CONSENT UNDER LOAN AND SECURITY AGREEMENT
THIS CONSENT under Loan and Security Agreement (this “Consent”) is entered into
as of April 17, 2020, by and among INNOVATUS LIFE SCIENCES LENDING FUND I, LP, a
Delaware limited partnership, as collateral agent (in such capacity, together
with its successors and assigns in such capacity, “Collateral Agent”), and the
Lenders listed on Schedule 1.1 hereof or otherwise a party hereto from time to
time, and CONFORMIS, INC., a Delaware corporation, IMATX, Inc., a California
corporation and Conformis Cares LLC, a Delaware limited liability company
(individually and collectively, jointly and severally, “Borrower”), provides the
terms on which the Lenders shall lend to Borrower and Borrower shall repay the
Lenders.
WHEREAS, Collateral Agent, Borrower and Lenders have entered into that certain
Loan and Security Agreement, dated as of June 25, 2019 (as amended, supplemented
or otherwise modified from time to time, the “Loan Agreement”) pursuant to which
Lenders have provided to Borrower certain loans in accordance with the terms and
conditions thereof; and
WHEREAS, Borrower desires to incur Indebtedness pursuant to, and enter into, the
SBA PPP Loan (as defined herein) and in connection therewith has requested
Collateral Agent and Required Lenders to consent to Borrower incurring such
Indebtedness, and Collateral Agent and Lenders have agreed to such request.
NOW, THEREFORE, in consideration of the promises, covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Borrower, Required Lenders and
Collateral Agent hereby agree as follows:
1.
Capitalized terms used herein but not otherwise defined shall have the
respective meanings given to them in the Loan Agreement.

2.
The following terms shall have the following meanings for the purposes of this
Consent:

“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act, and
applicable rules and regulations.

“CARES Allowable Uses” means “allowable uses” of proceeds of an SBA PPP Loan as
described in Section 1102 of the CARES Act.

“SBA” means the U.S. Small Business Administration.

“SBA PPP Loan” means a single unsecured loan incurred by the Borrower under 15
U.S.C. 636(a)(36) (as added to the Small Business Loan Act by Section 1102 of
the CARES Act) in the aggregate principal amount of up to Four Million Seven
Hundred Thousand Dollars ($4,700,000.00), upon such terms and conditions as are
acceptable to Collateral Agent in its discretion.

“SBA PPP Loan Cure Amount” is equal to (i) the SBA PPP Loan Liability Amount if
greater than 70% of the principal amount of the SBA PPP Loan is forgiven by the
SBA and (ii) two times the SBA PPP Loan Liability Amount if the principal amount
of the SBA PPP Loan forgiven by the SBA is 70% or less of the principal amount
of the SBA PPP Loan.

“SBA PPP Loan Date” means the date on which the Borrower receives the proceeds
of the SBA PPP Loan.

“SBA PPP Loan Liability Amount” is equal to the aggregate payments of principal
and interest that Borrower becomes obligated to pay if the SBA decides not to
forgive any portion of the SBA PPP Loan.

 
 
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“Small Business Loan Act” means the Small Business Act (15 U.S. Code Chapter 14A
– Aid to Small Business).

3.
Subject to the terms and conditions set forth herein, Collateral Agent and
Required Lenders hereby consent to Borrower’s entry into, and incurrence of
Indebtedness under, the SBA PPP Loan.

4.
Reporting Obligations.

a.
Borrower shall promptly (but no later than within two Business Days) notify
Collateral Agent of execution, consummation, filing, delivery or receipt, of any
agreement, instrument, application, document, amendment, modification, waiver,
supplement, consent or notice with respect to the SBA PPP Loan (including,
without limitation, forgiveness thereof), and with such notification provide to
Collateral Agent a copy thereof; provided, further, if such notification is
regarding any portion of the SBA PPP Loan not being forgiven, along, with such
notification, Borrower shall also provide Collateral Agent with the amounts and
scheduled dates of all payments of principal and interest that Borrower will be
obligated to make with respect to the SBA PPP Loan.

b.
Along with the quarterly Compliance Certificate to be delivered pursuant to
Section 6.2(b) of the Loan Agreement, Borrower shall deliver to each Lender and
Collateral Agent a written summary stating (A) the amount of the SBA PPP Loan
outstanding as of the end of the immediately preceding quarter, (B) the amount
of the SBA PPP Loan used in the immediately preceding quarter by Borrower and
(C) the purposes for which the SBA PPP Loan was used in the immediately
preceding quarter.

