business sales
of such products and services, (e) from any royalty, collaboration, commission
or similar arrangement, and (f) without duplication, any other transaction
(unless specifically specified in this proviso) that would not be an arms-length
sales transaction entered into in the ordinary course of business.

“Obligations” are all of Borrower’s obligations to pay when due any debts,
principal, interest, Lenders’ Expenses, the Prepayment Premium, all fees under
the Fee Letter and the Exit Fee Agreement, and any other amounts Borrower owes
the Collateral Agent or the Lenders now or later, in connection with, related
to, following, or arising from, out of or under, this Agreement or, the other
Loan Documents, or otherwise, and including interest accruing after Insolvency
Proceedings begin (whether or not allowed) and debts, liabilities, or
obligations of Borrower assigned to the Lenders and/or Collateral Agent in
connection with this Agreement and the other Loan Documents, and the performance
of Borrower’s duties under the Loan Documents.

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

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

“Operating Documents” are, for any Person, such Person’s formation documents, as
certified by the Secretary of State (or equivalent agency) of such Person’s
jurisdiction of organization on a date that is no earlier than thirty (30) days
prior to the Effective Date, and, (a) if such Person is a corporation, its
bylaws in current form, (b) if such Person is a limited liability company, its
limited liability company agreement (or similar agreement), and (c) if such
Person is a partnership, its partnership agreement (or similar agreement), each
of the foregoing with all current amendments or modifications thereto.

“Patents” means all patents, patent applications and like protections including
without limitation improvements, divisions, continuations, renewals, reissues,
re-examination certificates, utility models, extensions and
continuations-in-part of the same.

“Payment Date” is the first (1st) calendar day of each calendar month,
commencing on April 1, 2020.

“Permitted Indebtedness” is:

(a) Borrower’s Indebtedness to the Lenders and Collateral Agent under this
Agreement and the other Loan Documents;

(b) Indebtedness existing on the Effective Date and disclosed on the Perfection
Certificate;

(c) Subordinated Debt;

(d) unsecured Indebtedness to trade creditors incurred in the ordinary course of
business;

(e) Indebtedness consisting of Capital Lease obligations and purchase money
Indebtedness, in each case incurred by Borrower or any of its Subsidiaries to
finance the acquisition, repair, improvement or construction of fixed or capital
assets of such person, provided that (i) the aggregate outstanding principal
amount of all such Indebtedness does not exceed One Hundred Thousand Dollars
($100,000.00) at any time and (ii) the principal amount of such Indebtedness
does not exceed the lower of the cost or fair market value of the property so
acquired or built or of such repairs or improvements financed with such
Indebtedness (each measured at the time of such acquisition, repair, improvement
or construction is made);

 

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(f) Indebtedness by any Loan Party to any other Loan Party.

(g) Indebtedness incurred as a result of endorsing negotiable instruments
received in the ordinary course of Borrower’s business;

(h) unsecured Indebtedness in an aggregate amount not to exceed Two Hundred
Fifty Thousand Dollars ($250,000) at any time incurred under insurance premium
financing in the ordinary course of business;

(i) Indebtedness in an amount not to exceed Two Hundred Fifty Thousand Dollars
($250,000) incurred under a standby letter of credit issued on Borrower’s behalf
in favor of Borrower’s landlord;

(j) Indebtedness in connection with corporate credit cards, purchasing cards or
bank card products in an aggregate amount not to exceed Two Hundred Fifty
Thousand Dollars ($250,000) at any time; and

(k) extensions, refinancings, modifications, amendments and restatements of any
items of Permitted Indebtedness (a) through (f) above, provided that the
principal amount thereof is not increased or the terms thereof are not modified
to impose materially more burdensome terms upon Borrower, or its Subsidiary, as
the case may be.

“Permitted Investments” are:

(a) Investments disclosed on the Perfection Certificate and existing on the
Effective Date;

(b) (i) Investments consisting of cash and Cash Equivalents, and (ii) any
Investments permitted by Borrower’s investment policy, as amended from time to
time, provided that such investment policy (and any such amendment thereto) has
been approved in writing by Collateral Agent;

(c) Investments consisting of the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
Borrower;

(d) Investments consisting of Deposit Accounts in which Collateral Agent has a
perfected Lien (subject to the terms of this Agreement) for the ratable benefit
of the Secured Parties;

(e) Investments in connection with Transfers permitted by Section 7.1;

(f) Investments consisting of (i) travel advances and employee relocation loans
and other employee loans and advances in the ordinary course of business, and
(ii) loans to employees, officers or directors relating to the purchase of
equity securities of Borrower or its Subsidiaries pursuant to employee stock
purchase plans or agreements approved by Borrower’s board of directors; not to
exceed One Hundred Thousand Dollars ($100,000.00) in the aggregate for (i) and
(ii) in any fiscal year;

(g) Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or suppliers
arising in the ordinary course of business;

(h) Investments consisting of notes receivable of, or prepaid royalties and
other credit extensions, to customers and suppliers who are not Affiliates, in
the ordinary course of business; provided that this paragraph (h) shall not
apply to Investments of Borrower in any Subsidiary;

 

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(i) non-cash Investments in joint ventures or strategic alliances in the
ordinary course of Borrower’s business consisting of the non-exclusive licensing
of technology, the development of technology or the providing of technical
support; provided that any cash Investments by Borrower do not exceed Two
Hundred Fifty Thousand Dollars ($250,000) in the aggregate in any fiscal year;

(j) Investments by any Loan Party in any other Loan Party;

(k) repurchases of capital stock of former employees, directors, officers or
consultants pursuant to stock repurchase agreements so long as an Event of
Default does not exist at the time of any such repurchase and would not exist
after giving effect to any such repurchase; provided that the aggregate amount
of all such repurchases does to exceed Two Hundred Fifty Thousand Dollars
($250,000) in any fiscal year; and

(l) other Investments in an aggregate amount at any time not to exceed One
Hundred Fifty Thousand Dollars ($150,000).

“Permitted Licenses” are (A) licenses of over-the-counter software that is
commercially available to the public, and (B) non-exclusive licenses for the use
of the Intellectual Property of Borrower or any of its Subsidiaries entered into
in the ordinary course of business, provided, that, with respect to each such
license described in clause (B), the license constitutes an arms-length
transaction, the terms of which, on their face, do not provide for a sale or
assignment of any Intellectual Property and do not restrict the ability of
Borrower or any of its Subsidiaries, as applicable, to pledge, grant a security
interest in or lien on, or assign or otherwise Transfer any Intellectual
Property, and (C) exclusive licenses for the use of the Intellectual Property of
Borrower or any of its Subsidiaries entered into in the ordinary course of
business, provided, that, with respect to each such license described in this
clause (C), the license (i) constitutes an arms-length transaction, the terms of
which, on their face, do not provide for a sale or assignment of any
Intellectual Property and do not restrict the ability of Borrower or any of its
Subsidiaries, as applicable, to pledge, grant a security interest in or lien on,
or assign or otherwise Transfer any Intellectual Property, (ii) is limited in
territory with respect to a specific geographic country or region (i.e. Japan,
Germany, northern China) outside of the United States, and (iii) if requested by
Collateral Agent, Borrower has used commercially reasonable efforts to obtain
the consent and acknowledgement of the counterparty to such license for the
collateral assignment of such license to the Collateral Agent for the benefit of
the Lenders.

“Permitted Liens” are:

(a) Liens existing on the Effective Date and disclosed on the Perfection
Certificate or arising under this Agreement and the other Loan Documents;

(b) Liens for Taxes, fees, assessments or other government charges or levies,
either (i) not due and payable or (ii) being contested in good faith by
appropriate proceedings diligently conducted and for which Borrower maintains
adequate reserves on Borrower’s Books in accordance with GAAP, provided that no
notice of any such Lien has been filed or recorded under the Internal Revenue
Code and the Treasury Regulations adopted thereunder;

(c) Liens securing Indebtedness permitted under clause (e) of the definition of
“Permitted Indebtedness,” provided that (i) such liens exist prior to the
acquisition of, or attach substantially simultaneous with, or within twenty
(20) days after the, acquisition, lease, repair, improvement or construction of,
such property financed or leased by such Indebtedness and (ii) such liens do not
extend to any property of Borrower other than the property (and proceeds
thereof) acquired, leased or built, or the improvements or repairs, financed by
such Indebtedness;

 

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(d) Liens of carriers, warehousemen, suppliers, or other Persons that are
possessory in nature arising in the ordinary course of business so long as such
Liens attach only to Inventory, securing liabilities in the aggregate amount not
to exceed Five Hundred Thousand Dollars ($500,000.00), and which are not
delinquent or remain payable without penalty or which are being contested in
good faith and by appropriate proceedings which proceedings have the effect of
preventing the forfeiture or sale of the property subject thereto;

(e) Liens to secure payment of workers’ compensation, employment insurance,
old-age pensions, social security and other like obligations incurred in the
ordinary course of business (other than Liens imposed by ERISA);

(f) Liens incurred in the extension, renewal or refinancing of the indebtedness
secured by Liens described in (a) through (c), but any extension, renewal or
replacement Lien must be limited to the property encumbered by the existing Lien
and the principal amount of the indebtedness may not increase;

(g) leases or subleases of real property granted in the ordinary course of
Borrower’s business (or, if referring to another Person, in the ordinary course
of such Person’s business), and leases, subleases, non-exclusive licenses or
sublicenses of personal property (other than Intellectual Property) granted in
the ordinary course of Borrower’s business (or, if referring to another Person,
in the ordinary course of such Person’s business), if the leases, subleases,
licenses and sublicenses do not prohibit granting Collateral Agent or any Lender
a security interest therein;

(h) banker’s liens, rights of setoff and Liens in favor of financial
institutions incurred in the ordinary course of business arising in connection
with Borrower’s deposit accounts or securities accounts held at such
institutions solely to secure payment of fees and similar costs and expenses and
provided such accounts are maintained in compliance with Section 6.6(a) hereof;

(i) Liens arising from judgments, decrees or attachments in circumstances not
constituting an Event of Default under Section 8.4 or 8.7;

(j) deposits with landlords to secure performance of lease obligations, or to
secure letters of credit in favor of landlords, not exceeding Two Hundred Fifty
Thousand Dollars ($250,000) in the aggregate at any given time; and

(k) Permitted Licenses.

“Permitted Transfers” means:

(a) Transfers of Inventory in the ordinary course of business;

(b) Transfers of surplus, damaged, worn out or obsolete equipment that is, in
the reasonable judgment of Borrower exercised in good faith, no longer
economically practicable to maintain or useful in the ordinary course of
business consistent with past practice, and Transfers of other properties or
assets in lieu of any pending or threatened institution of any proceedings for
the condemnation or seizure of such properties or assets or for the exercise of
any right of eminent domain;

(c) to the extent constituting Transfers Permitted Liens, Permitted Indebtedness
or Permitted Investments;

(d) Transfers of cash and Cash Equivalents in a manner that is not prohibited by
the terms of this Agreement or the other Loan Documents;

 

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(e) Transfers between or among Loan Parties, provided that, with respect to any
properties or assets constituting Collateral under the Loan Documents, any and
all steps as may be required to be taken in order to create and maintain a first
priority security interest in and Lien upon such properties and assets in favor
and for the benefit of Collateral Agent and the other Secured Parties are taken
contemporaneously with the completion of any such transfer;

(f) the sale or issuance of Equity Interests of any Subsidiary of Borrower to
any Loan Party or Subsidiary that does not violate Section 7.2 or any other term
herein or in any Loan Document, provided, that any such sale or issuance by a
Loan Party shall be to another Loan Party;

(g) any abandonment, cancellation, non-renewal or discontinuance of use or
maintenance of Intellectual Property that Borrower reasonably determines in good
faith (i) is no longer economically practicable to maintain or useful in the
ordinary course of business consistent with past practice and that (ii) would
not reasonably be expected to be adverse to the rights, remedies and benefits
available to, or conferred upon, Collateral Agent and Lenders under any Loan
Document in any material respect; and

(h) other Transfers of assets (other than Intellectual Property) not to exceed
One Hundred Fifty Thousand Dollars ($150,000) in the aggregate.

“Person” is any individual, sole proprietorship, partnership, limited liability
company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.

“Prepayment Premium” is, with respect to any Term Loan subject to prepayment,
refinancing, substitution or replacement prior to the Maturity Date, whether by
mandatory or voluntary prepayment, acceleration or otherwise (including, but not
limited to, upon the occurrence of a bankruptcy or insolvency event (including
the acceleration of claims by operation of law)), an additional fee payable to
the Lenders in amount equal to:

(a) for a prepayment, refinancing, substitution or replacement made on or after
the Effective Date through and including the first anniversary of the Effective
Date, three percent (3.00%) of the principal amount of such Term Loan prepaid;

(b) for a prepayment, refinancing, substitution or replacement made after the
date which is after the first anniversary of the Effective Date through and
including the second anniversary of the Effective Date, two percent (2.00%) of
the principal amount of the Term Loans prepaid; and

(c) for a prepayment, refinancing, substitution or replacement made after the
date which is after the second anniversary of the Effective Date and prior to
the Maturity Date, one percent (1.00%) of the principal amount of the Term Loans
prepaid.

Notwithstanding the foregoing, Solar agrees to waive the Prepayment Premium if
Solar or any Affiliate of Solar (in their sole and absolute discretion) agree in
writing to refinance the Term Loans prior to the Maturity Date.

“Product Revenue Milestone” is the achievement, on or prior to November 30,
2021, of Net Product Revenue greater than or equal to [***], calculated on a
trailing twelve-month basis, subject to verification (including supporting
documents) reasonably satisfactory to Collateral Agent.

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, and whether tangible or intangible.

 

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“Pro Rata Share” is, as of any date of determination, with respect to each
Lender, a percentage (expressed as a decimal, rounded to the ninth decimal
place) determined by dividing the outstanding principal amount of Term Loans
held by such Lender by the aggregate outstanding principal amount of all Term
Loans.

“Qualified Cash” means the amount of Borrower’s cash and Cash Equivalents held
in accounts subject to a Control Agreement in favor of Collateral Agent.

“Qualified Cash A/P Amount” means the amount of Borrower’s accounts payable that
have not been paid within ninety (90) days from the invoice date of the relevant
account payable (other than accounts that are subject to good faith disputes as
permitted herein and for which Borrower maintains adequate reserves in
accordance with GAAP).

“Registered Organization” is any “registered organization” as defined in the
Code with such additions to such term as may hereafter be made under the Code.

“Registration” means any registration, authorization, approval, license, permit,
clearance, certificate, and exemption issued or allowed by the FDA or state
pharmacy licensing authorities (including, without limitation, new drug
applications, abbreviated new drug applications, biologics license applications,
investigational new drug applications, over-the-counter drug monograph, device
pre-market approval applications, device pre-market notifications,
investigational device exemptions, product recertifications, manufacturing
approvals, registrations and authorizations, CE Marks, pricing and reimbursement
approvals, labeling approvals or their foreign equivalent, controlled substance
registrations, and wholesale distributor permits).

“Regulatory Action” means an administrative, regulatory, or judicial enforcement
action, proceeding, investigation or inspection, FDA Form 483 notice of
inspectional observation, warning letter, untitled letter, other notice of
violation letter, recall, seizure, Section 305 notice or other similar written
communication, injunction or consent decree, issued by the FDA or a federal or
state court.

“Related Persons” means, with respect to any Person, each Affiliate of such
Person and each director, officer, employee, agent, trustee, representative,
attorney, accountant and each insurance, environmental, legal, financial and
other advisor and other consultants and agents of or to such Person or any of
its Affiliates.

“Relevant Governmental Body” means the Federal Reserve Board, the Federal
Reserve Bank of New York, and/or a committee officially endorsed or convened by
the Federal Reserve Board and/or the Federal Reserve Bank of New York, or any
successor thereto.

“Required Lenders” means (i) for so long as all of the Persons that are Lenders
on the Effective Date (each an “Original Lender”) have not assigned or
transferred any of their interests in their Term Loan other than to an Affiliate
of such Lender, Lenders holding one hundred percent (100%) of the aggregate
outstanding principal balance of the Term Loan, or (ii) at any time from and
after any Original Lender has assigned or transferred any interest in its Term
Loan, Lenders holding at least sixty six percent (66%) of the aggregate
outstanding principal balance of the Term Loan and, in respect of this clause
(ii), (A) each Original Lender that has not assigned or transferred any portion
of its Term Loan, (B) each assignee or transferee of an Original Lender’s
interest in the Term Loan, but only to the extent that such assignee or
transferee is an Affiliate or Approved Fund of such Original Lender, and (C) any
Person providing financing to any Person described in clauses (A) and (B) above;
provided, however, that this clause (C) shall only apply upon the occurrence of
a default, event of default or similar occurrence with respect to such
financing.

 

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“Requirement of Law” is as to any Person, the organizational or governing
documents of such Person, and any law (statutory or common), treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

“Responsible Officer” is any of the President, Chief Executive Officer, or Chief
Financial Officer of Borrower acting alone.

“Second Draw Conditions” are satisfaction of each of the following: (a) no Event
of Default has occurred and (b) Borrower has achieved the Product Revenue
Milestone.

“Second Draw Period” is the period commencing on the date Borrower satisfies the
Second Draw Conditions and ending on the earlier of (a) December 15, 2021, (b)
thirty (30) days following achievement of the Product Revenue Milestone and
(c) the occurrence of an Event of Default.

“Secured Parties” means the Collateral Agent and the Lenders.

“Securities Account” is any “securities account” as defined in the Code with
such additions to such term as may hereafter be made under the Code.

“SOFR” means the daily Secured Overnight Financing Rate provided by the Federal
Reserve Bank of New York as the administrator of the benchmark (or a successor
administrator) on the Federal Reserve Bank of New York’s Website.

“Solvent” means, with respect to any Person, that (a) the fair salable value of
such Person’s consolidated assets (including goodwill minus disposition costs)
exceeds the fair value of such Person’s liabilities, (b) such Person is not left
with unreasonably small capital giving effect to the transactions contemplated
by this Agreement and the other Loan Documents, and (c) such Person is able to
pay its debts (including trade debts) as they mature in the ordinary course
(without taking into account any forbearance and extensions related thereto).

“Subordinated Debt” is indebtedness incurred by Borrower or any of its
Subsidiaries subordinated to all Indebtedness of Borrower and/or its
Subsidiaries to the Lenders (pursuant to a subordination, intercreditor, or
other similar agreement in form and substance satisfactory to Collateral Agent
and the Required Lenders entered into between Collateral Agent, Borrower, and/or
any of its Subsidiaries, and the other creditor), on terms acceptable to
Collateral Agent and the Required Lenders.

“Subsidiary” is, with respect to any Person, any Person of which more than fifty
percent (50%) of the voting stock or other Equity Interests is owned or
controlled, directly or indirectly, by such Person or through one or more
intermediaries.

