Exhibit 10.1

EXECUTION VERSION

 

 

 

FACILITY AGREEMENT

dated as of March 11, 2020

by and among

SIENTRA, INC.,

as the Borrower,

the other Loan Parties party hereto from time to time,

the Lenders

and

DEERFIELD PARTNERS, L.P.,

as agent for itself and the Lenders

 

 

 

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Table of Contents

 

ARTICLE 1 DEFINITIONS

     1  

Section 1.1

  General Definitions      1  

Section 1.2

  Interpretation      21  

Section 1.3

  Business Day Adjustment      22  

Section 1.4

  Loan Records      22  

Section 1.5

  Accounting Terms and Principles      23  

Section 1.6

  Officers      24  

ARTICLE 2 AGREEMENT FOR THE LOAN

     24  

Section 2.1

  Disbursements      24  

Section 2.2

  Payments; Prepayments; Conversions      24  

Section 2.3

  Payment Details      25  

Section 2.4

  Taxes      25  

Section 2.5

  Costs, Expenses and Losses      27  

Section 2.6

  Interest      27  

Section 2.7

  Interest on Late Payments; Default Interest      27  

Section 2.8

  Fees      27  

ARTICLE 3 REPRESENTATIONS AND WARRANTIES

     28  

Section 3.1

  Existence and Power      28  

Section 3.2

  Organization and Governmental Authorization; No Contravention      28  

Section 3.3

  Binding Effect      28  

Section 3.4

  Capitalization      28  

Section 3.5

  Financial Information      29  

Section 3.6

  Litigation      29  

Section 3.7

  Ownership of Property      29  

Section 3.8

  No Default      29  

Section 3.9

  Labor Matters      29  

Section 3.10

  Regulated Entities      30  

Section 3.11

  Margin Regulations      30  

Section 3.12

  Compliance With Laws; Anti-Terrorism Laws      30  

Section 3.13

  Taxes      30  

Section 3.14

  Compliance with ERISA      30  

Section 3.15

  Brokers      31  

Section 3.16

  [Reserved]      31  

Section 3.17

  Material Contracts      31  

Section 3.18

  Compliance with Environmental Requirements; No Hazardous Materials      31  

Section 3.19

  Intellectual Property and License Agreements      32  

Section 3.20

  Solvency      32  

Section 3.21

  Full Disclosure      32  

Section 3.22

  [Reserved]      32  

Section 3.23

  Subsidiaries      32  

Section 3.24

  [Reserved]      32  

Section 3.25

  SEC Documents      32  

Section 3.26

  Accounting Controls      33  

 

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Section 3.27

  Shares of Stock      33  

Section 3.28

  Securities Law and Principal Market Matters      34  

Section 3.29

  Status as Senior Debt      35  

Section 3.30

  Convertible Notes      35  

Section 3.31

  Economic Risk      36  

Section 3.32

  Restricted Securities      36  

Section 3.33

  Accredited Investor      36  

ARTICLE 4 CONDITIONS OF DISBURSEMENT

     36  

Section 4.1

  Conditions to the Disbursement      36  

ARTICLE 5 AFFIRMATIVE COVENANTS

     37  

Section 5.1

  Reserved      37  

Section 5.2

  Payment and Performance of Obligations      37  

Section 5.3

  Maintenance of Existence, Etc.      37  

Section 5.4

  Maintenance of Property; Insurance      38  

Section 5.5

  Compliance with Laws and Material Contracts      38  

Section 5.6

  Inspections      38  

Section 5.7

  Use of Proceeds      39  

Section 5.8

  Required Authorizations      39  

Section 5.9

  Notices; Information      39  

Section 5.10

  SEC Documents; Financial Statements      39  

Section 5.11

  Disclosure      39  

Section 5.12

  Conversion Shares      40  

Section 5.13

  Further Assurances      40  

Section 5.14

  Environmental Matters      40  

Section 5.15

  [Reserved]      40  

Section 5.16

  [Reserved]      40  

Section 5.17

  [Reserved]      41  

Section 5.18

  Disclosure; No MNPI      41  

Section 5.19

  Major Transaction      42  

ARTICLE 6 NEGATIVE COVENANTS

     43  

Section 6.1

  Debt; Contingent Obligations      43  

Section 6.2

  Liens      43  

Section 6.3

  Distributions      43  

Section 6.4

  Restrictive Agreements      43  

Section 6.5

  Payments and Modifications of Subordinated Debt      43  

Section 6.6

  Consolidations, Mergers and Sales of Assets      44  

Section 6.7

  Purchase of Assets, Investments      44  

Section 6.8

  Transactions with Affiliates      44  

Section 6.9

  Modification of Organizational Documents      45  

Section 6.10

  Reserved      45  

Section 6.11

  Conduct of Business      45  

Section 6.12

  Compliance with Anti-Corruption Laws      45  

Section 6.13

  Accounting Changes      45  

 

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ARTICLE 7

     45  

EVENTS OF DEFAULT

     45  

Section 7.1

  Events of Default      45  

Section 7.2

  Remedies      47  

ARTICLE 8 MISCELLANEOUS

     48  

Section 8.1

  Notices      48  

Section 8.2

  Cost and Expense Reimbursement      49  

Section 8.3

  Governing Law      49  

Section 8.4

  Successors and Assigns      50  

Section 8.5

  Entire Agreement; Amendments      51  

Section 8.6

  Severability      52  

Section 8.7

  Counterparts      52  

Section 8.8

  Survival      52  

Section 8.9

  No Waiver      52  

Section 8.10

  Indemnity      53  

Section 8.11

  No Usury      53  

Section 8.12

  [Reserved]      54  

Section 8.13

  Agent      54  

Section 8.14

  USA Patriot Act      57  

Section 8.15

  Placement Agent      57  

Section 8.16

  Independent Nature of Lenders      57  

Section 8.17

  Required Disclosure.      58  

Section 8.18

  Joint and Several      58  

Section 8.19

  No Third Parties Benefited      58  

Section 8.20

  Binding Effect      58  

Section 8.21

  Payments Set Aside      58  

Section 8.22

  [Reserved]      58  

Section 8.23

  Right of Setoff      58  

Section 8.24

  Sharing of Payments, Etc.      59  

Section 8.25

  Certain Securities Matters      59  

Section 8.26

  Subordination Agreement      59  

 

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Annexes Annex A    Disbursement Amount    Schedules Schedule 2.3    Payment
Details and Notice Information    Schedule 3.1    Existence and Power   
Schedule 3.4    Capitalization    Schedule 3.6    Litigation    Schedule 3.17   
Material Contracts    Schedule 3.18    Environmental Matters    Schedule 3.19   
Intellectual Property    Schedule 3.26    Accounting Controls    Schedule 6.1   
Debt; Contingent Obligations    Schedule 6.2    Liens    Schedule 6.7   
Investments    Schedule 6.8    Transactions with Affiliates    Exhibits Exhibit
A    Form of Convertible Note    Exhibit B    Closing Checklist    Exhibit C   
Form of Assignment and Assumption    Exhibit D    Form of Solvency Certificate
  

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FACILITY AGREEMENT

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

W I T N E S S E T H:

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

WHEREAS, the Borrower has agreed to execute and deliver Convertible Notes to
each of the Lenders evidencing such Loans subject to the terms and conditions
set forth in this Agreement; and

WHEREAS, each of the Loan Parties is willing to guaranty all of the Obligations
(and, in the case of the Borrower, the Obligations of the other Loan Parties).

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

ARTICLE 1

DEFINITIONS

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

“2019 Annual Report” has the meaning set forth in Section 5.18(b).

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

“Acquisition Consideration” has the meaning set forth in the definition of
“Permitted Acquisitions.”

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

“Affiliate” means, with respect to any Person, (a) any Person that directly or
indirectly controls such Person, (b) any Person which is controlled by or is
under common control with such controlling

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Person, and (c) each of such Person’s (other than, with respect to any Lender,
any Lender’s) officers or directors (or Persons functioning in substantially
similar roles) and the spouses, parents, descendants and siblings of such
officers, directors or other Persons. As used in this definition, the term
“control” of a Person means the possession, directly or indirectly, of the power
to vote ten percent (10%) or more of any class of voting securities of such
Person or to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise. Unless expressly stated otherwise herein, no Lender shall, for the
purposes of this Agreement or any of the other Facility Documents, be deemed an
Affiliate of the Borrower, any other Loan Party or any of their respective
Subsidiaries. With respect to a Lender, any investment fund or managed account
that is managed on a discretionary basis by the same investment manager as such
Lender shall, for purposes hereof, be deemed to be an Affiliate of such Lender.

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

“Agreed Disclosure Process” has the meaning set forth in Section 5.18(d).

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

“Announcing Form 8-K” has the meaning set forth in Section 5.18(a).

“Anti-Terrorism Laws” means any Laws 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.

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

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy”, as the same may be amended, modified or supplemented from time to
time, and any successor statute thereto.

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

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

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

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C.A. § 9601 et seq., as the same may be amended
from time to time.

“Closing Date” means the date of this Agreement.

“Closing Date Lender” means Deerfield Partners, L.P.

 

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“Closing Market Price” means, with respect to any Trading Day, the last sales
price of shares of Common Stock on NASDAQ, or, if that is not the principal
trading market for shares of Common Stock, such Eligible Market on which shares
of Common Stock are traded or listed

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
any successor statutes thereto, and applicable U.S. Department of Treasury
regulations issued pursuant thereto in temporary or final form.

“Common Stock” means the common stock of the Borrower.

“Competitor” means, at any time of determination, any Person engaged in the same
or substantially the same line of business as the Borrower and the other Loan
Parties and such business accounts for all or substantially all the revenue or
net income of such Person at the time of such determination.

“Contingent Acquisition Consideration Obligations” means the obligations of Loan
Parties to make milestone payments and other contingent payments pursuant to the
CVR Agreement and the other Transaction Documents (in each case, as the same are
in effect as of the Closing Date).

“Contingent Obligation” means, with respect to any Person, any direct or
indirect liability of such Person: (a) with respect to any Debt of another
Person (a “Third Party Obligation”) if the purpose or intent of such Person
incurring such liability, or the effect thereof, is to provide assurance to the
obligee of such Third Party Obligation that such Third Party Obligation will be
paid or discharged, or that any agreement relating thereto will be complied
with, or that any holder of such Third Party Obligation will be protected, in
whole or in part, against loss with respect thereto; (b) with respect to any
undrawn portion of any letter of credit issued for the account of such Person or
as to which such Person is otherwise liable for the reimbursement of any
drawing; (c) if applicable, under any Swap Contract, to the extent not yet due
and payable; (d) to make take-or-pay or similar payments if required regardless
of nonperformance by any other party or parties to an agreement; or (e) for any
obligations of another Person pursuant to any Guarantee or pursuant to any
agreement to purchase, repurchase or otherwise acquire any obligation or any
property constituting security therefor, to provide funds for the payment or
discharge of such obligation or to preserve the solvency, financial condition or
level of income of another Person. The amount of any Contingent Obligation shall
be equal to the amount of the obligation so Guaranteed or otherwise supported
or, if not a fixed and determinable amount, the maximum amount so Guaranteed or
otherwise supported.

“Controlled Group” means all members of a group of corporations and all members
of a group of trades or businesses (whether or not incorporated) under common
control which, together with any Loan Party, are treated as a single employer
under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA
and, solely for purposes of Section 412 and 436 of the Code, Section 414(m) or
(o) of the Code.

“Convertible Notes” means the Convertible Notes issued to the Lenders evidencing
the Loans in substantially the form attached hereto as Exhibit A.

“Conversion”  means any conversion of the Convertible Notes into Conversion
Shares in accordance with the terms thereof.

“Conversion Shares”  means the shares of Common Stock issuable upon conversion
of the Convertible Notes.

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

 

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“Covered Person” has the meaning set forth in Section 3.29(d).

“CVR Agreement”  means that certain Contingent Value Rights Agreement, dated as
of July 1, 2019, among Sientra and Computershare Trust Company, N.A., as
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof.

“DEA”  means the Drug Enforcement Administration of the United States of
America, any comparable state or local Governmental Authority, any comparable
Governmental Authority in any non-United States jurisdiction, and any successor
agency of any of the foregoing.

“Debt” of a Person means at any date, without duplication, (a) all obligations
of such Person for borrowed money, (b) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (c) all obligations of
such Person to pay the deferred purchase price of property or services, except
trade accounts payable arising and paid on a timely basis and in the Ordinary
Course of Business, (d) all capital leases of such Person, (e) all
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, (f) Disqualified Stock, (g) all obligations secured by a
Lien on any asset of such Person, whether or not such obligation is otherwise an
obligation of such Person, (h) “earnouts”, purchase price adjustments, profit
sharing arrangements (other than those entered into in the Ordinary Course of
Business), deferred purchase money amounts and similar payment obligations or
continuing obligations of any nature of such Person arising out of purchase and
sale contracts, and (i) all Debt of others Guaranteed by such Person. Without
duplication of any of the foregoing, Debt of Loan Parties shall include any and
all Loans.

“Default” means any condition or event which with the giving of notice or lapse
of time or both would, unless cured or waived, become an Event of Default.

“Deposit Account” means a “deposit account” (as defined in Article 9 of the
UCC), an investment account, or other account in which funds are held or
invested for credit to or for the benefit of any Loan Party.

“Disbursement” has the meaning set forth in Section 2.1(a).

“Disbursement Date” means the date on which the Disbursement is funded in
accordance with the terms hereof.

“Disqualification Event” has the meaning set forth in Section 3.29(d).

“Disqualified Stock” means, with respect to any Person, any equity interest in
such Person that, by its terms (or by the terms of any security or other equity
interests into which it is convertible or for which it is exchangeable), or upon
the happening of any event or condition, less than 91 days after the Facility
Termination Date (a) matures or is mandatorily redeemable (other than solely for
Permitted Debt or other equity interests in such Person or of Sientra that do
not constitute Disqualified Stock and cash in lieu of fractional shares of such
equity interests), pursuant to a sinking fund obligation or otherwise, (b) is
redeemable at the option of the holder thereof, in whole or in part (other than
solely for Permitted Debt or other equity interests in such Person or of Sientra
that do not constitute Disqualified Stock and cash in lieu of fractional shares
of such equity interests), (c) provides for the scheduled payments of dividends
or distributions in cash, or (d) is or becomes convertible into or exchangeable
for Debt or any other equity interests that would constitute Disqualified Stock.

“Distribution” means as to any Person (a) any dividend or other distribution
(whether in cash, securities or other property) on any equity interest in such
Person (except those payable solely in its equity

 

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interests of the same class), (b) any payment by such Person on account of
(i) the purchase, redemption, retirement, defeasance, surrender, cancellation,
termination or acquisition of any equity interests in such Person or any claim
respecting the purchase or sale of any equity interest in such Person, or
(ii) any option, warrant or other right to acquire any equity interests in such
Person, or (c) any management fees, salaries or other fees or compensation to
any Person holding a material equity interest in a Loan Party or a Subsidiary of
a Loan Party (other than reasonable and customary (i) payments of salaries to
individuals, (ii) directors fees, and (iii) advances and reimbursements to
employees or directors, all in the Ordinary Course of Business), an Affiliate of
a Loan Party or an Affiliate of any Subsidiary of a Loan Party.

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

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

“Drug Application” means a new drug application, an abbreviated drug
application, or a product license application for any Product, as appropriate,
as those terms are defined in the FDCA.

“EDGAR” has the meaning set forth in Section 3.25.

“Eligible Market” means the NASDAQ Global Market, the NASDAQ Global Select
Market, the New York Stock Exchange, the NYSE Alternext, or the Nasdaq Capital
Market

“Environmental Laws” means any and all Laws pertaining to the environment,
natural resources, pollution, Hazardous Materials, or, to the extent relating to
exposure to substances that are harmful or detrimental to the environment,
employee health or safety, including any environmental clean-up Laws which
pertain to or impose liability or standards of conduct concerning medical waste
or medical products, equipment or supplies.

“ERISA”  means the Employee Retirement Income Security Act of 1974, as the same
may be amended, modified or supplemented from time to time, and any successor
statute thereto, and any and all rules or regulations promulgated from time to
time thereunder.

“ERISA Plan”  means any “employee benefit plan”, as such term is defined in
Section 3(3) of ERISA (other than a Multiemployer Plan), which any Loan Party
maintains, sponsors or contributes to, or, in the case of an employee benefit
plan which is subject to Section 412 of the Code or Title IV of ERISA, to which
any Loan Party or any member of the Controlled Group may have any liability,
including any liability by reason of having been a substantial employer within
the meaning of Section 4063 of ERISA at any time during the preceding five
(5) years, or by reason of being deemed to be a contributing sponsor under
Section 4069 of ERISA.

“Event of Default” has the meaning set forth in Section 7.1.

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

“Excluded Taxes” means with respect to any Lender, (a) Taxes imposed on (or
measured by) such Lender’s net income (however denominated), franchise Taxes and
branch profits Taxes, in each case (i) imposed as a result of such Lender being
organized under the laws of, or having its principal office or applicable
lending office located in, the jurisdiction imposing such Tax (or any political
subdivision

 

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thereof), or (ii) that are Other Connection Taxes, (b) any United States federal
withholding Tax imposed on amounts payable to or for the account of such Lender
with respect to its interest in a Loan under the laws in effect at the time such
Lender becomes a party to this Agreement or such Lender changes its lending
office, except to the extent such Lender acquired its interest in the Loan from
a transferor that was entitled, immediately before such transfer, to receive
Additional Amounts with respect to such withholding Tax pursuant to
Section 2.4(a) or was itself so entitled immediately before changing its lending
office, (c) any United States federal withholding Tax imposed on amounts payable
to such Lender directly as a result of such Lender’s failure to comply with
Section 2.4(d), or (d) any United States federal withholding Tax imposed on
amounts payable to such Lender under FATCA.

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

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

“FATCA” means Sections 1471 through 1474 of the Code as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any regulations or official
interpretations thereof and any agreements entered into pursuant to
Section 1471(b)(1) of the Code and any applicable intergovernmental agreements
entered into with respect to the foregoing.

“FDA” means the Food and Drug Administration of the United States of America,
any comparable state or local Governmental Authority, any comparable
Governmental Authority in any non-United States jurisdiction, and any successor
agency of any of the foregoing.

“FDCA” means the Federal Food, Drug and Cosmetic Act, as amended, 21 U.S.C.
Section 301 et seq., and all regulations promulgated thereunder.

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

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

“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the United States
accounting profession), which are applicable to the circumstances as of the date
of determination.

“Good Manufacturing Practices” means current good manufacturing practices, as
set forth in 21 C.F.R. Parts 210 and 211.