5.
SBA PPP Loan. Borrower shall, subject to the provisions of Section 6 below, (i)
comply with all terms and conditions of the SBA PPP Loan and all requirements of
the SBA and Small Business Act related thereto, (ii) use the proceeds of the SBA
PPP Loan solely for CARES Allowable Uses, (iii) keep proper records in which
full, true, timely and correct entries are made of all dealings and transactions
related to the SBA PPP Loan and, upon Collateral Agent’s request, provide such
records to Collateral Agent, (iv) not make any misrepresentations or omissions
in its application (or any document related to such application) for the SBA PPP
Loan and only draw the SBA PPP Loan if it fulfills the applicable eligibility
requirements and (v) promptly following the SBA PPP Loan Date (but in any event
no later than 45 days after the eight week period immediately following the SBA
PPP Loan Date), apply for forgiveness of the maximum amount of SBA PPP Loan
possible in accordance with Section 1106 of the CARES Act and provide notice of
the status of and any documentation related to such application for forgiveness
to Collateral Agent.

6.
SBA PPP Loan Payment.

a.
Borrower shall not: (i) make or permit any payment of principal or interest on
the SBA PPP Loan, until after Borrower has received the decision from SBA
regarding the amount of the SBA PPP Loan that is not being forgiven and complied
with its obligations set forth in Section 6(b) below, or (ii) amend any
provision in any document relating to the SBA PPP Loan.

b.
If the Borrower becomes obligated to make any payment of principal or interest
with respect to the SBA PPP Loan, Borrower shall promptly and no later than the
earlier of (i) the date of the first such payment and (ii) the date that is at
least sixty (60) days prior to the first scheduled or required date of such
payment raise net cash proceeds from the sale and issuance of its equity
securities and/or unsecured convertible Subordinated Debt equal to the SBA PPP
Loan Cure Amount (such date, the “Equity Raise Date”). If the Borrower is unable
to raise the net cash proceeds as specified in the preceding sentence on or
prior to the Equity Raise Date, then the Borrower shall provide a written notice
to the Collateral Agent stating the reason the Equity Raise Date for the delay
and, upon delivery of such written notice, the Equity Raise Date shall be
extended thirty (30) days (the

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“Extended Equity Raise Date”). If the Borrower is unable to raise the net cash
proceeds as specified in the preceding sentence on the Extended Equity Raise
Date, then prior to the Extended Equity Raise Date, the Borrower shall provide a
written notice to the Collateral Agent stating the reason the Extended Equity
Raise Date for the further delay and, upon delivery of such written notice, at
the discretion of the Collateral Agent, the Extended Equity Raise Date may be
further extended an additional number of days specified by the Collateral Agent.
If the SBA PPP Loan Cure Amount is twice the SBA PPP Loan Liability Amount, then
Borrower shall promptly use half of the SBA PPP Loan Cure Amount to make a
partial prepayment of the Term Loans outstanding along with payment of the
applicable Prepayment Fee.

7.
The parties hereby agree that no portion of the proceeds of the SBA PPP Loan
(other than such amount as has been forgiven by the SBA) shall be used for the
purposes of Borrower’s compliance with its obligations under Section 6.13 of the
Loan Agreement. The parties hereby further agree that no portion of the SBA PPP
Loan Cure Amount shall be used towards satisfying any other obligation of
Borrower under the Loan Agreement with respect to raising capital. Furthermore,
no portion of the proceeds of the SBA PPP Loan may be used to satisfy any
covenant with respect to the Revolving Line without the prior written consent of
the Bank.

8.
The parties hereby agree that any one of the following shall constitute and
immediate Event of Default for the purposes of the Loan Agreement: (i) any
default by Borrower of its obligations hereunder; and (ii) any default under the
SBA PPP Loan which allows any creditor party thereto a right, whether or not
exercised, to accelerate the maturity of any Indebtedness under the SBA PPP
Loan.