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

“Term Loan Commitment” is, for any Lender, the obligation of such Lender to make
a Term Loan, up to the principal amount shown opposite such Lender’s name on
Schedule 1.1.

“Term Loan Commitments” means the aggregate amount of such commitments of all
Lenders.

 

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“Trademarks” means any trademark and servicemark rights, whether registered or
not, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Borrower and each of its
Subsidiaries connected with and symbolized by such trademarks.

“Unqualified Opinion” means an opinion on financial statements from an
independent certified public accounting firm acceptable to Collateral Agent in
its reasonable discretion which opinion shall not include any qualifications or
any going concern limitations.

 

2.

LOANS AND TERMS OF PAYMENT

2.1 Promise to Pay. Borrower hereby unconditionally promises to pay each Lender,
the outstanding principal amount of all Term Loans advanced to Borrower by such
Lender and accrued and unpaid interest thereon and any other amounts due
hereunder as and when due in accordance with this Agreement.

2.2 Term Loans.

(a) Availability. (i) Subject to the terms and conditions of this Agreement, the
Lenders agree, severally and not jointly, to make term loans to Borrower on the
Effective Date in an aggregate principal amount of Thirty Five Million Dollars
($35,000,000.00) according to each Lender’s Term A Loan Commitment as set forth
opposite such Lender’s name on Schedule 1.1 hereto (such term loans are
hereinafter referred to singly as a “Term A Loan”, and collectively as the “Term
A Loans”). After repayment, no Term A Loan may be re-borrowed.

(ii) Subject to the terms and conditions of this Agreement, the Lenders agree,
severally and not jointly, during the Second Draw Period, to make term loans to
Borrower in an aggregate principal amount of up to Fifteen Million Dollars
($15,000,000) according to each Lender’s Term B Loan Commitment as set forth on
Schedule 1.1 hereto (such term loans are hereinafter referred to singly as a
“Term B Loan” and collectively as the “Term B Loans”; each Term A Loan or Term B
Loan is hereinafter referred to singly as a “Term Loan” and the Term A Loans and
the Term B Loans are hereinafter referred to collectively as the “Term Loans”).
After repayment, no Term B Loan may be re-borrowed.

(b) Repayment. Borrower shall make monthly payments of interest only commencing
on the first (1st) Payment Date following the Funding Date of each Term Loan,
and continuing on the Payment Date of each successive month thereafter through
and including the Payment Date immediately preceding the Amortization Date.
Borrower agrees to pay, on the Funding Date of each Term Loan, any initial
partial monthly interest payment otherwise due for the period between the
Funding Date of such Term Loan and the first Payment Date after such Funding
Date. Commencing on the Amortization Date, and continuing on the Payment Date of
each month thereafter, Borrower shall (i) make monthly payments of interest, to
each Lender in accordance with its Pro Rata Share, as calculated by Collateral
Agent (which calculations shall be deemed correct absent manifest error) based
upon the effective rate of interest applicable to the Term Loan, as determined
in Section 2.3(a) plus (ii) make consecutive equal monthly payments of principal
to each Lender in accordance with its Pro Rata Share, as calculated by
Collateral Agent (which calculations shall be deemed correct absent manifest
error) based upon: (A) the respective principal amounts of such Lender’s Term
Loans outstanding, and (B) a repayment schedule equal to the number of months
remaining from the Amortization Date until the Maturity Date. All unpaid
principal and accrued and unpaid interest with respect to each such Term Loan is
due and payable in full on the Maturity Date. The Term Loans may only be prepaid
in accordance with Sections 2.2(c) and 2.2(d).

 

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(c) Mandatory Prepayments. If the Term Loans are accelerated (including, but not
limited to, upon the occurrence of a bankruptcy or insolvency event (including
the acceleration of claims by operation of law)), Borrower shall immediately pay
to Lenders, payable to each Lender in accordance with its respective Pro Rata
Share, an amount equal to the sum of: (i) all outstanding principal of the Term
Loans plus accrued and unpaid interest thereon through the prepayment date,
(ii) any fees payable under the Fee Letter by reason of such prepayment,
(iii) the Prepayment Premium, plus (iv) all other Obligations that are due and
payable, including Lenders’ Expenses and interest at the Default Rate with
respect to any past due amounts. Notwithstanding (but without duplication with)
the foregoing, on the Maturity Date, if any fees payable under the Fee Letter by
reason of such prepayments had not previously been paid in full in connection
with the prepayment of the Term Loans in full, Borrower shall pay to each Lender
in accordance with the terms of the Fee Letter. The Prepayment Premium shall
also be payable in the event the Obligations (and/or this Agreement) are
satisfied or released by foreclosure (whether by power of judicial proceeding),
deed in lieu of foreclosure or by any other means. EACH BORROWER AND GUARANTOR
EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF
ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE
COLLECTION OF THE FOREGOING PREPAYMENT PREMIUM IN CONNECTION WITH ANY SUCH
ACCELERATION.

(d) Permitted Prepayment of Term Loans. Borrower shall have the option to prepay
all, but not less than all of the outstanding principal balance of the Term
Loans advanced by the Lenders under this Agreement, provided Borrower
(i) provides written notice to Collateral Agent of its election to prepay the
Term Loans at least five (5) Business Days prior to such prepayment, and
(ii) pays to the Lenders on the date of such prepayment, payable to each Lender
in accordance with its respective Pro Rata Share, an amount equal to the sum of
(A) the outstanding principal of the Term Loans plus accrued and unpaid interest
thereon through the prepayment date, (B) any fees payable under the Fee Letter
by reason of such prepayment, (C) the Prepayment Premium, plus (D) all other
Obligations that are due and payable on such prepayment date, including any
Lenders’ Expenses and interest at the Default Rate (if any) with respect to any
past due amounts.

2.3 Payment of Interest on the Term Loans.

(a) Interest Rate. Subject to Section 2.3(b), the principal amount outstanding
under the Term Loans shall accrue interest at a floating per annum rate equal to
the Applicable Rate in effect from time to time plus 7.65%, which aggregate
interest rate shall be determined by Collateral Agent on the third Business Day
prior to the Funding Date of the applicable Term Loan and on the date occurring
on the first Business Day of the month prior to each Payment Date occurring
thereafter, which interest shall be payable monthly in arrears in accordance
with Sections 2.2(b) and 2.3(e). Except as set forth in Section 2.2(b), such
interest shall accrue on each Term Loan commencing on, and including, the
Funding Date of such Term Loan, and shall accrue on the principal amount
outstanding under such Term Loan through and including the day on which such
Term Loan is paid in full (or any payment is made hereunder).

(b) Default Rate. Immediately upon the occurrence and during the continuance of
an Event of Default, all Obligations shall accrue interest at a fixed per annum
rate equal to the rate that is otherwise applicable thereto plus five percentage
points (5.00%) (the “Default Rate”). Payment or acceptance of the increased
interest rate provided in this Section 2.3(b) is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Collateral Agent.

(c) 360-Day Year. Interest shall be computed on the basis of a three hundred
sixty (360) day year for the actual number of days elapsed.

(d) Debit of Accounts. Collateral Agent and each Lender may debit (or ACH) any
deposit accounts, maintained by Borrower or any of its Subsidiaries, including
the Designated Deposit Account, for principal and interest payments or any other
amounts Borrower owes the Lenders under the Loan Documents when due. Any such
debits (or ACH activity) shall not constitute a set-off.

 

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(e) Payments. Except as otherwise expressly provided herein, all payments by
Borrower under the Loan Documents shall be made to the respective Lender to
which such payments are owed, at such Person’s office in immediately available
funds on the date specified herein. Unless otherwise provided, interest is
payable monthly on the Payment Date of each month. Payments of principal and/or
interest received after 2:00 p.m. Eastern time are considered received at the
opening of business on the next Business Day. When a payment is due on a day
that is not a Business Day, the payment is due the next Business Day and
additional fees or interest, as applicable, shall continue to accrue until paid.
All payments to be made by Borrower hereunder or under any other Loan Document,
including payments of principal and interest, and all fees, expenses,
indemnities and reimbursements, shall be made without set-off, recoupment or
counterclaim, in lawful money of the United States and in immediately available
funds. Collateral Agent may at its discretion and with prior notice of at least
one (1) Business Day, initiate debit entries to the Borrower’s account as
authorized on the ACH Letter (i) on each payment date of all Obligations then
due and owing, (ii) at any time any payment due and owing with respect to Lender
Expenses, and (iii) upon an Event of Default, any other Obligations outstanding.

2.4 Fees. Borrower shall pay to Collateral Agent and/or Lenders (as applicable)
the following fees, which shall be deemed fully earned and non-refundable upon
payment:

(a) Fee Letter. When due and payable under the terms of the Fee Letter, to
Collateral Agent and each Lender, as applicable, the fees set forth in the Fee
Letter.

(b) Prepayment Premium. The Prepayment Premium, when due hereunder, to be shared
between the Lenders in accordance with their respective Pro Rata Shares.
Borrower expressly agrees (to the fullest extent that each may lawfully do so)
that: (i) the Prepayment Premium is reasonable and is the product of an arm’s
length transaction between sophisticated business people, ably represented by
counsel; (ii) the Prepayment Premium shall be payable notwithstanding the then
prevailing market rates at the time payment is made; (iii) there has been a
course of conduct between Collateral Agent, Lenders and Borrower giving specific
consideration in this transaction for such agreement to pay the Prepayment
Premium and (iv) Borrower shall be estopped hereafter from claiming differently
than as agreed to in this paragraph. Borrower expressly acknowledges that its
agreement to pay the Prepayment Premium to Lenders as herein described is a
material inducement to Lenders to provide the Term Loan Commitments and make the
Term Loans.

(c) Lenders’ Expenses. All Lenders’ Expenses (including reasonable attorneys’
fees and expenses for documentation and negotiation of this Agreement) incurred
through and after the Effective Date, when due.

2.5 Taxes; Increased Costs. Borrower, Collateral Agent and the Lenders each
hereby agree to the terms and conditions set forth on Exhibit C attached hereto.

 

3.

CONDITIONS OF LOANS

3.1 Conditions Precedent to Initial Term Loan. Each Lender’s obligation to make
a Term A Loan is subject to the condition precedent that Collateral Agent and
each Lender shall consent to or shall have received, in form and substance
satisfactory to Collateral Agent and each Lender, such documents, and completion
of such other matters, as Collateral Agent and each Lender may reasonably deem
necessary or appropriate, including, without limitation:

(a) copies of the Loan Documents, each duly executed by Borrower and each
Subsidiary, as applicable, with originals to promptly follow;

(b) a completed Perfection Certificate for Borrower and each of its
Subsidiaries;

 

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(c) duly executed Control Agreements with respect to any Collateral Accounts
maintained by Borrower or any of its Subsidiaries;

(d) a duly executed Fee Letter;

(e) the Operating Documents and good standing certificates of Borrower and its
Subsidiaries certified by the Secretary of State (or equivalent agency) of
Borrower’s and such Subsidiaries’ jurisdiction of organization or formation and
each jurisdiction in which Borrower and each Subsidiary is qualified to conduct
business, each as of a date no earlier than thirty (30) days prior to the
Effective Date;

(f) a certificate of Borrower and each Guarantor in form and substance
reasonably satisfactory to the Collateral Agent executed by the Secretary (or
similar officer) of Borrower with appropriate insertions and attachments,
including with respect to (i) the Operating Documents of Borrower and each
Guarantor (which Certificate of Incorporation of Borrower and each Guarantor
shall be certified by the Secretary of State of the State of such entity’s
jurisdiction of formation) and (ii) the resolutions adopted by Borrower’s and
each Guarantor’s board of directors or a committee thereof for the purpose of
approving the transactions contemplated by the Loan Documents;

(g) certified copies, dated as of date no earlier than thirty (30) days prior to
the Effective Date, of financing statement searches, as Collateral Agent shall
request, accompanied by written evidence (including any UCC termination
statements) that the Liens indicated in any such financing statements either
constitute Permitted Liens or have been or, in connection with the initial Term
Loan, will be terminated or released;

(h) a duly executed legal opinion of counsel to Borrower and each Guarantor
dated as of the Effective Date;

(i) evidence satisfactory to Collateral Agent and the Lenders that the insurance
policies required by Section 6.5 hereof are in full force and effect;

(j) a payoff letter in form and substance satisfactory to Agent and the Lenders
evidencing the repayment in full and release of liens with respect to Borrower’s
existing Indebtedness;

(k) no later than five (5) days prior to the Effective Date, projections of
Borrower’s Net Product Revenue for 2020, 2021 and 2022 in form and substance
acceptable to Collateral Agent; and

(l) payment of the fees payable under the terms of the Fee Letter and Lenders’
Expenses then due as specified in Section 2.4 hereof.

3.2 Conditions Precedent to all Term Loans. The obligation of each Lender to
extend each Term Loan, including the initial Term Loan, is subject to the
following conditions precedent:

(a) receipt by Collateral Agent of an executed Loan Payment Request Form in the
form of Exhibit D attached hereto;

(b) the representations and warranties in Section 5 hereof shall be true,
accurate and complete in all material respects on the Funding Date of each Term
Loan; provided, however, that such materiality qualifier shall not be applicable
to any representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such date, and no
Event of Default shall have occurred and be continuing or result from the
funding of such Term Loan;

 

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(c) there has not been any Material Adverse Change;

(d) no Event of Default or an event that with the passage of time could result
in an Event of Default, shall exist; and

(e) payment of the fees and Lenders’ Expenses then due as specified in
Section 2.4 hereof.

3.3 Covenant to Deliver. Borrower agrees to deliver to Collateral Agent and the
Lenders each item required to be delivered to Collateral Agent under this
Agreement as a condition precedent to funding any Term Loan. Borrower expressly
agrees that a Term Loan made prior to the receipt by Collateral Agent or any
Lender of any such item shall not constitute a waiver by Collateral Agent or any
Lender of Borrower’s obligation to deliver such item, and any such Term Loan in
the absence of a required item shall be made in each Lender’s sole discretion.

3.4 Procedures for Borrowing. Subject to the prior satisfaction of all other
applicable conditions to the making of a Term Loan set forth in this Agreement,
to obtain a Term Loan (other than the Term Loan funded on the Effective Date),
Borrower shall notify the Lenders (which notice shall be irrevocable) by
electronic mail, facsimile, or telephone by 12:00 noon New York City time three
(3) Business Days prior to the date the Term Loan is to be made. Together with
any such electronic, facsimile or telephonic notification, Borrower shall
deliver to Collateral Agent by electronic mail or facsimile a completed Loan
Payment Request Form executed by a Responsible Officer or his or her designee.
The Collateral Agent may rely on any telephone notice given by a person whom
Collateral Agent reasonably believes is a Responsible Officer or designee. On
the Funding Date related to any Term Loan, each Lender shall credit and/or
transfer (as applicable) to the Designated Deposit Account, an amount equal to
its Term Loan Commitment in respect of such Term Loan.

3.5 Post-Closing Obligations. Notwithstanding any provision herein or in any
other Loan Document to the contrary, to the extent not actually delivered on or
prior to the Effective Date, Borrower will, and will cause of its applicable
Subsidiaries to:

(a) deliver to Collateral Agent a landlord’s consent executed in favor of
Collateral Agent in respect of all of Borrower’s and each Subsidiaries’ leased
locations no later than thirty (30) days after the Effective Date (or such later
date as Collateral Agent may agree, in each case, not to exceed sixty (60) days
thereafter);

(b) deliver a bailee waiver executed in favor of Collateral Agent in respect of
each third party bailee where Borrower or any Subsidiary maintains Collateral
having a book value in excess of One Hundred Thousand Dollars ($100,000.00) no
later than thirty (30) days after the Effective Date (or such later date as
Collateral Agent may agree, in each case, not to exceed sixty (60) days
thereafter); and

(c) with respect to the insurance policies required by Section 6.5 hereof,
deliver to Collateral Agent appropriate evidence showing loss payable and/or
additional insured clauses or endorsements in favor of Collateral Agent, for the
ratable benefit of the Secured Parties.

 

4.

CREATION OF SECURITY INTEREST

4.1 Grant of Security Interest. Borrower hereby grants Collateral Agent, for the
ratable benefit of the Secured Parties, to secure the payment and performance in
full of all of the Obligations, a continuing first priority security interest
in, and pledges to Collateral Agent, for the ratable benefit of the Secured
Parties, the Collateral, wherever located, whether now owned or hereafter
acquired or arising, and all proceeds and products and supporting obligations
(as defined in the Code) in respect thereof. If

 

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Borrower shall acquire any commercial tort claim (as defined in the Code),
Borrower shall grant to Collateral Agent, for the ratable benefit of the Secured
Parties, a first priority security interest therein and in the proceeds and
products and supporting obligations (as defined in the Code) thereof, all upon
the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to Collateral Agent.

If this Agreement is terminated, Collateral Agent’s Lien in the Collateral shall
continue until the Obligations (other than inchoate indemnity obligations) are
repaid in full in cash. Upon payment in full in cash of the Obligations (other
than inchoate indemnity obligations) and at such time as the Lenders’ obligation
to extend Term Loans has terminated, Collateral Agent shall, at the sole cost
and expense of Borrower, release its Liens in the Collateral and all rights
therein shall revert to Borrower.

4.2 Authorization to File Financing Statements. Borrower hereby authorizes
Collateral Agent to file financing statements or take any other action required
to perfect Collateral Agent’s security interests in the Collateral (held for the
ratable benefit of the Secured Parties), without notice to Borrower, with all
appropriate jurisdictions to perfect or protect Collateral Agent’s interest or
rights under the Loan Documents.

 

5.

REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Collateral Agent and the Lenders as follows:

5.1 Due Organization, Authorization: Power and Authority. Borrower and each of
its Subsidiaries is duly existing and in good standing as a Registered
Organization in its jurisdictions of organization or formation and Borrower and
each of its Subsidiaries is qualified and licensed to do business and is in good
standing in any jurisdiction in which the conduct of its businesses or its
ownership of property requires that it be so qualified except where the failure
to do so could not reasonably be expected to have a Material Adverse Change. In
connection with this Agreement, Borrower and each of its Subsidiaries has
delivered to Collateral Agent a completed perfection certificate and any updates
or supplements thereto on, before or after the Effective Date (each a
“Perfection Certificate” and collectively, the “Perfection Certificates”).
Borrower represents and warrants that all the information set forth on the
Perfection Certificates pertaining to Borrower and each of its Subsidiaries is
accurate and complete.

The execution, delivery and performance by Borrower and each of its Subsidiaries
of the Loan Documents to which it is, or they are, a party have been duly
authorized, and do not (i) conflict with any of Borrower’s or such Subsidiaries’
organizational documents, including its respective Operating Documents,
(ii) contravene, conflict with, constitute a default under or violate any
material Requirement of Law applicable thereto, (iii) contravene, conflict or
violate any applicable order, writ, judgment, injunction, decree, determination
or award of any Governmental Authority by which Borrower or such Subsidiary, or
any of their property or assets may be bound or affected, (iv) require any
action by, filing, registration, or qualification with, or Governmental Approval
from, any Governmental Authority (except such Governmental Approvals which have
already been obtained and are in full force and effect) or are being obtained
pursuant to Section 6.1(b), or (v) constitute an event of default under any
material agreement by which Borrower, any of its Subsidiaries or any of their
respective properties, is bound. Neither Borrower nor any of its Subsidiaries is
in default under any agreement to which it is a party or by which it or any of
its assets is bound in which such default could reasonably be expected to have a
Material Adverse Change.