“Governmental Authority” means any federal, state, foreign or international
government, regulatory or administrative agency, any state or other political
subdivision thereof having jurisdiction over any Loan Party or any Subsidiary of
any Loan Party, any central bank (or similar monetary or regulatory authority)
thereof, any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any corporation or
other entity owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing. For the avoidance of doubt, Governmental

 

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Authority shall include the SEC, the Principal Market, the Financial Industry
Regulatory Authority, any agency, branch or other governmental body, entity or
panel charged with the responsibility and/or vested with the authority to
administer and/or enforce any Health Care Laws, including any Medicare or
Medicaid administrators, contractors, intermediaries or carriers and any agency,
branch or other governmental body, entity or panel charged with the
responsibility and/or vested with the authority to administer and/or enforce
laws governing insurance, including the National Association of Insurance
Commissioners and any board of insurance, insurance department or insurance
commissioner.

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

“Guarantor” means any Loan Party that has executed or delivered, or shall in the
future execute or deliver, any Guarantee of any portion of the Obligations.

“Hazardous Materials” means (a) any “hazardous substance” as defined in CERCLA,
(b) any “hazardous waste” as defined by the Resource Conservation and Recovery
Act , (c) asbestos, (d) polychlorinated biphenyls, (e) petroleum and its
derivatives, by-products and other hydrocarbons, and (f) any other pollutant,
toxic, radioactive, caustic or otherwise hazardous substance regulated under
Environmental Laws.

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

 

7

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Amendments and the regulations promulgated thereunder and similar state laws;
(m) the provision of free or discounted care or services; (n) laws and
regulations regulating the generation, transportation, treatment, storage,
disposal and other handling of medical or radioactive waste, and (o) any and all
other applicable health care laws, regulations, and manual provisions, policies
and administrative guidance, each of clauses (a) through (o) as may be amended,
modified or supplemented from time to time and any successor statutes thereto
and regulations promulgated thereunder from time to time.

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

“Indemnified Person” has the meaning set forth in Section 8.10(a).

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

“Indemnity” has the meaning set forth in Section 8.10(a).

“Intellectual Property” means all copyright rights, copyright applications,
copyright registrations and like protections in each work of authorship and
derivative work, whether published or unpublished, any patents, patent
applications and like protections, including improvements, divisions,
continuations, renewals, reissues, extensions, and continuations-in-part of the
same, trademarks, trade names, service marks, mask works, rights of use of any
name, domain names, or any other similar rights, any applications therefor,
whether registered or not, know-how, operating manuals, trade secret rights,
clinical and non-clinical data, rights to unpatented inventions, and any claims
for damage by way of any past, present, or future infringement of any of the
foregoing.

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

“Interest Rate” means 4.00% per annum.

“Investment” means, with respect to any Person, directly or indirectly, (a) to
purchase or acquire any stock or stock equivalents, or any obligations or other
securities of, or any interest in, any Person, including the establishment or
creation of a Subsidiary, (b) to make or commit to make any Acquisition
(including through licensing) or (c) make or purchase any advance, loan,
extension of credit or capital contribution to, or any other investment in, any
Person. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect thereto.

“IRS” means the United States Internal Revenue Service.

“Laws” means any and all federal, state, provincial, territorial, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, codes, injunctions, permits, governmental agreements
and governmental restrictions, whether now or hereafter in effect, which are

 

8

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applicable to any Loan Party in any particular circumstance.  “Laws” includes,
without limitation, Health Care Laws and Environmental Laws.

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

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

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

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind, in respect of such asset. For the
purposes of this Agreement and the other Facility Documents, any Loan Party or
any Subsidiary shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.

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

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

“Loss” has the meaning set forth in Section 8.10(a).

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

“Major Transaction Payment” has the meaning set forth in Section 5.19.

“Material Adverse Effect”  means with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any
litigation, binding arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect upon, any of (a) the
condition (financial or otherwise), operations, business or properties of any of
the Loan Parties, (b) the rights and remedies of Agent or Lenders under any
Facility Document, or the ability of any Loan Party to perform any of its
obligations under any Facility Document to which it is a party, (c) the
legality, validity or enforceability of any Facility Document, or (d) a material
impairment of the prospect of repayment of any portion of the Obligations.

“Material Contracts” means (a) the Facility Documents, (b) the Transaction
Documents, (c) the agreements listed on Schedule 3.17, (d) (i) each contract or
agreement that is disclosed (or is required to be disclosed) publicly as a
material definitive agreement by the Loan Parties, (e) the Project Destiny
Acquisition Agreement, (f) the Project Destiny Transition Services Agreement and
(g) the Project Destiny Lease and (ii) each other agreement or contract to which
such Loan Party or its Subsidiaries is a party the termination of which could
reasonably be expected to result in a Material Adverse Effect.

 

9

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“Material Intangible Assets” means all of (a) Loan Parties’ Intellectual
Property and (b) license or sublicense agreements or other agreements with
respect to rights in Intellectual Property, in each case that are material to
the condition (financial or other), business or operations of Loan Parties.

“Maturity Date” means March 11, 2025.

“Monthly Cash Burn Amount” means, with respect to Loan Parties, an amount equal
to (a) the Loan Parties’ change in cash and cash equivalents, without giving
effect to any increase resulting from contributions or proceeds of financings,
for the immediately succeeding twelve (12) month period following the
consummation of the Permitted Acquisition based upon the Transaction
Projections, divided by (b) twelve (12).

“Multiemployer Plan” means a multiemployer plan within the meaning of
Section 4001(a)(3) of ERISA to which any Loan Party or any other member of the
Controlled Group (or any Person who in the last five years was a member of the
Controlled Group) is making or accruing an obligation to make contributions or
has within the preceding five plan years (as determined on the applicable date
of determination) made contributions.

“Necessary Disclosure” has the meaning set forth in Section 5.18(d).

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

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

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

“Ordinary Course of Business” means, in respect of any transaction involving any
Loan Party, the ordinary course of business of such Loan Party, as conducted by
such Loan Party in accordance with past practices.

“Organizational Documents” means, with respect to any Person other than a
natural person, the documents by which such Person was organized (such as a
certificate of incorporation, certificate of limited partnership or articles of
organization, and including, without limitation, any certificates of designation
for preferred stock or other forms of preferred equity) and which relate to the
internal governance of such Person (such as by-laws, a partnership agreement or
an operating agreement, joint venture agreement, limited liability company
agreement or members agreement), including any and all shareholder agreements or
voting agreements relating to the capital stock or other equity interests of
such Person.

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

 

10

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“Other Taxes” means any and all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes arising from any payment made
hereunder or from the execution, issuance, delivery, registration, enforcement
or transfer of, or otherwise with respect to, any Facility Document.

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

“PBGC” means the Pension Benefit Guaranty Corporation and any Person succeeding
to any or all of its functions under ERISA.

“Pension Plan” means any ERISA Plan that is subject to Section 412 of the Code
or Title IV of ERISA.

“Permit” means all licenses, certificates, accreditations, product clearances or
approvals, provider numbers or provider authorizations, supplier numbers,
marketing authorizations, drug or device authorizations and approvals, other
authorizations, franchises, qualifications, accreditations, registrations,
permits, consents and approvals of a Loan Party issued or required under Laws
applicable to the business of Borrower or any of its Subsidiaries or necessary
in the manufacturing, importing, exporting, possession, ownership, warehousing,
marketing, promoting, sale, labeling, furnishing, distribution or delivery of
goods or services under Laws applicable to the business of Borrower or any of
its Subsidiaries.   Without limiting the generality of the foregoing, “Permit”
includes any Regulatory Required Permit.

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

 

  (a)

the Borrower shall have delivered to Agent at least ten (10) Business Days (or
such shorter period as may be agreed by Agent) prior to the closing of the
proposed Acquisition: (i) a description of the proposed Acquisition; (ii) to the
extent available in the case of an Acquisition for cash consideration in excess
of $1,100,000, a due diligence package (including, to the extent available, a
quality of earnings report); and (iii) copies of the respective agreements,
documents or instruments pursuant to which such Acquisition is to be consummated
(or substantially final drafts thereof), any schedules to such agreements,
documents or instruments and all other material ancillary agreements,
instruments and documents to be executed or delivered in connection therewith,
and, to the extent required to be completed prior to the closing of such
Acquisition under the related acquisition agreement and reasonably requested by
Agent, all material regulatory and third party approvals and copies of any
environmental assessments, if applicable;

 

  (b)

the Loan Parties (including any new Subsidiary to the extent required by
Section 5.13) shall execute and deliver the agreements, instruments and other
documents to the extent required by Section 5.13 hereof;

 

  (c)

at the time of such Acquisition and after giving effect thereto, no Event of
Default has occurred and is continuing;

 

  (d)

all transactions in connection with such Acquisition shall be consummated in all
material respects in accordance with applicable Laws;

 

  (e)

the assets acquired in such Acquisition are for use in the same, similar,
related or complementary lines of business as the Loan Parties are currently
engaged or a similar, related

 

11

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or complementary line of business reasonably related, ancillary or supplemental
thereto or incidental thereto or reasonably expansive thereof;

 

  (f)

if required, such Acquisition shall have been approved by the board of directors
(or other similar body) and/or the stockholders or other equity holders of any
Person being acquired in such Acquisition;

 

  (g)

no Debt or Liens are assumed or created (other than Permitted Liens and
Permitted Debt) in connection with such Acquisition;

 

  (h)

[reserved];

 

  (i)

the sum of all cash amounts (including cash equivalents) paid or payable in
connection with all Permitted Acquisitions (including all Debt, liabilities and
Contingent Obligations (in each case to the extent otherwise permitted
hereunder) incurred or assumed and the maximum amount of any earn-out or
comparable payment obligation in connection therewith, regardless of when due or
payable and whether or not reflected on a consolidated balance sheet of Loan
Parties) shall not exceed $7,700,000 in the aggregate during the term of this
Agreement (such consideration, the “Acquisition Consideration”); and

 

  (j)

Agent has received, prior to the consummation of such Acquisition, updated
financial projections, in form and substance reasonably satisfactory to Agent,
for the immediately succeeding twelve (12) months following the proposed
consummation of the Acquisition beginning with the month during which the
Acquisition is to be consummated (the “Transaction Projections”) and such other
evidence as Agent may reasonably request demonstrating that Loan Parties have,
immediately before and immediately after giving effect to the consummation of
such Acquisition, unrestricted cash in one or more Deposit Accounts in an
aggregate amount equal to or greater than the positive value of the product of
(x) twelve (12) multiplied by (y) the Monthly Cash Burn Amount, as determined as
of the last day of the month immediately preceding such Acquisition.

“Permitted Contest”  means, with respect to any tax obligation or other
obligation allegedly or potentially owing from any Loan Party or its Subsidiary
to any governmental tax authority or other third party, a contest maintained in
good faith by appropriate proceedings promptly instituted and diligently
conducted and with respect to which such reserve or other appropriate provision,
if any, as shall be required in conformity with GAAP shall have been made on the
books and records and financial statements of the applicable Loan Party(ies);
provided, however, that (a) compliance with the obligation that is the subject
of such contest is effectively stayed during such challenge; and (b) upon a
final determination of such contest, Borrower and its Subsidiaries shall
promptly comply with the requirements thereof.

“Permitted Contingent Obligations” means

 

  (a)

Contingent Obligations arising in respect of the Debt under the Facility
Documents;

 

  (b)

Contingent Obligations resulting from endorsements for collection or deposit in
the Ordinary Course of Business;

 

  (c)

Contingent Obligations outstanding on the date of this Agreement and set forth
on Schedule 6.1 (but not including any refinancings, extensions, increases or
amendments to the indebtedness underlying such Contingent Obligations other than
extensions of the maturity thereof without any other change in terms);

 

12

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  (d)

[reserved];

 

  (e)

Contingent Obligations incurred in the Ordinary Course of Business with respect
to surety and appeal bonds, performance bonds and other similar obligations not
to exceed $1,100,000 in the aggregate at any time outstanding;

 

  (f)

Contingent Obligations arising under indemnity agreements with title insurers to
cause such title insurers to issue to Agent mortgagee title insurance policies;

 

  (g)

Contingent Obligations arising with respect to customary indemnification
obligations in favor of purchasers in connection with dispositions of personal
property assets permitted under Section 6.6;

 

  (h)

so long as there exists no Event of Default both immediately before and
immediately after giving effect to any such transaction, Contingent Obligations
existing or arising under any Swap Contract, provided, however, that such
obligations are (or were) entered into by Borrower or an Affiliate in the
Ordinary Course of Business for the purpose of directly mitigating risks
associated with liabilities, commitments, investments, assets, or property held
or reasonably anticipated by such Person and not for purposes of speculation;

 

  (i)

Contingent Obligations arising with respect to customary indemnification
obligations, adjustment of purchase price, non-compete or similar obligations of
any Loan Party, to the extent such Contingent Obligations arise in connection
with a Permitted Acquisition; and

 

  (j)

[reserved]; and

 

  (k)

other Contingent Obligations not permitted by clauses (a) through (j) above, not
to exceed $550,000 in the aggregate at any time outstanding.

“Permitted Debt” means:

 

  (a)

each Loan Party’s and its Subsidiaries’ Debt to Agent and each Lender under this
Agreement and the other Facility Documents;

 

  (b)

Debt incurred as a result of endorsing negotiable instruments received in the
Ordinary Course of Business;

 

  (c)

purchase money Debt not to exceed $1,100,000 in the aggregate at any time
(whether in the form of a loan or a lease) used solely to acquire equipment used
in the Ordinary Course of Business and secured only by such equipment;

 

  (d)

Debt existing on the date of this Agreement and described on Schedule 6.1 (but
not including any refinancings, extensions, increases or amendments to such Debt
other than extensions of the maturity thereof without any other change in
terms);

 

  (e)

unsecured Debt incurred in respect of corporate credit cards or credit card
processing services or other bank product obligations, in each case, incurred in
the Ordinary Course of Business in an aggregate amount not to exceed $1,100,000
outstanding at any time;

 

  (f)

so long as there exists no Event of Default both immediately before and
immediately after giving effect to any such transaction, Debt existing or
arising under any Swap Contract,

 

13

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provided, however, that such obligations are (or were) entered into by Borrower
or an Affiliate in the Ordinary Course of Business for the purpose of directly
mitigating risks associated with liabilities, commitments, investments, assets,
or property held or reasonably anticipated by such Person and not for purposes
of speculation;

 

  (g)

Debt in the form of insurance premiums financed through the applicable insurance
company so long as the amount of such Debt is not in excess of the amount of the
unpaid cost of, and shall be incurred only to defer the cost of, such insurance
for the policy year in which such Debt is incurred and such Debt is outstanding
only during such policy year;

 

  (h)

trade accounts payable arising and paid on a timely basis and in the Ordinary
Course of Business;

 

  (i)

Debt of the Loan Parties incurred under the Senior Financing Documents and any
renewals, extensions, refinancings and replacements of the foregoing, in an
aggregate principal amount (excluding interest paid in kind not to exceed a paid
in kind rate of 10% of such Debt at any time outstanding outstanding) not to
exceed $80,000,000 at any time outstanding;

 

  (j)

Debt consisting of unsecured intercompany loans and advances incurred by (1) any
Loan Party owing to any other Loan Party, (2) any Restricted Foreign Subsidiary
and owing to any other Restricted Foreign Subsidiary, or (3) any Restricted
Foreign Subsidiary owing to any Loan Party or any Guarantor so long as such Debt
constitutes a Permitted Investment of the applicable Loan Party pursuant to
clause (j) of the definition of Permitted Investments;

 

  (k)

Debt not to exceed $1,100,000 in the aggregate at any time with respect to
letters of credit issued to support any real property lease; provided that such
letters of credit are secured solely by Liens permitted pursuant to clause
(o) of the definition of Permitted Liens;

 

  (l)

unsecured earn-out obligations and other similar contingent purchase price
obligations incurred in connection with a Permitted Acquisition, in an amount
not to exceed the cap set forth in clause (i) of the definition of Permitted
Acquisitions after taking into account all other Acquisition Consideration paid
or payable by Loan Parties during the term of this Agreement;

 

  (m)

the Contingent Acquisition Consideration Obligations;

 

  (n)

Subordinated Debt;

 

  (o)

the Project Destiny Deferred Consideration in an aggregate amount not to exceed
$6,363,335; provided that no payment shall be made by or on behalf of Borrower
or its Subsidiaries in respect of the Project Destiny Deferred Consideration if
an Event of Default has occurred and is continuing or would result from the
making of any such payment unless Agent and Required Lenders have provided their
prior written consent to the making of such payment; and

 

  (p)

other unsecured Debt not to exceed $550,000 in the aggregate at any time at any
time outstanding.

“Permitted Distributions” means the following Distributions:

 

14

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  (a)

dividends by any Subsidiary of any of any Loan Party to such applicable parent
Loan Party;

 

  (b)

dividends payable solely in common stock and de minimis cash payable in lieu of
nominal fractional shares;

 

  (c)

repurchases of stock of former or current employees, directors, officers or
consultants pursuant to stock purchase agreements or rights of first refusal so
long as an Event of Default does not exist at the time of such repurchase and
would not exist after giving effect to such repurchase, provided, however, that
such repurchase does not exceed $550,000 in the aggregate per fiscal year;

 

  (d)

the honoring of any conversion requests in respect of any convertible securities
of Borrower (other than Disqualified Stock) permitted under Section 6.1 into
equity interests of Sientra pursuant to the terms of such convertible securities
or otherwise in exchange therefor; provided that no cash payments are made in
connection therewith except for de minimis cash payable in lieu of fractional
shares;

 

  (e)

the issuance of its equity interests (other than Disqualified Stock) upon the
exercise of warrants or options to purchase equity interests of Sientra;
provided that no cash payments are made in connection therewith except for de
minimis cash payable in lieu of fractional shares;

 

  (f)

the distribution of rights pursuant to a stockholder rights plan or redemption
of such rights for no or nominal consideration (including, for the avoidance of
doubt, cash consideration); provided that such redemption is in accordance with
the terms of such plan;

 

  (g)

Distributions in connection with the retention of equity interests in payment of
withholding taxes in connection with equity-based compensation plans in an
aggregate amount not to exceed $550,000 in any twelve (12) month period;

 

  (h)

the receipt or acceptance of the return to any Loan Party or any Subsidiary of
equity interests of Sientra constituting a portion of the purchase price
consideration in settlement of indemnification claims in connection with a
Permitted Acquisition pursuant to Section 6.7; provided that no cash payments
are made in connection therewith except for de minimis cash payable in lieu of
fractional shares; and

 

  (i)

payments or distributions to dissenting stockholders pursuant to applicable Law
in connection with any Permitted Acquisition, provided that such amounts when
taken together with the aggregate Acquisition Consideration paid or payable for
all Permitted Acquisitions shall not exceed the amounts permitted by the
definition of Permitted Acquisition.