9.
Exhibit C-1 to the Loan Agreement is hereby amended and restated in its entirety
as set forth on Exhibit A hereto.

10.
Limitation of Consent.

a.
The consents set forth above are effective for the purposes set forth herein and
shall be limited precisely as written and shall not be deemed to (a) be a
consent to any amendment, waiver or modification of any other term or condition
of any Loan Document, or (b) otherwise prejudice any right, remedy or obligation
which Lenders or Borrower may now have or may have in the future under or in
connection with any Loan Document, as amended hereby.

b.
This Consent constitutes a Loan Document and shall be construed in connection
with and as part of the Loan Documents and all terms, conditions,
representations, warranties, covenants and agreements set forth in the Loan
Documents, are hereby ratified and confirmed and shall remain in full force and
effect.

11.
To induce Collateral Agent and Required Lenders to enter into this Consent,
Borrower hereby represents and warrants to Collateral Agent and Lenders as
follows:

a.
Immediately after giving effect to this Consent (a) the representations and
warranties contained in the Loan Documents are true, accurate and complete in
all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case they are
true and correct as of such date), and (b) no Event of Default (other than the
Existing Defaults) has occurred and is continuing;

b.
Borrower has the power and due authority to execute and deliver this Consent and
to perform its obligations under the Loan Agreement, as amended by this Consent;

c.
The organizational documents of Borrower delivered to Collateral Agent on the
Effective Date, and updated pursuant to subsequent deliveries by or on behalf of
the Borrower to the Collateral

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Agent, remain true, accurate and complete and have not been amended,
supplemented or restated and are and continue to be in full force and effect;

d.
The execution and delivery by Borrower of this Consent and the performance by
Borrower of its obligations under the Loan Agreement, as amended by this
Consent, do not contravene (i) any material law or regulation binding on or
affecting Borrower, (ii) any material contractual restriction with a Person
binding on Borrower, (iii) any material order, judgment or decree of any court
or other governmental or public body or authority, or subdivision thereof,
binding on Borrower, or (iv) the organizational documents of Borrower;

e.
The execution and delivery by Borrower of this Consent and the performance by
Borrower of its obligations under the Loan Agreement, as amended by this
Consent, do not require any order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by any
governmental or public body or authority, or subdivision thereof, binding on
Borrower, except as already has been obtained or made; and

f.
This Consent has been duly executed and delivered by Borrower and is the binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium or other similar laws of general
application and equitable principles relating to or affecting creditors’ rights.

12.
Except as expressly set forth herein, the Loan Agreement shall continue in full
force and effect without alteration or amendment. This Consent and the Loan
Documents represent the entire agreement about this subject matter and supersede
prior negotiations or agreements.

13.
The Borrower hereby remises, releases, acquits, satisfies and forever discharges
the Lenders and Collateral Agent, their agents, employees, officers, directors,
predecessors, attorneys and all others acting or purporting to act on behalf of
or at the direction of the Lenders and Collateral Agent (“Releasees”), of and
from any and all manner of actions, causes of action, suit, debts, accounts,
covenants, contracts, controversies, agreements, variances, damages, judgments,
claims and demands whatsoever, in law or in equity, which any of such parties
ever had, now has or, to the extent arising from or in connection with any act,
omission or state of facts taken or existing on or prior to the date hereof, may
have after the date hereof against the Releasees, for, upon or by reason of any
matter, cause or thing whatsoever relating to or arising out of the Loan
Agreement or the other Loan Documents on or prior to the date hereof through the
date hereof. Without limiting the generality of the foregoing, the Borrower
waives and affirmatively agrees not to allege or otherwise pursue any defenses,
affirmative defenses, counterclaims, claims, causes of action, setoffs or other
rights they do, shall or may have as of the date hereof, including the rights to
contest: (a) the right of Collateral Agent and each Lender to exercise its
rights and remedies described in the Loan Documents; (b) any provision of this
Consent or the Loan Documents; or (c) any conduct of the Lenders or other
Releasees relating to or arising out of the Loan Agreement or the other Loan
Documents on or prior to the date hereof.

14.
This Consent shall be deemed effective as of the date first set forth above upon
the due execution and delivery to Collateral Agent of this Consent by each party
hereto.

15.
This Consent may be executed in any number of counterparts, each of which shall
be deemed an original, and all of which, taken together, shall constitute one
and the same instrument.