 

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5.2 Collateral.

(a) Borrower and each its Subsidiaries have good title to, have rights in, and
the power to transfer each item of the Collateral upon which it purports to
grant a Lien under the Loan Documents, free and clear of any and all Liens
except Permitted Liens, and neither Borrower nor any of its Subsidiaries have
any Deposit Accounts, Securities Accounts, Commodity Accounts or other
investment accounts other than the Collateral Accounts or the other investment
accounts, if any, described in the Perfection Certificates delivered to
Collateral Agent in connection herewith in respect of which Borrower or such
Subsidiary has given Collateral Agent notice and taken such actions as are
necessary to give Collateral Agent a perfected security interest therein as
required under this Agreement. The Accounts are bona fide, existing obligations
of the Account Debtors.

(b) The security interest granted herein is and shall at all times continue to
be a first priority perfected security interest in the Collateral, subject only
to Permitted Liens that, under applicable law, have priority over Collateral
Agent’s Lien.

(c) On the Effective Date, and except as disclosed on the Perfection Certificate
(i) the Collateral is not in the possession of any third party bailee, and
(ii) no such third party bailee possesses components of the Collateral in excess
of One Hundred Thousand Dollars ($100,000.00).

(d) All Inventory and Equipment is in all material respects of good and
marketable quality, free from material defects.

(e) Borrower and each of its Subsidiaries is the sole owner of the Intellectual
Property each respectively purports to own, free and clear of all Liens other
than Permitted Liens. Except as noted on the Perfection Certificate (which, upon
the consummation of a transaction not prohibited by this Agreement, may be
updated to reflect such transaction), neither Borrower nor any of its
Subsidiaries is a party to, nor is bound by, any Material Agreement.

(f) None of Borrower or any of its Subsidiaries has used any software or other
materials that are subject to an open-source or similar license (including the
General Public License, Lesser General Public License, Mozilla Public License,
or Affero License) (collectively, “Open Source Licenses”) in a manner that would
cause any software or other materials owned by any Borrower or used in any
Borrower products to have to be (i) distributed to third parties at no charge or
a minimal charge, (ii) licensed to third parties for the purpose of creating
modifications or derivative works, or (iii) subject to the terms of such Open
Source License.

5.3 Litigation. Except as disclosed on the Perfection Certificate, there are no
actions, suits, investigations, or proceedings pending or, to the Borrower’s
Knowledge, threatened in writing by or against Borrower or any of its
Subsidiaries involving more than One Hundred Fifty Thousand Dollars
($150,000.00).

5.4 No Material Adverse Change; Financial Statements. All consolidated financial
statements for Borrower and its consolidated Subsidiaries, delivered to
Collateral Agent fairly present, in conformity with GAAP, and in all material
respects the consolidated financial condition of Borrower and its consolidated
Subsidiaries, and the consolidated results of operations of Borrower and its
consolidated Subsidiaries. Since December 31, 2018, there has not been a
Material Adverse Change.

5.5 Solvency. Borrower is Solvent. Borrower and each of its Subsidiaries, when
taken as a whole, are Solvent.

5.6 Regulatory Compliance. Neither Borrower nor any of its Subsidiaries is an
“investment company” or a company “controlled” by an “investment company” under
the Investment Company Act of 1940, as amended. Neither Borrower nor any of its
Subsidiaries is engaged as one of its important activities in extending credit
for margin stock (under Regulations X, T and U of the Federal Reserve Board of
Governors). Borrower and each of its Subsidiaries has complied in all material
respects with the Federal Fair Labor Standards Act. Neither Borrower nor any of
its Subsidiaries is a “holding company” or an

 

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“affiliate” of a “holding company” or a “subsidiary company” of a “holding
company” as each term is defined and used in the Public Utility Holding Company
Act of 2005. Neither Borrower nor any of its Subsidiaries has violated any laws,
ordinances or rules, the violation of which could reasonably be expected to have
a Material Adverse Change. Neither Borrower’s nor any of its Subsidiaries’
properties or assets has been used by Borrower or such Subsidiary or, to
Borrower’s Knowledge, by previous Persons, in disposing, producing, storing,
treating, or transporting any hazardous substance other than in material
compliance with applicable laws. Borrower and each of its Subsidiaries has
obtained all consents, approvals and authorizations of, made all declarations or
filings with, and given all notices to, all Governmental Authorities that are
necessary to continue their respective businesses as currently conducted.

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

5.7 Investments. Neither Borrower nor any of its Subsidiaries owns any stock,
shares, partnership interests or other equity securities except for Permitted
Investments.

5.8 Tax Returns and Payments; Pension Contributions. Borrower and each of its
Subsidiaries have timely filed all required tax returns and reports, and
Borrower and each of its Subsidiaries have timely paid all foreign, federal,
state, and local Taxes, assessments, deposits and contributions owed by Borrower
and such Subsidiaries in an amount greater than Ten Thousand Dollars ($10,000),
in all jurisdictions in which Borrower or any such Subsidiary is subject to
Taxes, including the United States, unless such Taxes are being contested in
accordance with the next sentence. Borrower and each of its Subsidiaries may
defer payment of any contested Taxes, provided that Borrower or such Subsidiary,
(a) in good faith contests its obligation to pay the Taxes by appropriate
proceedings promptly and diligently instituted and conducted; (b) notifies
Collateral Agent of the commencement of, and any material development in, the
proceeding; and (c) maintains adequate reserves or other appropriate provisions
on its books in accordance with GAAP, provided, further, that such action would
not involve, in the reasonable judgment of Collateral Agent, any risk of the
sale, forfeiture or loss of any material portion of the Collateral. Neither
Borrower nor any of its Subsidiaries is aware of any claims or adjustments
proposed for any of Borrower’s or such Subsidiary’s prior Tax years which could
result in additional Taxes becoming due and payable by Borrower or its
Subsidiaries. Borrower and each of its Subsidiaries have paid all amounts
necessary to fund all present pension, profit sharing and deferred compensation
plans in accordance with their terms, and neither Borrower nor any of its
Subsidiaries has withdrawn from participation in, has permitted partial or
complete termination of, or has permitted the occurrence of any other event with
respect to, any such plan which could reasonably be expected to result in any
liability of Borrower or its Subsidiaries, including any liability to the
Pension Benefit Guaranty Corporation or its successors or any other Governmental
Authority.

5.9 Use of Proceeds. Borrower shall use the proceeds of the Term Loans to repay
all outstanding obligations under Borrower’s existing debt facility with Oxford
Finance LLC, as working capital and to fund its general business requirements
and other general corporate purposes and to pay any fees and expenses relating
to this Agreement and the transactions contemplated hereby, and not for
personal, family, household or agricultural purposes.

 

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5.10 Full Disclosure. No written representation, warranty or other statement of
Borrower or any of its Subsidiaries in any certificate or written statement,
when taken as a whole, given to Collateral Agent or any Lender, as of the date
such representation, warranty, or other statement was made, taken together with
all such written certificates and written statements given to Collateral Agent
or any Lender, contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained in the
certificates or statements not misleading (it being recognized that projections
and forecasts provided by Borrower in good faith and based upon reasonable
assumptions are not viewed as facts and that actual results during the period or
periods covered by such projections and forecasts may differ from the projected
or forecasted results).

 

6.

AFFIRMATIVE COVENANTS

Borrower shall, and shall cause each of its Subsidiaries to, do all of the
following:

6.1 Government Compliance.

(a) Other than specifically permitted hereunder, maintain its and all its
Subsidiaries’ legal existence and good standing in their respective
jurisdictions of organization and maintain qualification in each jurisdiction in
which the failure to so qualify could reasonably be expected to have a Material
Adverse Change. Comply with all laws, ordinances and regulations to which
Borrower or any of its Subsidiaries is subject, the noncompliance with which
could reasonably be expected to have a Material Adverse Change.

(b) Obtain and keep in full force and effect, all of the material Governmental
Approvals necessary for the performance by Borrower and its Subsidiaries of
their respective businesses and obligations under the Loan Documents and the
grant of a security interest to Collateral Agent for the ratable benefit of the
Secured Parties, in all of the Collateral.

6.2 Financial Statements, Reports, Certificates; Notices.

(a) Deliver to Collateral Agent:

(i) as soon as available, but no later than thirty (30) days after the last day
of each month, a company prepared consolidated and, if prepared by Borrower or
if reasonably requested by the Lenders, consolidating balance sheet, income
statement and cash flow statement covering the consolidated operations of
Borrower and its consolidated Subsidiaries for such month certified by a
Responsible Officer and in a form reasonably acceptable to the Collateral Agent;

(ii) as soon as available, but no later than forty-five (45) days after the last
day of each of the first three (3) of Borrower’s fiscal quarters, a company
prepared consolidated and, if prepared by Borrower or if reasonably requested by
the Lenders, consolidating balance sheet, income statement and cash flow
statement covering the consolidated operations of Borrower and its consolidated
Subsidiaries for such fiscal quarter certified by a Responsible Officer
(provided, however, that such certification by a Responsible Officer of Borrower
shall be deemed to have made if a similar certification is required under the
Sarbanes-Oxley Act of 2002 and such certification shall have been made available
within the time period specified above on the SEC’s EDGAR system (or any
successor system adopted by the SEC) and in a form reasonably acceptable to the
Collateral Agent).

 

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(iii) as soon as available, but no later than ninety (90) days after the last
day of Borrower’s fiscal year or within five (5) days of filing of the same with
the SEC, audited consolidated financial statements covering the consolidated
operations of Borrower and its consolidated Subsidiaries for such fiscal year,
prepared under GAAP, consistently applied, together with an Unqualified Opinion
on the financial statements;

(iv) as soon as available after approval thereof by Borrower’s board of
directors, but no later than the earlier of (x) ten (10) days’ after such
approval and (y) sixty days after the start of the then-current calendar
year, Borrower’s annual financial projections for the entire then-next or
current, as applicable, fiscal year as approved by Borrower’s board of
directors; provided that, any revisions to such projections approved by
Borrower’s board of directors shall be delivered to Collateral Agent and the
Lenders no later than seven (7) days after such approval);

(v) within five (5) days of filing, all reports on Form 10-K, 10-Q and 8-K filed
with the Securities and Exchange Commission;

(vi) as soon as available, but no later than thirty (30) days after the last day
of each month, copies of the month-end account statements for each Collateral
Account maintained by Borrower or its Subsidiaries, which statements may be
provided to Collateral Agent and each Lender by Borrower or directly from the
applicable institution(s);

(vii) prompt delivery of (and in any event within five (5) days after the same
are sent or received) copies of all material correspondence, reports, documents
and other filings with any Governmental Authority that could reasonably be
expected to result in a Material Adverse Change;

(viii) prompt notice of any event that (A) could reasonably be expected to
materially and adversely affect the value of the Intellectual Property or
(B) could reasonably be expected to result in a Material Adverse Change;

(ix) written notice delivered at least ten (10) days’ prior to Borrower’s
creation of a New Subsidiary in accordance with the terms of Section 6.10;

(x) written notice delivered at least ten (10) days’ prior to Borrower’s
(A) adding any new offices or business locations, including warehouses (unless
such new offices or business locations contain less than Two Hundred Thousand
Dollars ($200,000.00) in assets or property of Borrower or any of its
Subsidiaries) (it being understood that this clause shall not apply to assets or
property in transit), (B) changing its respective jurisdiction of organization,
(C) changing its organizational structure or type, (D) changing its respective
legal name, or (E) changing any organizational number(s) (if any) assigned by
its respective jurisdiction of organization;

(xi) upon Borrower becoming aware of the existence of any Event of Default or
event which, with the giving of notice or passage of time, or both, would
constitute an Event of Default, prompt (and in any event within three
(3) Business Days) written notice of such occurrence, which such notice shall
include a reasonably detailed description of such Event of Default or event
which, with the giving of notice or passage of time, or both, would constitute
an Event of Default, and Borrower’s proposal regarding how to cure such Event of
Default or event;

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

 

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(xiii) notice of any commercial tort claim (as defined in the Code) or letter of
credit rights (as defined in the Code) held by Borrower or any Guarantor, in
each case in an amount greater than One Hundred Thousand Dollars ($100,000.00)
and of the general details thereof;

(xiv) if Borrower or any of its Subsidiaries is not now a Registered
Organization but later becomes one, written notice of such occurrence and
information regarding such Person’s organizational identification number within
ten (10) days of receiving such organizational identification number;

(xv) prompt notice of the execution of any Material Agreement or any amendment
to, modification of, termination of or waiver under any Material Agreement; and

(xvi) other information as reasonably requested by Collateral Agent or any
Lender.

Notwithstanding the foregoing, the financial statements or other reports
required to be delivered pursuant to clauses (ii), (iii) and (iv) above may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date on which Borrower posts such documents, or provides a link
thereto, on Borrower’s website on the internet at Borrower’s website address.

(b) Concurrently with the delivery of the financial statements specified in
Section 6.2(a)(i) above for each March, June, September and December, but no
later than thirty (30) days after the last day of each such month, deliver to
each Lender (x) an updated Perfection Certificate to reflect any amendments,
modifications and updates, if any, to certain information in the Perfection
Certificate after the Effective Date to the extent such amendments,
modifications and updates are permitted by one or more specific provisions in
this agreement or (y) a certificate of a Responsible Officer certifying that
there has been no change in such information from the most recent Perfection
Certificate delivered to Collateral Agent.

(c) Concurrently with the delivery of the financial statements specified in
Section 6.2(a)(i) above but no later than thirty (30) days after the last day of
each month, deliver to each Lender:

(i) a duly completed Compliance Certificate signed by a Responsible Officer;

(ii) copies of any material Governmental Approvals obtained by Borrower or any
of its Subsidiaries;

(iii) written notice of the commencement of, and any material development in,
the proceedings contemplated by Section 5.8 hereof;

(iv) prompt written notice of any litigation or governmental proceedings pending
or threatened (in writing) against Borrower or any of its Subsidiaries, which
could reasonably be expected to result in damages or costs to Borrower or any of
its Subsidiaries of One Hundred Fifty Thousand Dollars ($150,000.00); and

(v) written notice of all returns, recoveries, disputes and claims regarding
Inventory that involve more than One Hundred Thousand Dollars ($100,000.00)
individually or in the aggregate in any calendar year.

(d) Keep proper, complete and true books of record and account in accordance
with GAAP in all material respects. Borrower shall, and shall cause each of its
Subsidiaries to, allow, at the sole cost of Borrower, Collateral Agent or any
Lender, during regular business hours upon reasonable prior notice (provided
that no notice shall be required when an Event of Default has occurred and is
continuing),

 

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to visit and inspect any of its properties, to examine and make abstracts or
copies from any of its books and records, and to conduct a collateral audit and
analysis of its operations and the Collateral. Such audits shall be conducted no
more often than once every year unless (and more frequently if) an Event of
Default has occurred and is continuing.

6.3 Inventory; Returns. Keep all Inventory in good and marketable condition,
free from material defects. Returns and allowances between Borrower, or any of
its Subsidiaries, as applicable, and their respective Account Debtors shall
follow Borrower’s, or such Subsidiary’s, customary practices as they exist as of
the Effective Date.

6.4 Taxes; Pensions. Timely file, and require each of its Subsidiaries to timely
file, all required tax returns and reports, and timely pay, and require each of
its Subsidiaries to timely pay, all foreign, federal, state, and local Taxes,
assessments, deposits and contributions owed by Borrower or its Subsidiaries,
except as otherwise permitted pursuant to the terms of Section 5.8 hereof;
deliver to Lenders, on demand, appropriate certificates attesting to such
payments; and pay all amounts necessary to fund all present pension, profit
sharing and deferred compensation plans in accordance with the terms of such
plans.

6.5 Insurance. Keep Borrower’s and its Subsidiaries’ business and the Collateral
insured for risks and in amounts standard for companies in Borrower’s and its
Subsidiaries’ industry and location and as Collateral Agent may reasonably
request. Insurance policies shall be in a form, with companies, and in amounts
that are reasonably satisfactory to Collateral Agent and Lenders. All property
policies shall have a lender’s loss payable endorsement showing Collateral Agent
as lender loss payee and shall waive subrogation against Collateral Agent, and
all liability policies shall show, or have endorsements showing, Collateral
Agent (for the ratable benefit of the Secured Parties), as additional insured.
The Collateral Agent shall be named as lender loss payee and/or additional
insured with respect to any such insurance providing coverage in respect of any
Collateral, and each provider of any such insurance shall agree, by endorsement
upon the policy or policies issued by it or by independent instruments furnished
to the Collateral Agent, that it will give the Collateral Agent thirty (30) days
prior written notice (or ten (10) days prior written notice for non-payment)
before any such policy or policies shall be cancelled. At Collateral Agent’s
request, Borrower shall deliver to the Collateral Agent certified copies of
policies and evidence of all premium payments. Proceeds payable under any policy
shall, at Collateral Agent’s option, be payable to Collateral Agent, for the
ratable benefit of the Secured Parties, on account of the then-outstanding
Obligations. Notwithstanding the foregoing, (a) so long as no Event of Default
has occurred and is continuing, Borrower shall have the option of applying the
proceeds of any casualty policy within one hundred eighty (180) days of receipt
thereof up to Five Hundred Thousand Dollars ($500,000.00) with respect to any
loss, but not exceeding Five Hundred Thousand Dollars ($500,000.00), in the
aggregate for all losses under all casualty policies in any one year, toward the
replacement promptly or repair of destroyed or damaged property; provided that
any such replaced or repaired property (i) shall be of equal or like value as
the replaced or repaired Collateral and (ii) shall be deemed Collateral in which
Collateral Agent has been granted a first priority security interest, and (b)
after the occurrence and during the continuance of an Event of Default, all
proceeds payable under such casualty policy shall, at the option of Collateral
Agent, be payable to Collateral Agent, for the ratable benefit of the Lenders,
on account of the Obligations. If Borrower or any of its Subsidiaries fails to
obtain insurance as required under this Section 6.5 or to pay any amount or
furnish any required proof of payment to third persons, Collateral Agent and/or
any Lender may make (but has no obligation to do so), at Borrower’s expense, all
or part of such payment or obtain such insurance policies required in this
Section 6.5, and take any action under the policies Collateral Agent or such
Lender deems prudent.

 

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6.6 Operating Accounts.