“Permitted Investments” means:

 

  (a)

[Reserved];

 

  (b)

Investments shown on Schedule 6.7 and existing on the Closing Date;

 

  (c)

cash and cash equivalents;

 

15

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  (d)

Investments consisting of the endorsement of negotiable instruments for deposit
or collection or similar transactions in the Ordinary Course of Business;

 

  (e)

Investments consisting of (i) travel advances and employee relocation loans and
other employee loans and advances in the Ordinary Course of Business, (ii) so
long as an Event of Default does not exist at the time of such loan and would
not exist after giving effect to such loan, loans to employees, officers,
directors or consultants relating to the purchase of equity securities of Loan
Parties or their Subsidiaries pursuant to employee stock purchase plans or
agreements approved by any Loan Party’s Board of Directors (or other governing
body), but the aggregate of all such loans outstanding may not exceed $550,000
at any time and (iii) non-cash loans to employees, officers, directors or
consultants related to the purchase of equity interests;

 

  (f)

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;

 

  (g)

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, however, that this subpart (g) shall not
apply to Investments of Loan Parties in any Subsidiary;

 

  (h)

Investments consisting of Deposit Accounts;

 

  (i)

Investments by any Loan Party in any Subsidiary now owned or hereafter created
by such Loan Party, which Subsidiary is a Loan Party or has provided a Guarantee
of the Obligations in compliance with Section 5.13;

 

  (j)

Investments of cash and cash equivalents in an Restricted Foreign Subsidiary but
solely to the extent that the aggregate amount of such Investments with respect
to all Restricted Foreign Subsidiaries does not, at any time, exceed $1,100,000
in the aggregate in any twelve (12) month period; provided that in no event
shall the aggregate amount of Investments made in any Restricted Foreign
Subsidiary exceed the amount necessary to fund the current operating expenses of
such Restricted Foreign Subsidiary (taking into account their revenue from other
sources);

 

  (k)

Investments constituting Permitted Acquisitions;

 

  (l)

so long as no Event of Default exists at the time of such Investment or after
giving effect to such Investment, Investments consisting of repurchases of stock
of former or current employees, officers, directors or consultants not to exceed
$550,000 in the aggregate during the term of this Agreement;

 

  (m)

Investment of cash and cash equivalents by any Loan Party in respect of Swap
Contracts but solely to the extent the obligations of any Loan Party thereunder
constitute Permitted Debt pursuant to clause (f) of the definition thereof;

 

  (n)

so long as no Event of Default exists at the time of such Investment or after
giving effect to such Investment, Investments of cash and cash equivalents in
respect of leasehold improvement costs associated with any expansion or
relocation of facilities in the Ordinary Course of Business not to exceed
$330,000; and

 

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  (o)

so long as no Event of Default exists at the time of such Investment or after
giving effect to such Investment, other Investments of cash and cash equivalents
in an amount not exceeding $550,000 in the aggregate.

“Permitted License”  means any non-exclusive license of patent rights of
Borrower or its Subsidiaries so long as all such Permitted Licenses are granted
to third parties in the Ordinary Course of Business, do not result in a legal
transfer of title to the licensed property, and have been granted in exchange
for fair consideration.

“Permitted Liens” means:

 

  (a)

deposits or pledges of cash to secure obligations under workmen’s compensation,
social security or similar laws, or under unemployment insurance (but excluding
Liens arising under ERISA or, with respect to any Pension Plan or Multiemployer
Plan, the Code) pertaining to a Loan Party’s or its Subsidiary’s employees, if
any;

 

  (b)

deposits or pledges of cash to secure bids, tenders, contracts (other than
contracts for the payment of money or the deferred purchase price of property or
services), leases, statutory obligations, surety and appeal bonds and other
obligations of like nature arising in the Ordinary Course of Business;

 

  (c)

carrier’s, warehousemen’s, mechanic’s, workmen’s, materialmen’s or other like
Liens arising in the Ordinary Course of Business with respect to obligations
which are not due, or which are being contested pursuant to a Permitted Contest;

 

  (d)

Liens for taxes or other governmental charges not at the time delinquent or
thereafter payable without penalty or the subject of a Permitted Contest;

 

  (e)

attachments, appeal bonds, judgments and other similar Liens for sums not
exceeding $1,100,000 in the aggregate arising in connection with court
proceedings; provided, however, that the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are the subject of a
Permitted Contest;

 

  (f)

with respect to real estate, easements, rights of way, restrictions, minor
defects or irregularities of title, none of which, individually or in the
aggregate, materially affect the value or marketability of such real estate,
impair the use or operation of such real estate for the use currently being made
thereof or impair Loan Parties’ ability to pay the Obligations in a timely
manner or impair the use of the real estate or the ordinary conduct of the
business of any Loan Party or any Subsidiary;

 

  (g)

Liens in favor of customs and revenue authorities arising as a matter of law
which secure payment of custom duties in connection with the importation of
goods in the Ordinary Course of Business;

 

  (h)

[reserved];

 

  (i)

Liens existing on the date hereof and set forth on Schedule 6.2;

 

  (j)

any Lien on any equipment securing Debt permitted under subpart (c) of the
definition of Permitted Debt, provided, however, that such Lien attaches
concurrently with or within thirty (30) days after the acquisition thereof; and

 

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  (k)

Liens in favor of a banking or other financial institution arising in the
Ordinary Course of Business encumbering reasonable and customary initial
deposits and margin deposits (made in the Ordinary Course of Business and not
for speculative purposes) and attaching solely to brokerage accounts otherwise
permitted pursuant to the terms of this Agreement (and not securing any Debt for
borrowed money);

 

  (l)

Liens solely on any cash earnest money deposits made by a Loan Party or any
Subsidiary in connection with any letter of intent or purchase agreement with
respect to any Permitted Investment;

 

  (m)

Permitted Licenses of any Product or Intellectual Property;

 

  (n)

leases or subleases of real property granted in the ordinary course of a Loan
Party’s business, and leases, subleases, non-exclusive licenses or sublicenses
of personal property (other than Intellectual Property or Products) granted to
third parties in the Ordinary Course of Business, if the leases, subleases,
licenses and sublicenses do not prohibit granting Agent or any lender a security
interest therein and are not otherwise prohibited under this Agreement;

 

  (o)

Liens for the benefit of insurance companies and insurance brokers on rights
under insurance policies and proceeds thereof securing obligations permitted by
clause (g) of the definition “Permitted Debt”;

 

  (p)

Liens of the applicable depository bank on each Cash Collateral Account (as
defined in the Senior Credit Agreements) and amounts deposited therein in
accordance with the terms thereof; and

 

  (q)

Liens and encumbrances in favor of the holders of the Senior Financing
Documents.

“Permitted Modifications” means (a) such amendments or other modifications to a
Loan Party’s or Subsidiary’s Organizational Documents as are required under this
Agreement or by applicable Law, and (b) such amendments or modifications to a
Loan Party’s or Subsidiary’s Organizational Documents (other than those
involving a change in the name of a Loan Party or Subsidiary or involving a
reorganization of a Loan Party or Subsidiary under the laws of a different
jurisdiction) that would not adversely affect the rights and interests of Agent
or Lenders in any material respect.

“Person”  means any natural person, corporation, limited liability company,
professional association, limited partnership, general partnership, joint stock
company, joint venture, association, company, trust, bank, trust company, land
trust, business trust or other organization, whether or not a legal entity, and
any Governmental Authority.

“Products” means, from time to time, any products currently manufactured, sold,
developed, tested or marketed by any Loan Party or any of its Subsidiaries.

“Project Destiny Acquisition” means the acquisition by Sientra of the Acquired
Assets (as defined in the Project Destiny Acquisition Agreement) on the terms
set forth in the Project Destiny Acquisition Agreement.

“Project Destiny Acquisition Agreement” means that certain Asset Purchase
Agreement, dated as of November 7, 2019, with Sientra, as purchaser, with Vesta
Intermediate Funding, Inc., as seller.

 

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“Project Destiny Deferred Consideration” means collectively (i) Three Million
Three Hundred Sixty-Three Thousand Three Hundred Thirty-Five Dollars
($3,363,335) due from Sientra to Vesta Intermediate Funding, Inc. on the second
(2nd) anniversary of the closing date of the Project Destiny Acquisition
Agreement and (ii) Three Million Dollars ($3,000,000) due from Sientra to Vesta
Intermediate Funding, Inc. on the fourth (4th) anniversary of the closing date
of the Project Destiny Acquisition Agreement, each of which constitutes a
portion of the consideration for the Project Destiny Acquisition pursuant to the
terms of the Project Destiny Acquisition Agreement.

“Project Destiny Lease” means that certain Lease Agreement, dated as of
November 7, 2019, between Vesta Intermediate Funding, Inc., as lessor, and
Sientra, as lessee.

“Project Destiny Transition Services Agreement”  means that certain Transition
Services Agreement dated as of November 7, 2019, by and between Sientra, Inc.
and Vesta Intermediate Funding, Inc.

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

“Principal Market” means the NASDAQ Global Select Market (or any successor to
the foregoing).

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

“Put Notice” has the meaning set forth in Section 5.19.

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

“Registered  Intellectual  Property”  means any patent, registered trademark or
servicemark, registered copyright, registered mask work, or any pending
application for any of the foregoing.

“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of March 11, 2020, among the Borrower, the Closing Date Lender, and the other
lenders party thereto from time to time.

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

“Regulatory Required Permit” means any and all licenses, approvals and permits
issued by the FDA, DEA or any other applicable Governmental Authority, including
without limitation Drug Applications, necessary for the testing, manufacture,
marketing or sale of any Product by any applicable Loan Party and its
Subsidiaries as such activities are being conducted by such Loan Party and its
Subsidiaries with respect to such Product at such time and any drug listings and
drug establishment registrations under 21 U.S.C. Section 510, registrations
issued by DEA under 21 U.S.C. Section 823 (if applicable to any Product), and
those issued by State governments for the conduct of any Loan Party’s or any
Subsidiary’s business.

“Required Lenders” means, at any time, the Lenders having Pro Rata Shares of
which the aggregate Dollar equivalent amount exceeds 50% of the outstanding
Loans.

“Responsible Officer” means any of the Chief Executive Officer, Chief Financial
Officer or any other officer of the applicable Loan Party acceptable to Agent.

 

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“Restricted Foreign Subsidiary” means (a) Miramar Labs HK Ltd., (b) miraDry
International Sweden AB, and (c) each other direct and indirect Subsidiary of
Borrower not organized under the laws of the United States or any state thereof
that is not a Credit Party (as defined in the Senior Credit Agreements) under
the Senior Credit Agreements.

“Sarbanes-Oxley” has the meaning set forth in Section 3.28(a).

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

“SEC Documents” means all reports, schedules, forms, statements and other
documents filed by any Loan Party or any of its Subsidiaries with the SEC
pursuant to the Securities Act or the Exchange Act since December 31, 2018
(including all financial statements and schedules included therein, all exhibits
thereto and all documents incorporated by reference therein).

“Securities” means the Loans, the Convertible Notes and the related guaranties
set forth in the guaranties of the Guarantors.

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

“Senior Credit Agreements” means (i) the Amended and Restated Credit and
Security Agreement (Revolving Loan), dated as of July 1, 2019, among the
Borrower, the other borrowers party thereto, MidCap Funding IV Trust, as lender
and agent, and the other lenders party thereto, and (ii) the Amended and
Restated Credit and Security Agreement (Term Loan), dated as of July 1, 2019,
among the Borrower, the other borrowers party thereto, MidCap Financial Trust,
as lender and agent, and the other lenders party thereto, in each case, as in
effect on the date hereof.

“Senior Financing Documents” means, with respect to each Senior Credit
Agreement, the “Financing Documents” as defined in such Senior Credit Agreement.

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

“Solvent” means, with respect to any Person, that such Person (a) owns and will
own assets the fair saleable value of which are (i) greater than the total
amount of its debts and liabilities (including subordinated and Contingent
Obligations), and (ii) greater than the amount that will be required to pay the
probable liabilities of its then existing debts as they become absolute and
matured considering all financing alternatives and potential asset sales
reasonably available to it; (b) has capital that is not unreasonably small in
relation to its business as presently conducted or after giving effect to any
contemplated transaction; and (c) does not intend to incur and does not believe
that it will incur debts beyond its ability to pay such debts as they become
due.

“Subordinated Debt” means any Debt of Loan Parties incurred pursuant to the
terms of the Subordinated Debt Documents and with the prior written consent of
Agent, all of which documents must be in form and substance acceptable to Agent
in its sole discretion. As of the Closing Date, there is no Subordinated Debt.

“Subordinated Debt Documents” means any documents evidencing and/or securing
Debt governed by a Subordination Agreement, all of which documents must be in
form and substance acceptable to Agent in its sole discretion. As of the Closing
Date, there are no Subordinated Debt Documents.

 

20

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“Subordination Agreement” means any agreement between Agent and another creditor
of any Loan Party, as the same may be amended, supplemented, restated or
otherwise modified from time to time in accordance with the terms thereof,
pursuant to which the Debt owing from any Loan Party and/or the Liens securing
such Debt granted by any Loan Party(s) to such creditor are subordinated in any
way to the Obligations, the terms and provisions of such Subordination
Agreements to have been agreed to by and be acceptable to Agent in the exercise
of its sole discretion.

“Subsidiary” means, with respect to any Person, (a) any corporation of which an
aggregate of more than fifty percent (50%) of the outstanding capital stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, capital stock of any
other class or classes of such corporation shall have or might have voting power
by reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially by such Person or one or more
Subsidiaries of such Person, or with respect to which any such Person has the
right to vote or designate the vote of more than fifty percent (50%) of such
capital stock whether by proxy, agreement, operation of law or otherwise, and
(b) any partnership or limited liability company in which such Person and/or one
or more Subsidiaries of such Person shall have an interest (whether in the form
of voting or participation in profits or capital contribution) of more than
fifty percent (50%) or of which any such Person is a general partner or may
exercise the powers of a general partner. Unless the context otherwise requires,
each reference to a Subsidiary shall be a reference to a Subsidiary of the
Borrower.

“Swap Contract” means any “swap agreement”, as defined in Section 101 of the
Bankruptcy Code, that is obtained by a Loan Party to provide protection against
fluctuations in interest or currency exchange rates, but only if Agent provides
its prior written consent to the entry into such “swap agreement”.

“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.

“Trading Day” has the meaning set forth in the Convertible Notes.

“Transaction Documents” means the Purchase Agreement, including the exhibits and
schedules thereto, the CVR Agreement, and all other agreements, documents and
instruments executed and delivered pursuant thereto or in connection the
Purchase Agreement.

“Transaction Projections” has the meaning provided for in clause (j) of the
definition of Permitted Acquisitions.

“Transactions” means the funding of the Disbursement, the issuance of the
Convertible Notes and the payment of fees, commissions, costs and expenses in
connection with each of the foregoing.

“UCC” means the Uniform Commercial Code of any applicable jurisdiction and, if
the applicable jurisdiction shall not have any Uniform Commercial Code, the
Uniform Commercial Code as in effect from time to time in the State of New York.

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

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

Section 1.2        Interpretation. In this Agreement and the other Facility
Documents, unless the context otherwise requires, all words and personal
pronouns relating thereto shall be read and construed as

 

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the number and gender of the party or parties requires and the verb shall be
read and construed as agreeing with the required word and pronoun. The division
of this Agreement and the other Facility Documents into Articles and Sections
and the use of headings and captions is for convenience of reference only and
shall not modify or affect the interpretation or construction of this Agreement
or any of its provisions. The words “herein,” “hereof,” “hereunder,”
“hereinafter” and “hereto” and words of similar import refer to this Agreement
(or other applicable Facility Document) as a whole and not to any particular
Article or Section hereof (or thereof). The term “or” has, except where
otherwise indicated, the inclusive meaning represented by the phrase “and/or.”
The term “documents” and “agreements” include any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced. The use in any of the Facility Documents of the word
“include” or “including,” when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not non-limiting language (such as “without limitation”
or “but not limited to” or words of similar import) is used with reference
thereto, but rather shall be deemed to refer to all other items or matters that
fall within the broadest possible scope of such general statement, term or
matter. References to a specified Article, Exhibit, Section or Schedule shall be
construed as a reference to that specified Article, Exhibit, Section or Schedule
of this Agreement (or other applicable Facility Document). Unless specifically
stated otherwise, any reference to any of the Facility Documents means such
document as the same shall be amended, restated, supplemented or otherwise
modified and from time to time in effect in accordance with the terms hereof or
thereof, as applicable. The references to “assets” and “properties” in the
Facility Documents are meant to be mean the same and are used throughout the
Facility Documents interchangeably, and such words shall be deemed to refer to
any and all tangible and intangible assets and properties, including cash,
securities, stock, accounts and contract rights. Terms (including uncapitalized
terms) not otherwise defined herein and that are defined in the UCC shall have
the meanings therein described. The payment, prepayment or repayment of any
principal, interest, fees, amounts and/or other Obligations under this Agreement
or the other Facility Documents shall be made in cash in Dollars unless
expressly stated otherwise herein or therein. Any reference to “payment in
full,” “payment in full in cash,” “paid in full,” “paid in full in cash,”
“repaid in full,” “repaid in full in cash,” “prepaid in full,” “prepaid in full
in cash,” “redeemed in full,” “redeemed in full in cash” or any other term or
word of similar effect used in this Agreement or any other Facility Document
with respect to the Loans or the Obligations shall mean all Obligations have
been repaid in full in cash (excluding contingent claims for indemnification to
the extent no claim giving rise thereto has been asserted) and have been fully
performed.

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

Section 1.4        Loan Records.

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

  (b)         The Agent, acting solely for this purpose as a non-fiduciary agent
(solely for tax purposes) shall establish and maintain at its office a record of
ownership (the “Register”) in which

 

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the Agent agrees to register by book entry the interests (including any rights
to receive payment hereunder) of each Lender in the Loan, and any assignment of
any such interest or interests, and accounts in the Register in accordance with
its usual practice in which it shall record (i) the names and addresses of the
Lenders (and any change thereto pursuant to this Agreement), (ii) the amount of
the Loan, (iii) the amount of any principal, interest, fee or other amount due
and payable or paid, and (iv) any other payment received by the Lenders from the
Borrower and its application to the Loan. Reasonably promptly after making each
such registration, the Agent shall provide written notice thereof to the
Borrower.