16.
This Consent and the rights and obligations of the parties hereto shall be
governed by and construed in accordance with the laws of the State of New York.

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IN WITNESS WHEREOF, the parties hereto have caused this Consent under Loan and
Security Agreement to be executed as of the date first set forth above.

BORROWER:
 
CONFORMIS, INC.
 
 
By:
 
/s/ Mark Augusti
Name:
 
Mark Augusti
Title:
 
President & Chief Executive Officer
 
 
 

BORROWER:
 
IMATX, INC.
 
 
By:
 
/s/ Mark Augusti
Name:
 
Mark Augusti
Title:
 
President

BORROWER:
 
CONFORMIS CARES LLC
 
 
By:
 
/s/ Mark Augusti
Name:
 
Mark Augusti
Title:
 
President & Chief Financial Officer

COLLATERAL AGENT AND REQUIRED LENDERS:
 
INNOVATUS LIFE SCIENCES LENDING FUND I, LP
 
 
By: Innovatus Life Sciences GP, LP
 
Its: General Partner
 
 
 
 
By:
/s/ Andrew Hobson
 
 
Name:
Andrew Hobson
 
 
Title:
Authorized Signatory
 

    

ACTIVE 46782026v2

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EXHIBIT C-1

Compliance Certificate
TO:

INNOVATUS LIFE SCIENCES LENDING FUND I, LP, as Collateral Agent and Lender
EAST WEST BANK, as Lender
FROM:

CONFORMIS, INC., as Borrower

The undersigned authorized officer (“Officer”) of CONFORMIS, INC., hereby
certifies on behalf of all Borrowers that in accordance with the terms and
conditions of the Loan and Security Agreement dated as of [June [_], 2019,] by
and among Borrower, Collateral Agent, and the Lenders from time to time party
thereto (the “Loan Agreement;” capitalized terms used but not otherwise defined
herein shall have the meanings given them in the Loan Agreement),
(a)    Borrower is in complete compliance for the period ending _______________
with all required covenants except as noted below;
(b)    There are no Defaults or Events of Default, except as noted below;
(c)    Except as noted below, all representations and warranties of Borrower
stated in the Loan Documents are true and correct in all material respects on
this date and for the period described in (a), above; provided, however, that
such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in
all material respects as of such date.
(d)    Borrower, and each of Borrower’s Subsidiaries, has timely filed all
required tax returns and reports, Borrower, and each of Borrower’s Subsidiaries,
has timely paid all foreign, federal, state, and material local taxes,
assessments, deposits and contributions owed by Borrower, or Subsidiary, except
as otherwise permitted pursuant to the terms of Section 5.8 of the Loan
Agreement;
(e)    No Liens have been levied or claims made against Borrower or any of its
Subsidiaries relating to unpaid employee payroll or benefits of which Borrower
has not previously provided written notification to Collateral Agent and the
Lenders.

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

ACTIVE 46782026v2

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Please indicate compliance status since the last Compliance Certificate by
circling Yes, No, or N/A under “Complies” column.
 
Reporting Covenant
Requirement
Actual
Complies
1)
Financial statements

Summary within 30 days of month end and Quarterly within 45 days
 
Yes
No
N/A
2)
Annual (CPA Audited) statements

Within 120 days after FYE
 
Yes
No
N/A
3)
Annual Financial Projections/Budget (prepared on a monthly basis)

Annually (within earlier 10 days of approval or 60 days of FYE), and when
revised (no later than 10 business days of approval)
 
Yes
No
N/A
4)
8‑K, 10‑K and 10‑Q Filings

If applicable, within 5 days of filing
 
Yes
No
N/A
5)
Month-end account statements

Monthly within 30 days
 
Yes
No
N/A
6)
Compliance Certificate

Quarterly within 45days
 
Yes
No
N/A
7)
IP Report

When required
 
Yes
No
N/A
8)
Total amount of Borrower’s cash and cash equivalents at the last day of the
measurement period

 
$________
Yes
No
N/A
9)
Total amount of Borrower’s Subsidiaries’ cash and cash equivalents at the last
day of the measurement period

 
$________
Yes
No
N/A
10)
Loan confirmation submitted to the fund administrator for Innovatus Life
Sciences Lending Fund I, LP (see Exhibit C-2 to the Loan Agreement)