(a) Maintain Borrower’s and Guarantors Collateral Accounts depositary
institutions that have agreed to execute Control Agreements in favor of
Collateral Agent with respect to such Collateral Accounts. The provisions of the
previous sentence shall not apply to Deposit Accounts exclusively used for
payroll, payroll Taxes and other employee wage and benefit payments to or for
the benefit of Borrower’s, or any Guarantor’s, employees, in an aggregate amount
not to exceed One Hundred Thousand Dollars $100,000 and as identified to
Collateral Agent by Borrower as such in the Perfection Certificate.

(b) Borrower shall provide Collateral Agent ten (10) days’ prior written notice
before Borrower or any Guarantor establishes any Collateral Account. In
addition, for each Collateral Account that Borrower or any Guarantor, at any
time maintains, Borrower or such Guarantor shall cause the applicable bank or
financial institution at or with which such Collateral Account is maintained to
execute and deliver a Control Agreement or other appropriate instrument with
respect to such Collateral Account to perfect Collateral Agent’s Lien in such
Collateral Account (held for the ratable benefit of the Secured Parties) in
accordance with the terms hereunder prior to the establishment of such
Collateral Account. The provisions of the previous sentence shall not apply to
any Excluded Accounts.

(c) Neither Borrower nor any Guarantor shall maintain any Collateral Accounts
except Collateral Accounts maintained in accordance with this Section 6.6.

6.7 Protection of Intellectual Property Rights. Borrower and each of its
Subsidiaries shall: (a) protect, defend and maintain the validity and
enforceability of its respective Intellectual Property that is material to its
business; (b) promptly advise Collateral Agent in writing of infringement by a
third party of its respective material Intellectual Property; and (c) not allow
any of its respective Intellectual Property material to its respective business
to be abandoned, forfeited or dedicated to the public without Collateral Agent’s
prior written consent.

6.8 Litigation Cooperation. Commencing on the Effective Date and continuing
through the termination of this Agreement, make available to Collateral Agent
and the Lenders, without expense to Collateral Agent or the Lenders, Borrower
and each of Borrower’s officers, employees and agents and Borrower’s Books, to
the extent that Collateral Agent or any Lender may reasonably deem them
necessary to prosecute or defend any third-party suit or proceeding instituted
by or against Collateral Agent or any Lender with respect to any Collateral or
relating to Borrower.

6.9 Landlord Waivers; Bailee Waivers. In the event that Borrower or any of its
Subsidiaries, after the Effective Date, intends to add any new offices or
business locations, including warehouses, or otherwise store any portion of the
Collateral with, or deliver any portion of the Collateral to, a bailee, in each
case pursuant to Section 7.2, then, in the event that the Collateral at any new
location is valued (based on book value) in excess of One Hundred Thousand
Dollars ($100,000.00) in the aggregate, at Collateral Agent’s election, such
bailee or landlord, as applicable, must execute and deliver a bailee waiver or
landlord waiver, as applicable, in form and substance reasonably satisfactory to
Collateral Agent prior to the addition of any new offices or business locations,
or any such storage with or delivery to any such bailee, as the case may be.

6.10 Creation/Acquisition of Subsidiaries. In the event any Borrower or any
Subsidiary of any Borrower creates or acquires any Subsidiary after the
Effective Date, Borrower or such Subsidiary shall promptly notify the Collateral
Agent and the Lenders of such creation or acquisition, and Borrower or such
Subsidiary shall, within sixty (60) days of the creation or acquisition of such
Subsidiary, take all actions reasonably requested by the Collateral Agent or the
Lenders to achieve any of the following with respect to such “New Subsidiary”
(defined as a Subsidiary formed after the date hereof during the term of this
Agreement): (i) to cause such New Subsidiary to become either a co-Borrower
hereunder, or a secured guarantor with respect to the Obligations; and (ii) to
grant and pledge to Collateral Agent a perfected security interest in 100% of
the stock, units or other evidence of ownership held by Borrower or its
Subsidiaries of any such New Subsidiary.

 

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6.11 Further Assurances. Execute any further instruments and take further action
as Collateral Agent or any Lender reasonably requests to perfect or continue
Collateral Agent’s Lien in the Collateral or to effect the purposes of this
Agreement.

 

7.

NEGATIVE COVENANTS

Borrower shall not, and shall not permit any of its Subsidiaries to, do any of
the following without the prior written consent of the Required Lenders:

7.1 Dispositions. Convey, sell, lease, transfer, assign, dispose of, license
(collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all
or any part of its business or property, except for Permitted Transfers.

7.2 Changes in Business, Management, Ownership, or Business Locations.
(a) Engage in or permit any of its Subsidiaries to engage in any business other
than the businesses engaged in by Borrower or such Subsidiary, as applicable, as
of the Effective Date or reasonably related thereto; (b) liquidate or dissolve;
or (c) (i) terminate the employment of any Key Person unless written notice
thereof is provided to each Lender within ten (10) days of such termination of
employment, or (ii) enter into any transaction or series of related transactions
in which (A) the stockholders of Borrower who were not stockholders immediately
prior to the first such transaction own more than thirty-five percent (35%) of
the voting stock of Borrower immediately after giving effect to such transaction
or related series of such transactions and (B) except as permitted by
Section 7.3, Borrower ceases to own, directly or indirectly, 100% of the
ownership interests in each Subsidiary of Borrower. Borrower shall not, and
shall not permit any of its Subsidiaries to, without at least ten (10) days’
prior written notice to Collateral Agent: (A) add any new offices or business
locations, including warehouses (unless such new offices or business locations
contain less than Two Hundred Thousand Dollars ($200,000.00) in assets or
property of Borrower or any of its Subsidiaries, as applicable); (B) change its
respective jurisdiction of organization, (C) except as permitted by Section 7.3,
change its respective organizational structure or type, (D) change its
respective legal name, or (E) change any organizational number(s) (if any)
assigned by its respective jurisdiction of organization.

7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or shares or any property of another Person, in each case
including for the avoidance of doubt through a merger, purchase, in-licensing
arrangement or any similar transaction. A Subsidiary may merge or consolidate
into another Subsidiary (provided such surviving Subsidiary is a “co-Borrower”
hereunder or has provided a secured Guaranty of Borrower’s Obligations hereunder
in accordance with Section 6.10) or with (or into) Borrower provided Borrower is
the surviving legal entity, and as long as no Event of Default is occurring
prior thereto or arises as a result therefrom.

7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or
permit any Subsidiary to do so, other than Permitted Indebtedness.

7.5 Encumbrance. Create, incur, allow, or suffer any Lien on any of its
property, or assign or convey any right to receive income, including the sale of
any Accounts, or permit any of its Subsidiaries to do so, except for Permitted
Liens, or permit any Collateral not to be subject to the first priority security
interest granted herein (except for Permitted Liens), or enter into any
agreement, document, instrument or other arrangement (except with or in favor of
Collateral Agent, for the ratable benefit of the Secured Parties) with any
Person which directly or indirectly prohibits or has the effect of prohibiting
Borrower, or any of its Subsidiaries, from assigning, mortgaging, pledging,
granting a security interest in or upon, or encumbering any of Borrower’s or
such Subsidiary’s Intellectual Property, except as is otherwise permitted in
Section 7.1 hereof and the definition of “Permitted Liens”.

 

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7.6 Maintenance of Collateral Accounts. With respect to Borrower any Guarantors,
maintain any Collateral Account except pursuant to the terms of Section 6.6
hereof.

7.7 Restricted Payments. (a) Declare or pay any dividends (other than dividends
payable solely in capital stock) or make any other distribution or payment in
respect of or redeem, retire or purchase any capital stock (other than (i) the
declaration or payment of dividends to Borrower or its Subsidiaries, (ii) the
declaration or payment of any dividends solely in the form of equity securities,
and (iii) repurchases pursuant to the terms of employee stock purchase plans,
employee restricted stock agreements, stockholder rights plans, employee,
director or consultant equity plans, or similar plans, provided such repurchases
do not exceed Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate
per fiscal year), (b) other than the Obligations in accordance with the terms
hereof, purchase, redeem, defease or prepay any principal of, premium, if any,
interest or other amount payable in respect of any Indebtedness prior to its
scheduled maturity unless being replaced with Indebtedness of at least the same
principal amount and such new Indebtedness is Permitted Indebtedness, or (c) be
a party to or bound by an agreement that restricts a Subsidiary from paying
dividends or otherwise distributing property to Borrower.

7.8 Investments. Directly or indirectly make any Investment other than Permitted
Investments, or permit any of its Subsidiaries to do so other than Permitted
Investments.

7.9 Transactions with Affiliates. Directly or indirectly enter into or permit to
exist any material transaction with any Affiliate of Borrower or any of its
Subsidiaries, except for (a) transactions that are in the ordinary course of
Borrower’s or such Subsidiary’s business, upon fair and reasonable terms that
are no less favorable to Borrower or such Subsidiary than would be obtained in
an arm’s length transaction with a non-affiliated Person, and (b) Subordinated
Debt or equity investments by Borrower’s investors in Borrower or its
Subsidiaries.

7.10 Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt,
except under the terms of the subordination, intercreditor, or other similar
agreement to which such Subordinated Debt is subject, or (b) amend any provision
in any document relating to the Subordinated Debt which would increase the
amount thereof or adversely affect the subordination thereof to Obligations owed
to the Lenders.

7.11 Compliance. (a) Become an “investment company” or a company controlled by
an “investment company”, under the Investment Company Act of 1940, as amended,
or undertake as one of its important activities extending credit to purchase or
carry margin stock (as defined in Regulation U of the Board of Governors of the
Federal Reserve System), or use the proceeds of any Term Loan for that purpose;
(b) fail to meet the minimum funding requirements of ERISA; (c) permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur;
(d) fail to comply with the Federal Fair Labor Standards Act or violate any
other law or regulation, if the violation could reasonably be expected to have a
Material Adverse Change, or permit any of its Subsidiaries to do so; or
(e) withdraw or permit any Subsidiary to withdraw from participation in, permit
partial or complete termination of, or permit the occurrence of any other event
with respect to, any present pension, profit sharing and deferred compensation
plan which could reasonably be expected to result in any liability of Borrower
or any of its Subsidiaries, including any liability to the Pension Benefit
Guaranty Corporation or its successors or any other Governmental Authority.

 

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7.12 Compliance with Anti-Terrorism Laws. Directly or indirectly, Knowingly or
permit any Affiliate to enter into any documents, instruments, agreements or
contracts with any Person listed on the OFAC Lists. Directly or indirectly or
permit any Affiliate to, (a) conduct any business or engage in any transaction
or dealing with any Blocked Person, including, without limitation, the making or
receiving of any contribution of funds, goods or services to or for the benefit
of any Blocked Person, (b) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to Executive
Order No. 13224 or any similar executive order or other Anti-Terrorism Law, or
(c) engage in or conspire to engage in any transaction that evades or avoids, or
has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism Law.

7.13 Financial Covenants.

(a) Minimum Liquidity. Permit, at any time, Qualified Cash to be less than Ten
Million Dollars ($10,000,000) plus the Qualified Cash A/P Amount.

(b) Minimum Net Product Revenue. Permit Net Product Revenue, measured monthly on
a trailing twelve-month basis, to be lower than the Net Product Revenue set
forth opposite the applicable month end as provided on Schedule 7.13(b) attached
hereto:

7.14 Material Agreements. Without the consent of Collateral Agent, amend any
Material Agreement in a manner adverse to the interests of the Collateral Agent
or Lenders.

 

8.

EVENTS OF DEFAULT

Any one of the following shall constitute an event of default (an “Event of
Default”) under this Agreement:

8.1 Payment Default. Borrower fails to (a) make any payment of principal or
interest on any Term Loan on its due date, or (b) pay any other Obligation
within three (3) Business Days after such Obligations are due and payable (which
three (3) Business Day grace period shall not apply to payments due on the
Maturity Date or the date of acceleration pursuant to Section 9.1 (a) hereof);

8.2 Covenant Default.

(a) Borrower or any of its Subsidiaries fails or neglects to perform any
obligation in Sections 3.5 (Post-Closing Obligations), 6.2 (Financial
Statements, Reports, Certificates), 6.4 (Taxes), 6.5 (Insurance), 6.6 (Operating
Accounts), 6.7 (Protection of Intellectual Property Rights), 6.9 (Landlord
Waivers; Bailee Waivers), 6.10 (Creation/Acquisition of Subsidiaries) or
Borrower violates any provision in Section 7; or

(b) Borrower, or any of its Subsidiaries, fails or neglects to perform, keep, or
observe any other term, provision, condition, covenant or agreement contained in
this Agreement or any other Loan Document to which such person is a party, and
as to any default (other than those specified in this Section 8) under such
other term, provision, condition, covenant or agreement that can be cured, has
failed to cure the default within twenty (20) days after the occurrence thereof;
provided, however, that if the default cannot by its nature be cured within the
twenty (20) day period or cannot after diligent attempts by Borrower or such
Subsidiary, as applicable, be cured within such twenty (20) day period, and such
default is likely to be cured within a reasonable time, then Borrower shall have
an additional period (which shall not in any case exceed thirty (30) days) to
attempt to cure such default, and within such reasonable time period the failure
to cure the default shall not be deemed an Event of Default (but no Term Loans
shall be made during such cure period).

8.3 Material Adverse Change. A Material Adverse Change has occurred;

 

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8.4 Attachment; Levy; Restraint on Business.

(a) (i) The service of process seeking to attach, by trustee or similar process,
any funds of Borrower or any of its Subsidiaries or of any entity under control
of Borrower or its Subsidiaries on deposit with any institution at which
Borrower or any of its Subsidiaries maintains a Collateral Account, or (ii) a
notice of lien, levy, or assessment is filed against Borrower or any of its
Subsidiaries or their respective assets by any government agency, and the same
under subclauses (i) and (ii) of this clause (a) are not, within ten (10) days
after the occurrence thereof, discharged or stayed (whether through the posting
of a bond or otherwise); and

(b) (i) any material portion of Borrower’s or any of its Subsidiaries’ assets is
attached, seized, levied on, or comes into possession of a trustee or receiver,
or (ii) any court order enjoins, restrains, or prevents Borrower or any of its
Subsidiaries from conducting any part of its business;

8.5 Insolvency. (a) Borrower or any of its Subsidiaries is or becomes Insolvent;
(b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding; or
(c) an Insolvency Proceeding is begun against Borrower or any of its
Subsidiaries and not dismissed or stayed within forty-five (45) days (but no
Term Loans shall be extended while Borrower or any Subsidiary is Insolvent
and/or until any Insolvency Proceeding is dismissed);

8.6 Other Agreements. There is a default in (a) any agreement to which Borrower
or any of its Subsidiaries is a party with a third party or parties resulting in
a right by such third party or parties, whether or not exercised, to accelerate
the maturity of any Indebtedness in an amount in excess of One Hundred Thousand
Dollars ($100,000.00) or that could reasonably be expected to have a Material
Adverse Change or (b) there is any default under a Material Agreement that
permits the counterparty thereto to accelerate the payments owed thereunder;

8.7 Judgments. One or more judgments, orders, or decrees for the payment of
money in an amount, individually or in the aggregate, of at least Five Hundred
Thousand Dollars ($500,000.00) (not covered by independent third-party insurance
as to which (a) Borrower reasonably believes such insurance carrier will accept
liability, (b) Borrower or the applicable Subsidiary has submitted such claim to
such insurance carrier and (c) liability has not been rejected by such insurance
carrier) shall be rendered against Borrower or any of its Subsidiaries and shall
remain unsatisfied, unvacated, or unstayed for a period of ten (10) days after
the entry thereof;

8.8 Misrepresentations. Borrower or any of its Subsidiaries or any Person acting
for Borrower or any of its Subsidiaries makes any representation, warranty, or
other statement now or later in this Agreement, any Loan Document or in any
writing delivered to Collateral Agent and/or the Lenders or to induce Collateral
Agent and/or the Lenders to enter this Agreement or any Loan Document, and such
representation, warranty, or other statement, when taken as a whole, is
incorrect in any material respect when made;

8.9 Subordinated Debt. A default or breach occurs under any subordination
agreement, or any creditor that has signed such an agreement with Collateral
Agent or the Lenders breaches any terms of such agreement;

8.10 Guaranty. (a) Any Guaranty terminates or ceases for any reason to be in
full force and effect; (b) any Guarantor does not perform any obligation or
covenant under any Guaranty; or (c) any circumstance described in Section 8
occurs with respect to any Guarantor;

 

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8.11 Governmental Approvals; FDA Action. Any Governmental Approval shall have
been revoked, rescinded, suspended, modified in an adverse manner, or not
renewed in the ordinary course for a full term and such revocation, rescission,
suspension, modification or non-renewal has resulted in or could reasonably be
expected to result in a Material Adverse Change; or (b) (i) the FDA, DOJ or
other Governmental Authority initiates a Regulatory Action or any other
enforcement action against Borrower or any of its Subsidiaries or any supplier
of Borrower or any of its Subsidiaries that causes Borrower or any of its
Subsidiaries to recall, withdraw, remove or discontinue manufacturing,
distributing, and/or marketing any of its products, even if such action is based
on previously disclosed conduct; (ii) the FDA or any other comparable
Governmental Authority issues a warning letter to Borrower or any of its
Subsidiaries with respect to any of its activities or products which could
reasonably be expected to result in a Material Adverse Change; (iii) Borrower or
any of its Subsidiaries conducts a mandatory or voluntary recall which could
reasonably be expected to result in liability and expense to Borrower or any of
its Subsidiaries of Five Hundred Thousand Dollars ($500,000) or more;
(iv) Borrower or any of its Subsidiaries enters into a settlement agreement with
the FDA, DOJ or other Governmental Authority that results in aggregate liability
as to any single or related series of transactions, incidents or conditions, of
Five Hundred Thousand Dollars ($500,000) or more, or that could reasonably be
expected to result in a Material Adverse Change, even if such settlement
agreement is based on previously disclosed conduct; or (v) the FDA or any other
comparable Governmental Authority revokes any authorization or permission
granted under any Registration, or Borrower or any of its Subsidiaries withdraws
any Registration, that could reasonably be expected to result in a Material
Adverse Change.

8.12 Lien Priority. Except as the result of the action or inaction of the
Collateral Agent or the Lenders, any Lien created hereunder or by any other Loan
Document shall at any time fail to constitute a valid and perfected Lien on any
of the Collateral purported to be secured thereby, subject to no prior or equal
Lien, other than Permitted Liens arising as a matter of applicable law.

 

9.

RIGHTS AND REMEDIES

9.1 Rights and Remedies.

(a) Upon the occurrence and during the continuance of an Event of Default,
Collateral Agent may, and at the written direction of Required Lenders shall,
without notice or demand, do any or all of the following: (i) deliver notice of
the Event of Default to Borrower, (ii) by notice to Borrower declare all
Obligations immediately due and payable (but if an Event of Default described in
Section 8.5 occurs all Obligations shall be immediately due and payable without
any action by Collateral Agent or the Lenders) or (iii) by notice to Borrower
suspend or terminate the obligations, if any, of the Lenders to advance money or
extend credit for Borrower’s benefit under this Agreement or under any other
agreement between Borrower and Collateral Agent and/or the Lenders (but if an
Event of Default described in Section 8.5 occurs all obligations, if any, of the
Lenders to advance money or extend credit for Borrower’s benefit under this
Agreement or under any other agreement between Borrower and Collateral Agent
and/or the Lenders shall be immediately terminated without any action by
Collateral Agent or the Lenders).