  (c)         The Loans made by each Lender are evidenced by this Agreement and
the Convertible Notes issued pursuant to this Agreement. On the Closing Date,
the Borrower shall execute and deliver to each Lender a new Convertible Note,
and after the Closing Date the Borrower shall execute and deliver to each Lender
(and/or, if applicable and if so requested by any assignee Lender pursuant to
the assignment provisions of Section 8.4) on the date of request by such Lender
an amended and restated Convertible Note (in each case, with any amendment and
restatement mechanics built in as necessary that are in form and substance
reasonably satisfactory to such applicable Lender and the Agent), in each case,
payable to such Lender in an amount equal to the unpaid principal amount of the
Loans held by such Lender. Notwithstanding anything to the contrary contained in
this Agreement, the Loans (including any Convertible Note(s) evidencing the
Loans) are registered obligations, the right, title and interest of the Lenders
and their successors and assignees in and to the Loan shall be transferable only
upon notation of such transfer in the Register and no assignment thereof shall
be effective until recorded therein. This Section 1.4 shall be construed so that
the Loan is at all times maintained in “registered form” within the meaning of
Sections 163(f), 871(h)(2) and 881(c)(2) of the Code.

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

Section 1.5        Accounting Terms and Principles. All accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in accordance with GAAP. No change in the
accounting principles used in the preparation of any financial statement
hereafter adopted by any Loan Party or any of its Subsidiaries (including any
change in GAAP after December 14, 2018 that would require leases that would be
classified as operating leases under GAAP on December 14, 2018 to be classified
as capital leases or otherwise reflected as Debt on the Borrower’s consolidated
balance sheet) shall be given effect for purposes of measuring compliance with
any provision of this Agreement or otherwise determining any relevant ratios and
baskets which govern whether any action is permitted hereunder unless the
Borrower and the Required Lenders agree to modify such provisions to reflect
such changes in GAAP, and unless such provisions are modified, all financial
statements and similar documents provided hereunder shall be provided together
with a reconciliation between the calculations and amounts set forth therein
before and after giving effect to such change in GAAP. Notwithstanding any other
provision contained herein or in any other Facility Document, all terms of an
accounting or financial nature used herein and in the other Facility Documents
shall be construed, and all computations of amounts and ratios referred to
herein and in the other Facility Documents shall be made, without giving effect
to any election under Statement of Financial Accounting Standards No. 159
(Codification of Accounting

 

23

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Standards 825-10) to value any Debt or other liabilities of any Loan Party or
any Subsidiary at “fair value,” as defined therein.

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

ARTICLE 2

AGREEMENT FOR THE LOAN

Section 2.1        Disbursements.

    (a)          Disbursement. Each Lender on the Closing Date (or such later
date required pursuant to when the written notice regarding the Disbursement was
delivered to each Lender) severally but not jointly agrees, on the terms and
subject to the conditions set forth herein, to lend to the Borrower on such
date, the principal amount set forth opposite such Lender’s name in Annex A
under the heading “Disbursement Amount” by making such amount available to the
Borrower by promptly wiring such amounts to an account or accounts designated in
writing by the Borrower on the proposed date of funding. Amounts borrowed under
this Section 2.1(a) are referred to as the “Disbursement.”

    (b)          No Re-Borrowing. Amounts borrowed hereunder that are paid,
repaid, redeemed and/or prepaid may not be re-borrowed under any circumstance.

Section 2.2        Payments; Prepayments; Conversions.

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

  (b)         Lenders shall have the right to convert all or any part of the
principal amount of their Convertible Notes into shares of Common Stock in
accordance with and subject to the terms of the Convertible Notes. Upon the
Share Delivery Date (as defined in the Convertible Notes). Borrower shall pay to
Lenders all accrued and unpaid interest on the principal amount of the
Convertible Notes converted into shares of Common Stock. The Agent shall be
promptly notified of any conversion and shall treat the same as a prepayment of
outstanding Loans.

  (c)         Notwithstanding anything to the contrary in any of the Facility
Documents, outstanding principal amounts on the Loans and the Convertible Notes
shall not be permitted to be voluntarily prepaid, repaid or redeemed except as
expressly set forth in Section 2.2(d).

  (d)         [Reserved].

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

 

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

  (f)         From and after the Closing Date, any Conversion of principal under
a Convertible Note by any Lender shall be applied against, and reduce, the
principal amount of such Lender’s Loan on the same basis as the repayment of
such principal amount in cash hereunder and shall otherwise for all purposes
hereof be deemed a repayment of such principal amount.

Section 2.3        Payment Details. All payments, prepayments and repayments of
the Obligations by the Borrower or any other Loan Party hereunder and under any
of the other Facility Documents shall be made without setoff or counterclaim.
Payments, prepayments and repayments of any amounts and other Obligations due to
Agent or the Lenders under this Agreement or the other Facility Documents shall
be made in in cash Dollars in immediately available funds prior to 11:00 a.m.
(New York City time) on the date that any such payment is due, using the wire
information or address for Agent that is set forth on Schedule 2.3 or at such
other bank or place as Agent or such applicable Lenders shall from time to time
designate in writing at least three (3) Business Days prior to the date such
payment is due. Any payment received by Agent or any Lender after such time may,
in the Agent’s discretion, be deemed to have been made on the following Business
Day. The Borrower shall pay all and any fees, costs and expenses (administrative
or otherwise) imposed by banks, clearing houses or any other financial
institutions in connection with making any payments under any of the Facility
Documents.

Section 2.4        Taxes.

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

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

  (c)         The Borrower shall reimburse and indemnify, within ten (10) days
after receipt of demand therefor, each Lender Party for all Indemnified Taxes
(including all Indemnified Taxes imposed on amounts payable under this
Section 2.4(c)) paid or payable by such Lender Party, and any Liabilities
arising therefrom or relating thereto, whether or not such Indemnified Taxes
were

 

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correctly or legally asserted. A certificate of the applicable Lender Party
setting forth the amounts to be paid thereunder and delivered to the Borrower
shall be absolute, conclusive and binding, absent manifest error.

  (d)         Each Lender that is a United States person (as such term is
defined in Section 7701(a)(30) of the Code) shall, on or before the date on
which the Lender becomes a party to this Agreement, provide to Borrower and the
Agent a properly completed and executed IRS Form W-9 certifying that such Lender
is not subject to backup withholding tax. Each Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) (a
“Foreign Lender”) and is entitled to an exemption from or reduction of U.S.
federal withholding tax with respect to payments under this Agreement shall, on
or before the date on which such Lender becomes a party to this Agreement,
provide Borrower and the Agent with a properly completed and executed IRS Form
W-8ECI, W-8BEN, W-8BEN-E, W-8IMY or other applicable forms (together with any
required supporting documentation), or any other applicable certificate or
document reasonably requested by the Borrower or the Agent, and, if such Foreign
Lender is relying on the portfolio interest exception of Section 871(h) or
Section 881(c) of the Code (or any successor provision thereto), shall also
provide the Borrower with a certificate (the “Portfolio Interest Certificate”)
representing that such Foreign Lender is not a “bank” for purposes of
Section 881(c) of the Code (or any successor provision thereto), is not a 10%
holder of the Borrower described in Section 871(h)(3)(B) of the Code (or any
successor provision thereto), and is not a controlled foreign corporation
receiving interest from a related person (within the meaning of Sections
881(c)(3)(C) and 864(d)(4) of the Code or any successor provisions thereto). 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 Portfolio Interest Certificate on behalf of such
partners. Each Lender shall provide new forms (or successor forms) as reasonably
requested by the Borrower and the Agent from time to time and shall notify the
Borrower in writing within a reasonable time after becoming aware of any event
requiring a change in the most recent forms previously delivered by such Lender
to the Borrower.

  (e)         If a payment to a Lender under this Agreement 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, such Lender shall
deliver to the Borrower and the Agent, at the times prescribed by law or as
reasonably requested by Borrower or the Agent, such documentation as is required
in order for the Borrower or the Agent to comply with its obligations under
FATCA, to determine that such Lender has or has not complied with its
obligations under FATCA or to determine the amount to deduct and withhold from
such payment. Solely for purposes of this Section 2.4(e), “FATCA” shall include
any amendments made to FATCA after the date of this Agreement.

  (f)         If a Lender or the Agent determines, in its sole discretion
exercised in good faith, that it has received a refund of any Indemnified Taxes
as to which it has been indemnified pursuant to this Section 2.4, such Lender or
the Agent shall promptly pay such refund (but only to the extent of indemnity
payments made or Additional Amounts paid under this Section 2.4 with respect to
the Taxes refunded) to the Borrower, net of all out-of-pocket expense (including
any Taxes imposed thereon) of such Lender of the Agent incurred in obtaining
such refund or making such payment, provided that the Borrower, upon the request
of such Lender or the Agent, agrees to repay the amount paid over to the
Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to such Lender or the Agent if such Lender or the Agent
is required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this Section 2.4(f), in no event shall a Lender or
the Agent be required to pay any amount to the Borrower pursuant to this
Section 2.4(f), the payment of which would place such Lender or

 

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the Agent in a less favorable net after-Tax position than such Lender or the
Agent would have been in if the Tax subject to indemnification and giving rise
to such refund had not been deducted or otherwise imposed and the
indemnification payments with respect to such Tax had never been paid. Nothing
in this Section 2.4(f) shall require any Lender or the Agent to disclose any
information it deems confidential (including its tax returns) to any Person,
including the Borrower.

Section 2.5        Costs, Expenses and Losses. If, as a result of any failure by
the Borrower or any other Loan Party to pay any sums or Obligations due under
this Agreement or any other Facility Document on the due date therefor (after
the expiration of any applicable grace periods, but without giving effect to any
grace period after the occurrence of an Event of Default of the type set forth
in Section 7.1(d)), the Agent or any Lender shall incur costs, expenses and/or
losses, by reason of the liquidation or redeployment of deposits from third
parties or in connection with obtaining funds to make or maintain any
Disbursement or Loan, the Borrower shall pay to the Agent or such Lender upon
request by the Agent or such Lender, the amount of such costs, expenses and/or
losses within fifteen (15) days after receipt by the Borrower of a certificate
from the Agent or such Lender setting forth in reasonable detail such costs,
expenses and/or losses, along with supporting documentation. For the purposes of
the preceding sentence, “costs, expenses and/or losses” shall include any
interest paid or payable to carry any unpaid amount and any loss, premium,
penalty or expense that may be incurred in obtaining, liquidating or employing
deposits of or borrowings from third parties and/or third Persons in order to
make, maintain or fund any Disbursement or Loan or any portion thereof.

Section 2.6        Interest. From and after the Closing Date, the outstanding
principal amount of the Loans, any overdue interest and any other amounts and
Obligations shall bear interest at the Interest Rate (calculated on the basis of
the actual number of days elapsed in each month based on a year of 360 days).
Interest shall be paid in cash quarterly in arrears commencing on July 1, 2020
and on the first Business Day of each calendar quarter thereafter (each, an
“Interest Payment Date”). Interest shall accrue to, but not including, each
Interest Payment Date.

Section 2.7        Interest on Late Payments; Default Interest.

  (a)         Without limiting the remedies available to the Agent or any Lender
under the Facility Documents or otherwise, to the maximum extent permitted by
Law, if the Borrower or any other Loan Party fails to make a required payment of
principal or interest on any Loan or make a required payment of any other
Obligation when due, the Borrower shall pay, in respect of such principal,
interest and other Obligations, interest thereon at the rate per annum equal to
the Interest Rate then in effect for the Loans, plus ten percent (10%) for so
long as such payment remains outstanding for a period of five Business Days
following the due date thereof. Such interest shall be payable in cash on
demand.

  (b)         At the election of the Required Lenders while any Event of Default
(other than an Event of Default described under clause (a) above) exists (or
automatically while any Event of Default under Section 7.1(a) or 7.1(d) exists),
the Borrower shall pay interest (after as well as before entry of judgment
thereon to the extent permitted by Law) on the outstanding principal amount of
the Loans, from and after the date of occurrence of such Event of Default, at a
rate per annum equal to the Interest Rate then in effect for the Loans, plus two
percent (2.0%). Such interest shall be payable in cash on demand.

Section 2.8        Fees. Borrower agrees to pay (or cause to be paid)
administrative fees to Cortland Products Corporation, for loan agency services
on behalf of the Agent, in an aggregate amount per annum equal to (i) $30,000
for the first year following the Closing Date, and (ii) $25,000 for each year
thereafter,

 

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in each case due quarterly in advance and payable on the Closing Date and
quarterly thereafter, until the Obligations are paid in full (with rebates for
partial periods).

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

 

  A.

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

Section 3.1        Existence and Power. Each Loan Party (a) is an entity as
specified on Schedule 3.1, (b) is duly organized, validly existing and in good
standing under the laws of the jurisdiction specified on Schedule 3.1 and no
other jurisdiction, (c) has the same legal name as it appears in such Loan
Party’s Organizational Documents and an organizational identification number (if
any), in each case as specified on Schedule 3.1, (d) has all powers to own its
assets and has powers and all Permits necessary in the operation of its business
as presently conducted or as proposed to be conducted, except where the failure
to have such Permits could not reasonably be expected to have a Material Adverse
Effect, and (e) is qualified to do business as a foreign entity in each
jurisdiction in which it is required to be so qualified, which jurisdictions as
of the Closing Date are specified on Schedule 3.1, except where the failure to
be so qualified would not reasonably be expected to have a Material Adverse
Effect. Except as set forth on Schedule 3.1, no Loan Party (x) has had, over the
five (5) year period preceding the Closing Date, any name other than its current
name, or (y) was incorporated or organized under the laws of any jurisdiction
other than its current jurisdiction of incorporation or organization.

Section 3.2        Organization and Governmental Authorization; No
Contravention. The execution, delivery and performance by each Loan Party of the
Facility Documents to which it is a party (a) are within its powers, (b) have
been duly authorized by all necessary action pursuant to its Organizational
Documents, (c) require no further action by or in respect of, or filing with,
any Governmental Authority and (d) do not violate, conflict with or cause a
breach or a default under (i) any Law applicable to any Loan Party, (ii) any of
the Organizational Documents of any Loan Party, or (iii) any agreement or
instrument binding upon it, except for such violations, conflicts, breaches or
defaults which, with respect to this clause (iii), would not reasonably be
expected to have a Material Adverse Effect.

Section 3.3        Binding Effect. Each of the Facility Documents to which any
Loan Party is a party constitutes a valid and binding agreement or instrument of
such Loan Party, enforceable against such Loan Party in accordance with its
respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws relating to the enforcement of
creditors’ rights generally and by general equitable principles. Each Facility
Document has been duly executed and delivered by each Loan Party party thereto..

Section 3.4        Capitalization. The authorized equity securities of each of
the Loan Parties (other than Sientra) as of the Closing Date are as set forth on
Schedule 3.4. All issued and outstanding equity securities of each of the Loan
Parties are duly authorized and validly issued, fully paid, nonassessable, free
and clear of all Liens other than those in favor of Agent for the benefit of
Agent and Lenders, and such equity securities were issued in compliance with all
applicable Laws. The identity of the holders of the equity securities of each of
the Loan Parties (other than Sientra) and the percentage of their fully-diluted

 

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ownership of the equity securities of each of the Loan Parties (other than
Sientra) as of the Closing Date is set forth on Schedule 3.4. No shares of the
capital stock or other equity securities of any Loan Party (other than Sientra),
other than those described above, are issued and outstanding as of the Closing
Date. Except as set forth on Schedule 3.4, as of the Closing Date there are no
preemptive or other outstanding rights, options, warrants, conversion rights or
similar agreements or understandings for the purchase or acquisition from any
Loan Party of any equity securities of any such entity.

Section 3.5        Financial Information. All information delivered to Agent and
pertaining to the financial condition of any Loan Party fairly presents in all
material respects the financial position of such Loan Party as of such
respective date in conformity with GAAP (and as to unaudited financial
statements, subject to normal year-end adjustments and the absence of footnote
disclosures). Since September 30, 2019, there has been no material adverse
change in the business, operations, properties or condition (financial or
otherwise) of any Loan Party.

Section 3.6        Litigation. Except as set forth on Schedule 3.6, as of the
Closing Date, and except as hereafter disclosed to Agent in writing, to the best
of Borrower’s knowledge, there is no Litigation pending against, or to such Loan
Party’s knowledge, threatened in writing against or affecting, any Loan Party
or, to the best of such Loan Party’s knowledge, any party to any Facility
Document other than a Loan Party involving more than, individually or in the
aggregate, Five Hundred Thousand Dollars ($500,000). There is no Litigation
pending in which an adverse decision would reasonably be expected to have a
Material Adverse Effect or which in any manner draws into question the validity
of any of the Facility Documents.

Section 3.7        Ownership of Property. Each Loan Party and each of its
Subsidiaries is the lawful owner of, has good title to and is in lawful
possession of, or has valid leasehold interests in, all properties, accounts and
other assets (real or personal, tangible, intangible or mixed), in each case
constituting a Material Intangible Asset or that is otherwise material to its
business, subject, in each case, only to Permitted Liens and except for minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to utilize such properties for their intended purposes
purported or reported to be owned or leased (as the case may be) by such Person.

Section 3.8        No Default. No Event of Default, or to such Loan Party’s
knowledge, Default, has occurred and is continuing. No Loan Party is in breach
or default under or with respect to any contract, agreement, lease or other
instrument to which it is a party or by which its property is bound or affected,
which breach or default would reasonably be expected to have a Material Adverse
Effect.

Section 3.9        Labor Matters. As of the Closing Date, there are no strikes
or other labor disputes pending or, to any Loan Party’s knowledge, threatened in
writing against any Loan Party, which could reasonably be expected to have a
Material Adverse Effect. Hours worked and payments made to the employees of the
Loan Parties have not been in material violation of the Fair Labor Standards Act
or any other applicable Law dealing with such matters. All payments due from the
Loan Parties, or for which any claim may be made against any of them, on account
of wages and employee and retiree health and welfare insurance and other
benefits have been paid or accrued as a liability on their books, as the case
may be. The consummation of the transactions contemplated by the Facility
Documents will not give rise to a right of termination or right of renegotiation
on the part of any union under any collective bargaining agreement to which it
is a party or by which it is bound, the result of which could reasonably be
expected to have a Material Adverse Effect.

 

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Section 3.10     Regulated Entities. No Loan Party is an “investment company” or
a company “controlled” by an “investment company” or a “subsidiary” of an
“investment company,” all within the meaning of the Investment Company Act of
1940.

Section 3.11     Margin Regulations. None of the proceeds from the Loans have
been or will be used, directly or indirectly, for the purpose of purchasing or
carrying any “margin stock” (as defined in Regulation U of the Federal Reserve
Board), for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry any “margin stock” or for any other
purpose which might cause any of the Loans to be considered a “purpose credit”
within the meaning of Regulation T, U or X of the Federal Reserve Board.

Section 3.12     Compliance With Laws; Anti-Terrorism Laws.

  (a)        Each Loan Party is in compliance with the requirements of all
applicable Laws (including Health Care Laws), except for such Laws the
noncompliance with which could not reasonably be expected to have a Material
Adverse Effect.