Quarterly within 45 days
 
Yes
No
N/A
11)
Borrowing Base Certificate
Monthly within 30 days
 
Yes
No
N/A
 
 
 
 
 
 
 
12)
A/R & A/P agings
If applicable
 
Yes
No
N/A
13)
Material Agreements (§ 7.13)

Yes
No
N/A
13)
Material Agreements (§ 7.13)

ACTIVE 46782026v2

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Negative Covenant Compliance
 
Negative Covenant
Complies
1)
Dispositions (§ 7.1)

Yes
No
N/A
2)
Changes in Business, Management, Ownership, or Business Locations (§ 7.2)

Yes
No
N/A
3)
Mergers or Acquisitions (§ 7.3)

Yes
No
N/A
4)
Indebtedness (§ 7.4)

Yes
No
N/A
5)
Encumbrance (§ 7.5)

Yes
No
N/A
6)
Maintenance of Collateral Accounts (§ 7.6)

Yes
No
N/A
7)
Restricted Payments (§ 7.7)

Yes
No
N/A
8)
Investments (§ 7.8)

Yes
No
N/A
9)
Transactions with Affiliates (§ 7.9)

Yes
No
N/A
10)
Subordinated Debt (§ 7.10)

Yes
No
N/A
11)
Compliance (§ 7.11)

Yes
No
N/A
12)
Compliance with Anti-Terrorism Laws (§ 7.12)

Yes
No
N/A

Please attach supporting documentation and calculations for the below financial
covenants.
 
Financial Covenant
Requirement
Actual
Complies
1)
Minimum TTM Revenue
T6M Product Revenue (Section 6.12)
$______
Yes
No
N/A

2)

Minimum Cash Balance

Set forth in Section 6.13

$______

Yes

No

N/A
3)
Minimum Cash Balance
Set forth in Section 6.14
$

Yes

No

N/A

Deposit and Securities Accounts
(Please list all accounts since last Compliance Certificate; attach separate
sheet if additional space needed)

ACTIVE 46782026v2

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Institution Name
Account Number
New Account?
Account Control Agreement in place?
1)
 
 
Yes
No
Yes
No
2)
 
 
Yes
No
Yes
No
3)
 
 
Yes
No
Yes
No
4)
 
 
Yes
No
Yes
No

Other Matters
1)
Have there been any changes in any Key Person since the last Compliance
Certificate?
Yes
No
 
 
 
 
2)
Have there been any transfers/sales/disposals/retirement of Collateral or IP
prohibited by the Loan Agreement?
Yes
No
 
 
 
 
3)
Have there been any new or pending claims or causes of action by or against
Borrower required to be disclosed under Section 5.3?
Yes
No
 
 
 
 
4)
Have there been any amendments of or other changes to the Operating Documents of
Borrower or any of its Subsidiaries? If yes, provide copies of any such
amendments or changes with the Compliance Certificate.
Yes
No
 
 
 
 
 
 
 
 
5)
Has Borrower provided the Collateral Agent with all notices required to be
delivered under Sections 6.2(a) and 6.2(b) of the Loan Agreement?
Yes
No
 
 
 
 
6)
Has Borrower or any Subsidiary terminated any Material Agreement? If yes, please
explain and provide a copy of the Material Agreement(s) and/or amendment(s).
Yes
No
 
 
 
 
7)
Have there been any material updates to the contents of the Perfection
Certificate last delivered? If yes, please explain.
Yes
No
 
 
 
 
8)
Since the last Compliance Certificate, do you anticipate any impending product
shortages or supply chain disruptions? If yes, please explain.
Yes
No
 
 
 
 
9)
Are there major components from suppliers that are single sourced? If yes,
please explain.
Yes
No
 
 
 
 
10)
Does the Borrower’s Business Continuity Plan address potential business
interruptions and provide a plan to resume business operations?
Yes
No
 
 
 
 
11)
Have there been any changes to insurance policies providing coverage for
business interruption since the last Compliance Certificate? If yes, please
explain.
Yes
No
 
 
 
 

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Exceptions
Please explain any exceptions with respect to the certification above: (If no
exceptions exist, state “No exceptions.” Attach separate sheet if additional
space needed.)
CONFORMIS, INC., on behalf of all Borrowers
By:  
 
Name:
 
Title:  
 
 
 
Date:
 

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

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