(b) Without limiting the rights of Collateral Agent and the Lenders set forth in
Section 9.1(a) above, upon the occurrence and during the continuance of an Event
of Default, Collateral Agent shall have the right and at the written direction
of the Required Lenders shall, without notice or demand, to do any or all of the
following:

(i) foreclose upon and/or sell or otherwise liquidate, the Collateral;

(ii) make a demand for payment upon any Guarantor pursuant to the Guaranty
delivered by such Guarantor;

 

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(iii) apply to the Obligations any (A) balances and deposits of Borrower that
Collateral Agent or any Lender holds or controls, (B) any amount held or
controlled by Collateral Agent or any Lender owing to or for the credit or the
account of Borrower, or (C) amounts received from any Guarantors in accordance
with the respective Guaranty delivered by such Guarantor; and/or

(iv) commence and prosecute an Insolvency Proceeding or consent to Borrower
commencing any Insolvency Proceeding.

(c) Without limiting the rights of Collateral Agent and the Lenders set forth in
Sections 9.1(a) and (b) above, upon the occurrence and during the continuance of
an Event of Default, Collateral Agent shall have the right and at the written
direction of the Required Lenders shall, without notice or demand, to do any or
all of the following:

(i) settle or adjust disputes and claims directly with Account Debtors for
amounts on terms and in any order that Collateral Agent considers advisable,
notify any Person owing Borrower money of Collateral Agent’s security interest
in such funds, and verify the amount of such account;

(ii) make any payments and do any acts it considers necessary or reasonable to
protect the Collateral and/or its Liens in the Collateral (held for the ratable
benefit of the Secured Parties). Borrower shall assemble the Collateral if
Collateral Agent requests and make it available at such location as Collateral
Agent reasonably designates. Collateral Agent may enter premises where the
Collateral is located, take and maintain possession of any part of the
Collateral, and pay, purchase, contest, or compromise any Lien which appears to
be prior or superior to its security interest and pay all expenses incurred.
Borrower grants Collateral Agent a license to enter and occupy any of its
premises, without charge, to exercise any of Collateral Agent’s rights or
remedies;

(iii) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale,
and/or advertise for sale, any of the Collateral. Collateral Agent is hereby
granted a non-exclusive, royalty-free license or other right to use, without
charge, Borrower’s and each of its Subsidiaries’ labels, patents, copyrights,
mask works, rights of use of any name, trade secrets, trade names, trademarks,
service marks, and advertising matter, or any similar property as it pertains to
the Collateral, in completing production of, advertising for sale, and selling
any Collateral and, in connection with Collateral Agent’s exercise of its rights
under this Section 9.1, Borrower’s and each of its Subsidiaries’ rights under
all licenses and all franchise agreements inure to Collateral Agent, for the
benefit of the Lenders;

(iv) place a “hold” on any Collateral Account maintained with Collateral Agent
or any Lender or otherwise in respect of which a Control Agreement has been
delivered in favor of Collateral Agent (for the ratable benefit of the Secured
Parties) and/or deliver a notice of exclusive control, any entitlement order, or
other directions or instructions pursuant to any Control Agreement or similar
agreements providing control of any Collateral;

(v) demand and receive possession of Borrower’s Books;

(vi) appoint a receiver to seize, manage and realize any of the Collateral, and
such receiver shall have any right and authority as any competent court will
grant or authorize in accordance with any applicable law, including any power or
authority to manage the business of Borrower or any of its Subsidiaries; and

(vii) subject to clauses 9.1(a) and (b), exercise all rights and remedies
available to Collateral Agent and each Lender under the Loan Documents or at law
or equity, including all remedies provided under the Code (including disposal of
the Collateral pursuant to the terms thereof).

 

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Notwithstanding any provision of this Section 9.1 to the contrary, upon the
occurrence of any Event of Default, Collateral Agent shall have the right to
exercise any and all remedies referenced in this Section 9.1 without the written
consent of Required Lenders following the occurrence of an Exigent Circumstance.

9.2 Power of Attorney. Borrower hereby irrevocably appoints Collateral Agent as
its lawful attorney-in-fact, exercisable upon the occurrence and during the
continuance of an Event of Default, to: (a) endorse Borrower’s or any of its
Subsidiaries’ name on any checks or other forms of payment or security; (b) sign
Borrower’s or any of its Subsidiaries’ name on any invoice or bill of lading for
any Account or drafts against Account Debtors; (c) settle and adjust disputes
and claims about the Accounts of Borrower directly with the applicable Account
Debtors, for amounts and on terms Collateral Agent determines reasonable;
(d) make, settle, and adjust all claims under Borrower’s insurance policies;
(e) pay, contest or settle any Lien, charge, encumbrance, security interest, and
adverse claim in or to the Collateral, or any judgment based thereon, or
otherwise take any action to terminate or discharge the same; and (f) transfer
the Collateral into the name of Collateral Agent or a third party as the Code or
any applicable law permits. Borrower hereby appoints Collateral Agent as its
lawful attorney-in-fact to sign Borrower’s or any of its Subsidiaries’ name on
any documents necessary to perfect or continue the perfection of Collateral
Agent’s security interest in the Collateral regardless of whether an Event of
Default has occurred until all Obligations (other than inchoate indemnity
obligations) have been satisfied in full and Collateral Agent and the Lenders
are under no further obligation to make extend Term Loans hereunder. Collateral
Agent’s foregoing appointment as Borrower’s or any of its Subsidiaries’ attorney
in fact, and all of Collateral Agent’s rights and powers, coupled with an
interest, are irrevocable until all Obligations (other than inchoate indemnity
obligations) have been fully repaid and performed and Collateral Agent’s and the
Lenders’ obligation to provide Term Loans terminates.

9.3 Protective Payments. If Borrower or any of its Subsidiaries fail to obtain
the insurance called for by Section 6.5 or fails to pay any premium thereon or
fails to pay any other amount which Borrower or any of its Subsidiaries is
obligated to pay under this Agreement or any other Loan Document, Collateral
Agent may obtain such insurance or make such payment, and all amounts so paid by
Collateral Agent are Lenders’ Expenses and immediately due and payable, bearing
interest at the Default Rate, and secured by the Collateral. Collateral Agent
will make reasonable efforts to provide Borrower with notice of Collateral Agent
obtaining such insurance or making such payment at the time it is obtained or
paid or within a reasonable time thereafter. No such payments by Collateral
Agent are deemed an agreement to make similar payments in the future or
Collateral Agent’s waiver of any Event of Default.

9.4 Application of Payments and Proceeds. Notwithstanding anything to the
contrary contained in this Agreement, upon the occurrence and during the
continuance of an Event of Default, (a) Borrower irrevocably waives the right to
direct the application of any and all payments at any time or times thereafter
received by Collateral Agent from or on behalf of Borrower or any of its
Subsidiaries of all or any part of the Obligations, and, as between Borrower on
the one hand and Collateral Agent and Lenders on the other, Collateral Agent
shall have the continuing and exclusive right to apply and to reapply any and
all payments received against the Obligations in such manner as Collateral Agent
may deem advisable notwithstanding any previous application by Collateral Agent,
and (b) the proceeds of any sale of, or other realization upon all or any part
of the Collateral shall be applied: first, to the Lenders’ Expenses; second, to
accrued and unpaid interest on the Obligations (including any interest which,
but for the provisions of the United States Bankruptcy Code, would have accrued
on such amounts); third, to the principal amount of the Obligations outstanding;
and fourth, to any other Obligations owing to Collateral Agent or any Lender
under the Loan Documents. Any balance remaining shall be delivered to Borrower
or to whoever may be lawfully entitled to receive such balance or as a court of
competent jurisdiction may direct. In carrying out the foregoing, (x) amounts
received shall be applied in the numerical order provided until exhausted prior
to the application to the next succeeding category, and (y) each of the Persons
entitled to receive a payment in any particular category shall receive an amount
equal to its pro rata share of amounts available to be applied pursuant thereto
for such category. Any reference in this Agreement to an allocation

 

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between or sharing by the Lenders of any right, interest or obligation
“ratably,” “proportionally” or in similar terms shall refer to the Lenders’ Pro
Rata Shares unless expressly provided otherwise. Collateral Agent, or if
applicable, each Lender, shall promptly remit to the other Lenders such sums as
may be necessary to ensure the ratable repayment of each Lender’s Pro Rata Share
of any Term Loan and the ratable distribution of interest, fees and
reimbursements paid or made by Borrower. Notwithstanding the foregoing, a Lender
receiving a scheduled payment shall not be responsible for determining whether
the other Lenders also received their scheduled payment on such date; provided,
however, if it is later determined that a Lender received more than its Pro Rata
Share of scheduled payments made on any date or dates, then such Lender shall
remit to Collateral Agent or other the Lenders such sums as may be necessary to
ensure the ratable payment of such scheduled payments, as instructed by
Collateral Agent. If any payment or distribution of any kind or character,
whether in cash, properties or securities, shall be received by a Lender in
excess of its Pro Rata Share, then the portion of such payment or distribution
in excess of such Lender’s Pro Rata Share shall be received and held by such
Lender in trust for and shall be promptly paid over to the other Lenders (in
accordance with their respective Pro Rata Shares) for application to the
payments of amounts due on such other Lenders’ claims. To the extent any payment
for the account of Borrower is required to be returned as a voidable transfer or
otherwise, the Lenders shall contribute to one another as is necessary to ensure
that such return of payment is on a pro rata basis. If any Lender shall obtain
possession of any Collateral, it shall hold such Collateral for itself and as
agent and bailee for the Secured Parties for purposes of perfecting Collateral
Agent’s security interest therein (held for the ratable benefit of the Secured
Parties).

9.5 Liability for Collateral. So long as Collateral Agent and the Lenders comply
with reasonable banking practices regarding the safekeeping of the Collateral in
the possession or under the control of Collateral Agent and the Lenders,
Collateral Agent and the Lenders shall not be liable or responsible for: (a) the
safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any
diminution in the value of the Collateral; or (d) any act or default of any
carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss,
damage or destruction of the Collateral.

9.6 No Waiver; Remedies Cumulative. Failure by Collateral Agent or any Lender,
at any time or times, to require strict performance by Borrower of any provision
of this Agreement or by Borrower or any other Loan Document shall not waive,
affect, or diminish any right of Collateral Agent or any Lender thereafter to
demand strict performance and compliance herewith or therewith. No waiver
hereunder shall be effective unless signed by Collateral Agent and the Required
Lenders and then is only effective for the specific instance and purpose for
which it is given. The rights and remedies of Collateral Agent and the Lenders
under this Agreement and the other Loan Documents are cumulative. Collateral
Agent and the Lenders have all rights and remedies provided under the Code, any
applicable law, by law, or in equity. The exercise by Collateral Agent or any
Lender of one right or remedy is not an election, and Collateral Agent’s or any
Lender’s waiver of any Event of Default is not a continuing waiver. Collateral
Agent’s or any Lender’s delay in exercising any remedy is not a waiver,
election, or acquiescence.

9.7 Demand Waiver. Borrower waives, to the fullest extent permitted by law,
demand, notice of default or dishonor, notice of payment and nonpayment, notice
of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees held by Collateral Agent or any Lender on which Borrower or any
Subsidiary is liable.

 

10.

NOTICES

Other than as specifically provided herein, all notices, consents, requests,
approvals, demands, or other communication (collectively, “Communications”) by
any party to this Agreement or any other Loan Document must be in writing and
shall be deemed to have been validly served, given, or delivered: (a) upon the
earlier of actual receipt and three (3) Business Days after deposit in the U.S.
mail, first class, registered

 

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or certified mail return receipt requested, with proper postage prepaid;
(b) upon transmission, when sent by electronic mail or facsimile transmission;
(c) one (1) Business Day after deposit with a reputable overnight courier with
all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all
of which shall be addressed to the party to be notified and sent to the address,
facsimile number, or email address indicated below. Any of Collateral Agent,
Lender or Borrower may change its mailing address or facsimile number by giving
the other party written notice thereof in accordance with the terms of this
Section 10.

 

  If to Borrower:   

NEURONETICS, INC.

3222 Phoenixville Pike

Malvern, PA 19355

Attn: Chief Financial Officer

Email: sfurlong@neurostar.com

  with a copy to:   

NEURONETICS, INC.

3222 Phoenixville Pike

Malvern, PA 19355

Attn: General Counsel

Fax:

Email: andrew.macan@neurostar.com

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

Pepper Hamilton LLP

400 Berwyn Park

899 Cassatt Road

Berwyn, Pennsylvania 19312-1183

Attn: Timothy C. Atkins, Esq.

Fax: (267) 200-0731

Email: ATKINST@pepperlaw.com

  If to Collateral Agent:   

SOLAR CAPITAL LTD.

500 Park Avenue, 3rd Floor

New York, NY 10022

Attention: Anthony Storino

Fax: (212) 993-1698

Email: storino@Solarcapltd.com

 

with a copy (which

shall not constitute notice) to:

  

LATHAM & WATKINS LLP

505 Montgomery Street, Suite 2000

San Francisco, CA 94111

Attention: Haim Zaltzman

Facsimile: (415) 395-8095

Email: haim.zaltzman@lw.com

 

11.

CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

11.1 Waiver of Jury Trial. EACH OF BORROWER, COLLATERAL AGENT AND LENDERS
UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN
DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED HEREBY, ANY

 

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DEALINGS AMONG BORROWER, COLLATERAL AGENT AND/OR LENDERS RELATING TO THE SUBJECT
MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP
THAT IS BEING ESTABLISHED AMONG BORROWER, COLLATERAL AGENT AND/OR LENDERS. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT
BE MODIFIED EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
ANY OTHER LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO
THIS TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

11.2 Governing Law and Jurisdiction. THIS AGREEMENT, THE OTHER LOAN DOCUMENTS
(EXCLUDING THOSE LOAN DOCUMENTS THAT BY THEIR OWN TERMS ARE EXPRESSLY GOVERNED
BY THE LAWS OF ANOTHER JURISDICTION) AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THAT WOULD RESULT IN THE
APPLICATION OF ANY LAW OTHER THAN THE LAW OF SUCH STATE), INCLUDING ALL MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE
COLLATERAL, PROVIDED, HOWEVER, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN
NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF
PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT
OF ANY LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE
TO APPLY TO THAT EXTENT.

11.3 Submission to Jurisdiction. Any legal action or proceeding with respect to
the Loan Documents shall be brought exclusively in the courts of the State of
New York located in the City of New York, Borough of Manhattan, or of the United
States of America for the Southern District of New York and, by execution and
delivery of this Agreement, Borrower hereby accepts for itself and in respect of
its Property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Notwithstanding the foregoing, Collateral Agent and Lenders shall have
the right to bring any action or proceeding against Borrower (or any property of
Borrower) in the court of any other jurisdiction Collateral Agent or Lenders
deem necessary or appropriate in order to realize on the Collateral or other
security for the Obligations. The parties hereto hereby irrevocably waive any
objection, including any objection to the laying of venue or based on the
grounds of forum non conveniens, that any of them may now or hereafter have to
the bringing of any such action or proceeding in such jurisdictions.

11.4 Service of Process. Borrower irrevocably waives personal service of any and
all legal process, summons, notices and other documents and other service of
process of any kind and consents to such service in any suit, action or
proceeding brought in the United States of America with respect to or otherwise
arising out of or in connection with any Loan Document by any means permitted by
applicable requirements of law, including by the mailing thereof (by registered
or certified mail, postage prepaid) to the address of Borrower specified herein
(and shall be effective when such mailing shall be effective, as provided
therein). Borrower agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.

 

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11.5 Non-exclusive Jurisdiction. Nothing contained in this Article 11 shall
affect the right of Collateral Agent or Lenders to serve process in any other
manner permitted by applicable requirements of law or commence legal proceedings
or otherwise proceed against Borrower in any other jurisdiction.

 

12.

GENERAL PROVISIONS

12.1 Successors and Assigns.

(a) This Agreement binds and is for the benefit of the successors and permitted
assigns of each party. Borrower may not transfer, pledge or assign this
Agreement or any rights or obligations under it without Collateral Agent’s prior
written consent (which may be granted or withheld in Collateral Agent’s
discretion, subject to Section 12.5). The Lenders have the right, without the
consent of or notice to Borrower, to sell, transfer, assign, pledge, negotiate,
or grant participation in (any such sale, transfer, assignment, negotiation, or
grant of a participation, a “Lender Transfer”) all or any part of, or any
interest in, the Lenders’ obligations, rights, and benefits under this Agreement
and the other Loan Documents; provided, however, that any such Lender Transfer
(other than (i) any Transfer at any time that an Event of Default has occurred
and is continuing, or (ii) a transfer, pledge, sale or assignment to an Eligible
Assignee) of its obligations, rights, and benefits under this Agreement and the
other Loan Documents shall require the prior written consent of Collateral Agent
(such approved assignee, an “Approved Lender”). Borrower and Collateral Agent
shall be entitled to continue to deal solely and directly with such Lender in
connection with the interests so assigned until Collateral Agent shall have
received and accepted an effective assignment agreement in form satisfactory to
Collateral Agent executed, delivered and fully completed by the applicable
parties thereto, and shall have received such other information regarding such
Eligible Assignee or Approved Lender as Collateral Agent reasonably shall
require.

(b) Notwithstanding anything to the contrary contained herein, so long as no
Event of Default has occurred and is continuing, no Lender Transfer (other than
a Lender Transfer in connection with (x) assignments by a Lender due to a forced
divestiture at the request of any regulatory agency; or (y) upon the occurrence
of a default, event of default or similar occurrence with respect to a Lender’s
own financing or securitization transactions) shall be permitted, without
Borrower’s consent, to any Person which is an Affiliate or Subsidiary of
Borrower, a then-current direct competitor of Borrower, as reasonably determined
by Collateral Agent at the time of such assignment, vulture funds or distressed
debt funds, as reasonably determined by Collateral Agent at the time of such
assignment, and natural persons.