  (b)        None of the Loan Parties and, to the knowledge of the Loan Parties,
none of their Affiliates (i) is in violation of any Anti-Terrorism Law,
(ii) engages in or conspires 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, (iii) is a Blocked Person, or
is controlled by a Blocked Person, (iv) is acting or will act for or on behalf
of a Blocked Person, (v) is associated with, or will become associated with, a
Blocked Person or (vi) is providing, or will provide, material, financial or
technical support or other services to or in support of acts of terrorism of a
Blocked Person. No Loan Party nor, to the knowledge of any Loan Party, any of
its Affiliates or agents acting or benefiting in any capacity in connection with
the transactions contemplated by this Agreement, (A) 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 (B) 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.

Section 3.13     Taxes. All federal, state and local income and other material
tax returns, reports and statements required to be filed by or on behalf of each
Loan Party have been filed with the appropriate Governmental Authorities in all
jurisdictions in which such returns, reports and statements are required to be
filed and, except to the extent subject to a Permitted Contest, all income and
other material Taxes (including real property Taxes) and other charges shown to
be due and payable in respect thereof have been timely paid prior to the date on
which any fine, penalty, interest, late charge or loss may be added thereto for
nonpayment thereof.

Section 3.14     Compliance with ERISA.

  (a)        Each ERISA Plan (and the related trusts and funding agreements)
complies in form and in operation with, has been administered in compliance
with, and the terms of each ERISA Plan satisfy, the applicable requirements of
ERISA and the Code in all material respects. Each ERISA Plan which is intended
to be qualified under Section 401(a) of the Code is so qualified, and the United
States Internal Revenue Service has issued a favorable determination letter with
respect to each such ERISA Plan which may be relied on currently. No Loan Party
has incurred liability for any material excise tax under any of Sections 4971
through 5000 of the Code.

 

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  (b)        Except as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, each Loan Party and each
Subsidiary is in compliance with the applicable provisions of ERISA and the
provision of the Code relating to ERISA Plans and the regulations and published
interpretations therein. During the thirty-six (36) month period prior to the
Closing Date or the making of any Loan (i) no steps have been taken to terminate
any Pension Plan, and (ii) no contribution failure has occurred with respect to
any Pension Plan sufficient to give rise to a Lien under Section 303(k) of ERISA
or Section 430(k) of the Code and no event has occurred that would give rise to
a Lien under Section 4068 of ERISA. No condition exists or event or transaction
has occurred with respect to any Pension Plan which could result in the
incurrence by any Loan Party of any material liability, fine or penalty. No Loan
Party has incurred liability to the PBGC (other than for current premiums) with
respect to any employee Pension Plan. All contributions (if any) have been made
on a timely basis to any Multiemployer Plan that are required to be made by any
Loan Party or any other member of the Controlled Group under the terms of the
plan or of any collective bargaining agreement or by applicable Law; no Loan
Party nor any member of the Controlled Group has withdrawn or partially
withdrawn from any Multiemployer Plan, incurred any withdrawal liability with
respect to any such plan or received notice of any claim or demand for
withdrawal liability or partial withdrawal liability from any such plan, and no
condition has occurred which, if continued, could result in a withdrawal or
partial withdrawal from any such plan, and no Loan Party nor any member of the
Controlled Group has received any notice that any Multiemployer Plan is in
reorganization, that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of any excise tax, that any such
plan is or has been funded at a rate less than that required under Section 412
of the Code, that any such plan is or may be terminated, or that any such plan
is or may become insolvent.

Section 3.15     Brokers. Except for fees payable to Agent and/or Lenders, no
broker, finder or other intermediary has brought about the obtaining, making or
closing of the transactions contemplated by the Facility Documents, and no Loan
Party has or will have any obligation to any Person in respect of any finder’s
or brokerage fees, commissions or other expenses in connection herewith.

Section 3.16     [Reserved].

Section 3.17     Material Contracts. Except for the Facility Documents, the
agreements specifically listed in the definition of Material Contracts and the
other agreements set forth on Schedule 3.17, as of the Closing Date there are no
Material Contracts. The consummation of the transactions contemplated by the
Facility Documents will not give rise to a right of termination in favor of any
party to any Material Contract (other than any Loan Party), except for such
Material Contracts the noncompliance with which would not reasonably be expected
to have a Material Adverse Effect.

Section 3.18     Compliance with Environmental Requirements; No Hazardous
Materials. Except in each case as set forth on Schedule 3.18:

  (a)        no notice, notification, demand, request for information, citation,
summons, complaint or order has been issued, no complaint has been filed, no
penalty has been assessed and no investigation or review is pending, or to such
Loan Party’s knowledge, threatened in writing by any Governmental Authority or
other Person with respect to any (i) alleged violation by any Loan Party of any
Environmental Law, (ii) alleged failure by any Loan Party to have any Permits
required in connection with the conduct of its business or to comply with the
terms and conditions thereof, (iii) any generation, treatment, storage,
recycling, transportation or disposal of any Hazardous Materials, or
(iv) release of Hazardous Materials; and

 

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  (b)        no property now owned or leased by any Loan Party and, to the
knowledge of each Loan Party, no such property previously owned or leased by any
Loan Party, to which any Loan Party has, directly or indirectly, transported or
arranged for the transportation of any Hazardous Materials, is listed or, to
such Loan Party’s knowledge, proposed for listing, on the National Priorities
List promulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or any
similar state list or is the subject of federal, state or local enforcement
actions or, to the knowledge of such Loan Party, other investigations which may
lead to claims against any Loan Party for clean-up costs, remedial work, damage
to natural resources or personal injury claims, including, without limitation,
claims under CERCLA.

For purposes of this Section 3.18, each Loan Party shall be deemed to include
any business or business entity (including a corporation) that is, in whole or
in part, a predecessor of such Loan Party.

Section 3.19     Intellectual Property and License Agreements. A list of all
Registered Intellectual Property of each Loan Party and all material in-bound
license or sublicense agreements and material exclusive out-bound license or
sublicense agreements (but excluding in-bound licenses of over-the-counter
software that is commercially available to the public), as of the Closing Date
is set forth on Schedule 3.19. Schedule 3.19 shall be prepared by Borrower in
the form provided by Agent and contain all information required in such form.
Except for Permitted Licenses, each Loan Party is the sole owner of its material
Intellectual Property free and clear of any Liens. To Borrower’s knowledge after
reasonable inquiry, each patent is valid and enforceable and no part of the
Material Intangible Assets has been judged invalid or unenforceable, in whole or
in part. To the best of Borrower’s knowledge, no claim has been made that any
part of the Material Intangible Assets violates the rights of any third party in
any material respect.

Section 3.20     Solvency. The Borrower is, and after giving effect to each
Disbursement and the liabilities and obligations of each Loan Party under the
Facility Documents, will be, Solvent; and each other Loan Party together with
Borrower and its Subsidiaries, taken as a whole, is Solvent.

Section 3.21     Full Disclosure. None of the written information (financial or
otherwise) furnished by or on behalf of any Loan Party to Agent or any Lender in
connection with the consummation of the transactions contemplated by the
Facility Documents, contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading in light of the circumstances under which such statements
were made. All financial projections delivered to Agent and the Lenders by Loan
Parties (or their agents) have been prepared on the basis of the assumptions
stated therein. Such projections represent each Loan Party’s best estimate of
such Loan Party’s future financial performance and such assumptions are believed
by such Loan Party to be fair and reasonable in light of current business
conditions; provided, however, that Loan Parties can give no assurance that such
projections will be attained.

Section 3.22     [Reserved].

Section 3.23     Subsidiaries. Loan Parties do not own any stock, partnership
interests, limited liability company interests or other equity securities or
Subsidiaries except for Permitted Investments.

Section 3.24     [Reserved].

Section 3.25     SEC Documents. The Borrower has filed, through the SEC’s
Electronic Data Gathering, Analysis, and Retrieval system (or successor thereto)
(“EDGAR”), all of the SEC Documents

 

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

Section 3.26     Accounting Controls. Each Loan Party and each of its
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (a) transactions are executed in accordance
with management’s general or specific authorizations, (b) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset and liability accountability,
(c) access to assets or incurrence of liability is permitted only in accordance
with management’s general or specific authorization and (d) the recorded
accountability for assets and liabilities is compared with the existing assets
and liabilities at reasonable intervals and appropriate action is taken with
respect to any differences. The Borrower and its Subsidiaries have (i) timely
filed and made publicly available on EDGAR all certifications, statements and
documents required by (1) Rule 13a-14 or Rule 15d-14 under the Exchange Act. The
Borrower and its Subsidiaries maintain disclosure controls and procedures
required by Rule 13a-15 or Rule 15d-15 under the Exchange Act; such controls and
procedures are effective to ensure that the information required to be disclosed
by the Borrower and its Subsidiaries in the reports that they file with or
submit to the SEC (A) is recorded, processed, summarized and reported accurately
within the time periods specified in the SEC’s rules and forms and (ii) is
accumulated and communicated to the Borrower’s (and, to the extent applicable,
its Subsidiaries’) management, including its or their principal executive
officer and principal financial officer, as appropriate to allow timely
decisions regarding required disclosure. Except as set forth in Schedule 3.26,
the Borrower and its Subsidiaries maintain internal control over financial
reporting required by Rule 13a-15 or Rule 15d-15 under the Exchange Act; such
internal control over financial reporting is effective and does not contain any
material weaknesses.

Section 3.27     Shares of Stock.

  (a)         [Reserved].

  (b)         The Borrower has reserved for issuance the maximum of 1,942,086
shares of Common Stock issuable as of the Closing Date upon Conversion of the
Convertible Notes (computed without regard to any limitations on the number of
shares that may be issued on conversion thereof and assuming the maximum number
of Additional Conversion Shares (as defined in the Convertible Note) are issued
in connection therewith). The Conversion Shares have been duly authorized, and
upon any Conversion of the Convertible Notes in accordance with the terms
thereof, the Conversion Shares issued thereupon will be validly issued, fully
paid and non-assessable and free from all taxes and Liens with respect to the
issue thereof, with the holders thereof being entitled to all rights accorded to
a holder of Common Stock.

  (c)         [Reserved].

 

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  (d)         [Reserved].

  (e)         The issuance and delivery of the Convertible Notes does not and,
assuming full or partial Conversion of Convertible Notes, the issuance of the
Conversion Shares will not: (i) require approval from the shareholders or board
of directors of the Borrower or from any Governmental Authority; (ii) obligate
the Borrower to issue shares of Common Stock or other securities to any Person
(other than the Lenders); and (iii) will not result in a right of any holder of
the Borrower’s securities to adjust the exercise, conversion, exchange or reset
price under and will not result in any other adjustments (automatic or
otherwise) under, any securities of the Borrower.

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

Section 3.28     Securities Law and Principal Market Matters.

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

  (b)         Neither the Borrower nor any of its Subsidiaries nor, to the
Borrower’s knowledge, any director, officer or employee, of the Borrower or any
of its Subsidiaries, has received or otherwise obtained any material complaint,
allegation, assertion or claim, whether written or oral, regarding the
accounting or auditing practices, procedures, methodologies or methods of the
Borrower or any of its Subsidiaries or its internal accounting controls,
including any complaint, allegation, assertion or claim that the Borrower or any
of its Subsidiaries has engaged in questionable accounting or auditing
practices. No attorney representing the Borrower or any of its Subsidiaries,
whether or not employed by the Borrower or any of its Subsidiaries, has reported
evidence of a material violation of securities laws or breach of fiduciary duty
or similar violation by the Borrower or any of its Subsidiaries or any of their
respective officers, directors, employees or agents to the Borrower’s or any of
its Subsidiaries’ board of directors (or equivalent governing body) or any
committee thereof or to any director (or equivalent person) or officer of the
Borrower or any of its Subsidiaries. There have been no internal or SEC
investigations regarding accounting or revenue recognition discussed with,
reviewed by or initiated at the direction of the chief executive officer, the
principal financial officer or the principal accounting officer (in each case,
or officer holding such equivalent position) of the Borrower or any of its
Subsidiaries, the Borrower’s or any of its Subsidiaries’ board of directors (or
equivalent governing body) or any committee thereof.

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

  (d)         None of the Loan Parties, any of its predecessors, any director,
executive officer, other officer of any Loan Party participating in the offering
of the Securities, any beneficial owner (as that term is defined in Rule 13d-3
under the Exchange Act) of 20% or more of any Loan Party’s

 

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outstanding voting equity securities, calculated on the basis of voting power,
any “promoter” (as that term is defined in Rule 405 under the Securities Act)
connected with any Loan Party at the time this representation is made, any
placement agent or dealer participating in the offering of the Securities and
any of such agents’ or dealer’s directors, executive officers, other officers
participating in the offering of the Securities (each, a “Covered Person”) is
subject to any of the “Bad Actor” disqualifications described in Rule
506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”).
The Borrower has exercised reasonable care to determine (i) the identity of each
person that is a Covered Person and (ii) whether any Covered Person is subject
to a Disqualification Event. Each Loan Party has complied in all material
respects, to the extent applicable, with its disclosure obligations under Rule
506(e). With respect to each Covered Person, the Borrower has established
procedures reasonably designed to ensure that the Borrower receives notice from
each such Covered Person of (A) any Disqualification Event relating to that
Covered Person, and (B) any event that would, with the passage of time, become a
Disqualification Event relating to that Covered Person, in each case occurring
up to and including the date this representation is made. No Loan Party is any
other reason disqualified from reliance upon Rule 506 of Regulation D for
purposes of the offer, sale and issuance of the Securities.

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

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

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

Section 3.29     Status as Senior Debt. Subject to the terms of the Senior
Credit Agreements and related loan documents, all Obligations constitute senior
Debt entitled to the benefits of the subordination and/or intercreditor
provisions contained in the applicable subordination and/or intercreditor
agreements governing any subordinated Debt.

 

  B.

Lender Representations and Warranties. Each Lender, severally and not jointly,
represents and warrants to each Loan Party as of the Closing Date that:

Section 3.30     Convertible Notes. The Convertible Notes and the Conversion
Shares to be issuable thereunder will be acquired for such Lender’s own account,
and not with a view to the resale or distribution of any part thereof in
violation of the Securities Act, except pursuant to sales registered or in a
transaction exempted under the Securities Act, and such Lender has no present
intention of selling, granting any participation in, or otherwise distributing
the same in violation of the Securities Act without prejudice, however, to such
Lender’ s right at all times to sell or otherwise dispose of all or any part of
such Securities

 

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in compliance with applicable federal and state securities laws. Nothing
contained herein shall be deemed a representation or warranty by such Lender to
hold the Securities for any period of time and such Lender reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the Securities Act.

Section 3.31     Economic Risk. Such Lender can bear the economic risk and
complete loss of its investment in the Securities and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment contemplated hereby.

Section 3.32     Restricted Securities. Such Lender understands that the
Convertible Notes and the Conversion Shares thereunder are characterized as
“restricted securities” under the U.S. federal securities laws inasmuch as they
are being acquired from Borrower in a transaction not involving a public
offering and that under such laws and applicable regulations such securities may
not be resold except pursuant to an effective registration statement under the
Securities Act (including a registration statement filed pursuant to the
Registration Rights Agreement) or pursuant to an applicable exemption from the
registration requirements under the Securities Act.

Section 3.33     Accredited Investor. Such Lender is an “accredited inventor” as
such temi is defined in Regulation D promulgated under the Securities Act.

ARTICLE 4

CONDITIONS OF DISBURSEMENT

Section 4.1        Conditions to the Disbursement. The obligation of the Lenders
to make the Disbursement shall be subject to the satisfaction (or written
waiver) of the following conditions in a manner satisfactory to each Lender:

  (a)         Agent and the Lenders shall have received (i) executed
counterparts of this Agreement and each other Facility Document set forth on the
closing checklist attached hereto as Exhibit B, other than those that are
specified therein as permitted to be delivered after the Closing Date and
(ii) an original Convertible Note duly executed and delivered by the Borrower;

  (b)         each Lender shall have received a certificate from an Responsible
Officer of the Borrower certifying that all of the conditions set forth in this
Section 4.1 have been, or contemporaneously with the funding of the Disbursement
will be, satisfied;

  (c)         a favorable legal opinion of DLA Piper LLP, counsel to the Loan
Parties, addressed to the Lender and the Agent, as to such matters concerning
the Loan Parties and the Facility Documents as the Lender may reasonably
request;

  (d)         the administrative fees required to be paid pursuant to
Section 2.8 and all other fees required to be paid on the Closing Date pursuant
to this Agreement and the other Facility Documents and all costs and expenses
required to be paid on the Closing Date (including pursuant to Section 8.2)
pursuant to this Agreement and the other Facility Documents, in the case of
costs and expenses, to the extent invoiced at least one (1) Business Day prior
to the Closing Date, shall have been, or substantially contemporaneously with
the Disbursement shall be, paid (which amounts, at the sole option of the
Lenders, may be offset against the proceeds of the Disbursement);

  (e)         Agent and the Lenders shall have received at least three
(3) Business Days prior to the Closing Date all documentation and other
information required by regulatory authorities under

 

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applicable “know your customer” and anti-money laundering rules and regulations,
including the USA Patriot Act, that has been reasonably requested by Agent or
any Lender at least ten (10) days in advance of the Closing Date, which shall
include a duly executed IRS Form W-9; and

  (f)         such other conditions, documents and deliverables that Agent or
any Lender may reasonably request shall have been satisfied or delivered, as
applicable.

  (g)         no Default or Event of Default shall have occurred or could
reasonably be expected to result from such Disbursement or the use of the
proceeds therefrom;

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

ARTICLE 5

AFFIRMATIVE COVENANTS

For so long as the Obligations (other than unasserted contingent indemnification
obligations) remain outstanding

Section 5.1        Reserved.

Section 5.2        Payment and Performance of Obligations.

  (a)         Each Loan Party (i) will pay and discharge, and cause each
Subsidiary to pay and discharge, on a timely basis as and when due, all of their
respective obligations and liabilities, except for such obligations and/or
liabilities (A) that may be the subject of a Permitted Contest, and (B) the
nonpayment or nondischarge of which could not reasonably be expected to have a
Material Adverse Effect, (ii) without limiting anything contained in the
foregoing clause (i), pay all material amounts due and owing in respect of Taxes
(including without limitation, payroll and withholdings tax liabilities) on a
timely basis as and when due, and in any case prior to the date on which any
fine, penalty, interest, late charge or loss may be added thereto for nonpayment
thereof, except for Taxes subject a Permitted Contest, (iii) will maintain, and
cause each Subsidiary to maintain, in accordance with GAAP, appropriate reserves
for the accrual of all of their respective obligations and liabilities, and
(iv) will not breach or permit any Subsidiary to breach, or permit to exist any
default under, the terms of any lease, commitment, contract, instrument or
obligation to which it is a party, or by which its properties or assets are
bound, except for such breaches or defaults which could not reasonably be
expected to have a Material Adverse Effect.

  (b)         Upon completion of any Permitted Contest, each Loan Party shall,
and will cause each Subsidiary to, promptly pay the amount due, if any, except
where the failure to pay such amount could not reasonably be expected to have a
Material Adverse Effect.

Section 5.3        Maintenance of Existence, Etc. Each Loan Party will preserve,
renew and keep in full force and effect, and will cause each Subsidiary to
preserve, renew and keep in full force and effect, (a) their respective
existence and (b) their respective rights, privileges and franchises necessary
or desirable in the normal conduct of business, except with respect to
clauses (a) and (b) above in connection with a

 

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transaction permitted under Section 5.6, and (c) their respective qualification
to do business and good standing in each jurisdiction except, with respect to
clause (b) and this clause (c), where the failure to be qualified or in good
standing could not reasonably be expected to have a Material Adverse Effect.

Section 5.4        Maintenance of Property; Insurance.

  (a)         Each Loan Party will keep, and will cause each Subsidiary to keep,
all property material to its business in good working order and condition,
ordinary wear and tear excepted. If all or any part of any of such property
material to its business, becomes damaged or destroyed, each Loan Party will,
and will cause each Subsidiary to, promptly and completely repair and/or restore
such property in a good and workmanlike manner, regardless of whether Agent
agrees to disburse insurance proceeds or other sums to pay costs of the work of
repair or reconstruction.

  (b)         Upon completion of any Permitted Contest, each Loan Party shall,
and will cause each Subsidiary to, promptly pay the amount due, if any, and
deliver to Agent proof of the completion of the contest and payment of the
amount due, if any.

  (c)         Each Loan Party will maintain (i) casualty insurance on all real
and personal property on an all risks basis (including the perils of windstorm
and quake), covering the repair and replacement cost of all such property and
coverage, business interruption and rent loss coverages with extended period of
indemnity (for the period required by Agent from time to time) and indemnity for
extra expense, in each case without application of coinsurance and with agreed
amount endorsements, (ii) general and professional liability insurance
(including products/completed operations liability coverage), and (iii) such
other insurance coverage against loss or damage of the kinds customarily insured
against by Persons engaged in substantially the same business, of such types and
in such amounts as are customarily carried under similar circumstances by such
other Persons; provided, however, that, in no event shall such insurance be in
amounts or with coverage less than, or with carriers with qualifications
inferior to, any of the insurance or carriers in existence as of the Closing
Date (or required to be in existence after the Closing Date under a Facility
Document). All such insurance shall be provided by insurers having an A.M. Best
policyholders rating reasonably acceptable to Agent.

Section 5.5        Compliance with Laws and Material Contracts. Each Loan Party
will comply, and cause each Subsidiary to comply, with the requirements of all
applicable Laws (including Health Care Laws) and Material Contracts, except to
the extent that failure to so comply would not reasonably be expected to
(a) have a Material Adverse Effect, or (b) result in any Lien upon a material
portion of the assets of any such Person in favor of any Governmental Authority.

Section 5.6        Inspections. On and after the date that Required Lenders
believe in good faith that a Default or Event of Default has occurred and is
continuing, each Loan Party shall, and shall cause each of its Subsidiaries to,
with respect to each owned, leased or controlled property, at all times and
without notice, at the sole option of Agent or any Lender: (a) provide access to
such property to Agent, the Lenders and their respective representatives, as
frequently as Agent or any Lender determines to be appropriate; and (b) permit
Agent or any Lender to conduct field examinations, appraise, inspect, and make
extracts and copies (or take originals if reasonably necessary) from all of such
Loan Party’s and its Subsidiaries’ books and records, and evaluate and conduct
appraisals and evaluations in any manner and through any medium that Agent or
any Lender considers advisable, in each instance, at the Loan Parties’ sole
expense.

 

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Section 5.7        Use of Proceeds. The proceeds of the Disbursement will be
used for working capital and for general corporate purposes of the Borrower.

Section 5.8        Required Authorizations. The Loan Parties shall, and shall
cause their Subsidiaries to, obtain, make and keep in full force and effect all
material required regulatory permits.

Section 5.9        Notices; Information. The Loan Parties shall promptly (and,
in any event, within two (2) Business Days) notify the Agent in writing of the
occurrence of (i) any Default or Event of Default; (ii) any default or event of
default under the Senior Credit Agreements; and (iii) any event or occurrence or
series or related events or occurrences that could reasonably be expected to
have Material Adverse Effect. In addition, promptly after request therefor, the
Borrower shall provide the Agent and the Lenders such other financial and other
information as any Lender or the Agent may from time to time reasonably request.

Section 5.10    SEC Documents; Financial Statements. The Borrower shall comply
in all respects with its filing requirements under Section 13 or 15(d) of the
Exchange Act, as applicable. Without limiting the foregoing, the Borrower shall
timely file (or furnish, as applicable) all SEC Documents required to be filed
with (or furnished to) the SEC pursuant to the Exchange Act, and the Borrower
and its Subsidiaries shall not terminate the registration of the Common Stock
under the Exchange Act or otherwise terminate its status as an issuer required
to file reports under the Exchange Act, even if the securities laws would
otherwise permit any such termination. None of such SEC Documents, when filed or
furnished, shall contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. All financial statements including in any such SEC
Documents shall fairly present the consolidated financial position of the
Borrower and its Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods presented and shall
have been prepared in accordance with GAAP, consistently applied (subject, in
the case of unaudited quarterly financial statements, to normal year-end
adjustments that are not material individually or in the aggregate and lack of
footnote disclosures). Any audit or report of the Borrower’s independent
certified public accountants on any financial statements included in any such
SEC Document shall (i) contain an unqualified opinion (subject to the exception
set forth below in clause (ii) of this sentence), stating that such consolidated
financial statements present fairly in all material respects the consolidated
financial position and results of operations and cash flows of the Borrower and
its Subsidiaries as of the dates thereof and for the periods presented and have
been prepared in conformity with GAAP applied on a basis consistent with prior
years, and (ii) not include any explanatory paragraph expressing substantial
doubt as to going concern status, and no financial statements included in any
SEC Document shall include any statement in the footnotes thereto that indicates
there is substantial doubt about the Borrower’s ability to continue as a going
concern (or any statement to similar effect) (other than, with respect to
clauses (i) and (ii) a going concern qualification based solely on the
Borrower’s having negative profits or a determination that any Loan Party has
less than 12 months liquidity).

Section 5.11    Disclosure. Each Loan Party shall, and shall cause each of its
Subsidiaries to, ensure that all written information, exhibits and reports
furnished to any Lender Party, when taken as a whole, do not and will not (or
does not, as applicable) contain any untrue statement of a material fact and do
not and will not omit to state any material fact or any fact necessary to make
the statements contained therein not materially misleading in light of the
circumstances in which made, and will promptly disclose to Agent and the Lenders
and correct any defect or error that may be discovered therein or in any
Facility Document or in the execution, acknowledgement or recordation thereof.

 

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Section 5.12    Conversion Shares.

  (a)        The Borrower shall, so long as any of the Convertible Notes are
outstanding, take all action necessary to reserve and keep available out of its
authorized and unissued capital stock, solely for the purpose of effecting the
conversion of the Convertible Notes, the number of shares of Common Stock
issuable upon such conversion (without taking into account any limitations on
the conversion of the Convertible Notes as set forth therein)

  (b)        The Borrower shall provide, free from preemptive rights, out of the
Borrower’s authorized but unissued shares or shares held in treasury, sufficient
shares of Common Stock to provide for conversion of the Convertible Notes held
by the Lenders from time to time as such Convertible Notes are presented for
conversion (assuming that at the time of computation of such number of shares of
Common Stock, all such Convertible Notes would be converted by Lenders into
Conversion Shares without regard to any limitation on conversion) and cause all
shares of Common Stock issued upon conversion of the Convertible Notes held by
the Lenders to be fully paid and free from all taxes, liens and charges with
respect to the issue thereof.

Section 5.13    Further Assurances. Promptly upon the request of the Required
Lenders (or the Agent acting at the direction of the Required Lenders), the Loan
Parties shall (and, subject to the limitations set forth herein and in the other
Facility Documents, shall cause each of their Subsidiaries to) take such
additional actions and execute such documents as he Required Lenders (or the
Agent acting at the direction of the Required Lenders) may reasonably require
from time to time in order (a) to carry out more effectively the purposes of
this Agreement or any other Facility Document, and (b) to better assure, grant,
preserve, protect and confirm to the Agent and the Lenders the rights granted or
now or hereafter intended to be granted to them under any Facility Document.
Without limiting the generality of the foregoing, the Loan Parties shall cause
each of their Subsidiaries (other than a Restricted Foreign Subsidiary) within
30 days after the date of the formation (including pursuant to a Division/Series
Transaction) or acquisition thereof, to Guarantee the Obligations and to take
such other actions reasonably requested by the Required Lenders with respect to
making any such Subsidiary a Loan Party under the Facility Documents.
Furthermore, the Borrower shall notify Agent and the Lenders in writing on the
date of the formation (including pursuant to a Division/Series Transaction) or
acquisition of any Subsidiary. The Loan Parties shall deliver, or cause to be
delivered, promptly after (and in any event within 30 days (or such later date
as may be agreed to by the Required Lenders in their sole discretion) after)
such date to Agent and the Lenders, appropriate resolutions, secretary
certificates, certified Organizational Documents and, if requested by any
Lender, legal opinions relating to the matters described in this Section 5.13
(which opinions shall be in form and substance reasonably acceptable to the
Required Lenders and, to the extent applicable, substantially similar to the
opinions delivered on the Closing Date), in each instance with respect to each
Loan Party or Subsidiary (other than a Restricted Foreign Subsidiary) formed
(including pursuant to a Division/Series Transaction) or acquired after the
Closing Date.

Section 5.14    Environmental Matters. Each Loan Party shall, and shall cause
each of its Subsidiaries to, comply with, and maintain its real estate, whether
owned, leased, subleased or otherwise operated or occupied, in compliance with
all applicable Environmental Laws or as is required by orders and directives of
any Governmental Authority except where the failure to comply could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.

Section 5.15    [Reserved].

Section 5.16    [Reserved].

 

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Section 5.17    [Reserved].

Section 5.18    Disclosure; No MNPI.

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

  (b)        Upon the filing of the Borrower’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2019 (the “2019 Annual Report”), the Borrower
and its Subsidiaries shall have disclosed all material, non-public information
(if any) regarding any Loan Party, its securities, any Loan Party, its
securities, any of its Affiliates or any other Person provided or made available
to any Lender Party or any of its Affiliates, attorneys, agents or
representatives by any Loan Party or any of its employees, officers, directors
(or equivalent persons), attorneys, agents or representatives on or prior to the
Closing Date. Each Loan Party shall not, and shall cause each of its employees,
officers, directors (or equivalent persons), Affiliates, attorneys, agents and
representatives to not, provide the Agent, any Lender or any of its Affiliates,
attorneys, agents or representatives with any material nonpublic information
regarding any Loan Party, its securities, any of its Affiliates or any other
Person from and after the Closing Date without the express prior written consent
of the Agent or such Lender, as applicable. Each Loan Party hereby acknowledges
and agrees that neither the Agent nor any Lender (nor any of such Person’s
Affiliates, attorneys, agents or representatives) shall have any duty of trust
or confidence (including any obligation under any confidentiality or
non-disclosure agreement entered into by such Person) with respect to, or any
obligation not to trade in any securities while aware of, any material nonpublic
information (i) provided by, or on behalf of, any Loan Party, any of its
Affiliates or any of its officers, directors (or equivalent persons), employees,
attorneys, agents or representatives in violation of any of the representations,
covenants, provisions or agreements set forth in this Section 5.18 or
(ii) otherwise possessed (or continued to be possessed) by any Lender Party (or
any Affiliate, agent or representative thereof) as a result of any breach or
violation of any representation, covenant, provision or agreement set forth in
this Section 5.18 or Section 3.25.

  (c)        Notwithstanding anything to the contrary herein, in the event that
any Loan Party believes that a notice or communication to the Agent, any Lender
or any of its Affiliates, attorneys, agents or representatives contains
material, nonpublic information relating to any Loan Party, it securities, any
of its Affiliates or any other Person, the Borrower shall so indicate to such
Person prior to delivery of such notice or communication, and such indication
shall provide such Person the means to refuse to receive such notice or
communication; and in the absence of any such indication, the Agent and each
Lender, the other holders of the Securities and their respective Affiliates,
agents and representatives shall be allowed to presume that all matters relating
to such

 

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notice or communication do not constitute material, nonpublic information
relating to any Loan Party, its securities, any of its Affiliates or any other
Person. Upon receipt or delivery by any Loan Party of any notice in accordance
with the terms of the Facility Documents, unless the Borrower has in good faith
determined that the matters relating to such notice do not constitute material,
nonpublic information relating to any Loan Party, its securities, any of its
Affiliates or any other Person, the Borrower shall contemporaneously (or, in the
case of any Loan Party’s receipt of such a notice, within one Business Day after
such receipt) publicly disclose such material, nonpublic information. In the
event of a breach of any of the foregoing covenants by any Loan Party, any of
its Affiliates, or any of its or their respective officers, directors (or
equivalent persons), employees, attorneys, agents or representatives, in
addition to any other remedies provided in the Facility Documents or otherwise
available at law or in equity, the Agent and each Lender shall have the right to
make a public disclosure in the form of a press release or otherwise, of the
applicable material nonpublic information without the prior approval by any Loan
Party or any of its Affiliates, officers, directors (or equivalent persons),
employees, stockholders, attorneys, agents or representatives, and neither the
Agent nor any Lender (nor any of its Affiliates, agents or representatives)
shall have any liability to any Loan Party, any of its Affiliates or any of its
or their respective officers, directors (or equivalent persons), employees,
stockholders, attorneys, agents or representatives for any such disclosure.

  (d)        Notwithstanding the foregoing, to the extent the Borrower
reasonably and in good faith determines that it is necessary to disclose
material non-public information to the Agent or any Lender for purposes relating
to any of the Facility Documents (a “Necessary Disclosure”), the Borrower shall
inform counsel to the Agent (which shall be Sullivan & Cromwell LLP or such
other counsel as shall have been designated in writing by the Agent) of such
determination without disclosing the applicable material non-public information,
and the Borrower and such counsel on behalf of the Agent shall endeavor to agree
upon a process for making such Necessary Disclosure to the applicable Lender
Party or its representatives that is mutually acceptable to the Agent and the
Borrower (an “Agreed Disclosure Process”). Thereafter, the Borrower shall be
permitted to make such Necessary Disclosure (only) in accordance with the Agreed
Disclosure Process.

  (e)        Neither the Agent, any Lender nor any of their respective
Affiliates shall be deemed to be in possession of any material non-public
information because such information was provided to any attorney or agent of
any such Person, and the Borrower agrees not to (and the Borrower agrees to
cause its Affiliates not to) assert any contrary position.

Section 5.19    Major Transaction. The Borrower shall give the Lenders notice of
a Major Transaction at least thirty (30) days prior to the consummation thereof
but in any event not later than five (5) business days following the first
public announcement thereof. Each Lender, within the Major Transaction
Conversion Period (as defined in the Convertible Notes), in the exercise of its
sole discretion, may deliver a notice to the Borrower (the “Put Notice”), that
the Convertible Notes shall be due and payable in cash (collectively, the “Major
Transaction Payment”). If any of the Lenders deliver a Put Notice, then
simultaneously with consummation of such Major Transaction, the Borrower shall
make such Major Transaction Payment to each such Lender. The Borrower shall not
consummate any Major Transaction without complying with the provisions of this
Section 5.19.

 

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ARTICLE 6

NEGATIVE COVENANTS

For so long as the Obligations (other than unasserted contingent indemnification
obligations) remain outstanding:

Section 6.1        Debt; Contingent Obligations. No Loan Party will, or will
permit any Subsidiary to, directly or indirectly, create, incur, assume,
guarantee or otherwise become or remain directly or indirectly liable with
respect to, any Debt, except for Permitted Debt. No Loan Party will, or will
permit any Subsidiary to, directly or indirectly, create, assume, incur or
suffer to exist any Contingent Obligations, except for Permitted Contingent
Obligations.

Section 6.2        Liens. No Loan Party will, or will permit any Subsidiary to,
directly or indirectly, create, assume or suffer to exist any Lien on any asset
now owned or hereafter acquired by it, except for Permitted Liens.

Section 6.3        Distributions. No Loan Party will, or will permit any
Subsidiary to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Distribution, except for Permitted Distributions.

Section 6.4        Restrictive Agreements. No Loan Party will, or will permit
any Subsidiary to, directly or indirectly (a) enter into or assume any agreement
(other than the Facility Documents, the Senior Financing Documents, and any
agreements for purchase money debt permitted under clause (c) of the definition
of Permitted Debt) prohibiting the creation or assumption of any Lien upon its
properties or assets, whether now owned or hereafter acquired, or (b) create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind (except as provided by the Facility
Documents and the Senior Financing Documents) on the ability of any Subsidiary
to: (i) pay or make Distributions to any Loan Party or any Subsidiary; (ii) pay
any Debt owed to any Loan Party or any Subsidiary; (iii) make loans or advances
to any Loan Party or any Subsidiary; or (iv) transfer any of its property or
assets to any Loan Party or any Subsidiary.

Section 6.5        Payments and Modifications of Subordinated Debt. No Loan
Party will, or will permit any Subsidiary to, directly or indirectly
(a) declare, pay, make or set aside any amount for payment in respect of
Subordinated Debt, except for payments made in full compliance with and
expressly permitted under the Subordination Agreement, (b) amend or otherwise
modify the terms of any Subordinated Debt, except for amendments or
modifications made in full compliance with the Subordination Agreement,
(c) declare, pay, make or set aside any amount for payment in respect of any
Debt hereinafter incurred that, by its terms, or by separate agreement, is
subordinated to the Obligations, except for payments made in full compliance
with and expressly permitted under the subordination provisions applicable
thereto, or (d) amend or otherwise modify the terms of any such Debt if the
effect of such amendment or modification is to (i) increase the interest rate or
fees on, or change the manner or timing of payment of, such Debt,
(ii) accelerate or shorten the dates upon which payments of principal or
interest are due on, or the principal amount of, such Debt, (iii) change in a
manner materially adverse to any Loan Party or Agent any event of default or add
or make more restrictive any covenant with respect to such Debt, (iv) change the
prepayment provisions of such Debt or any of the defined terms related thereto,
(v) change the subordination provisions thereof (or the subordination terms of
any guaranty thereof), or (vi) change or amend any other term if such change or
amendment would materially increase the obligations of the obligor or confer
additional material rights on the holder of such Debt in a manner adverse to
Loan Parties, any Subsidiaries, Agent or Lenders.

 

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Loan Parties shall, prior to entering into any such amendment or modification,
deliver to Agent reasonably in advance of the execution thereof, any final or
execution form copy thereof.

Section 6.6        Consolidations, Mergers and Sales of Assets.

  (a)         No Loan Party will, or will permit any Subsidiary to, directly or
indirectly consolidate or merge or amalgamate with or into any other Person
other than (i) consolidations or mergers among Loan Parties (provided that in
any merger involving Sientra, Sientra shall be the surviving entity), (ii)
consolidations or mergers among a Guarantor and a Loan Party so long as the
Borrower is the surviving entity, (iii) consolidations or mergers among
Guarantors, (iv) consolidations or mergers among Subsidiaries that are not Loan
Parties and (v) consolidations or mergers in connection with a Permitted
Acquisition (provided that in any merger involving Sientra, Sientra shall be the
surviving entity and in any merger involving a Loan Party other than Sientra,
the surviving entity shall be or become a Loan Party).

  (b)         [Reserved].

  (c)         Notwithstanding anything contained in the Facility Documents to
the contrary, the Loan Parties may enter into and consummate Major Transactions
(and enter into agreements with respect thereto).

Section 6.7        Purchase of Assets, Investments. No Loan Party will, or will
permit any Subsidiary to, directly or indirectly:

  (a)         (i) make any Acquisition other than a Permitted Acquisition or
(ii) acquire or own any other Investment other than Permitted Investments;

  (b)         without limiting clause (a), otherwise acquire or enter into any
agreement to acquire any assets other than (i) in the Ordinary Course of
Business, (ii) constituting capital expenditures, or (iii) constituting
replacement assets purchased with proceeds of property insurance policies,
awards or other compensation with respect to any eminent domain, condemnation or
similar proceeding; or

  (c)         engage or enter into any agreement to engage in any joint venture
or partnership with any other Person.

Section 6.8        Transactions with Affiliates. No Loan Party will, or will
permit any Subsidiary to, directly or indirectly, enter into or permit to exist
any transaction (including the purchase, sale, lease or exchange of any property
or the rendering of any service) with any Affiliate of any Loan Party, except:

  (a)         transactions permitted by Section 6.3 of this Agreement;

  (b)         customary compensation and indemnification of, and other
employment arrangements with, directors, officers and employees of Borrower or
any Subsidiary in the Ordinary Course of Business;

  (c)         transactions constituting bona fide equity raised or Subordinated
Debt to the extent otherwise permitted hereunder;

  (d)         transactions that are disclosed to Agent in advance of being
entered into and which contain terms that are no less favorable to the
applicable Borrower or any Subsidiary, as the case

 

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may be, than those which might be obtained from a third party not an Affiliate
of any Loan Party; and

(e)        transactions disclosed on Schedule 6.8 on the Closing Date.

Section 6.9        Modification of Organizational Documents. No Loan Party will,
or will permit any Subsidiary to, directly or indirectly, amend or otherwise
modify any Organizational Documents of such Person, except for Permitted
Modifications.

Section 6.10    Reserved.

Section 6.11    Conduct of Business. No Loan Party will, or will permit any
Subsidiary to, directly or indirectly, engage in any line of business other than
those businesses engaged in on the Closing Date and similar, related or
complementary businesses reasonably related, ancillary or supplemental thereto
or incidental thereto or reasonably expansive thereof.

Section 6.12    Compliance with Anti-Corruption Laws. Agent hereby notifies Loan
Parties that pursuant to the requirements of Anti-Terrorism Laws, and Agent’s
policies and practices, Agent is required to obtain, verify and record certain
information and documentation that identifies Loan Parties and its principals,
which information includes the name and address of each Loan Party and its
principals and such other information that will allow Agent to identify such
party in accordance with Anti-Terrorism Laws. No Loan Party will, or will permit
any Subsidiary to, directly or indirectly, knowingly enter into any Material
Contracts with any Blocked Person or any Person listed on the OFAC Lists. Each
Loan Party shall immediately notify Agent if such Loan Party has knowledge that
any Loan Party, any additional Loan Party or any of their respective Affiliates
or agents acting or benefiting in any capacity in connection with the
transactions contemplated by this Agreement is or becomes a Blocked Person 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. No Loan Party will, or will permit any
Subsidiary to, directly or indirectly, (i) conduct any business or engage in any
transaction or dealing with any Blocked Person, including, without limitation,
the making or receiving of any contribution of funds, goods or services to or
for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to Executive Order No. 13224, any similar executive order or other
Anti-Terrorism Law, or (iii) engage in or conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in Executive Order No. 13224 or other
Anti-Terrorism Law.

Section 6.13    Accounting Changes. No Loan Party shall, and no Loan Party shall
suffer or permit any of its Subsidiaries to, (a) make any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
(b) change the fiscal year or method for determining the fiscal quarters of any
Loan Party or of any consolidated Subsidiary of any Loan Party.

ARTICLE 7

EVENTS OF DEFAULT

Section 7.1        Events of Default. Any of the following events, conditions or
other occurrences shall constitute an “Event of Default”:

  (a)         The Borrower or any other Loan Party shall have failed (i) to pay
when and as required to be paid herein or in any other Facility Document, any
amount of principal of any Loan,

 

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including upon maturity of the Loans, or (ii) to pay within three (3) Business
Days after the same shall become due, interest on any Loan, or any fee or any
other amount or Obligation payable hereunder or pursuant to any other Facility
Document.

  (b)         Any Loan Party shall have failed to comply with or observe (i)
5.2(b), 5.3, 5.4(c), 5.6, 5.9, 5.10,5.12, 5.13, 5.18, 5.19 or Article 6 or any
covenant contained in the Convertible Notes (including any Conversion Failure
(as defined in the Convertible Notes) or (ii) any covenant contained in this
Agreement or in any other Facility Document (other than occurrences described in
other provisions of this Section 7.1 for which a different grace or cure period
is specified or for which no grace or cure period is specified and thereby
constitute immediate Events of Default) and such default is not remedied by the
Loan Party or waived by Agent within fifteen thirty (30) days after the earlier
of (i) receipt by Borrower of notice from Agent or Required Lenders of such
default, or (ii) the date on which any officer of any Loan Party or any of its
subsidiaries becomes aware of such default.

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

  (d)         (i) Failure of any Loan Party to pay when due or within any
applicable grace period any principal, interest or other amount on Debt (other
than the Loans), or the occurrence of any breach, default, condition or event
with respect to any Debt (other than the Loans), if the effect of such failure
or occurrence is to cause or to permit the holder or holders of any such Debt,
or to cause, Debt or other liabilities having a principal amount, individually
or in the aggregate, in excess of $1,100,000 to become or be declared due prior
to its stated maturity, or (ii) the occurrence of any breach or default under
any terms or provisions of any Subordinated Debt Document or under any agreement
subordinating the Subordinated Debt to all or any portion of the Obligations or
the occurrence of any event requiring the prepayment of any Subordinated Debt.

  (e)         Any Loan Party or any Subsidiary of a Loan Party shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing.

  (f)         An involuntary case or other proceeding shall be commenced against
any Loan Party or any Subsidiary of a Loan Party seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of forty-five (45) days; or an order for relief shall be entered against
any Loan Party or any Subsidiary of a Loan Party under applicable federal
bankruptcy, insolvency or other similar law in respect of (i) bankruptcy,
liquidation, winding-up, dissolution or suspension of general operations,
(ii) composition, rescheduling, reorganization, arrangement or readjustment of,
or other relief from, or stay of proceedings to enforce, some or all of the
debts or obligations, or (iii) possession, foreclosure, seizure or retention,
sale or other

 

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disposition of, or other proceedings to enforce security over, all or any
substantial part of the assets of such Loan Party or Subsidiary.

  (g)         (i) Institution of any steps by any Person to terminate a Pension
Plan if as a result of such termination any Loan Party or any member of the
Controlled Group could be required to make a contribution to such Pension Plan,
or could incur a liability or obligation to such Pension Plan, in excess of
$1,100,000, (ii) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 303(k) of ERISA or
Section 430(k) of the Code or an event occurs that could reasonably be expected
to give rise to a Lien under Section 4068 of ERISA, or (iii) there shall occur
any withdrawal or partial withdrawal from a Multiemployer Plan and the
withdrawal liability (without unaccrued interest) to Multiemployer Plans as a
result of such withdrawal (including any outstanding withdrawal liability that
any Loan Party or any member of the Controlled Group have incurred on the date
of such withdrawal) exceeds $1,100,000.

  (h)         one or more judgments or orders for the payment of money (not paid
or fully covered by insurance maintained in accordance with the requirements of
this Agreement and as to which the relevant insurance company has acknowledged
coverage) aggregating in excess of $1,100,000 shall be rendered against any or
all Loan Parties and either (i) enforcement proceedings shall have been
commenced by any creditor upon any such judgments or orders, or (ii) there shall
be any period of thirty (30) consecutive days during which a stay of enforcement
of any such judgments or orders, by reason of a pending appeal, bond or
otherwise, shall not be in effect.

  (i)         Any of the Facility Documents shall for any reason fail to
constitute the valid and binding agreement of any party thereto, or any Loan
Party shall so assert, in each case, unless such Facility Document terminates
pursuant to the terms and conditions thereof without any breach or default
thereunder by any Loan Party thereto..

  (j)         The institution by any Governmental Authority of criminal
proceedings against any Loan Party.

  (k)         any Loan Party makes any payment on account of any Debt that has
been subordinated to any of the Obligations, other than payments specifically
permitted by the terms of such subordination;

  (l)         There shall occur any revocation, suspension, termination,
rescission, non-renewal (except for any such non-renewal at the election of a
Loan Party or a Subsidiary of a Loan Party as could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect) or
forfeiture or any similar final administrative action with respect to one or
more Regulatory Required Permits, in each case, of any Loan Party or any
Subsidiary of any Loan Party that could reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.

  (m)       The Common Stock shall cease to be registered under the Exchange
Act.

Section 7.2        Remedies. Upon the occurrence and during the continuance of
any Event of Default the Required Lenders may direct Agent to:

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

 

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

provided, however, upon the occurrence of any event specified in Section 7.1(d)
above, the obligation of each Lender to make Loans shall automatically terminate
and the unpaid principal amount of all outstanding Loans and all interest and
other amounts as aforesaid shall automatically become due and payable without
further act of Agent or any Lender.

ARTICLE 8

MISCELLANEOUS

Section 8.1        Notices. Any notices or other information (including an
financial information) required or permitted to be given under the terms hereof
shall be sent by certified or registered mail (return receipt requested) or
delivered personally or by courier (including a recognized overnight delivery
service) or by email and shall be effective five (5) days after being placed in
the mail, if mailed by regular United States mail, or upon receipt, if delivered
personally or by courier (including a recognized overnight delivery service), or
when received by email in each case addressed to a party as follows (or such
other address or email address provided by such party to such other parties
pursuant to the below (or such later address or email address provided in
accordance herewith):

Sientra, Inc.

420 South Fairview Avenue, Suite 200

Santa Barbara, CA 93117

Email: oliver.bennett@sientra.com

Attn: Oliver Bennett, Esq.

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

DLA Piper LLP (US)

4365 Executive Dr., Suite 1100

San Diego, CA 92121

Email: michael.kagnoff@dlapiper.com

Attn: Michael Kagnoff, Esq.

If to Agent:

c/o Deerfield Management Company, L.P.

780 Third Avenue, 37th Floor

New York, NY 10017

E-mail: dclark@deerfield.com

Attn: David J. Clark, Esq.

With a copy to:

Cortland Capital Market Services LLC

225 W. Washington St., 9th Floor

Chicago, IL 60606

 

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E-mail: legal@cortlandglobal.com and DeerfieldAgency@cortlandglobal.com

Attn: Legal Department and Deerfield Agency Department

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

Sullivan & Cromwell LLP

125 Broad Street

New York, NY 10004

E-mail: blauta@sullcrom.com

Attn: Ari B. Blaut, Esq.

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

Section 8.2        Cost and Expense Reimbursement. The Loan Parties agree to pay
on or prior to the Closing Date and, within ten (10) Business Days after
delivery of an invoice therefor, after the Closing Date, (a) all costs and
expenses of the Lender Parties of negotiation, preparation, execution, delivery,
filing and administration of the Facility Documents and any consents,
amendments, waivers or other modifications thereto (whether or not any such
consent, amendment, waiver or other modification is ultimately consummated), (b)
all fees, costs and expenses of legal counsel to each Lender Party in connection
with the negotiation, preparation, execution and administration of the Facility
Documents and any consents, amendments, waivers or other modifications thereto
and any other documents or matters requested by the Borrower or any other Loan
Party related thereto, (c) all costs and expenses, including fees, costs and
expenses of legal counsel to the Agent and the Lenders and all fees, costs and
expenses of accountants, advisors and consultants and costs of settlement,
incurred by the Agent and the Lenders in enforcing any of the Facility Documents
or any Obligations of, or in collecting any payments due from, any Loan Party
hereunder or under the other Facility Documents or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a “work-out” or pursuant to any proceeding or event
of the type set forth in Section 7.1(d), (d) the cost of purchasing insurance in
accordance with this Agreement that the Loan Parties fail to obtain as required
by the Facility Documents, and (e) all fees, costs and expenses (including costs
and expenses of counsel) incurred by the Agent or any Lender in connection with
the enforcement of its rights or remedies under the Facility Documents after the
occurrence or during the continuance of an Event of Default; provided that the
aggregate fees and expenses of legal counsel to the Agent and the Lenders, taken
as a whole, incurred prior to and including the Closing Date that are required
to be reimbursed by the Borrower in connection with the execution of this
Agreement on the Closing Date shall not exceed $275,000. Without limiting any of
the foregoing provisions of this Section 8.2, any action taken by any Loan Party
under or with respect to any Facility Document, even if required under any
Facility Document or at the request of Agent or any other Lender, shall be at
the sole expense of such Loan Party, and neither Agent nor any other Lender
shall be required under any Facility Document to reimburse any Loan Party or any
Subsidiary of any Loan Party therefor. The obligations and provisions contained
in this Section 8.2 shall survive the termination of this Agreement and the
repayment of the Obligations.

Section 8.3        Governing Law; Venue; Jurisdiction; Service of Process;
WAIVER OF JURY TRIAL.

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

 

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

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

  (d)         THE PARTIES HERETO, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING
ARISING OUT OF, IN CONNECTION WITH OR RELATING TO, THIS AGREEMENT, THE OTHER
FACILITY DOCUMENTS AND ANY OTHER TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.
THIS WAIVER APPLIES TO ANY ACTION, SUIT OR PROCEEDING WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE. EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER PARTY AND
NO AGENT, REPRESENTATIVE OR OTHER PERSON AFFILIATED WITH OR RELATED TO ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THE FACILITY DOCUMENTS, AS APPLICABLE, BY THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 8.3. EACH OF THE PARTIES HERETO REPRESENT AND
WARRANT THAT IT HAS HAD THE OPPORTUNITY TO REVIEW THE JURY WAIVER CONTAINED IN
THIS SECTION 8.3 WITH LEGAL COUNSEL.

Section 8.4        Successors and Assigns.

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

 

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  (b)         Any Lender may assign or transfer its rights or the Obligations
owing to it under the Facility Documents, including the Convertible Notes, to
any Person without the consent of any Party. Notwithstanding the anything
contained in this Agreement or any other Facility Document to the contrary,
prior to the occurrence of an Event of Default, Agent may not assign its rights
under this provision to a Competitor. Upon a Lender’s assignment of any of the
Loans held by it (in accordance with this Section 8.4(b)) and the Convertible
Notes, the Agent shall record the identity of the transferee and other relevant
information in the Register, and the transferee shall (to the extent of the
interests transferred to such transferee) have all the rights and obligations
of, and shall be deemed, a Lender with respect to such Loan (as applicable)
hereunder or under the other Facility Documents. For the avoidance of doubt,
each assignment or transfer of the rights or Obligations of any Lender shall be
subject only to the following conditions: (i) the parties to each assignment or
transfer shall execute and deliver to Agent an Assignment and Assumption,
(ii) the parties to each assignment shall send the Agent a recordation and
processing fee of $3,500 and (ii) upon the reasonable request by Agent, the
assignee or transferee shall provide all documentation and other information
reasonably determined by Agent to be required by applicable regulatory
authorities required under applicable “know your customer” and anti-money
laundering rules and regulations, including the USA Patriot Act.

  (c)         In addition to the other rights provided in this Section 8.4, each
Lender may grant a security interest in, or otherwise assign as collateral, any
of its rights under the Facility Documents, whether now owned or hereafter
acquired (including rights to payments of principal or interest on the Loans),
to any holder of, or trustee for the benefit of the holders of, such Lender’s
Debt or equity securities.

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

Section 8.5        Entire Agreement; Amendments.

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

  (b)         Subject to the provisions of Section 8.5(c), no amendment,
restatement, modification, supplement, change, termination or waiver of any
provision of this Agreement or the other Facility Documents, and no consent to
any departure by any Loan Party therefrom shall in any event be effective
without the written concurrence of the Borrower and the Required Lenders.

  (c)         No amendment, restatement, supplement, modification, change,
termination, waiver or consent of any provision of any Facility Document shall,
unless in writing and signed by Agent, (i) amend, restate, supplemented, modify,
change, terminate or waive (or consent to any diversion from) any provision of
this Section 8.5(c) or of any other provision of this Agreement or any other
Facility Document that, by its terms, expressly requires the approval or
concurrence of Agent, (ii) reduce the amount or postpone the due date of or
waives any fees, expenses and/or

 

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indemnities payable to Agent hereunder or under the other Facility Documents or
(iii) or otherwise affect the rights, benefits, liabilities or duties of Agent
under this Agreement or any other Facility Document. Notwithstanding anything to
the contrary in Section 8.5(b), Agent and the Borrower may amend or modify this
Agreement and any other Facility Document to (A) cure any ambiguity, omission,
defect or inconsistency therein, and (B) grant a new Lien to Agent, for the
benefit of the Lender Parties, extend an existing Lien over additional property
for the benefit of the Lender Parties or join additional Persons as Loan
Parties.

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

Section 8.6        Severability. If any provision of this Agreement or any of
the other Facility Documents shall be invalid, illegal or unenforceable in any
respect under any law, the validity, legality and enforceability of the
remaining provisions hereof or thereof shall not in any way be affected or
impaired thereby. The Parties shall endeavor in good faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provision.

Section 8.7        Counterparts. This Agreement may be executed in several
counterparts, and by each Party on separate counterparts, each of which and any
photocopies, facsimile copies and other electronic methods of transmission
thereof shall be deemed an original, but all of which together shall constitute
one and the same agreement.

Section 8.8        Survival. All representations and warranties made hereunder
and in the other Facility Documents and in any document, certificate or
statement delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive (and shall continue to be made in accordance with the
terms hereof and thereof after) the execution and delivery of this Agreement and
the other Facility Documents and the making of the Loans hereunder or
thereunder. Such representations and warranties have been or will be relied upon
by the Lender Parties, regardless of any investigation made by the Agent or any
Lender or on their behalf and notwithstanding that the Agent or any Lender may
have had notice or knowledge of any Default or Event of Default at the time of
the making of any Loan, and shall continue in full force and effect (and shall
continue to be made in accordance with the terms of the applicable Facility
Documents) as long as any Loan or any other Obligation hereunder shall remain
unpaid or unsatisfied, in each case, other than contingent obligations not due
and owing.

Section 8.9        No Waiver; Remedies Cumulative. No failure or delay on the
part of the Agent or any Lender in the exercise of any power, right or privilege
hereunder or under any other Facility Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or
privilege. No course of dealing and no delay in exercising, or omission to
exercise, any right, power or remedy accruing to Agent or the Lenders upon any
breach, Default or Event of Default under this Agreement, any other Facility
Document or any other agreement shall impair any such right, power or remedy or
be construed to be a waiver thereof or an acquiescence therein; nor shall the
action of Agent or the Lenders in respect of any such breach, Default or Event
of Default or any acquiescence by it therein, affect or impair any right, power
or remedy of Agent or the Lenders in respect of any other breach, Default or any
Event of Default. All rights and remedies existing under this Agreement and the
other Facility Documents are cumulative to, and not exclusive of, any rights or
remedies otherwise available.

 

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Section 8.10     Indemnity.

  (a)        The Loan Parties shall, at all times, indemnify and hold harmless
(the “Indemnity”) Agent, each Lender, each of their respective Affiliates, and
each of their respective directors, partners, officers, employees, agents,
counsel and advisors (each, an “Indemnified Person”) in connection with any
losses, claims (including the reasonable attorneys’ fees incurred in defending
against such claims), damages, liabilities, penalties or other expenses arising
out of, or relating to, the Facility Documents, the extension of credit under
the Facility Documents or the Loans or the other Obligations, the use or
intended use of the Loan or the other Obligations and the issuance of the
Securities or Conversion Shares (including any transactions or assets financed
in whole or in part, directly or indirectly, therewith), any disclosure made
pursuant to Section 5.18, or the status of a Lender or other holder of
Securities as an investor in any Loan Party, that an Indemnified Person may
incur or to which an Indemnified Person may become subject, but excluding
Excluded Taxes (each, a “Loss”). The Indemnity shall not be available to any
Indemnified Person to the extent that a court or arbitral tribunal of competent
jurisdiction issues a final and non-appealable judgment that such Loss resulted
from the gross negligence or willful misconduct of such Indemnified Person. The
Indemnity is independent of, and in addition to, any other agreement of any
Party under any Facility Document to indemnify or any amount to the any of the
Lender Parties, and any exclusion of any obligation to pay any amount under this
Section 8.10(a) shall not affect the requirement to pay such amount under any
other section or provision hereof or under any other agreement, instrument or
document. For the avoidance of doubt, this Section 8.10 shall not apply to
Indemnified Taxes.

  (b)        An Indemnified Person shall have the right to retain its own legal
counsel with the fees, costs and expenses of such legal counsel and of such
Indemnified Person to be paid by the Loan Parties. The indemnification required
by this Section 8.10 shall be made and paid by such Loan Parties as Losses are
incurred within ten (10) Business Days of written demand by such Indemnified
Person.

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

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

Section 8.11     No Usury. Notwithstanding any other provision herein, the
aggregate interest rate charged with respect to any of the Obligations,
including all charges or fees in connection therewith deemed in the nature of
interest under applicable law shall not exceed the highest rate permitted by
Law. If the rate of interest (determined without regard to the preceding
sentence) under this Agreement at any time exceeds the highest lawful rate
permitted by Law, the outstanding amount of the Loans made hereunder shall bear
interest at the highest lawful rate permitted by Law until the total amount of
interest due hereunder equals the amount of interest that would have been due
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Agreement had at all times been in effect. Accordingly, if any Lender contracts
for, charges, or receives any consideration that constitutes interest in excess
of the highest lawful rate permitted by Law, then any such excess shall be
cancelled automatically and, if previously paid, shall at such Lender’s option
be applied to the outstanding amount of the Loans made hereunder or be refunded
to the Loan Parties.

Section 8.12     [Reserved].

Section 8.13     Agent.

  (a)        Each Lender hereby irrevocably appoints Deerfield Partners, L.P.
(together with any successor Agent appointed by Deerfield Partners, L.P. or any
successor Agent that was appointed by the Required Lenders), as Agent hereunder
and under the other Facility Documents and authorizes Agent to (i) execute and
deliver the Facility Documents to which it is a party and accept delivery
thereof on its behalf from any Loan Party, (ii) take such other actions on its
behalf and to exercise all rights, powers and remedies and perform the duties as
are expressly delegated to Agent under the Facility Documents and (iii) exercise
such powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary contained elsewhere in this Agreement or in any other Facility
Document, Agent shall not have any duty or responsibility except those expressly
set forth herein; nor shall Agent have or be deemed to have any fiduciary
relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Facility Document or otherwise exist against
Agent. Without limiting the generality of the foregoing sentence, the use of the
term “agent” herein and in other Facility Documents with reference to Agent is
not intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any Law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties. The
provisions of this Section 8.13 are solely for the benefit of Agent and the
Lenders and none of the Borrower or the other Loan Parties shall have any rights
as a third party beneficiary of any of the provisions in this Section 8.13. In
performing its functions and duties under this Agreement and the other Facility
Documents, Agent shall act solely as agent of Lenders and does not assume and
shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for any Loan Party or any other Loan Party. Agent may
perform any of its duties hereunder, or under the Facility Documents, by or
through its agents, subagents, servicers, trustees, investment managers or
employees and any such Person shall benefit from this Section 8.13 to the extent
provided by Agent. Agent shall have the same rights and powers under the
Facility Documents as any other Lender and may exercise or refrain from
exercising the same as though it were not Agent, and Agent and its Affiliates
may lend money to, invest in and generally engage in any kind of business with
each Loan Party, Affiliate of any Loan Party as if it were not Agent hereunder.
The duties of Agent shall be mechanical and administrative in nature. Agent
shall not have by reason of this Agreement or the other Facility Documents a
fiduciary relationship in respect of any Lender. Nothing in this Agreement or
any of the other Facility Documents is intended to or shall be construed to
impose upon Agent any obligations in respect of this Agreement or any of the
other Facility Documents except as expressly set forth herein or therein.

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

 

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

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

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

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

 

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

  (g)        Other than with respect to the matters described in clause
(i) below, which shall be governed by such clause, whether or not the
transactions contemplated hereby are consummated, each Lender shall severally
indemnify upon demand Agent and its directors, officers, partners, employees,
attorneys, advisors, representatives and agents (to the extent not reimbursed by
or on behalf of any Loan Party and without limiting the obligation of the Loan
Parties to do so), according to its applicable pro rata share, from and against
any and all losses, claims (including the reasonable attorneys’ fees incurred in
defending against such claims), damages, liabilities, penalties or other
expenses arising out of, or relating to, any of Agent’s duties, responsibilities
or actions set forth in or that taken pursuant to the Facility Documents;
provided that no Lender shall be liable for any payment to any such Person of
any portion of the foregoing to the extent determined by a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from the
applicable Person’s gross negligence or willful misconduct. No action taken in
accordance with the directions of the Required Lenders shall be deemed to
constitute gross negligence or willful misconduct for purposes of this
Section 8.13(g). Without limitation of the foregoing, each Lender shall
reimburse Agent upon demand for such Lender’s ratable share of any costs or out
of pocket expenses incurred by Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any other
Facility Document or any document contemplated by or referred to herein or
therein, to the extent that Agent is not reimbursed for such fees, costs and
expenses by or on behalf of the Loan Parties. The undertaking in this
Section 8.13(g) shall survive repayment of the Loans and the other Obligations,
termination of this Agreement or the other Facility Documents and the
resignation or replacement of Agent.

  (h)        Agent may resign as Agent upon thirty (30) days’ notice to the
Lenders, and the Required Lenders have the right, at their sole election, to
remove the Person serving as Agent upon ten (10) days’ notice to Agent (or
immediately upon any material breach of Agent of its obligations under the
Facility Documents). If Agent resigns under this Agreement or the Required
Lenders remove the Person serving as Agent, the Required Lenders shall appoint
from among the Lenders a successor Agent for such successor Agent and the
Lenders. If no successor Agent is appointed prior to the effective date of the
resignation or removal of Agent, Agent may appoint, after consulting with the
Lenders, a successor Agent from among the Lenders. Upon the acceptance of its
appointment as successor Agent hereunder, such successor Agent shall succeed to
all the rights, powers and duties of the retiring or removed Agent, and the term
“Agent” shall mean such successor Agent, and the retiring or removed Agent’s
appointment, powers and duties as Agent shall be immediately and automatically
terminated at such time. After any retiring Agent’s resignation or removal
hereunder as Agent, the provisions of this Section 8.13 shall inure to its
benefit (in its capacity as Agent) as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement and the other Facility
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appointment as Agent by the date that is thirty (30) days following a retiring
Agent’s notice of resignation (or at the time of removal of a Person as Agent),
the retiring Agent’s resignation or removal shall nevertheless thereupon become
effective, and the Lenders shall perform all of the duties of Agent hereunder
until such time, if any, as the Required Lenders appoint a successor Agent as
provided for above.

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

Section 8.14    USA Patriot Act. Each Lender that is subject to the USA Patriot
Act and Agent (for itself and not on behalf of any Lender) hereby notifies the
Loan Parties that pursuant to the requirements of the USA Patriot Act, it is
required to obtain, verify and record information that identifies each Loan
Party, which information includes the name and address of each Loan Party and
other information that will allow such Lender or Agent to identify each Loan
Party in accordance with the USA Patriot Act.

Section 8.15    Placement Agent. The Borrower and the other Loan Parties shall
be solely responsible for the payment of any fees, costs, expenses and
commissions of any placement agent, broker or financial adviser relating to or
arising out of the transactions contemplated by the Facility Documents,
including the offer, sale and issuance of the Securities. The Borrower and the
other Loan Parties shall pay, and hold each of the Lender Parties harmless
against, any liability, loss or expense (including attorneys’ fees, costs and
expenses) arising in connection with any claim for any such payment.

Section 8.16    Independent Nature of Lenders. The obligations of each Lender
under the Facility Documents are several and not joint with the obligations of
any other Lender, and no Lender shall be responsible in any way for the
performance of the obligations of any other Lender under the Facility Documents.
Each Lender shall be responsible only for its own representations, warranties,
agreements and covenants under the Facility Documents. The decision of each
Lender to acquire the Securities pursuant to the Facility Documents has been
made by such Lender independently of any other Lender and independently of any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Borrower or any of its Subsidiaries
that may have been made or given by any other Lender or by any agent, attorney,
advisor, representative or employee of any other Lender, and no Lender nor any
of its agents, attorneys, advisors, representatives or employees shall have any
liability to any other Lender (or any other Person) relating to or arising from
any such information, materials, statements or opinions. Nothing contained in
the Facility Documents, and no action taken by any Lender pursuant hereto or
thereto (including a Lender’s acquisition of Obligations, Convertible Notes or
any other Securities at the same time as any other Lender), shall be deemed to
constitute the Lenders as, and each of the Lenders acknowledges and agrees that
the Lenders do not thereby constitute, a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Lenders
are in any way acting in concert or as a group with respect to such Obligations
or the transactions contemplated by any of the Facility Documents, and none of
the Loan Parties shall assert any contrary position.

 

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Section 8.17    Required Disclosure. On December 6, 2016, a final judgment (the
“Judgment”) was entered against Stifel, Nicolaus & Company, Incorporated
(“Stifel”) by the United States District Court for the Eastern District of
Wisconsin (Civil Action No. 2:11-cv-00755) resolving a civil lawsuit filed by
the U.S. Securities & Exchange Commission (the “SEC”) in 2011 involving
violations of several antifraud provisions of the federal securities laws in
connection with the sale of synthetic collateralized debt obligations to five
Wisconsin school districts in 2006. As a result of the Judgment: (i) Stifel is
required to cease and desist from committing or causing any violations and any
future violations of Section 17(a)(2) and 17(a)(3) of the Securities Act; and
(ii) Stifel and a former employee were jointly liable to pay disgorgement and
prejudgment interest of $2.5 million. Stifel was also required to pay a civil
penalty of $22.0 million, of which disgorgement and civil penalty Stifel was
required to pay $12.5 million to the school districts involved in this matter.
Simultaneously with the entry of the Judgment, the SEC issued an Order granting
Stifel a waiver from, among other things, the application of the
disqualification provisions of Rule 506(d)(1)(iv) of Regulation D under the
Securities Act. A copy of the Judgment is available on the SEC’s website at:
https://www.sec.gov/litigation/litreleases/2016/lr23700-final-judgment.pdf.

Section 8.18    Joint and Several. The obligations of the Loan Parties hereunder
and under the other Facility Documents are joint and several.

Section 8.19    No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Loan Parties, the Agent,
the Lenders and their successors and permitted assigns, and no other Person
shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any of
the other Facility Documents.

Section 8.20    Binding Effect. This Agreement shall become effective when it
shall have been executed by each of the Loan Parties party hereto, each Lender
party hereto and Agent and such executed counterparts have been delivered to
Agent and the Lenders pursuant to the terms of this Agreement.

Section 8.21    Payments Set Aside. To the extent that the Agent or any Lender
receives a payment from the Borrower, from any other Loan Party, from the
exercise of its rights of setoff, from any enforcement action or otherwise, and
such payment is subsequently, in whole or in part, invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party, then to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not occurred.

Section 8.22    [Reserved].

Section 8.23    Right of Setoff. The Agent and each Lender and each of its
Affiliates is hereby authorized, without notice or demand (each of which is
hereby waived by each Loan Party), at any time and from time to time during the
continuance of any Event of Default and to the fullest extent permitted by Law,
to set off and apply any and all deposits (whether general or special, time or
demand, provisional or final) at any time held and other Debt, claims or other
obligations at any time owing by the Agent, such Lender or any of its Affiliates
to or for the credit or the account of the Borrower or any other Loan Party
against any Obligation of any Loan Party now or hereafter existing, whether or
not any demand was made under any Facility Document with respect to such
Obligation and even though such Obligation may be unmatured. No Lender shall
exercise any such right of setoff without the prior consent of the Required
Lenders. The rights under this Section 8.23 are in addition to any other rights
and remedies (including other rights of setoff) that the Agent, any Lender or
any of their respective Affiliates may have.

 

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Section 8.24    Sharing of Payments, Etc. If any Lender, directly or through any
of its Affiliates, obtains any payment of any Obligation of any Loan Party
(whether voluntary, involuntary or through the exercise of any right of setoff)
(and other than pursuant to Section 8.4) and such payment exceeds the amount
such Lender would have been entitled to receive if all payments had gone to, and
been distributed in accordance with the provisions of the Facility Documents,
such Lender shall purchase for cash from the other Lenders such participations
in their Obligations as necessary for such Lender to share such excess payment
with such other Lenders to ensure such payment is applied as though it had been
applied in accordance with this Agreement; provided, however, that (i) if such
payment is rescinded or otherwise recovered from such Lender in whole or in
part, such purchase shall be rescinded and the purchase price therefor shall be
returned to such Lender without interest and (ii) such Lender shall, to the
fullest extent permitted by Law, be able to exercise all its rights of payment
(including the right of setoff) with respect to such participation as fully as
if such Lender were the direct creditor of the applicable Loan Party in the
amount of such participation.

Section 8.25    Certain Securities Matters. Each of the Loan Parties
acknowledges and agrees that none of the Lender Parties or holders of the
Securities has been asked to agree, nor has any Lender Party agreed, to desist
from purchasing or selling, long and/or short, capital stock or other securities
of the Borrower or “derivative” securities or capital stock based on capital
stock or other securities issued by the Borrower or to hold the Securities for
any specified term.

Section 8.26    Subordination Agreement. This Agreement (and all payment and
enforcement provisions with respect to the Obligations) is an unsecured
obligation of the Loan Parties and is subject to the terms of (1) a
Subordination Agreement, dated as of March 11, 2020, by and among the Loan
Parties, MidCap Financial Trust, a Delaware statutory trust (together with its
permitted successors and assigns), as administrative agent, the agent and the
other parties named therein (as amended, restated, supplemented or otherwise
modified from time to time, the “Subordination Agreement (Term Loan)”) and (2) a
Subordination Agreement, dated as of March 11, 2020, by and among the Loan
Parties, MidCap Funding IV Trust, a Delaware statutory trust (together with its
permitted successors and assigns), as administrative agent, the agent and the
other parties named therein (as amended, restated, supplemented or otherwise
modified from time to time, the “Subordination Agreement (Revolving Loan)” and
together with the Subordination Agreement (Term Loan), the “Subordination
Agreements”). In the event of any inconsistency between this Agreement and the
Subordination Agreements, the terms of the Subordination Agreements shall
control.

[SIGNATURE PAGE FOLLOWS]

 

59

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

 

BORROWER:

SIENTRA, INC.,

a Delaware corporation

By:

 

/s/Paul Little

Name:

 

Paul Little

Title:

 

CFO

OTHER LOAN PARTIES:

 

MIRADAY HOLDINGS, INC.

By:

 

/s/Paul Little

Name:

 

Paul Little

Title:

 

CFO

 

MIRADRY, INC.

By:

 

/s/Paul Little

Name: Paul Little

Title:   CFO

 

MIRADRY INTERNATIONAL, INC.

 

By:

 

/s/Paul Little

Name: Paul Little

Title:   CFO

[Signature Page to Facility Agreement]

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LENDER AND AGENT:

DEERFIELD PARTNERS, L.P.

 

        

 

By:

 

Deerfield Mgmt, L.P.,

   

its General Partner

   

By:

 

J.E. Flynn Capital, LLC,

     

its General Partner

     

By:

 

/s/David J. Clark

       

Name: David J. Clark

       

Title: Authorized Signatory

[Signature Page to Facility Agreement]

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ANNEX A

DISBURSEMENT AMOUNT

 

      Lender    Disbursement Amount   

% of Total Disbursement

Amount

     

Deerfield Partners, L.P.

   $60,000,000.00    100%      

Total

   $60,000,000.00    100%