(c) Collateral Agent, acting solely for this purpose as an agent of Borrower,
shall maintain at one of its offices in the United States a register for the
recordation of the names and addresses of the Lenders, and the Term Loan
Commitments of, and principal amounts (and stated interest) of the Term Loans
owing to each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive absent manifest
error, and Borrower, Collateral Agent and Lenders shall treat each Person whose
name is recorded in the Register pursuant to the terms hereof as Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by Borrower and any Lender at any reasonable time and from time
to time upon reasonable prior notice. Each Lender that sells a participation
shall, acting solely for this purpose as a non-fiduciary agent of Borrower,
maintain a register on which it enters the name and address of each participant
and the principal amounts (and stated interest) of each participant’s interest
in the Term Loans or other obligations under the Loan Documents (the
“Participant Register”); provided that no Lender shall have any obligation to
disclose all or any portion of the Participant Register (including the identity
of any participant or any information relating to a participant’s interest in
any commitments, loans or its other obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such commitment, loan or other obligation is in registered form under
Section 5f.103-1(c) of the United States Treasury Regulations. The entries in
the Participant Register shall be conclusive absent manifest error, and

 

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such Lender shall treat each Person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary. For the avoidance of doubt,
Collateral Agent (in its capacity as Collateral Agent) shall have no
responsibility for maintaining a Participant Register. Borrower agrees that each
participant shall be entitled to the benefits of the provisions in Exhibit C
attached hereto (subject to the requirements and limitations therein, including
the requirements under Section 7 of Exhibit C attached hereto (it being
understood that the documentation required under Section 7 of Exhibit C attached
hereto shall be delivered to the participating Lender)) to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to this
Section 12.1; provided that such participant shall not be entitled to receive
any greater payment under Exhibit C attached hereto, with respect to any
participation, than its participating Lender would have been entitled to
receive, except to the extent such entitlement to receive a greater payment
results from a change in law that occurs after the participant acquired the
applicable participation.

12.2 Indemnification. Borrower agrees to indemnify, defend and hold each Secured
Party and their respective directors, officers, employees, consultants, agents,
attorneys, or any other Person affiliated with or representing such Secured
Party (each, an “Indemnified Person”) harmless against: (a) all obligations,
demands, claims, and liabilities (collectively, “Claims”) asserted by any other
party in connection with; related to; following; or arising from, out of or
under, the transactions contemplated by the Loan Documents; and (b) all losses
and Lenders’ Expenses incurred, or paid by Indemnified Person in connection
with; related to; following; or arising from, out of or under, the transactions
contemplated by the Loan Documents (including reasonable and invoiced
out-of-pocket attorneys’ fees and expenses), except, in each case, for Claims
and/or losses directly caused by such Indemnified Person’s gross negligence or
willful misconduct. Borrower hereby further agrees to indemnify, defend and hold
each Indemnified Person harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including
the reasonable and invoiced out-of-pocket fees and disbursements of counsel for
such Indemnified Person) in connection with any investigative, response,
remedial, administrative or judicial matter or proceeding, whether or not such
Indemnified Person shall be designated a party thereto and including any such
proceeding initiated by or on behalf of Borrower, and the reasonable expenses of
investigation by engineers, environmental consultants and similar technical
personnel and any commission, fee or compensation claimed by any broker (other
than any broker retained by Collateral Agent or Lenders) asserting any right to
payment for the transactions contemplated hereby which may be imposed on,
incurred by or asserted against such Indemnified Person as a result of or in
connection with the transactions contemplated hereby and the use or intended use
of the proceeds of the loan proceeds except for liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements directly caused by such Indemnified Person’s gross negligence
or willful misconduct.

12.3 Severability of Provisions. Each provision of this Agreement is severable
from every other provision in determining the enforceability of any provision.

12.4 Correction of Loan Documents. Collateral Agent may correct patent errors
and fill in any blanks in this Agreement and the other Loan Documents consistent
with the agreement of the parties.

12.5 Amendments in Writing; Integration. (a) No amendment, modification,
termination or waiver of any provision of this Agreement or any other Loan
Document, no approval or consent thereunder, or any consent to any departure by
Borrower or any of its Subsidiaries therefrom, shall in any event be effective
unless the same shall be in writing and signed by Borrower, Collateral Agent and
the Required Lenders provided that:

(i) no such amendment, waiver or other modification that would have the effect
of increasing or reducing a Lender’s Term Loan Commitment or Commitment
Percentage shall be effective as to such Lender without such Lender’s written
consent;

 

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(ii) no such amendment, waiver or modification that would affect the rights and
duties of Collateral Agent shall be effective without Collateral Agent’s written
consent or signature; and

(iii) no such amendment, waiver or other modification shall, unless signed by
all the Lenders directly affected thereby, (A) reduce the principal of, rate of
interest on or any fees with respect to any Term Loan or forgive any principal,
interest (other than default interest) or fees (other than late charges) with
respect to any Term Loan (B) postpone the date fixed for, or waive, any payment
of principal of any Term Loan or of interest on any Term Loan (other than
default interest) or any fees provided for hereunder (other than late charges or
for any termination of any commitment); (C) change the definition of the term
“Required Lenders” or the percentage of Lenders which shall be required for the
Lenders to take any action hereunder; (D) release all or substantially all of
any material portion of the Collateral, authorize Borrower to sell or otherwise
dispose of all or substantially all or any material portion of the Collateral or
release any Guarantor of all or any portion of the Obligations or its Guaranty
obligations with respect thereto, except, in each case with respect to this
clause (D), as otherwise may be expressly permitted under this Agreement or the
other Loan Documents (including in connection with any disposition permitted
hereunder); (E) amend, waive or otherwise modify this Section 12.5 or the
definitions of the terms used in this Section 12.5 insofar as the definitions
affect the substance of this Section 12.5; (F) consent to the assignment,
delegation or other transfer by Borrower of any of its rights and obligations
under any Loan Document or release Borrower of its payment obligations under any
Loan Document, except, in each case with respect to this clause (F), pursuant to
a merger or consolidation permitted pursuant to this Agreement; (G) amend any of
the provisions of Section 9.4 or amend any of the definitions of Pro Rata Share,
Term Loan Commitment, Commitment Percentage or that provide for the Lenders to
receive their Pro Rata Shares of any fees, payments, setoffs or proceeds of
Collateral hereunder; (H) subordinate the Liens granted in favor of Collateral
Agent securing the Obligations; or (I) amend any of the provisions of
Section 12.8. It is hereby understood and agreed that all Lenders shall be
deemed directly affected by an amendment, waiver or other modification of the
type described in the preceding clauses (C), (D), (E), (F), (G) and (H) of the
immediately preceding sentence.

(b) Other than as expressly provided for in Section 12.5(a)(i)-(iii), Collateral
Agent may, at its discretion, or if requested by the Required Lenders, from time
to time designate covenants in this Agreement less restrictive by notification
to a representative of Borrower.

(c) This Agreement and the Loan Documents represent the entire agreement about
this subject matter and supersede prior negotiations or agreements with respect
to such subject matter. All prior agreements, understandings, representations,
warranties, and negotiations between the parties about the subject matter of
this Agreement and the Loan Documents merge into this Agreement and the Loan
Documents.

12.6 Counterparts. This Agreement may be executed in any number of counterparts
and by different parties on separate counterparts, each of which, when executed
and delivered, is an original, and all taken together, constitute one Agreement.
Delivery of an executed counterpart of a signature page of this Agreement by
facsimile, portable document format (.pdf) or other electronic transmission will
be as effective as delivery of a manually executed counterpart hereof.

12.7 Survival. Except as otherwise provided in this Agreement, all covenants,
representations and warranties made in this Agreement continue in full force and
effect until this Agreement has terminated pursuant to its terms and all
Obligations (other than inchoate indemnity obligations and any other obligations
which, by their terms, are to survive the termination of this Agreement) have
been satisfied.

 

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The obligation of Borrower in Section 12.2 to indemnify each Lender and
Collateral Agent, as well as the confidentiality provisions in Section 12.8
below, shall survive until the statute of limitations with respect to such claim
or cause of action shall have run.

12.8 Confidentiality. In handling any confidential information of Borrower, each
of the Lenders and Collateral Agent shall exercise the same degree of care that
it exercises for their own confidential information, but disclosure of
information may be made: (a) subject to the terms and conditions of this
Agreement, to the Lenders’ and Collateral Agent’s Subsidiaries or Affiliates, or
in connection with a Lender’s own financing or securitization transactions and
upon the occurrence of a default, event of default or similar occurrence with
respect to such financing or securitization transaction; (b) to prospective
transferees (other than those identified in (a) above) or purchasers of any
interest in the Term Loans (provided, however, the Lenders and Collateral Agent
shall, except upon the occurrence and during the continuance of an Event of
Default, obtain such prospective transferee’s or purchaser’s agreement to the
terms of this provision or to similar confidentiality terms); (c) as required by
law, rule, regulation, regulatory or self-regulatory authority, subpoena, or
other order; (d) to Lenders’ or Collateral Agent’s regulators or as otherwise
required in connection with an examination or audit; (e) as Collateral Agent
reasonably considers appropriate in exercising remedies under the Loan
Documents; and (f) to third party service providers of the Lenders and/or
Collateral Agent so long as such service providers have executed a
confidentiality agreement or have agreed to similar confidentiality terms with
the Lenders and/or Collateral Agent, as applicable, with terms no less
restrictive than those contained herein. Confidential information does not
include information that either: (i) is in the public domain or in the Lenders’
and/or Collateral Agent’s possession when disclosed to the Lenders and/or
Collateral Agent, or becomes part of the public domain after disclosure to the
Lenders and/or Collateral Agent through no breach of this provision by the
Lenders or the Collateral Agent; or (ii) is disclosed to the Lenders and/or
Collateral Agent by a third party, if the Lenders and/or Collateral Agent does
not know that the third party is prohibited from disclosing the information.
Collateral Agent and the Lenders may use confidential information for any
purpose, including, without limitation, for the development of client databases,
reporting purposes, and market analysis. The provisions of the immediately
preceding sentence shall survive the termination of this Agreement. The
agreements provided under this Section 12.8 supersede all prior agreements,
understanding, representations, warranties, and negotiations between the parties
about the subject matter of this Section 12.8.

12.9 Right of Set Off. Borrower hereby grants to Collateral Agent and to each
Lender, a Lien, security interest and right of set off as security for all
Obligations to Secured Parties hereunder, whether now existing or hereafter
arising upon and against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of any Secured
Party or any entity under the control of such Security Party (including a
Collateral Agent Affiliate) or in transit to any of them. At any time after the
occurrence and during the continuance of an Event of Default, without demand or
notice, any Secured Party may set off the same or any part thereof and apply the
same to any liability or obligation of Borrower even though unmatured and
regardless of the adequacy of any other collateral securing the Obligations. ANY
AND ALL RIGHTS TO REQUIRE COLLATERAL AGENT TO EXERCISE ITS RIGHTS OR REMEDIES
WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY
BORROWER.

12.10 Cooperation of Borrower. If necessary, Borrower agrees to (i) execute any
documents reasonably required to effectuate and acknowledge each assignment of a
Term Loan Commitment (or portion thereof) or Term Loan (or portion thereof) to
an assignee in accordance with Section 12.1, (ii) make Borrower’s management
personnel available to meet with Collateral Agent and prospective participants
and assignees of Term Loan Commitments, the Term Loans or portions thereof
(which meetings shall be

 

43

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conducted no more often than twice every twelve months unless an Event of
Default has occurred and is continuing), and (iii) assist Collateral Agent and
the Lenders in the preparation of information relating to the financial affairs
of Borrower as any prospective participant or assignee of a Term Loan Commitment
(or portions thereof) or Term Loan (or portions thereof) reasonably may request.
Subject to the provisions of Section 12.8, Borrower authorizes each Lender to
disclose to any prospective participant or assignee of a Term Loan Commitment
(or portions thereof), any and all information in such Lender’s possession
concerning Borrower and its financial affairs which has been delivered to such
Lender by or on behalf of Borrower pursuant to this Agreement, or which has been
delivered to such Lender by or on behalf of Borrower in connection with such
Lender’s credit evaluation of Borrower prior to entering into this Agreement.

12.11 Public Announcement. Subject to Borrower’s review and approval, Borrower
hereby agrees that Collateral Agent and each Lender may make a public
announcement of the transactions contemplated by this Agreement, and may
publicize the same in marketing materials, newspapers and other publications,
and otherwise, and in connection therewith may use Borrower’s name, tradenames
and logos. Collateral Agent and the Lenders may also make disclosures to the
Securities and Exchange Commission or other governmental agency and any other
public disclosure with investors, other governmental agencies or other related
persons.

12.12 Collateral Agent and Lender Agreement. Collateral Agent and the Lenders
hereby agree to the terms and conditions set forth on Exhibit B attached hereto.
Borrower acknowledges and agrees to the terms and conditions set forth on
Exhibit B attached hereto.

12.13 Time of Essence. Time is of the essence for the performance of Obligations
under this Agreement.

12.14 Termination Prior to Maturity Date; Survival. All covenants,
representations and warranties made in this Agreement continue in full force
until this Agreement has terminated pursuant to its terms and all Obligations
have been satisfied. So long as Borrower has satisfied the Obligations (other
than inchoate indemnity obligations and any other obligations which, by their
terms, are to survive the termination of this Agreement and for which no claim
has been made) in accordance with the terms of this Agreement, this Agreement
may be terminated prior to the Maturity Date by Borrower, effective five
(5) Business Days after written notice of termination is given to the Collateral
Agent and the Lenders.

[Balance of Page Intentionally Left Blank]

 

44

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the Effective Date.

 

BORROWER: NEURONETICS, INC. By   /s/ Stephen Furlong Name:   Stephen Furlong
Title:   Chief Financial Officer

[Signature Page to Loan and Security Agreement]

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COLLATERAL AGENT AND LENDER:

SOLAR CAPITAL LTD.

By  

/s/ Anthony Storino

Name:  

Anthony Storino

Title:  

Authorized Signatory

[Signature Page to Loan and Security Agreement]

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LENDERS: SUNS SPV LLC By  

/s/ Anthony Storino

Name:   Anthony Storino Title:   Authorized Signatory SCP PRIVATE CREDIT INCOME
FUND SPV LLC By  

/s/ Anthony Storino

Name:   Anthony Storino Title:   Authorized Signatory SCP PRIVATE CREDIT INCOME
BDC SPV LLC By  

/s/ Anthony Storino

Name:   Anthony Storino Title:   Authorized Signatory SCP PRIVATE CORPORATE
LENDING FUND SPV LLC By  

/s/ Anthony Storino

Name:   Anthony Storino Title:   Authorized Signatory SCP SF DEBT FUND L.P. By  

/s/ Anthony Storino

Name:   Anthony Storino Title:   Authorized Signatory

[Signature Page to Loan and Security Agreement]

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

SCHEDULE 1.1

Lenders and Commitments

Term A Loans

 

Lender

   Term Loan Commitment      Commitment Percentage  

SOLAR CAPITAL LTD.

   $ 15,612,935.51        44.61 % 

SUNS SPV LLC

   $ 2,399,509.81        6.86 % 

SCP PRIVATE CREDIT INCOME FUND SPV LLC

   $ 4,096,038.24        11.70 % 

SCP PRIVATE CREDIT INCOME BDC SPV LLC

   $ 3,055,625.78        8.73 % 

SCP PRIVATE CORPORATE LENDING FUND SPV LLC

   $ 7,923,781.28        22.64 % 

SCP SF DEBT FUND L.P.

   $ 1,912,109.38        5.46 %    

 

 

    

 

 

 

TOTAL

     35,000,000        100.00 %    

 

 

    

 

 

 

Term B Loans

 

Lender

   Term Loan Commitment      Commitment Percentage  

SOLAR CAPITAL LTD.

   $ 6,691,258.07        44.61 % 

SUNS SPV LLC

   $ 1,028,361.35        6.86 % 

SCP PRIVATE CREDIT INCOME FUND SPV LLC

   $ 1,755,444.96        11.70 % 

SCP PRIVATE CREDIT INCOME BDC SPV LLC

   $ 1,309,553.91        8.73 % 

SCP PRIVATE CORPORATE LENDING FUND SPV LLC

   $ 3,395,906.26        22.64 % 

SCP SF DEBT FUND L.P.

   $ 819,475.45        5.46 %    

 

 

    

 

 

 

TOTAL

   $ 15,000,000        100.00 %    

 

 

    

 

 

 

Aggregate (all Term Loans)

 

Lender

   Term Loan Commitment      Commitment Percentage  

SOLAR CAPITAL LTD.

   $ 22,304,193.58        44.61 % 

SUNS SPV LLC

   $ 3,427,871.16        6.86 % 

SCP PRIVATE CREDIT INCOME FUND SPV LLC

   $ 5,851,483.20        11.70 % 

SCP PRIVATE CREDIT INCOME BDC SPV LLC

   $ 4,365,179.69        8.73 % 

SCP PRIVATE CORPORATE LENDING FUND SPV LLC

   $ 11,319,687.54        22.64 % 

SCP SF DEBT FUND L.P.

   $ 2,731,584.83        5.46 %    

 

 

    

 

 

 

TOTAL

   $ 50,000,000        100.00 %    

 

 

    

 

 

 

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

Schedule 7.13(b)

Minimum Product Revenue

 

Month End

  

Product Revenue

December 2020    [***] January 2021    [***] February 2021    [***] March 2021
   [***] April 2021    [***] May 2021    [***] June 2021    [***] July 2021   
[***] August 2021    [***] September 2021    [***] October 2021    [***]
November 2021    [***] December 2021    [***] January 2022    [***] February
2022    [***] March 2022    [***] April 2022    [***] May 2022    [***] June
2022    [***] July 2022    [***] August 2022    [***] September 2022    [***]
October 2022    [***] November 2022    [***] December 2022    [***] January 2023
and each month thereafter    [***]

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EXHIBIT A

Description of Collateral

The Collateral consists of all of Borrower’s right, title and interest in and to
the following property:

All goods, Accounts (including health-care receivables), Equipment, Inventory,
contract rights or rights to payment of money, leases, license agreements,
franchise agreements, General Intangibles, commercial tort claims, documents,
instruments (including any promissory notes), chattel paper (whether tangible or
electronic), cash, deposit accounts and other Collateral Accounts, all
certificates of deposit, fixtures, letters of credit rights (whether or not the
letter of credit is evidenced by a writing), securities, and all other
investment property, supporting obligations, and financial assets, whether now
owned or hereafter acquired, wherever located; and

All Borrower’s Books relating to the foregoing, and any and all claims, rights
and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.

Notwithstanding the foregoing, the Collateral does not include (a) any interest
of Borrower as a lessee or sublessee under a real property lease; (b) rights
held under a license that are not assignable by their terms without the consent
of the licensor thereof (but only to the extent such restriction on assignment
is effective under Section 9-406, 9-407, 9-408 or 9-409 of the Code (or any
successor provision or provisions) of any relevant jurisdiction or any other
applicable law (including the Bankruptcy Code) or principles of equity); (c) any
interest of Borrower as a lessee under an Equipment lease if Borrower is
prohibited by the terms of such lease from granting a security interest in such
lease or under which such an assignment or Lien would cause a default to occur
under such lease; and (d) any “intent to use” United States Trademark
applications for which a statement of use or an amendment to allege use has not
been filed (but only until such statement is filed) solely to the extent, if
any, that, and only during the period, if any, in which, the grant of a security
interest therein would impair the validity or enforceability of such intent to
use Trademark applications under applicable federal law provided, however, that
upon termination of such prohibition, such interest shall immediately become
Collateral without any action by Borrower, Collateral Agent or any Lender.

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EXHIBIT B

Collateral Agent and Lender Terms

1. Appointment of Collateral Agent.

(a) Each Lender hereby appoints Solar (together with any successor Collateral
Agent pursuant to Section 7 of this Exhibit B) as Collateral Agent under the
Loan Documents and authorizes Collateral Agent to (i) execute and deliver the
Loan Documents and accept delivery thereof on its behalf from Borrower,
(ii) take such action on its behalf and to exercise all rights, powers and
remedies and perform the duties as are expressly delegated to Collateral Agent
under such Loan Documents and (iii) exercise such powers as are reasonably
incidental thereto.

(b) Without limiting the generality of clause (a) above, Collateral Agent shall
have the sole and exclusive right and authority (to the exclusion of the
Lenders), and is hereby authorized, to (i) act as the disbursing and collecting
agent for the Lenders with respect to all payments and collections arising in
connection with the Loan Documents (including in any other bankruptcy,
insolvency or similar proceeding), and each Person making any payment in
connection with any Loan Document to any Lender is hereby authorized to make
such payment to Collateral Agent, (ii) file and prove claims and file other
documents necessary or desirable to allow the claims of Collateral Agent and
Lenders with respect to any Obligation in any bankruptcy, insolvency or similar
proceeding (but not to vote, consent or otherwise act on behalf of such Lender),
(iii) act as collateral agent for the Secured Parties for purposes of the
perfection of all Liens created by the Loan Documents and all other purposes
stated therein, (iv) manage, supervise and otherwise deal with the Collateral as
permitted pursuant to the Loan Agreement, (v) take such other action as is
necessary or desirable to maintain the perfection and priority of the Liens
created or purported to be created by the Loan Documents, (vi) except as may be
otherwise specified in any Loan Document, exercise all remedies given to
Collateral Agent and the other Lenders with respect to the Borrower and/or the
Collateral, whether under the Loan Documents, applicable Requirements of Law or
otherwise and (vii) execute any amendment, consent or waiver under the Loan
Documents on behalf of any Lender that has consented in writing to such
amendment, consent or waiver; provided, however, that Collateral Agent hereby
appoints, authorizes and directs each Lender to act as collateral sub-agent for
Collateral Agent and the Lenders for purposes of the perfection of all Liens
with respect to the Collateral, including any Deposit Account maintained by
Borrower or any Guarantor with, and cash and Cash Equivalents held by, such
Lender, and may further authorize and direct the Lenders to take further actions
as collateral sub-agents for purposes of enforcing such Liens or otherwise to
transfer the Collateral subject thereto to Collateral Agent, and each Lender
hereby agrees to take such further actions to the extent, and only to the
extent, so authorized and directed. Collateral Agent may, upon any term or
condition it specifies, delegate or exercise any of its rights, powers and
remedies under, and delegate or perform any of its duties or any other action
with respect to, any Loan Document by or through any trustee, co-agent,
employee, attorney-in-fact and any other Person (including any Lender). Any such
Person shall benefit from this Exhibit B to the extent provided by Collateral
Agent.

(c) Under the Loan Documents, Collateral Agent (i) is acting solely on behalf of
the Lenders, with duties that are entirely administrative in nature,
notwithstanding the use of the defined term “Collateral Agent”, the terms
“agent”, “Collateral Agent” and “collateral agent” and similar terms in any Loan
Document to refer to Collateral Agent, which terms are used for title purposes
only, (ii) is not assuming any obligation under any Loan Document other than as
expressly set forth therein or any role as agent, fiduciary or trustee of or for
any Lender or any other Person and (iii) shall have no implied functions,
responsibilities, duties, obligations or other liabilities under any Loan
Document, and each Lender, by accepting the benefits of the Loan Documents,
hereby waives and agrees not to assert any claim against Collateral Agent based
on the roles, duties and legal relationships expressly disclaimed in clauses (i)

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

through (iii) above. Except as expressly set forth in the Loan Documents,
Collateral Agent shall not have any duty to disclose, and shall not be liable
for failure to disclose, any information relating to Borrower or any of its
Subsidiaries that is communicated to or obtained by Solar or any of its
Affiliates in any capacity.

2. Binding Effect; Use of Discretion; E-Systems.

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

(b) If Collateral Agent shall request instructions from the Required Lenders or
all affected Lenders with respect to any act or action (including failure to
act) in connection with any Loan Document, then Collateral Agent shall be
entitled to refrain from such act or taking such action unless and until
Collateral Agent shall have received instructions from the Required Lenders or
all affected Lenders, as the case may be, and Collateral Agent shall not incur
liability to any Person by reason of so refraining. Collateral Agent shall be
fully justified in failing or refusing to take any action under any Loan
Document (i) if such action would, in the opinion of Collateral Agent, be
contrary to any Requirement of Law or any Loan Document, (ii) if such action
would, in the opinion of Collateral Agent, expose Collateral Agent to any
potential liability under any Requirement of Law or (iii) if Collateral Agent
shall not first be indemnified to its satisfaction against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. Without limiting the foregoing, no Lender shall have any
right of action whatsoever against Collateral Agent as a result of Collateral
Agent acting or refraining from acting under any Loan Document in accordance
with the instructions of the Required Lenders or all affected Lenders, as
applicable.

(c) Collateral Agent is hereby authorized by Borrower and each Lender to
establish procedures (and to amend such procedures from time to time) to
facilitate administration and servicing of the Term Loans and other matters
incidental thereto. Without limiting the generality of the foregoing, Collateral
Agent is hereby authorized to establish procedures to make available or deliver,
or to accept, notices, documents (including, without limitation, borrowing base
certificates) and similar items on, by posting to or submitting and/or
completion, on E-Systems. Borrower and each Lender acknowledges and agrees that
the use of transmissions via an E-System or electronic mail is not necessarily
secure and that there are risks associated with such use, including risks of
interception, disclosure and abuse, and Borrower and each Lender assumes and
accepts such risks by hereby authorizing the transmission via E-Systems or
electronic mail. Each “e-signature” on any such posting shall be deemed
sufficient to satisfy any requirement for a “signature”, and each such posting
shall be deemed sufficient to satisfy any requirement for a “writing”, in each
case including pursuant to any Loan Document, any applicable provision of any
Code, the federal Uniform Electronic Transactions Act, the Electronic Signatures
in Global and National Commerce Act and any substantive or procedural
Requirement of Law governing such subject matter. All uses of an E-System shall
be governed by and subject to, in addition to this Section, the separate terms,
conditions and privacy policy posted or referenced in such E-System (or such
terms, conditions and privacy policy as may be updated from time to time,
including on such E-System) and related contractual obligations executed by
Collateral Agent, Borrower and/or Lenders in connection with the use of such
E-System. ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS SHALL BE PROVIDED “AS IS”
AND “AS AVAILABLE”. NO REPRESENTATION OR WARRANTY OF ANY KIND IS MADE BY AGENT,
ANY LENDER OR ANY OF THEIR RELATED PERSONS IN CONNECTION WITH ANY E-SYSTEMS.

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

3. Collateral Agent’s Reliance, Etc. Collateral Agent may, without incurring any
liability hereunder, (a) consult with any of its Related Persons and, whether or
not selected by it, any other advisors, accountants and other experts (including
advisors to, and accountants and experts engaged by, Borrower) and (b) rely and
act upon any document and information (including those transmitted by electronic
transmission) and any telephone message or conversation, in each case believed
by it to be genuine and transmitted, signed or otherwise authenticated by the
appropriate parties. None of Collateral Agent and its Related Persons shall be
liable for any action taken or omitted to be taken by any of them under or in
connection with any Loan Document, and each Lender and Borrower hereby waives
and shall not assert (and Borrower shall cause its Subsidiaries to waive and
agree not to assert) any right, claim or cause of action based thereon, except
to the extent of liabilities resulting from the gross negligence or willful
misconduct of Collateral Agent or, as the case may be, such Related Person (each
as determined in a final, non-appealable judgment of a court of competent
jurisdiction) in connection with the duties of Collateral Agent expressly set
forth herein. Without limiting the foregoing, Collateral Agent: (i) shall not be
responsible or otherwise incur liability for any action or omission taken in
reliance upon the instructions of the Required Lenders or for the actions or
omissions of any of its Related Persons, except to the extent that a court of
competent jurisdiction determines in a final non-appealable judgment that
Collateral Agent acted with gross negligence or willful misconduct in the
selection of such Related Person; (ii) shall not be responsible to any Lender or
other Person for the due execution, legality, validity, enforceability,
effectiveness, genuineness, sufficiency or value of, or the attachment,
perfection or priority of any Lien created or purported to be created under or
in connection with, any Loan Document; (iii) makes no warranty or
representation, and shall not be responsible, to any Lender or other Person for
any statement, document, information, representation or warranty made or
furnished by or on behalf of Borrower or any Related Person of Borrower in
connection with any Loan Document or any transaction contemplated therein or any
other document or information with respect to Borrower, whether or not
transmitted or (except for documents expressly required under any Loan Document
to be transmitted to the Lenders) omitted to be transmitted by Collateral Agent,
including as to completeness, accuracy, scope or adequacy thereof, or for the
scope, nature or results of any due diligence performed by Collateral Agent in
connection with the Loan Documents; and (iv) shall not have any duty to
ascertain or to inquire as to the performance or observance of any provision of
any Loan Document, whether any condition set forth in any Loan Document is
satisfied or waived, as to the financial condition of Borrower or as to the
existence or continuation or possible occurrence or continuation of any Event of
Default, and shall not be deemed to have notice or knowledge of such occurrence
or continuation unless it has received a notice from Borrower or any Lender
describing such Event of Default that is clearly labeled “notice of default” (in
which case Collateral Agent shall promptly give notice of such receipt to all
Lenders, provided that Collateral Agent shall not be liable to any Lender for
any failure to do so, except to the extent that such failure is attributable to
Collateral Agent’s gross negligence or willful misconduct as determined by a
final non-appealable judgment of a court of competent jurisdiction); and, for
each of the items set forth in clauses (i) through (iv) above, each Lender and
Borrower hereby waives and agrees not to assert (and Borrower shall cause its
Subsidiaries to waive and agree not to assert) any right, claim or cause of
action it might have against Collateral Agent based thereon.

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

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5. Lender Credit Decision; Collateral Agent Report. Each Lender acknowledges
that it shall, independently and without reliance upon Collateral Agent, any
Lender or any of their Related Persons or upon any document solely or in part
because such document was transmitted by Collateral Agent or any of its Related
Persons, conduct its own independent investigation of the financial condition
and affairs of Borrower and make and continue to make its own credit decisions
in connection with entering into, and taking or not taking any action under, any
Loan Document or with respect to any transaction contemplated in any Loan
Document, in each case based on such documents and information as it shall deem
appropriate. Except for documents expressly required by any Loan Document to be
transmitted by Collateral Agent to the Lenders, Collateral 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
and other condition or creditworthiness of Borrower or any Affiliate of Borrower
that may come in to the possession of Collateral Agent or any of its Related
Persons. Each Lender agrees that is shall not rely on any field examination,
audit or other report provided by Collateral Agent or its Related Persons (an
“Collateral Agent Report”). Each Lender further acknowledges that any Collateral
Agent Report (a) is provided to the Lenders solely as a courtesy, without
consideration, and based upon the understanding that such Lender will not rely
on such Collateral Agent Report, (b) was prepared by Collateral Agent or its
Related Persons based upon information provided by Borrower solely for
Collateral Agent’s own internal use, and (c) may not be complete and may not
reflect all information and findings obtained by Collateral Agent or its Related
Persons regarding the operations and condition of Borrower. Neither Collateral
Agent nor any of its Related Persons makes any representations or warranties of
any kind with respect to (i) any existing or proposed financing, (ii) the
accuracy or completeness of the information contained in any Collateral Agent
Report or in any related documentation, (iii) the scope or adequacy of
Collateral Agent’s and its Related Persons’ due diligence, or the presence or
absence of any errors or omissions contained in any Collateral Agent Report or
in any related documentation, and (iv) any work performed by Collateral Agent or
Collateral Agent’s Related Persons in connection with or using any Collateral
Agent Report or any related documentation. Neither Collateral Agent nor any of
its Related Persons shall have any duties or obligations in connection with or
as a result of any Lender receiving a copy of any Collateral Agent Report.
Without limiting the generality of the forgoing, neither Collateral Agent nor
any of its Related Persons shall have any responsibility for the accuracy or
completeness of any Collateral Agent Report, or the appropriateness of any
Collateral Agent Report for any Lender’s purposes, and shall have no duty or
responsibility to correct or update any Collateral Agent Report or disclose to
any Lender any other information not embodied in any Collateral Agent Report,
including any supplemental information obtained after the date of any Collateral
Agent Report. Each Lender releases, and agrees that it will not assert, any
claim against Collateral Agent or its Related Persons that in any way relates to
any Collateral Agent Report or arises out of any Lender having access to any
Collateral Agent Report or any discussion of its contents, and agrees to
indemnify and hold harmless Collateral Agent and its Related Persons from all
claims, liabilities and expenses relating to a breach by any Lender arising out
of such Lender’s access to any Collateral Agent Report or any discussion of its
contents.

6. Indemnification. Each Lender agrees to reimburse Collateral Agent and each of
its Related Persons (to the extent not reimbursed by Borrower as required under
the Loan Documents (including pursuant to Section 12.2 of the Agreement))
promptly upon demand for its Pro Rata Share of any out-of-pocket costs and
expenses (including, without limitation, fees, charges and disbursements of
financial, legal and other advisors and any Taxes or insurance paid in the name
of, or on behalf of, Borrower) incurred by Collateral Agent or any of its
Related Persons in connection with the preparation, syndication, execution,
delivery, administration, modification, amendment, consent, waiver or
enforcement of, or the taking of any other action (whether through negotiations,
through any work-out, bankruptcy, restructuring or other legal or other
proceeding (including, without limitation, preparation for and/or response to
any subpoena or request for document production relating thereto) or otherwise)
in respect of, or legal advice with respect to, its rights or responsibilities
under, any Loan Document. Each Lender further agrees to indemnify Collateral
Agent and each of its Related Persons (to the extent not reimbursed by

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Borrower as required under the Loan Documents (including pursuant to
Section 12.2 of the Agreement)), ratably according to its Pro Rata Share, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever (including, to the extent not indemnified by the applicable
Lender, 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 Collateral Agent or any of
its Related Persons in any matter relating to or arising out of, in connection
with or as a result of any Loan Document 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 Collateral Agent or any of its
Related Persons under or with respect to the foregoing; provided that no Lender
shall be liable to Collateral Agent or any of its Related Persons under this
Section 6 of this Exhibit B to the extent such liability has resulted from the
gross negligence or willful misconduct of Collateral Agent or, as the case may
be, such Related Person, as determined by a final non-appealable judgment of a
court of competent jurisdiction. To the extent required by any applicable
Requirement of Law, Collateral Agent may withhold from any payment to any Lender
under a Loan Document an amount equal to any applicable withholding Tax. If the
IRS or any other Governmental Authority asserts a claim that Collateral Agent
did not properly withhold Tax from amounts paid to or for the account of any
Lender for any reason, or if Collateral Agent reasonably determines that it was
required to withhold Taxes from a prior payment to or for the account of any
Lender but failed to do so, such Lender shall promptly indemnify Collateral
Agent fully for all amounts paid, directly or indirectly, by Collateral Agent as
Tax or otherwise, including penalties and interest, and together with all
expenses incurred by Collateral Agent. Collateral Agent may offset against any
payment to any Lender under a Loan Document, any applicable withholding Tax that
was required to be withheld from any prior payment to such Lender but which was
not so withheld, as well as any other amounts for which Collateral Agent is
entitled to indemnification from such Lender under the immediately preceding
sentence of this Section 6 of this Exhibit B.

7. Successor Collateral Agent. Collateral Agent may resign at any time by
delivering notice of such resignation to the Lenders and Borrower, effective on
the date set forth in such notice or, if no such date is set forth therein, upon
the date such notice shall be effective, in accordance with the terms of this
Section 7 of this Exhibit B. If Collateral Agent delivers any such notice, the
Required Lenders shall have the right to appoint a successor Collateral Agent.
If, after 30 days after the date of the retiring Collateral Agent’s notice of
resignation, no successor Collateral Agent has been appointed by the Required
Lenders and has accepted such appointment, then the retiring Collateral Agent
may, on behalf of the Lenders, appoint a successor Collateral Agent from among
the Lenders. Effective immediately upon its resignation, (a) the retiring
Collateral Agent shall be discharged from its duties and obligations under the
Loan Documents, (b) the Lenders shall assume and perform all of the duties of
Collateral Agent until a successor Collateral Agent shall have accepted a valid
appointment hereunder, (c) the retiring Collateral Agent and its Related Persons
shall no longer have the benefit of any provision of any Loan Document other
than with respect to any actions taken or omitted to be taken while such
retiring Collateral Agent was, or because such Collateral Agent had been,
validly acting as Collateral Agent under the Loan Documents, and (iv) subject to
its rights under Section 2(b) of this Exhibit B, the retiring Collateral Agent
shall take such action as may be reasonably necessary to assign to the successor
Collateral Agent its rights as Collateral Agent under the Loan Documents.
Effective immediately upon its acceptance of a valid appointment as Collateral
Agent, a successor Collateral Agent shall succeed to, and become vested with,
all the rights, powers, privileges and duties of the retiring Collateral Agent
under the Loan Documents.

8. Release of Collateral. Each Lender hereby consents to the release and hereby
directs Collateral Agent to release (or in the case of clause (b)(ii) below,
release or subordinate) the following:

(a) any Guarantor if all of the stock of such Subsidiary owned by Borrower is
sold or transferred in a transaction permitted under the Loan Documents
(including pursuant to a valid waiver or consent), to the extent that, after
giving effect to such transaction, such Subsidiary would not be required to
guaranty any Obligations pursuant to any Loan Document; and

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(b) any Lien held by Collateral Agent for the benefit of the Secured Parties
against (i) any Collateral that is sold or otherwise disposed of by Borrower in
a transaction permitted by the Loan Documents (including pursuant to a valid
waiver or consent), (ii) any Collateral subject to a Lien that is expressly
permitted under clause (c) of the definition of the term “Permitted Lien” and
(iii) all of the Collateral and Borrower, upon (A) termination of all of the
Commitments, (B) the payment in full in cash of all of the Obligations (other
than inchoate indemnity obligations for which no claim has been made), and
(C) to the extent requested by Collateral Agent, receipt by Collateral Agent and
Lenders of liability releases from Borrower in form and substance acceptable to
Collateral Agent (the satisfaction of the conditions in this clause (iii), the
“Termination Date”).

9. Setoff and Sharing of Payments. In addition to any rights now or hereafter
granted under any applicable Requirement of Law and not by way of limitation of
any such rights, upon the occurrence and during the continuance of any Event of
Default and subject to Section 10(d) of this Exhibit B, each Lender is hereby
authorized at any time or from time to time upon the direction of Collateral
Agent, without notice to Borrower or any other Person, any such notice being
hereby expressly waived, to setoff and to appropriate and to apply any and all
balances held by it at any of its offices for the account of Borrower
(regardless of whether such balances are then due to Borrower) and any other
properties or assets at any time held or owing by that Lender or that holder to
or for the credit or for the account of Borrower against and on account of any
of the Obligations that are not paid when due. Any Lender exercising a right of
setoff or otherwise receiving any payment on account of the Obligations in
excess of its Pro Rata Share thereof shall purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender’s
or holder’s Pro Rata Share of the Obligations as would be necessary to cause
such Lender to share the amount so offset or otherwise received with each other
Lender or holder in accordance with their respective Pro Rata Shares of the
Obligations. Borrower agrees, to the fullest extent permitted by law, that
(a) any Lender may exercise its right to offset with respect to amounts in
excess of its Pro Rata Share of the Obligations and may purchase participations
in accordance with the preceding sentence and (b) any Lender so purchasing a
participation in the Term Loans made or other Obligations held by other Lenders
or holders may exercise all rights of offset, bankers’ liens, counterclaims or
similar rights with respect to such participation as fully as if such Lender or
holder were a direct holder of the Term Loans and the other Obligations in the
amount of such participation. Notwithstanding the foregoing, if all or any
portion of the offset amount or payment otherwise received is thereafter
recovered from the Lender that has exercised the right of offset, the purchase
of participations by that Lender shall be rescinded and the purchase price
restored without interest.

10. Advances; Payments; Non-Funding Lenders; Actions in Concert.

(a) Advances; Payments. If Collateral Agent receives any payment with respect to
a Term Loan for the account of the Lenders on or prior to 2:00 p.m. (New York
time) on any Business Day, Collateral Agent shall pay to each applicable Lender
such Lender’s Pro Rata Share of such payment on such Business Day. If Collateral
Agent receives any payment with respect to a Term Loan for the account
of Lenders after 2:00 p.m. (New York time) on any Business Day, Collateral Agent
shall pay to each applicable Lender such Lender’s Pro Rata Share of such payment
on the next Business Day.

(b) Return of Payments.

(i) If Collateral Agent pays an amount to a Lender under this Agreement in the
belief or expectation that a related payment has been or will be received by
Collateral Agent or on behalf of from Borrower and such related payment is not
received by Collateral Agent, then Collateral Agent will be entitled to recover
such amount (including interest accruing on such amount at the rate otherwise
applicable to such Obligation) from such Lender on demand without setoff,
counterclaim or deduction of any kind.

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(ii) If Collateral Agent determines at any time that any amount received by
Collateral Agent under any Loan Document must be returned to Borrower or paid to
any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of any Loan Document, Collateral
Agent will not be required to distribute any portion thereof to any Lender. In
addition, each Lender will repay to Collateral Agent on demand any portion of
such amount that Collateral Agent has distributed to such Lender, together with
interest at such rate, if any, as Collateral Agent is required to pay to
Borrower or such other Person, without setoff, counterclaim or deduction of any
kind and Collateral Agent will be entitled to set off against future
distributions to such Lender any such amounts (with interest) that are not
repaid on demand.

(c) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of any Loan
Document (including exercising any rights of setoff) without first obtaining the
prior written consent of Collateral Agent or Required Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under any
Loan Document shall be taken in concert and at the direction or with the consent
of Collateral Agent or Required Lenders.

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EXHIBIT C

Taxes; Increased Costs.

1. Defined Terms. For purposes of this Exhibit C:

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

(b) “Excluded Taxes” means any of the following Taxes imposed on or with respect
to a Recipient or required to be withheld or deducted from a payment to a
Recipient, (i) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (A) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(B) that are Other Connection Taxes, (ii) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Term Loan or Term Loan
Commitment pursuant to a law in effect on the date on which (A) such Lender
acquires such interest in the Term Loan or Term Commitment or (B) such Lender
changes its lending office, except in each case to the extent that, pursuant to
Section 2 or Section 4 of this Exhibit C, amounts with respect to such Taxes
were payable either to such Lender’s assignor immediately before such Lender
became a party hereto or to such Lender immediately before it changed its
lending office, (iii) Taxes attributable to such Recipient’s failure to comply
with Section 7 of this Exhibit C and (iv) any withholding Taxes imposed under
FATCA.

(c) “FATCA” means Sections 1471 through 1474 of the Internal Revenue 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 Internal Revenue
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 Internal Revenue
Code.

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

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

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

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

(h) “Recipient” means Collateral Agent or any Lender, as applicable.

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

(j) “Withholding Agent” means Borrower and Collateral Agent.

2. Payments Free of Taxes. Any and all payments by or on account of any
obligation of Borrower under any Loan Document shall be made without deduction
or withholding for any Taxes, except as required by applicable law. If any
applicable law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by Borrower shall be increased as necessary so that after such deduction or
withholding has been made (including such deductions and withholdings applicable
to additional sums payable under this Section 2 or Section 4 of this Exhibit C)
the applicable Recipient receives an amount equal to the sum it would have
received had no such deduction or withholding been made.

3. Payment of Other Taxes by Borrower. Borrower shall timely pay to the relevant
Governmental Authority in accordance with applicable law, or at the option of
Collateral Agent timely reimburse it for the payment of, any Other Taxes.

4. Indemnification by Borrower. Borrower shall indemnify each Recipient, within
10 days after demand therefor, for the full amount of any Indemnified Taxes
(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under Section 2 of this Exhibit C or this Section 4) payable or paid by
such Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to Borrower by a Lender (with a copy to
Collateral Agent), or by Collateral Agent on its own behalf or on behalf of a
Lender, shall be conclusive absent manifest error.

5. Indemnification by the Lenders. Each Lender shall severally indemnify
Collateral Agent, within 10 days after demand therefor, for (a) any Indemnified
Taxes attributable to such Lender (but only to the extent that Borrower has not
already indemnified Collateral Agent for such Indemnified Taxes and without
limiting the obligation of Borrower to do so), (b) any Taxes attributable to
such Lender’s failure to comply with the provisions of Section 12.1 of the
Agreement relating to the maintenance of a Participant Register and (c) any
Excluded Taxes attributable to such Lender, in each case, that are payable or
paid by Collateral Agent in connection with any Loan Document, and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to any Lender by Collateral Agent shall be conclusive absent
manifest error. Each Lender hereby authorizes Collateral Agent to set off and
apply any and all amounts at any time owing to such Lender under any Loan
Document or otherwise payable by Collateral Agent to the Lender from any other
source against any amount due to Collateral Agent under this Section 5.

6. Evidence of Payments. As soon as practicable after any payment of Taxes by
Borrower to a Governmental Authority pursuant to the provisions of this Exhibit
C, Borrower shall deliver to Collateral Agent the original or a certified copy
of a receipt issued by such Governmental Authority evidencing such payment, a
copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to Collateral Agent.

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7. Status of Lenders.

(a) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to
Borrower and Collateral Agent, at the time or times reasonably requested by
Borrower or Collateral Agent, such properly completed and executed documentation
reasonably requested by Borrower or Collateral 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 Borrower or Collateral Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by Borrower or Collateral Agent as will enable Borrower or
Collateral Agent to determine whether or not such Lender is subject to backup
withholding or information reporting requirements. Notwithstanding anything to
the contrary in the preceding two sentences, the completion, execution and
submission of such documentation (other than such documentation set forth in
Sections 7(b)(i), 7(b)(ii) and 7(b)(iv) of this Exhibit C) shall not be required
if in the Lender’s reasonable judgment such completion, execution or submission
would subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.

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

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

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

 

  (A)

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

 

  (B)

executed copies of IRS Form W-8ECI;

 

  (C)

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

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  (D)

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

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

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

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

8. Treatment of Certain Refunds. If any party determines, in its sole discretion
exercised in good faith, that it has received a refund of any Taxes as to which
it has been indemnified pursuant to the provisions of this Exhibit C (including
by the payment of additional amounts pursuant to the provisions of this Exhibit
C), it shall pay to the indemnifying party an amount equal to such refund (but
only to the extent of indemnity payments made under the provisions of this
Exhibit C with respect to the Taxes giving rise to such refund), net of all
out-of-pocket expenses (including Taxes) of such indemnified party and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund). Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount paid over
pursuant to this Section 8 (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) in the event that such
indemnified party is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this Section 8, in no

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event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this Section 8 the payment of which would place
the indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the Tax subject to indemnification and
giving rise to such refund had not been deducted, withheld or otherwise imposed
and the indemnification payments or additional amounts with respect to such Tax
had never been paid. This Section 8 shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

9. Increased Costs. If any change in applicable law shall subject any Recipient
to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses
(ii) through (iv) of the definition of Excluded Taxes and (C) Connection Income
Taxes) on its loans, loan principal, commitments, or other obligations, or its
deposits, reserves, other liabilities or capital attributable thereto, and the
result shall be to increase the cost to such Recipient of making, converting to,
continuing or maintaining any Term Loan or of maintaining its obligation to make
any such Term Loan, or to reduce the amount of any sum received or receivable by
such Recipient (whether of principal, interest or any other amount), then, upon
the request of such Recipient, Borrower will pay to such Recipient such
additional amount or amounts as will compensate such Recipient for such
additional costs incurred or reduction suffered.

10. Survival. Each party’s obligations under the provisions of this Exhibit C
shall survive the resignation or replacement of Collateral Agent or any
assignment of rights by, or the replacement of, a Lender, the termination of the
Term Loan Commitments and the repayment, satisfaction or discharge of all
obligations under any Loan Document.

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EXHIBIT D

Loan Payment Request Form

 

Fax To: (212) 993-1698   Date: _____________________

 

LOAN PAYMENT:

                                     Neuronetics, Inc.

 

From Account #________________________________   
To Account #________________________________________ (Deposit Account #)   
(Loan Account #) Principal $____________________________________   
and/or Interest $______________________________________ Authorized Signature:
                                                         Phone Number:
________________________

Print Name/Title: ______________________________

 

  

 

LOAN ADVANCE:

Complete Outgoing Wire Request section below if all or a portion of the funds
from this loan advance are for an outgoing wire.

 

From Account #________________________________   To Account
#__________________________________________ (Loan Account #)   (Deposit Account
#)

Amount of Advance $___________________________

All Borrower’s representations and warranties in the Loan and Security Agreement
are true, correct and complete in all material respects on the date of the
request for an advance; provided, however, that such materiality qualifier shall
not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof; and provided, further
that those representations and warranties expressly referring to a specific date
shall be true, accurate and complete in all material respects as of such date:

 

Authorized Signature: __________________   Phone Number:
________________________ Print Name/Title: ______________________  

 

OUTGOING WIRE REQUEST:

Complete only if all or a portion of funds from the loan advance above is to be
wired.

 

Beneficiary Name: _____________________________    Amount of Wire: $
________________________ Beneficiary Bank: _____________________________   
Account Number: ________________________ City and State:
________________________________    Beneficiary Bank Transit (ABA) #:
                                    Beneficiary Bank Code (Swift, Sort, Chip,
etc.): __________                    (For International Wire Only) Intermediary
Bank: ________________________    Transit (ABA) #: ________________________ For
Further Credit to:
_______________________________________________________________________________________
Special Instruction:
_______________________________________________________________________________________

By signing below, I (we) acknowledge and agree that my (our) funds transfer
request shall be processed in accordance with and subject to the terms and
conditions set forth in the agreements(s) covering funds transfer service(s),
which agreements(s) were previously received and executed by me (us).

 

Authorized Signature: __________________________    2nd Signature (if required):
________________________ Print Name/Title: ______________________________   
Print Name/Title: ________________________________ Telephone #:
_________________________________    Telephone #: ________________________ ]

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EXHIBIT E

Compliance Certificate

 

TO:    SOLAR CAPITAL LTD., as Collateral Agent and Lender FROM:    Neuronetics,
Inc.

The undersigned authorized officer (“Officer”) of Neuronetics, Inc.
(“Borrower”), hereby certifies that in accordance with the terms and conditions
of the Loan and Security Agreement dated as of March 2, 2020, by and among
Borrower, Collateral Agent, and the Lenders from time to time party thereto (the
“Loan Agreement;” capitalized terms used but not otherwise defined herein shall
have the meanings given them in the Loan Agreement),

(a) Borrower is in complete compliance for the period ending _______________
with all required covenants except as noted below;

(b) There are no Events of Default, except as noted below;

(c) Except as noted below, all representations and warranties of Borrower stated
in the Loan Documents are true and correct in all material respects on this date
and for the period described in (a), above; provided, however, that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in
all material respects as of such date.

(d) Borrower, and each of Borrower’s Subsidiaries, has timely filed all required
tax returns and reports; Borrower, and each of Borrower’s Subsidiaries, has
timely paid all foreign, federal, state, and local Taxes, assessments, deposits
and contributions owed by Borrower, or Subsidiary, except as otherwise permitted
pursuant to the terms of Section 5.8 of the Loan Agreement;

(e) No Liens have been levied or claims made against Borrower or any of its
Subsidiaries relating to unpaid employee payroll or benefits of which Borrower
has not previously provided written notification to Collateral Agent and the
Lenders.

Attached are the required documents, if any, supporting Borrower’s
certification(s). The Officer, on behalf of Borrower, further certifies that the
attached financial statements are prepared in accordance with Generally Accepted
Accounting Principles (GAAP) and are consistently applied from one period to the
next except as explained in an accompanying letter or footnotes and except, in
the case of unaudited financial statements, for the absence of footnotes and
subject to year-end audit adjustments as to the interim financial statements.

Please indicate compliance status since the last Compliance Certificate by
circling Yes, No, or N/A under “Complies” column.

 

     Reporting Covenant    Requirement    Actual    Complies 1)   

Monthly financial statements

  

Monthly within 30 days

      Yes    No    N/A 2)   

Quarterly financial statements

  

Quarterly within 45 days

      Yes    No    N/A

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

3)    Annual (CPA Audited) statements    Within 90 days after FYE       Yes   
No    N/A 4)    Annual Financial Projections/Budget (prepared on a monthly
basis)    Annually (within earlier of 10 days of approval or 60 days after FYE),
and when revised       Yes    No    N/A 5)    A/R & A/P agings    If applicable
      Yes    No    N/A 6)    8-K, 10-K and 10-Q Filings    within 5 days of
filing       Yes    No    N/A 7)    Compliance Certificate    Monthly within 30
days       Yes    No    N/A 8)    IP Report    When required       Yes    No   
N/A 9)    Total amount of Borrower’s cash and cash equivalents at the last day
of the measurement period       $________    Yes    No    N/A 10)    Total
amount of Borrower’s Subsidiaries’ cash and cash equivalents at the last day of
the measurement period       $________    Yes    No    N/A

Deposit and Securities Accounts

(Please list all accounts; attach separate sheet if additional space needed)

 

     Institution Name    Account Number   

New

Account?

   Account Control Agreement in place? 1)          Yes    No    Yes    No 2)   
      Yes    No    Yes    No 3)          Yes    No    Yes    No 4)          Yes
   No    Yes    No

Financial Covenants

 

Minimum Liquidity Requirement   

(A) Qualified Cash

$___________

  

(B) A/P not paid within 90 days
from invoice date

$____________

  

Complies with
Minimum Liquidity
Requirement (Is (A)

greater than or equal to
$10,000,000 plus (B)?

         Y        N        N/A

 

Minimum Product Revenue (period

            ending __________)

   (A) Actual Product
Revenue
$___________   

(B) Minimum
Product Revenue per
Section 7.13(b)

$____________

  

Complies with Minimum
Product Revenue (Is (A)

greater than or equal to (B))?

   Y    N    N/A

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

Other Matters

 

1)    Have there been any changes in Key Persons since the last Compliance
Certificate?    Yes    No 2)    Have there been any
transfers/sales/disposals/retirement of Collateral or IP prohibited by the Loan
Agreement?    Yes    No 3)    Have there been any new or pending claims or
causes of action against Borrower that involve more than One Hundred Thousand
Dollars ($100,000.00)?    Yes    No 4)    Have there been any amendments of or
other changes to the capitalization table of Borrower and to the Operating
Documents of Borrower or any of its Subsidiaries? If yes, provide copies of any
such amendments or changes with this Compliance Certificate.    Yes    No 5)   
Has Borrower or any Subsidiary entered into or amended any Material Agreement?
If yes, please explain and provide a copy of the Material Agreement(s) and/or
amendment(s).    Yes    No 6)    Has Borrower provided the Collateral Agent with
all notices required to be delivered under Sections 6.2(a) and 6.2(c) of the
Loan Agreement?    Yes    No

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

Exceptions

Please explain any exceptions with respect to the certification above: (If no
exceptions exist, state “No exceptions.” Attach separate sheet if additional
space needed.)

 

NEURONETICS, INC. By:     Name:     Title:    

Date:

 

  COLLATERAL AGENT USE ONLY   Received by:                                     
  Date:                    Verified by:                                        
Date:                    Compliance Status:        Yes                No

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

EXHIBIT F

CORPORATE BORROWING CERTIFICATE

[Signature Page to Corporate Borrowing Certificate]

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

EXHIBIT G

Certificate of Incorporation (including amendments)

[see attached]

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

EXHIBIT H

Bylaws

[see attached]

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

EXHIBIT I

ACH LETTER

SOLAR CAPITAL LTD.

500 Park Avenue, 3rd Floor

New York, NY 10022

Attention: Anthony Storino

Fax: (212) 993-1698

Email: storino@solarcapital.com

Re: Loan and Security Agreement dated as of March 2, 2020 (the “Agreement”) by
and among Neuronetics, Inc. (“Borrower”), Solar Capital Ltd. (“Solar”), as
collateral agent (in such capacity, “Collateral Agent”) and the Lenders listed
on Schedule 1.1 thereof or otherwise a party thereto from time to time,
including Solar in its capacity as a Lender and Collateral Agent (each a
“Lender” and collectively, the “Lenders”). Capitalized terms used but not
otherwise defined herein shall have the meanings given them under the Agreement.

In connection with the above referenced Agreement, the Borrower hereby
authorizes the Collateral Agent to, at its discretion and with prior notice of
at least one (1) Business Day, initiate debit entries to the Borrower’s account
indicated below (i) on each payment date of all Obligations then due and owing,
(ii) at any time any payment due and owing with respect to Lender Expenses, and
(iii) upon an Event of Default, any other Obligations outstanding, in each case
pursuant to Section 2.3(e) of the Agreement. The Borrower authorizes the
depository institution named below to debit to such account.

 

DEPOSITORY NAME    BRANCH CITY    STATE AND ZIP CODE TRANSIT/ABA NUMBER   
ACCOUNT NUMBER

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

 

NEURONETICS, INC.

By:    

Title:    

Date: