Exhibit 10.1

AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT (this “Agreement”),
dated as of December 3, 2015 (the “Closing Date”) by and among MIDCAP FUNDING
III TRUST, a Delaware statutory trust (“MidCap”), as administrative agent
(“Agent”), the Lenders listed on the Credit Facility Schedule attached hereto
and otherwise party hereto from time to time (each a “Lender”, and collectively
the “Lenders”), and OCULAR THERAPEUTIX, INC., a Delaware corporation
(“Borrower”), provides the terms on which Lenders agree to lend to Borrower and
Borrower shall repay Lenders.

A. MidCap, Borrower, and the Lenders party thereto (the “Existing Lenders”) are
party to that certain Credit and Security Agreement, dated as of April 17, 2014
(the “Original Closing Date”) by and among MidCap, as successor agent to MidCap
Financial SBIC, LP (the “Existing Agent”), Borrower and the Existing Lenders (as
amended, restated, supplemented or otherwise modified from time to time, the
“Existing Credit Agreement”).

B. Existing Agent, Borrower and certain Existing Lenders wish to amend and
restate the Existing Credit Agreement in its entirety with this Agreement, it
being their intention that this Agreement and the execution and the delivery of
the other documents or agreements executed in connection herewith shall not be a
novation of the ‘Credit Extensions’ (as such term is defined in the Existing
Credit Agreement, the “Existing Loan”) and ‘Obligations’ (as defined in the
Existing Credit Agreement and as used herein, the “Existing Obligations”) of the
Borrower or any Credit Party pursuant to the Existing Credit Agreement and the
‘Financing Documents’ (as such term is defined in the Existing Credit Agreement
and as used herein, the “Existing Financing Documents”), but shall merely
restate, and where applicable, amend or modify the terms of such Existing
Obligations, so that the Obligations (as hereinafter defined) represent, among
other things, the amendment, restatement, renewal, extension and modification of
the Existing Obligations and the Financing Documents (as hereinafter defined)
shall restructure, restate, renew, extend, amend and modify the Existing Credit
Agreement and the other Existing Financing Documents executed in connection
therewith. The parties agree as follows:

 

  1 ACCOUNTING AND OTHER TERMS

Accounting terms not defined in this Agreement shall be construed in accordance
with GAAP. Calculations and determinations must be made in accordance with GAAP.
Capitalized terms not otherwise defined in this Agreement shall have the
meanings set forth in Section 15. All other terms contained in this Agreement,
unless otherwise indicated, shall have the meaning provided by the Code to the
extent such terms are defined therein. All headings numbered without a decimal
point are herein referred to as “Articles,” and all paragraphs numbered with a
decimal point (and all subparagraphs or subsections thereof) are herein referred
to as “Sections.”

 

  2 CREDIT FACILITIES AND TERMS

2.1 Promise to Pay. Borrower hereby unconditionally promises to pay to each
Lender in accordance with each Lender’s respective Pro Rata Share of each Credit
Facility, the outstanding principal amount of all Credit Extensions made by the
Lenders under such Credit Facility and accrued and unpaid interest thereon and
any other amounts due hereunder as and when due in accordance with this
Agreement.

 

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2.2 Credit Facilities. Subject to the terms and conditions hereof, each Lender,
severally, but not jointly, agrees to make available to Borrower Credit
Extensions in respect of each Credit Facility set forth opposite such Lender’s
name on the Credit Facility Schedule, in each case not to exceed such Lender’s
commitment as identified on the Credit Facility Schedule (such commitment of
each Lender, as it may be amended to reflect assignments made in accordance with
this Agreement or terminated or reduced in accordance with this Agreement, its
“Applicable Commitment”, and the aggregate of all such commitments, the
“Applicable Commitments”).

2.3 Term Credit Facilities.

(a) Nature of Credit Facility; Credit Extension Requests. For any Credit
Facility identified on the Credit Facility Schedule as a term facility (a “Term
Credit Facility”), Credit Extensions in respect of a Term Credit Facility may be
requested by Borrower during the Draw Period for such Term Credit Facility. As
of the Closing Date, the Existing Loan (in the outstanding principal amount of
$13,500,000 made pursuant to Credit Facility #1 on the Original Closing Date
under the Existing Credit Agreement, shall constitute a portion of the principal
balance of the Credit Extension for the Term Credit Facility funded pursuant to
this Agreement and shall constitute a portion of the Obligations under, and
subject to the terms of, this Agreement (including the revised Credit Facility
Schedule and Amortization Schedule attached hereto). On the Closing Date, the
Existing Loan shall be deemed assigned by the Existing Lenders as of the Closing
Date to the Lenders hereunder as of the Closing Date in accordance with (i) the
allocations set forth on the Credit Facility Schedule and (ii) Article 9. To the
extent any Term Credit Facility proceeds are repaid for any reason, whether
voluntarily or involuntarily (including repayments from insurance or
condemnation proceeds), Agent and Lenders shall have no obligation to re-advance
such sums to Borrower.

(b) Principal Payments. Principal payable on account of a Term Credit Facility
shall be payable by Borrower to Agent immediately upon the earliest of (i) the
date(s) set forth in the Amortization Schedule for such Term Credit Facility (or
if no such Amortization Schedule is attached, then upon Agent’s demand for
payment), or (ii) the Maturity Date. Except as this Agreement may specifically
provide otherwise, all prepayments of Credit Extensions under Term Credit
Facilities shall be applied by Agent to the applicable Term Credit Facility in
inverse order of maturity. The monthly payments required under the Amortization
Schedule shall continue in the same amount (for so long as the applicable Term
Credit Facility shall remain outstanding) notwithstanding any partial
prepayment, whether mandatory or optional, of the applicable Term Credit
Facility.

(c) Mandatory Prepayment. If a Term Credit Facility is accelerated following the
occurrence of an Event of Default, Borrower shall immediately pay to Agent, for
payment to each Lender in accordance with its respective Pro Rata Share, an
amount equal to the sum of: (i) all outstanding principal of the Term Credit
Facility and all other Obligations, plus accrued and unpaid interest thereon,
(ii) any fees payable under the Fee Letters by reason of such prepayment,
(iii) the Applicable Prepayment Fee as specified in the Credit Facility Schedule
for the Credit

 

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Facility being prepaid, and (iv) all other sums that shall have become due and
payable, including Protective Advances. Additionally, at the election of Agent,
Borrower shall prepay the Term Credit Facilities (to be allocated pro rata among
the outstanding Credit Extensions under all Term Credit Facilities) in the
following amounts: (A) on the date on which any Credit Party (or Agent as loss
payee or assignee) receives any casualty proceeds in excess of Fifty Thousand
Dollars ($50,000) for personal property, or in excess of One Hundred Thousand
Dollars ($100,000) for real property, in respect of assets upon which Agent
maintained a Lien, an amount equal to one hundred percent (100%) of such
proceeds (net of out-of-pocket expenses and, in the case of personal property,
repayment of any permitted purchase money debt encumbering the personal property
that suffered such casualty), or such lesser portion of such proceeds as Agent
shall elect to apply to the Obligations; and (B) upon receipt by any Credit
Party of the proceeds of any asset disposition of personal property not made in
the Ordinary Course of Business (other than transfers permitted by Section 7.1)
an amount equal to one hundred percent (100%) of the net cash proceeds of such
asset disposition (net of out-of-pocket expenses and repayment of any permitted
purchase money debt encumbering such asset), or such lesser portion as Agent
shall elect to apply to the Obligations. Notwithstanding the foregoing, (a) so
long as no Default or Event of Default has occurred and is continuing, Borrower
shall have the option of applying the proceeds of any casualty policy up to
$100,000 in the aggregate with respect to any property loss in any one year,
toward the replacement or repair of destroyed or damaged property; provided that
any such replaced or repaired property (x) shall be of equal or like value as
the replaced or repaired Collateral and (y) shall be deemed Collateral in which
Agent and Lenders have been granted a first priority security interest, and
(b) after the occurrence and during the continuance of a Default or Event of
Default, all proceeds payable under such casualty policy shall, at the option of
Agent, be payable to Agent, for the ratable benefit of the Lenders, on account
of the Obligations.

(d) Permitted Prepayment. Except as provided below, Borrower shall have no right
to prepay the Credit Extensions made in respect of a Term Credit Facility. After
the Closed Period, if any, for the applicable Term Credit Facility as specified
in the Credit Facility Schedule, Borrower shall have the option to prepay the
Prepayable Amount (as defined below) of a Term Credit Facility advanced by the
Lenders under this Agreement, provided Borrower (i) provides written notice to
Agent of its election to prepay the Prepayable Amount at least thirty (30) days
prior to such prepayment, and (ii) pays to Agent, for payment to each Lender in
accordance with its respective Pro Rata Share, on the date of such prepayment,
an amount equal to the sum of (A) the Prepayable Amount plus accrued interest
thereon, (B) any fees payable under the Fee Letters by reason of such
prepayment, (C) the Applicable Prepayment Fee as specified in the Credit
Facility Schedule for the Credit Facility being prepaid and (D) all Protective
Advances. The term “Prepayable Amount” means all or any portion of the Credit
Extensions and all other Obligations under the applicable Term Credit Facility.

2.4 Reserved.

2.5 Reserved.

2.6 Interest and Payments; Administration.

(a) Interest; Computation of Interest. Each Credit Extension shall bear interest
on the outstanding principal amount thereof from the date when made until paid
in full at a rate per

 

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annum equal to the Applicable Interest Rate. Each Lender may, upon the failure
of Borrower to pay any fees or interest as required herein, capitalize such
interest and fees and begin to accrue interest thereon until paid in full, which
such interest shall be at a rate per annum equal to the Applicable Interest Rate
unless and until the Default Rate shall otherwise apply. All other Obligations
shall bear interest on the outstanding amount thereof from the date they first
become payable by Borrower under the Financing Documents until paid in full at a
rate per annum equal to the Applicable Interest Rate unless and until the
Default Rate shall otherwise apply. Interest on the Credit Extensions and all
fees payable under the Financing Documents shall be computed on the basis of a
360-day year and the actual number of days elapsed in the period during which
such interest accrues. In computing interest on any Credit Extension or other
advance, the date of the making of such Credit Extension or advance shall be
included and the date of payment shall be excluded; provided, however, that if
any Credit Extension or advance is repaid on the same day on which it is made,
such day shall be included in computing interest on such Credit Extension or
advance.

(b) Default Rate. Upon the election of Agent following the occurrence and during
the continuance of an Event of Default, Obligations shall bear interest at a
rate per annum which is four hundred basis points (4.00%) above the rate that is
otherwise applicable thereto (the “Default Rate”). Payment or acceptance of the
increased interest rate provided in this subsection is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of Agent or
Lenders.

(c) Payments Generally. Except as otherwise provided in this Section 2.6(c), all
payments in respect of the Obligations shall be made to Agent for the account of
the applicable Lenders in accordance with their Pro Rata Share. Payments of
principal and interest in respect of any Credit Facility identified on the
Credit Facility Schedule as “Term” shall be made to each applicable Lender. All
Obligations are payable upon demand of Agent in the absence of any other due
date specified herein. All fees payable under the Financing Documents shall be
deemed non-refundable as of the date paid. Any payment required to be made to
Agent or a Lender under this Agreement may be made by debit or automated
clearing house payment initiated by Agent or such Lender from any of Borrower’s
deposit accounts, including the Designated Funding Account, and Borrower hereby
authorizes Agent and each Lender to debit any such accounts for any amounts
Borrower owes hereunder when due. Without limiting the foregoing, Borrower shall
tender to Agent and Lenders any authorization forms as Agent or any Lender may
require to implement such debit or automated clearing house payment. These
debits or automated clearing house payments shall not constitute a set-off.
Payments of principal and/or interest received after 12:00 noon New York time
are considered received at the opening of business on the next Business Day.
When a payment is due on a day that is not a Business Day, the payment is due
the next Business Day and additional fees or interest, as applicable, shall
continue to accrue until paid. All payments to be made by Borrower under any
Financing Document shall be made without set-off, recoupment or counterclaim, in
lawful money of the United States and in immediately available funds. The
balance of the Obligations, as recorded in Agent’s books and records at any
time, shall be conclusive and binding evidence of the amounts due and owing to
Agent and Lenders by each Borrower absent manifest error; provided, however,
that any failure to so record or any error in so recording shall not limit or
otherwise affect any Borrower’s duty to pay all amounts owing hereunder or under
any Financing Document. Agent shall endeavor to provide Borrower with a monthly
statement regarding the Credit Extensions (but neither Agent nor any

 

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Lender shall have any liability if Agent shall fail to provide any such
statement). Unless Borrower notifies Agent of any objection to any such
statement (specifically describing the basis for such objection) within ninety
(90) days after the date of receipt thereof, it shall be deemed final, binding
and conclusive upon Borrower in all respects as to all matters reflected
therein.

(d) Interest Payments; Maturity Date. Commencing on the first (1st) Payment Date
following the funding of a Credit Extension, and continuing on the Payment Date
of each successive month thereafter through and including the Maturity Date,
Borrower shall make monthly payments of interest, in arrears, calculated as set
forth in this Section 2.6. All unpaid principal and accrued interest is due and
payable in full on the Maturity Date or any earlier date specified herein. If
the Obligations are not paid in full on or before the Maturity Date, all
interest thereafter accruing shall be payable immediately upon accrual.

(e) Fees. Borrower shall pay, as and when due and payable under the terms of the
Fee Letters, to Agent and each Lender, for their own accounts and not for the
benefit of any other Lenders, the fees set forth in the Fee Letters.

(f) Protective Advances. Borrower shall pay to Agent for the account of Lenders
all Protective Advances (including reasonable attorneys’ fees and expenses for
documentation and negotiation of this Agreement, the Warrants and the other
Financing Documents) when due under any Financing Document (and in the absence
of any other due date specified herein, such Protective Advances shall be due
upon demand).

(g) Maximum Lawful Rate. In no event shall the interest charged hereunder with
respect to the Obligations exceed the maximum amount permitted under the Laws of
the State of Maryland. Notwithstanding anything to the contrary in any Financing
Document, if at any time the rate of interest payable hereunder (the “Stated
Rate”) would exceed the highest rate of interest permitted under any applicable
Law to be charged (the “Maximum Lawful Rate”), then for so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable shall be equal to
the Maximum Lawful Rate; provided, however, that if at any time thereafter the
Stated Rate is less than the Maximum Lawful Rate, Borrower shall, to the extent
permitted by Law, continue to pay interest at the Maximum Lawful Rate until such
time as the total interest received is equal to the total interest which would
have been received had the Stated Rate been (but for the operation of this
provision) the interest rate payable. Thereafter, the interest rate payable
shall be the Stated Rate unless and until the Stated Rate again would exceed the
Maximum Lawful Rate, in which event this provision shall again apply. In no
event shall the total interest received by any Lender exceed the amount which it
could lawfully have received, had the interest been calculated for the full term
hereof at the Maximum Lawful Rate. If, notwithstanding the prior sentence, any
Lender has received interest hereunder in excess of the Maximum Lawful Rate,
such excess amount shall be applied to the reduction of the principal balance of
such Lender’s Credit Extensions or to other amounts (other than interest)
payable hereunder, and if no such Credit Extensions or other amounts are then
outstanding, such excess or part thereof remaining shall be paid to Borrower. In
computing interest payable with reference to the Maximum Lawful Rate applicable
to any Lender, such interest shall be calculated at a daily rate equal to the
Maximum Lawful Rate divided by the number of days in the year in which such
calculation is made.

 

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(h) Taxes; Additional Costs.

(i) All payments of principal and interest on the Obligations and all other
amounts payable hereunder shall be made free and clear of and without deduction
for any present or future income, excise, stamp, documentary, payroll,
employment, property or franchise taxes and other taxes, fees, duties, levies,
assessments, withholdings or other charges of any nature whatsoever (including
interest and penalties thereon) imposed by any taxing authority, excluding taxes
imposed on or measured by Agent’s or any Lender’s net income by the
jurisdictions under which Agent or such Lender is organized or conducts business
(other than solely as the result of entering into any of the Financing Documents
or taking any action thereunder) (all non-excluded items being called “Taxes”).
If any withholding or deduction from any payment to be made by any Borrower
hereunder is required in respect of any Taxes pursuant to any applicable Law,
then Borrower will: (i) pay directly to the relevant authority the full amount
required to be so withheld or deducted; (ii) promptly forward to Agent an
official receipt or other documentation satisfactory to Agent evidencing such
payment to such authority; and (iii) pay to Agent for the account of Agent and
Lenders such additional amount or amounts as is necessary to ensure that the net
amount actually received by Agent and each Lender will equal the full amount
Agent and such Lender would have received had no such withholding or deduction
been required. If any Taxes are directly asserted against Agent or any Lender
with respect to any payment received by Agent or such Lender hereunder, Agent or
such Lender may pay such Taxes and Borrower will promptly pay such additional
amounts (including any penalty, interest or expense) as is necessary in order
that the net amount received by such Person after the payment of such Taxes
(including any Taxes on such additional amount) shall equal the amount such
Person would have received had such Taxes not been asserted so long as such
amounts have accrued on or after the day which is two hundred seventy (270) days
prior to the date on which Agent or such Lender first made written demand
therefor.

(ii) If any Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to Agent, for the account of Agent and the
respective Lenders, the required receipts or other required documentary
evidence, Borrower shall indemnify Agent and Lenders for any incremental Taxes,
interest or penalties that may become payable by Agent or any Lender as a result
of any such failure.

(iii) Each Lender that (A) is organized under the laws of a jurisdiction other
than the United States, and (B)(1) is a party hereto on the Closing Date or
(2) purports to become an assignee of an interest as a Lender under this
Agreement after the Closing Date (unless such Lender was already a Lender
hereunder immediately prior to such assignment) (each such Lender a “Foreign
Lender”) shall execute and deliver to each of Borrower and Agent one or more (as
Borrower or Agent may reasonably request) United States Internal Revenue Service
Forms W-8ECI, W-8BEN, W-8IMY (as applicable) and other applicable forms,
certificates or documents prescribed by the United States Internal Revenue
Service or reasonably requested by Agent certifying as to such Lender’s
entitlement to a complete exemption from withholding or deduction of Taxes.
Borrower shall not be required to pay additional amounts to any Lender pursuant
to this subsection (h) with respect to United States withholding and income
Taxes to the extent that the obligation to pay such additional amounts would not
have arisen but for the failure of such Lender to comply with this paragraph
other than as a result of a change in law.

(iv) If any Lender shall determine in its commercially reasonable judgment that
the adoption or taking effect of, or any change in, any applicable Law regarding

 

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capital adequacy, in each instance, after the Closing Date, or any change after
the Closing Date in the interpretation, administration or application thereof by
any Governmental Authority, central bank or comparable agency charged with the
interpretation, administration or application thereof, or the compliance by any
Lender or any Person controlling such Lender with any request, guideline or
directive regarding capital adequacy (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable agency adopted or
otherwise taking effect after the Closing Date, has or would have the effect of
reducing the rate of return on such Lender’s or such controlling Person’s
capital as a consequence of such Lender’s obligations hereunder to a level below
that which such Lender or such controlling Person could have achieved but for
such adoption, taking effect, change, interpretation, administration,
application or compliance (taking into consideration such Lender’s or such
controlling Person’s policies with respect to capital adequacy) then from time
to time, upon written demand by such Lender (which demand shall be accompanied
by a statement setting forth the basis for such demand and a calculation of the
amount thereof in reasonable detail, a copy of which shall be furnished to
Agent), Borrower shall promptly pay to such Lender such additional amount as
will compensate such Lender or such controlling Person for such reduction, so
long as such amounts have accrued on or after the day which is two hundred
seventy (270) days prior to the date on which such Lender first made demand
therefor; provided, however, that notwithstanding anything in this Agreement to
the contrary, (A) the Dodd-Frank Wall Street Reform and Consumer Protection Act
and all requests, rules, guidelines or directives thereunder or issued in
connection therewith and (B) all requests, rules, guidelines or directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the United States
or foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “change in applicable Law”, regardless of the date
enacted, adopted or issued.

(v) If any Lender requires compensation under this subsection (h), or requires
any Borrower to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to this subsection (h), then,
upon the written request of Borrower, such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Credit
Extensions hereunder or to assign its rights and obligations hereunder (subject
to the terms of this Agreement) to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(A) would eliminate or materially reduce amounts payable pursuant to any such
subsection, as the case may be, in the future, and (B) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender (as determined in its sole discretion). Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

(i) Administrative Fees and Charges.

(i) Borrower shall pay to Agent, for its own account and not for the benefit of
any other Lenders, all reasonable fees and expenses in connection with audits
and inspections of the books and records of the Credit Parties, audits,
valuations or appraisals of the Collateral, audits of Borrower’s compliance with
applicable Laws and such other matters as Agent shall deem appropriate, which
shall be due and payable on the first Business Day of the month following the
date of issuance by Agent of a written request for payment thereof to any
Borrower; provided, that, as long as no Default has occurred within the
preceding twelve (12) months, Agent shall be entitled to such reimbursement for
no more than one audit and inspection per calendar quarter.

 

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(ii) If payments of principal or interest due on the Obligations, or any other
amounts due hereunder or under the other Financing Documents, are not timely
made and remain overdue for a period of five (5) days, Borrower, without notice
or demand by Agent, promptly shall pay to Agent, for its own account and not for
the benefit of any other Lenders, as additional compensation to Agent in
administering the Obligations, an amount equal to five percent (5.0%) of each
delinquent payment.

2.7 Secured Promissory Notes. At the election of any Lender made as to each
Credit Facility for which it has made Credit Extensions, each Credit Facility
shall be evidenced by one or more secured promissory notes in form and substance
satisfactory to Agent and Lenders (each a “Secured Promissory Note”). Upon
receipt of an affidavit of an officer of a Lender as to the loss, theft,
destruction, or mutilation of its Secured Promissory Note, Borrower shall issue,
in lieu thereof, a replacement Secured Promissory Note in the same principal
amount thereof and of like tenor.

 

  3 CONDITIONS OF CREDIT EXTENSIONS

3.1 Conditions Precedent to Credit Extension to be made on the Closing Date.
Each Lender’s obligation to make an advance in respect of a Credit Facility is
subject to the condition precedent that Agent shall consent to or shall have
received, in form and substance satisfactory to Agent, such documents, and
completion of such other matters, as Agent may reasonably deem necessary or
appropriate, including, without limitation, all items listed on the Closing
Deliveries Schedule attached hereto.

3.2 Conditions Precedent to all Credit Extensions. The obligation of each Lender
to make each Credit Extension, including the initial Credit Extension, is
subject to the following conditions precedent:

(a) satisfaction of all Applicable Funding Conditions for the applicable Credit
Extension as set forth in the Credit Facility Schedule, each in form and
substance satisfactory to Agent and each Lender;

(b) timely receipt by the Agent and each Lender of an executed Credit Extension
Form in the form attached hereto;

(c) (i) for Credit Extensions made on the Closing Date, the representations and
warranties in Article 5 and elsewhere in the Financing Documents shall be true,
correct and complete in all respects on the Closing Date; provided, however,
that those representations and warranties expressly referring to a specific date
shall be true, correct and complete in all respects as of such date; and

(ii) for Credit Extensions made after the Closing Date, if any, the
representations and warranties in Article 5 and elsewhere in the Financing
Documents shall be true, correct and complete in all material respects on the
date of the Credit Extension Form and on the Funding Date of each Credit
Extension; provided, however, that such materiality qualifier shall

 

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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.
Each Credit Extension is Borrower’s representation and warranty on that date
that the representations and warranties in Article 5 and elsewhere in the
Financing Documents remain true, accurate and complete in all material respects;
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) no Default or Event of Default shall have occurred and be continuing or
result from the Credit Extension;

(e) Agent shall be satisfied with the results of any searches conducted under
Section 3.5;

(f) receipt by Agent of such evidence as Agent shall request to confirm that the
deliveries made in Section 3.1 remain current, accurate and in full force and
effect, or if not, updates thereto, each in form and substance satisfactory to
Agent; and

(g) as determined in such Lender’s sole discretion, there has not been any
Material Adverse Change or any material adverse deviation by Borrower from the
most recent business plan of Borrower presented to and accepted by Agent.

3.3 Method of Borrowing. The Credit Extension in respect of each Credit Facility
shall be funded in a single drawing and shall be in an amount at least equal to
the applicable Minimum Credit Extension Amount for such Credit Facility as set
forth in the Credit Facility Schedule. The date of funding for any requested
Credit Extension shall be a Business Day. To obtain a Credit Extension, Borrower
shall deliver to Agent a completed Credit Extension Form executed by a
Responsible Officer. Agent may rely on any notice given by a person whom Agent
reasonably believes is a Responsible Officer or designee thereof. Agent and
Lenders shall have no duty to verify the authenticity of any such notice.

3.4 Funding of Credit Facilities. Upon the terms and subject to the conditions
set forth herein, each Lender, severally and not jointly, shall make available
to Agent its Pro Rata Share of the requested Credit Extension, in lawful money
of the United States of America in immediately available funds, prior to 11:00
a.m. (New York time) on the specified date for the Credit Extension. Agent
shall, unless it shall have determined that one of the conditions set forth in
Section 3.1 or 3.2, as applicable, has not been satisfied, by 2:00 p.m. (New
York time) on such day, credit the amounts received by it in like funds to
Borrower by wire transfer to the Designated Funding Account (or to the account
of Borrower in respect of the Obligations, if the Credit Extension is being made
to pay an Obligation of Borrower). A Credit Extension made prior to the
satisfaction of any conditions set forth in Section 3.1 or 3.2 shall not
constitute a waiver by Agent or Lenders of Borrower’s obligation to satisfy such
conditions, and any such Credit Extension made in the absence of such
satisfaction shall be made in Agent’s discretion.

 

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3.5 Searches. Before the Closing Date, and thereafter (as and when determined by
Agent in its discretion), Agent shall have the right to perform, all at
Borrower’s expense, the searches described in clauses (a), (b), and (c) below
against Borrower and any other Credit Party, the results of which are to be
consistent with Borrower’s representations and warranties under this Agreement
and the reasonably satisfactory results of which shall be a condition precedent
to all Credit Extensions requested by Borrower: (a) title investigations, UCC
searches and fixture filings searches; (b) judgment, pending litigation, federal
tax lien, personal property tax lien, and corporate and partnership tax lien
searches, in each jurisdiction searched under clause (a) above; and (c) searches
of applicable corporate, limited liability company, partnership and related
records to confirm the continued existence, organization and good standing of
the applicable Person and the exact legal name under which such Person is
organized.

 

  4 CREATION OF SECURITY INTEREST

4.1 Grant of Security Interest. Borrower hereby reaffirms its grant of the
security interests, pledges and other Liens granted to the Existing Agent and
Existing Lenders under the Existing Credit Agreement, as more fully described in
Article 9 of this Agreement, and hereby further grants to Agent, for the ratable
benefit of the Lenders, to secure the payment and performance in full of all of
the Obligations, a continuing security interest in, and pledges to Agent, for
the ratable benefit of the Lenders, the Collateral, wherever located, whether
now owned or hereafter acquired or arising, and all proceeds and products
thereof. Borrower represents, warrants, and covenants that the security interest
granted herein is and shall at all times continue to be a first priority
perfected security interest in the Collateral, subject only to Permitted Liens
that may have priority by operation of applicable Law or by the terms of a
written intercreditor or subordination agreement entered into by Agent.

4.2 Representations and Covenants.

(a) As of the Closing Date, Borrower has no ownership interest in any Chattel
Paper, letter of credit rights, commercial tort claims, Instruments, documents
or investment property (other than equity interests in any Subsidiaries of
Borrower disclosed on the Disclosure Schedule attached hereto).

(b) Borrower shall deliver to Agent all tangible Chattel Paper and all
Instruments and documents owned by any Borrower and constituting part of the
Collateral duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to Agent.
Borrower shall provide Agent with “control” (as in the Code) of all electronic
Chattel Paper owned by any Borrower and constituting part of the Collateral by
having Agent identified as the assignee on the records pertaining to the single
authoritative copy thereof and otherwise complying with the applicable elements
of control set forth in the Code. Borrower also shall deliver to Agent all
security agreements securing any such Chattel Paper and securing any such
Instruments. Borrower will mark conspicuously all such Chattel Paper and all
such Instruments and Documents with a legend, in form and substance satisfactory
to Agent, indicating that such Chattel Paper and such Instruments and Documents
are subject to the security interests and Liens in favor of Agent created
pursuant to this Agreement and the Financing Documents.

 

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(c) Borrower shall deliver to Agent all letters of credit on which any Borrower
is the beneficiary and which give rise to letter of credit rights owned by such
Borrower which constitute part of the Collateral in each case duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to Agent. Borrower shall take any and all actions as
may be necessary or desirable, or that Agent may request, from time to time, to
cause Agent to obtain exclusive “control” (as defined in the Code) of any such
letter of credit rights in a manner acceptable to Agent.

(d) Borrower shall promptly advise Agent upon any Borrower becoming aware that
it has any interests in any commercial tort claim that constitutes part of the
Collateral, which such notice shall include descriptions of the events and
circumstances giving rise to such commercial tort claim and the dates such
events and circumstances occurred, the potential defendants with respect such
commercial tort claim and any court proceedings that have been instituted with
respect to such commercial tort claims, and Borrower shall, with respect to any
such commercial tort claim, execute and deliver to Agent such documents as Agent
shall request to perfect, preserve or protect the Liens, rights and remedies of
Agent with respect to any such commercial tort claim.

(e) Except for Accounts and Inventory in an aggregate amount of Twenty-Five
Thousand Dollars ($25,000), no Accounts or Inventory or other Collateral shall
at any time be in the possession or control of any warehouse, consignee, bailee
or any of Borrower’s agents or processors without prior written notice to Agent
and the receipt by Agent, if Agent has so requested, of warehouse receipts,
consignment agreements or bailee lien waivers (as applicable) satisfactory to
Agent prior to the commencement of such possession or control. Borrower shall,
upon the request of Agent, notify any such warehouse, consignee, bailee, agent
or processor of the security interests and Liens in favor of Agent created
pursuant to this Agreement and the Financing Documents, instruct such Person to
hold all such Collateral for Agent’s account subject to Agent’s instructions and
shall obtain an acknowledgement from such Person that such Person holds the
Collateral for Agent’s benefit.

(f) Upon request of Agent, Borrower shall promptly deliver to Agent any and all
certificates of title, applications for title or similar evidence of ownership
of all such tangible personal property and shall cause Agent to be named as
lienholder on any such certificate of title or other evidence of ownership.
Borrower shall not permit any such tangible personal property to become fixtures
to real estate unless such real estate is subject to a Lien in favor of Agent.

(g) Each Borrower hereby authorizes Agent to file without the signature of such
Borrower one or more UCC financing statements relating to its Liens on all or
any part of the Collateral, which financing statements may list Agent as the
“secured party” and such Borrower as the “debtor” and which describe and
indicate the collateral covered thereby as all or any part of the Collateral
under the Financing Documents in such jurisdictions as Agent from time to time
determines are appropriate, and to file without the signature of such Borrower
any continuations of or corrective amendments to any such financing statements,
in any such case in order for Agent to perfect, preserve or protect the Liens,
rights and remedies of Agent with respect to the Collateral. Each Borrower also
ratifies its authorization for Agent to have filed in any jurisdiction any
initial financing statements or amendments thereto if filed prior to the date
hereof. Any financing statement may include a notice that any disposition of the
Collateral, by either Borrower or any other Person, shall be deemed to violate
the rights of Agent and the Lenders under the Code.

 

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(h) As of the Closing Date, no Borrower holds, and after the Closing Date
Borrower shall promptly notify Agent in writing upon creation or acquisition by
any Borrower of, any Collateral which constitutes a claim against any
Governmental Authority, including, without limitation, the federal government of
the United States or any instrumentality or agency thereof, the assignment of
which claim is restricted by any applicable Law, including, without limitation,
the federal Assignment of Claims Act and any other comparable Law. Upon the
request of Agent, Borrower shall take such steps as may be necessary or
desirable, or that Agent may request, to comply with any such applicable Law.

(i) Borrower shall furnish to Agent from time to time any statements and
schedules further identifying or describing the Collateral and any other
information, reports or evidence concerning the Collateral as Agent may
reasonably request from time to time.

(j) Borrower shall, and shall cause each Credit Party to, maintain its deposit
accounts, transaction accounts, and primary investment accounts with Silicon
Valley Bank and its Affiliates.

 

  5 REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants as follows on the Closing Date and the date of
each Credit Extension:

5.1 Due Organization, Authorization: Power and Authority.

(a) Each Credit Party is duly existing and in good standing, as a Registered
Organization in its respective jurisdiction of formation. Each Credit Party is
qualified and licensed to do business and is in good standing in any
jurisdiction in which the conduct of its business or its ownership of property
requires that it be qualified except where the failure to do so could not
reasonably be expected to have a Material Adverse Change. The Financing
Documents have been duly authorized, executed and delivered by each Credit Party
and constitute legal, valid and binding agreements enforceable in accordance
with their terms. The execution, delivery and performance by each Credit Party
of each Financing Document executed or to be executed by it is in each case
within such Credit Party’s powers.

(b) The execution, delivery and performance by each Credit Party of the
Financing Documents to which it is a party do not (i) conflict with any of such
Credit Party’s organizational documents; (ii) contravene, conflict with,
constitute a default under or violate any Law; (iii) contravene, conflict or
violate any applicable order, writ, judgment, injunction, decree, determination
or award of any Governmental Authority by which such Credit Party or any of its
property or assets may be bound or affected; (iv) require any action by, filing,
registration, or qualification with, or Required Permit from, any Governmental
Authority (except such Required Permits which have already been obtained and are
in full force and effect); or (v) constitute a default under or conflict with
any Material Agreement. No Credit Party is in default under any agreement to
which it is a party or by which it is bound in which the default could
reasonably be expected to have a Material Adverse Change.

 

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5.2 Litigation. Except as disclosed on the Disclosure Schedule or, after the
Closing Date, pursuant to Section 6.7, there are no actions, suits, proceedings
or investigations pending or, to the knowledge of the Responsible Officers,
threatened in writing by or against any Credit Party which involves the
possibility of any judgment or liability of more than Fifty Thousand Dollars
($50,000.00) or that could result in a Material Adverse Change, or which
questions the validity of the Financing Documents, or the other documents
required thereby or any action to be taken pursuant to any of the foregoing, nor
does any Credit Party have reason to believe that any such actions, suits,
proceedings or investigations are threatened.

5.3 No Material Deterioration in Financial Condition; Financial Statements. All
financial statements for the Credit Parties delivered to Agent or any Lender
fairly present, in conformity with GAAP, in all material respects the
consolidated financial condition and consolidated results of operations of such
Credit Party. There has been no material deterioration in the consolidated
financial condition of any Credit Party from the most recent financial
statements and projections submitted to Agent or any Lender. There has been no
material adverse deviation from the most recent annual operating plan of
Borrower delivered to Agent and Lenders

5.4 Solvency. The fair salable value of each Credit Party’s assets (including
goodwill minus disposition costs) exceeds the fair value of its liabilities.
After giving effect to the transactions described in this Agreement, (a) no
Credit Party is left with unreasonably small capital in relation to its business
as presently conducted, and (b) each Credit Party is able to pay its debts
(including trade debts) as they mature.

5.5 Subsidiaries; Investments. Borrower and its Subsidiaries do not own any
stock, partnership interest or other equity securities, except for Permitted
Investments.

5.6 Tax Returns and Payments; Pension Contributions. Each Credit Party has
timely filed all required tax returns and reports, and each Credit Party has
timely paid all foreign, federal, state and material local taxes, assessments,
deposits and contributions owed by such Credit Party. Borrower is unaware of any
claims or adjustments proposed for any of prior tax years of any Credit Party
which could result in additional taxes becoming due and payable by such Credit
Party. Each Credit Party has paid all amounts necessary to fund all present
pension, profit sharing and deferred compensation plans in accordance with their
terms, and no Credit Party has withdrawn from participation in, or has permitted
partial or complete termination of, or permitted the occurrence of any other
event with respect to, any such plan which could reasonably be expected to
result in any liability of such Credit Party, including any liability to the
Pension Benefit Guaranty Corporation or its successors or any other Governmental
Authority.

5.7 Disclosure Schedule. All information set forth in the Disclosure Schedule is
true, accurate and complete as of the date hereof. All information set forth in
the Perfection Certificate is true, accurate and complete, as of the date
hereof, other than with respect to changes that are reflected in the Disclosure
Schedule, Intangible Assets Schedule, Required Permits Schedule or Products
Schedule attached to this Agreement.

 

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  6 AFFIRMATIVE COVENANTS

Borrower covenants and agrees as follows:

6.1 Organization and Existence; Government Compliance.

(a) Each Credit Party shall maintain its legal existence and good standing in
its respective jurisdiction of formation and maintain qualification in each
jurisdiction in which the failure to so qualify could reasonably be expected to
have a Material Adverse Change. If a Credit Party is not now a Registered
Organization but later becomes one, Borrower shall promptly notify Agent of such
occurrence and provide Agent with such Credit Party’s organizational
identification number.

(b) Each Credit Party shall comply with all Laws, ordinances and regulations to
which it or its business locations is subject, the noncompliance with which
could reasonably be expected to result in a Material Adverse Change. Each Credit
Party shall obtain and keep in full force and effect and comply with all of the
Required Permits, except where failure to have or maintain compliance with or
effectiveness of such Required Permit could not reasonably be expected to result
in a Material Adverse Change. Each Credit Party shall promptly provide copies of
any such obtained Required Permits to Agent. Borrower shall notify Agent within
three (3) Business Days (but in any event prior to Borrower submitting any
requests for Credit Extensions or release of any reserves) of the occurrence of
any facts, events or circumstances known to a Borrower, whether threatened,
existing or pending, that could cause any Required Permit to become limited,
suspended or revoked.

6.2 Financial Statements, Reports, Certificates.

(a) Each Credit Party shall deliver to Agent and each Lender: (i) as soon as
available, but no later than thirty (30) days after the last day of each month,
a company prepared consolidated and consolidating balance sheet, income
statement and cash flow statement covering such Credit Party’s consolidated
operations for such month certified by a Responsible Officer and in a form
acceptable to Agent and each Lender; (ii) as soon as available, but no later
than one hundred eighty (180) days after the last day of a Credit Party’s fiscal
year, audited consolidated and consolidating financial statements prepared under
GAAP, consistently applied, together with an unqualified opinion on the
financial statements from an independent certified public accounting firm
acceptable to Agent and each Lender in its reasonable discretion; (iii) as soon
as available after approval thereof by such Credit Party’s governing board, but
no later than sixty (60) days after the last day of such Credit Party’s fiscal
year, and as amended and/or updated, such Credit Party’s financial projections
for current fiscal year; (iv) within five (5) days of delivery, copies of all
statements, reports and notices made available to all of such Credit Party’s
security holders; (v) in the event that such Credit Party is or becomes subject
to the reporting requirements under the Securities Exchange Act of 1934, as
amended, within five (5) days of filing, all reports on Form 10-K, 10-Q and 8-K
filed with the Securities and Exchange Commission (“SEC”) or a link thereto on
such Credit Party’s or another website on the Internet; (vi) budgets, sales
projections, operating plans and other financial information reasonably
requested by Agent or any Lender; (vii) as soon as available, but no later than
thirty (30) days after the last day of each month, copies of the month-end
account statements for each Collateral Account maintained by a Credit Party,
which statements may be provided to Agent and each Lender by Borrower or
directly from the applicable institution(s); and (viii) such additional
information, reports or statements regarding the Credit Parties or their
respective businesses, contractors and subcontractors as Agent or any Lender may
from time to time reasonably request.

 

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(b) Within thirty (30) days after the last day of each month, Borrower shall
deliver to Agent and each Lender with the monthly financial statements described
above, a duly completed Compliance Certificate signed by a Responsible Officer.

(c) Borrower shall cause each Credit Party to keep proper books of record and
account in accordance with GAAP in which full, true and correct entries shall be
made of all dealings and transactions in relation to its business and
activities. Upon prior written notice and during business hours (which such
limitations shall not apply if a Default or Event of Default has occurred),
Borrower shall allow, and cause each Credit Party to allow, Agent and Lenders to
visit and inspect any properties of a Credit Party, to examine and make
abstracts or copies from any Credit Party’s books, to conduct a collateral audit
and analysis of its operations and the Collateral to verify the amount and age
of the accounts, the identity and credit of the respective account debtors, to
review the billing practices of the Credit Party and to discuss its respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants as often as may reasonably be desired. Borrower
shall reimburse Agent and each Lender for all reasonable costs and expenses
associated with such visits and inspections; provided, however, that Borrower
shall be required to reimburse Agent and each Lender for such costs and expenses
for no more than two (2) such visits and inspections per twelve (12) month
period unless a Default or Event of Default has occurred during such period.

(d) Borrower shall, and shall cause each Credit Party to, deliver to Agent and
each Lender, within five (5) days after the same are sent or received, copies of
all material correspondence, reports, documents and other filings with any
Governmental Authority that could reasonably be expected to have a material
effect on any of the Required Permits material to Borrower’s business or
otherwise on the operations of Borrower or any of its Subsidiaries.

6.3 Maintenance of Property. Borrower shall cause all equipment and other
tangible personal property other than Inventory to be maintained and preserved
in the same condition, repair and in working order as of the date hereof,
ordinary wear and tear excepted, and shall promptly make or cause to be made all
repairs, replacements and other improvements in connection therewith that are
necessary or desirable to such end. Borrower shall cause each Credit Party to
keep all Inventory in good and marketable condition, free from material defects.
Returns and allowances between a Credit Party and its Account Debtors shall
follow the Credit Party’s customary practices as they existed at the Original
Closing Date. Borrower shall promptly notify Agent of all returns, recoveries,
disputes and claims that involve more than One Hundred Thousand Dollars
($100,000) of Inventory collectively among all Credit Parties.

6.4 Taxes; Pensions. Borrower shall timely file and cause each Credit Party to
timely file, all required tax returns and reports and timely pay, and cause each
Credit Party to timely pay, all foreign, federal, state, and local taxes,
assessments, deposits and contributions owed, and shall deliver to Agent, on
demand, appropriate certificates attesting to such payments. Borrower shall pay,
and cause each Credit Party to pay, all amounts necessary to fund all present
pension, profit sharing and deferred compensation plans in accordance with their
terms. Notwithstanding the foregoing, a Credit Party may defer payment of any
contested taxes, provided, however, that such Credit Party (a) in good faith
contests its obligation to pay the taxes by appropriate proceedings promptly and
diligently instituted and conducted, (b) notifies Agent in writing of the
commencement of, and any material development in, the proceedings, and (c) posts
bonds or takes any other steps required to prevent the Governmental Authority
levying such contested taxes from obtaining a Lien upon any of the Collateral.

 

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6.5 Insurance. Borrower shall, and shall cause each Credit Party to, keep its
business and the Collateral insured for risks and in amounts standard for
companies in Borrower’s industry and location and as Agent may reasonably
request. Insurance policies shall be in a form, with companies, and in amounts
that are satisfactory to Agent. All property policies shall have a lender’s loss
payable endorsement showing Agent as sole lender’s loss payee and waive
subrogation against Agent, and all liability policies shall show, or have
endorsements showing, Agent as an additional insured. No other loss payees may
be shown on the policies unless Agent shall otherwise consent in writing. If
required by Agent, all policies (or the loss payable and additional insured
endorsements) shall provide that the insurer shall endeavor to give Agent at
least thirty (30) days’ notice before canceling, amending, or declining to renew
its policy. At Agent’s request, Borrower shall deliver certified copies of all
such Credit Party insurance policies and evidence of all premium payments. If
any Credit Party fails to obtain insurance as required under this Section 6.5 or
to pay any amount or furnish any required proof of payment to third persons and
Agent, Agent may make all or part of such payment or obtain such insurance
policies required in this Section 6.5, and take any action under the policies
Agent deems prudent. Each Borrower hereby waives any rights against Agent and
Lenders for any property damages or claims to the extent the same is insured or
required to be insured hereunder.

6.6 Collateral Accounts. Borrower shall, and shall cause each Credit Party to,
provide Agent five (5) days prior written notice before establishing any
Collateral Account at or with any bank or financial institution. In addition,
for each Collateral Account that any Credit Party at any time maintains,
Borrower shall, and shall cause each Credit Party to, cause the applicable bank
or financial institution at or with which any Collateral Account is maintained
to execute and deliver a Control Agreement or other appropriate instrument with
respect to such Collateral Account to perfect Agent’s Lien in such Collateral
Account in accordance with the terms hereunder, which Control Agreement may not
be terminated without prior written consent of Agent. The provisions of the
previous sentence shall not apply to deposit accounts exclusively used for
payroll, payroll taxes and other employee wage and benefit payments to or for
the benefit of a Credit Party’s employees and identified to Agent by Borrower as
such; provided, however, that at all times Borrower shall maintain one or more
separate Deposit Accounts to hold any and all amounts to be used for payroll,
payroll taxes and other employee wage and benefit payments, and shall not
commingle any monies allocated for such purposes with funds in any other Deposit
Account.

6.7 Notices of Material Agreements, Litigation and Defaults; Cooperation in
Litigation. Promptly (and in any event within three (3) Business Days), (a) upon
Borrower becoming aware of the existence of any Event of Default or event which,
with the giving of notice or passage of time, or both, would constitute an Event
of Default or (b) upon the execution and delivery of any Material Agreement and
each material amendment, consent, waiver or other modification, and each notice
of termination or default or similar notice delivered to or by a Credit Party in
connection with any Material Agreement, or (c) upon Borrower becoming aware of
(or having reason to believe any of the following are pending or threatened in
writing) any action, suit, proceeding or investigation by or against Borrower or
any Credit Party which involves the possibility of any judgment or liability of
more than Fifty Thousand Dollars ($50,000) or that could result in a Material
Adverse Change, or which questions the validity of any of the Financing

 

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Documents, or the other documents required thereby or any action to be taken
pursuant to any of the foregoing, Borrower shall give written notice to Agent
and each Lender of such occurrence, and such further information (including
copies of such documentation) as Agent or any Lender shall reasonably request.
From the date hereof and continuing through the termination of this Agreement,
Borrower shall, and shall cause each Credit Party to, make available to Agent
and each Lender, without expense to Agent or any Lender, each Credit Party’s
officers, employees and agents and books, to the extent that Agent or any Lender
may deem them reasonably necessary to prosecute or defend any third-party suit
or proceeding instituted by or against Agent or any Lender with respect to any
Collateral or relating to a Credit Party.

6.8 Creation/Acquisition of Subsidiaries. In the event Borrower or any
Subsidiary creates or, to the extent permitted hereunder, acquires any
Subsidiary, Borrower and such Subsidiary shall promptly (and in any event within
five (5) Business Days of such creation or acquisition) notify Agent of the
creation or acquisition of such new Subsidiary and take all such action as may
be reasonably required by Agent or the Required Lenders to cause each such
Subsidiary to become a co-Borrower hereunder or to guarantee the Obligations of
Borrower under the Financing Documents and, in each case, grant a continuing
pledge and security interest in and to the assets of such Subsidiary
(substantially as described on Exhibit A hereto); and Borrower shall grant and
pledge to Agent, for the ratable benefit of the Lenders, a perfected security
interest in the stock, units or other evidence of ownership of each Subsidiary
(the foregoing collectively, the “Joinder Requirements”); provided, that
Borrower shall not be permitted to make any Investment in such Subsidiary until
such time as Borrower has satisfied the Joinder Requirements.

6.9 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions
solely for (a) transaction fees incurred in connection with the Financing
Documents, (b) for working capital needs of Borrower and its Subsidiaries, and
(c) any other Permitted Purpose specified in the Credit Facility Schedule for
such Credit Facility. No portion of the proceeds of the Credit Extensions will
be used for family, personal, agricultural or household use.

6.10 Hazardous Materials; Remediation.

(a) If any release or disposal of Hazardous Materials shall occur or shall have
occurred on any real property or any other assets of any Borrower or any other
Credit Party, such Borrower will cause, or direct the applicable Credit Party to
cause, the prompt containment and removal of such Hazardous Materials and the
remediation of such real property or other assets as is necessary to comply with
all Laws and to preserve the value of such real property or other assets.
Without limiting the generality of the foregoing, each Borrower shall, and shall
cause each other Credit Party to, comply with each Law requiring the performance
at any real property by any Borrower or any other Credit Party of activities in
response to the release or threatened release of a Hazardous Material.

(b) Borrower will provide Agent within thirty (30) days after written demand
therefor with a bond, letter of credit or similar financial assurance evidencing
to the reasonable satisfaction of Agent that sufficient funds are available to
pay the cost of removing, treating and disposing of any Hazardous Materials or
Hazardous Materials Contamination and discharging any assessment which may be
established on any property as a result thereof, such demand to be made, if at
all, upon Agent’s determination that the failure to remove, treat or dispose of
any Hazardous Materials or Hazardous Materials Contamination, or the failure to
discharge any such assessment could reasonably be expected to have a Material
Adverse Change.

 

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(c) If there is any conflict between this Section 6.10 and any environmental
indemnity agreement which is a Financing Document, the environmental indemnity
agreement shall govern and control.

6.11 Power of Attorney. Each of the officers of Agent is hereby irrevocably
made, constituted and appointed the true and lawful attorney for each Borrower
(without requiring any of them to act as such) with full power of substitution
to do the following: (a) pay, contest or settle any Lien, charge, encumbrance,
security interest, and adverse claim in or to the Collateral (in each case, so
long as no Default or Event of Default has occurred, other than Permitted
Liens), or any judgment based thereon, or otherwise take any action to terminate
or discharge the same; (b) so long as Agent has provided not less than three
(3) Business Days’ prior written notice to Borrower to perform the same and
Borrower has failed to take such action, (i) execute in the name of any Person
comprising Borrower any schedules, assignments, instruments, documents, and
statements that Borrower is obligated to give Agent under this Agreement or that
Agent or any Lender deems necessary to perfect or better perfect Agent’s
security interest or Lien in any Collateral, (ii) do such other and further acts
and deeds in the name of Borrower that Agent may deem necessary or desirable to
enforce, protect or preserve any Collateral or its rights therein, including,
but not limited to, to sign Borrower’s name on any invoice or bill of lading for
any Account or drafts against Account Debtors; and (iii) after the occurrence
and during the continuance of an Event of Default, (A) endorse the name of any
Borrower upon any and all checks, drafts, money orders, and other instruments
for the payment of money that are payable to Borrower; (B) make, settle, and
adjust all claims under Borrower’s insurance policies; (C) take any action any
Credit Party is required to take under this Agreement or any other Financing
Document; (D) transfer the Collateral into the name of Agent or a third party as
the Code permits; (E) exercise any rights and remedies described in this
Agreement or the other Financing Documents; and (F) do such other and further
acts and deeds in the name of Borrower that Agent may deem necessary or
desirable to enforce its rights with regard to any Collateral.

6.12 Further Assurances. Borrower shall, and shall cause each Credit Party to,
promptly execute any further instruments and take further action as Agent
reasonably requests to perfect or better perfect or continue Agent’s Lien in the
Collateral or to effect the purposes of this Agreement or any other Financing
Document.

6.13 Post-Closing Obligations. Borrower shall, and shall cause each Credit Party
to, complete each of the post-closing obligations and/or deliver to Agent each
of the documents, instruments, agreements and information listed on the
Post-Closing Obligations Schedule attached hereto, on or before the date set
forth for each such item thereon (as may be extended by the Agent in writing in
its sole discretion), each of which shall be completed or provided in form and
substance satisfactory to Agent and Lenders.

6.14 Disclosure Schedule. Borrower shall, in the event of any information in the
Disclosure Schedule becoming outdated, inaccurate, incomplete or misleading,
deliver to Agent, together with the next Compliance Certificate required to be
delivered under this Agreement for a calendar month ending
March 31, June 30, September 30 or December 31, a proposed update to

 

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the Disclosure Schedule correcting all outdated, inaccurate, incomplete or
misleading information. With respect to any proposed updates to the Disclosure
Schedule involving Permitted Liens, Permitted Indebtedness or Permitted
Investments, Agent will replace the Disclosure Schedule attached hereto with
such proposed update only if such updated information is consistent with the
definitions of and limitations herein pertaining to Permitted Liens, Permitted
Indebtedness or Permitted Investments. With respect to any proposed updates to
the Disclosure Schedule involving other matters, Agent will replace the
applicable portion of the Disclosure Schedule attached hereto with such proposed
update upon Agent’s approval thereof.

 

  7 NEGATIVE COVENANTS

Borrower shall not do, nor shall it permit any Credit Party to do, any of the
following without the prior written consent of Agent and the Required Lenders:

7.1 Dispositions. Convey, sell, abandon, lease, license, transfer, assign or
otherwise dispose of (collectively, “Transfer”) all or any part of its business
or property, except for (a) sales, transfers or dispositions of Inventory in the
Ordinary Course of Business; (b) sales or abandonment of worn-out or obsolete
Equipment; or (c) non-exclusive licenses of patent rights of Borrower or its
Subsidiaries granted to third parties in the Ordinary Course of Business and
that does not result in a legal transfer of title to the licensed property.

7.2 Changes in Business, Management, Ownership or Business Locations. (a) Engage
in any business other than the businesses currently engaged in by Borrower or
such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or
dissolve; (c) (i) have a change in Chief Executive Officer or Chief Operating
Officer where a suitable permanent replacement, as approved by Borrower’s board
of directors, has not been named and hired by not later than sixty (60) days
after such change, or (ii) enter into any transaction or series of related
transactions which would result in a Change in Control; (d) add any new offices
or business locations, or enter into any new leases with respect to existing
offices or business locations (unless such new or existing offices or business
locations contain less than One Hundred Thousand Dollars ($100,000) in
Borrower’s assets or property and do not contain any of Borrower’s Books)
without first delivering a fully-executed Access Agreement to Agent; (e) change
its jurisdiction of organization; (f) change its organizational structure or
type; (g) change its legal name; or (h) change any organizational number (if
any) assigned by its jurisdiction of organization.

7.3 Mergers or Acquisitions. Merge or consolidate with any other Person, or
acquire all or substantially all of the capital stock or property of another
Person; provided, however, that a Subsidiary of Borrower may merge or
consolidate into another Subsidiary that is a Borrower, so long as (a) Borrower
has provided Agent and each Lender with prior written notice of such
transaction, (b) a Person already comprising the Borrower shall be the surviving
legal entity, (c) Borrower’s tangible net worth is not thereby reduced, (d) no
Event of Default has occurred and is continuing prior thereto or arises as a
result therefrom, and (e) Borrower shall be in compliance with the covenants set
forth in this Agreement both before and after giving effect to such transaction.

7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness other
than Permitted Indebtedness.

 

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7.5 Encumbrance. (a) Create, incur, allow, or suffer any Lien on any of its
property, except for Permitted Liens, (b) permit any Collateral to fail to be
subject to the first priority security interest granted herein except for
Permitted Liens that may have priority by operation of applicable Law or by the
terms of a written intercreditor or subordination agreement entered into by
Agent, or (c) enter into any agreement, document, instrument or other
arrangement (except with or in favor of Agent for the ratable benefit of
Lenders) with any Person which directly or indirectly prohibits or has the
effect of prohibiting Borrower or any Subsidiary from assigning, mortgaging,
pledging, granting a security interest in or upon, or encumbering any of
Borrower’s or any Subsidiary’s Collateral or Intellectual Property, except as is
otherwise permitted in the definition of “Permitted Liens” herein.

7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account, except
pursuant to the terms of Section 6.6 hereof.

7.7 Distributions; Investments; Margin Stock. (a) Pay any dividends (other than
dividends payable solely in common stock) or make any distribution or payment
with respect to or redeem, retire or purchase or repurchase any of its equity
interests (other than repurchases pursuant to the terms of employee stock
purchase plans, employee restricted stock agreements or similar plans), or
(b) directly or indirectly make any Investment (including, without limitation,
any additional Investment in any Subsidiary) other than Permitted Investments.
Without limiting the foregoing, Borrower shall not, and shall not permit any of
its Subsidiaries to, purchase or carry Margin Stock.

7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to
exist any material transaction with any Affiliate of any Credit Party, except
for (a) transactions that are in the Ordinary Course of Business, upon fair and
reasonable terms that are no less favorable to Borrower than would be obtained
in an arm’s length transaction with a non-affiliated Person, (b) transactions
with Subsidiaries that are designated as a Borrower hereunder and that are not
otherwise prohibited by Article 7 of this Agreement, and (c) transactions
permitted by Section 7.7 of this Agreement.

7.9 [Reserved]

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

 

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7.11 Amendments to Organization Documents and Material Agreements. Amend, modify
or waive any provision of (a) any Material Agreement in a manner that is
materially adverse to Borrower, that is adverse to Agent or any Lender, that
pertains to rights to assign or grant a security interest in such Material
Agreement or that could or could reasonably be expected to result in a Material
Adverse Change, or (b) any of its organizational documents (other than a change
in registered agents, or a change that could not adversely affect the rights of
Agent or Lenders hereunder, but, for the avoidance of doubt, under no
circumstances a change of its name, type of organization or jurisdiction of
organization), in each case, without the prior written consent of Agent.
Borrower shall provide to Agent copies of all amendments, waivers and
modifications of any Material Agreement or organizational documents.

7.12 Compliance with Anti-Terrorism Laws. Directly or indirectly, knowingly
enter into any documents, instruments, agreements or contracts with any Person
listed on the OFAC Lists. Borrower shall immediately notify Agent if Borrower
has knowledge that Borrower or any Subsidiary or Affiliate is listed on the OFAC
Lists or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on,
or (d) is arraigned and held over on charges involving money laundering or
predicate crimes to money laundering. Borrower will not, nor will Borrower
permit any Subsidiary or Affiliate to, directly or indirectly, (i) conduct any
business or engage in any transaction or dealing with any Blocked Person,
including, without limitation, the making or receiving of any contribution of
funds, goods or services to or for the benefit of any Blocked Person, (ii) deal
in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to Executive Order No. 13224, 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. Agent hereby notifies
Borrower 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 Borrower and its principals, which
information includes the name and address of Borrower and its principals and
such other information that will allow Agent to identify such party in
accordance with Anti-Terrorism Laws.

 

  8 LIFE SCIENCES PROVISIONS.

8.1 Life Sciences Covenants.

(a) As used in this Agreement, the following terms have the following meanings:

“DEA” means the Drug Enforcement Administration of the United States of America,
and any successor agency thereof.

“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.

“FDA” means the Food and Drug Administration of the United States of America, or
any successor entity thereto.

 

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

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

“Products” means any products manufactured, sold, developed, tested or marketed
by any Borrower or any of its Subsidiaries, including without limitation, those
products set forth on the Products Schedule (as updated from time to time in
accordance with Section 8.1(d)); provided, however, that if Borrower shall fail
to comply with the obligations under Section 8.1(d) to give notice to Agent and
each Lender and update the Products Schedule prior to manufacturing, selling,
developing, testing or marketing any new Product, any such improperly
undisclosed Product shall be deemed to be included in this definition.

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

(b) [Reserved];

(c) Borrower represents and warrants as follows at all times unless expressly
provided below:

(i) Intellectual Property and License Agreements. A list of all of Intellectual
Property of each Credit Party and all license agreements, sublicenses, or other
rights of any Credit Party to use Intellectual Property (including all in-bound
license agreements, but excluding over-the-counter software that is commercially
available to the public), as of the Closing Date and, as updated pursuant to
Section 8.1(d), is set forth on the Intangible Assets Schedule, which indicates,
for each item of property: (A) the name of the Credit Party owning such
Intellectual Property or licensee to such license agreement; (B) the Credit
Party’s identifier for such property (i.e., name of patent, license, etc.),
(C) whether such property is Intellectual Property (or application therefor)
owned by a Credit Party or is property to which a Credit Party has rights
pursuant to a license agreement, and (D) the expiration date of such
Intellectual Property or license agreement. In the case of any Material
Intangible Property that is a license agreement, the Intangible Assets Schedule
further indicates, for each: (1) the name and address of the licensor, (2) the
name and date of the agreement pursuant to which such item of Material
Intangible Property is licensed, (3) whether or not such license agreement
grants an exclusive license to a Credit Party, (4) whether there are any
purported restrictions in such license agreement as to the ability of a Credit
Party to grant a security interest in and/or to transfer any of its rights as a
licensee under such license agreement, and (5) whether a default under or
termination of such license agreement could interfere with Agent’s right to sell
or assign such license or any other Collateral. Except as noted on the
Intangible Assets Schedule, each Credit Party is the sole owner of its
Intellectual Property, free and clear of any Liens. Each Patent is valid and
enforceable to the knowledge of the Borrower and no part of the Material
Intangible Property has been judged invalid or unenforceable, in whole or in
part, and to the best of Borrower’s knowledge, no claim has been made that
Borrower’s use of any part of the Intellectual Property violates the rights of
any third party.

 

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(ii) Regulatory Status.

(A) All Products and all Required Permits are listed on the Products Schedule
and Required Permits Schedule (as updated from time to time pursuant to
Section 8.1(d)), and Borrower has delivered to Agent and each Lender a copy of
all Required Permits requested by Agent and such Lender as of the date hereof or
to the extent requested by Agent or such Lender pursuant to Section 8.1(d).

(B) Without limiting the generality of Section 8.1 above, as of the date of this
Agreement and on each subsequent date that the representations and warranties in
this Agreement are brought down or remade, with respect to any Product being
tested or manufactured, Borrower and its Subsidiaries have received, and such
Product is the subject of, all Required Permits needed in connection with the
testing or manufacture of such Product as such testing or manufacturing is
currently being conducted by or on behalf of Borrower, and Borrower and its
Subsidiaries have not received any notice from any applicable Governmental
Authority, specifically including the FDA, that such Governmental Authority is
conducting an investigation or review of (1) Borrower’s or such Subsidiary’s
manufacturing facilities and processes for such Product which have disclosed any
material deficiencies or violations of Laws and/or the Required Permits related
to the manufacture of such Product, or (2) any such Required Permit or that any
such Required Permit has been revoked or withdrawn, nor has any such
Governmental Authority issued any order or recommendation stating that the
development, testing and/or manufacturing of such Product should cease.

(C) Without limiting the generality of Section 8.1 above, as of the date of this
Agreement and on each subsequent date that the representations and warranties in
this Agreement are brought down or remade, with respect to any Product marketed
or sold by Borrower or its Subsidiaries, Borrower and its Subsidiaries have
received, and such Product is the subject of, all Required Permits needed in
connection with the marketing and sales of such Product as currently being
marketed or sold by Borrower or its Subsidiaries, and Borrower and its
Subsidiaries have not received any notice from any applicable Governmental
Authority, specifically including the FDA, that such Governmental Authority is
conducting an investigation or review of any such Required Permit or approval or
that any such Required Permit has been revoked or withdrawn, nor has any such
Governmental Authority issued any order or recommendation stating that such
marketing or sales of such Product cease or that such Product be withdrawn from
the marketplace.

(D) Without limiting the generality of Section 8.1 above, as of the date of this
Agreement and on each subsequent date that the representations and warranties in
this Agreement are brought down or remade, (i) there have been no adverse
clinical test results which have or could reasonably be expected to result in a
Material Adverse Change, and (ii) there have been no Product recalls or
voluntary Product withdrawals from any market.

(E) As of the date of this Agreement and on each subsequent date that the
representations and warranties in this Agreement are brought down or remade,

 

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Borrower and its Subsidiaries have not experienced any significant failures in
its manufacturing of any Product such that the amount of such Product
successfully manufactured by Borrower or its Subsidiaries in accordance with all
specifications thereof and the required payments related thereto in any month
shall decrease significantly with respect to the quantities of such Product
produced in the prior month.

(d) Borrower covenants and agrees as follows:

(i) [Reserved.]

(ii) Borrower shall own, or be licensed to use or otherwise have the right to
use, all Material Intangible Property. All Material Intangible Property of
Borrower is and shall be fully protected and/or duly and properly registered,
filed or issued in the appropriate office and jurisdictions for such
registrations, filings or issuances, except where the failure to do so would not
reasonably be expected to result in a Material Adverse Change. Borrower shall
not become a party to, nor become bound by, any material license or other
agreement with respect to which Borrower is the licensee that prohibits or
otherwise restricts Borrower from granting a security interest in Borrower’s
interest in such license or agreement or other property. Borrower shall at all
times conduct its business without infringement or claim of infringement of any
Intellectual Property rights of others. Borrower shall do the following, to the
extent it determines, in the exercise of its reasonable business judgment, that
it is prudent to do so: (A) protect, defend and maintain the validity and
enforceability of its Material Intangible Property; (B) promptly advise Agent
and each Lender in writing of material infringements of its Material Intangible
Property; and (C) not allow, without Agent’s and Required Lenders’ prior written
consent, any Material Intangible Property to be abandoned, invalidated,
forfeited or dedicated to the public or to become unenforceable. If Borrower
(1) obtains any patent, registered trademark or servicemark, registered
copyright, registered mask work, or notice of any pending application for any of
the foregoing, whether as owner, licensee or otherwise, or (2) applies for any
patent or the registration of any trademark or servicemark, then concurrently
with the delivery of an updated Intangible Assets Schedule as required under
clause (iv) below, Borrower shall provide written notice thereof to Agent and
each Lender and shall execute such documents and take such other actions as
Agent or the Required Lenders shall request in its or their, as applicable, good
faith business judgment to perfect and maintain a first priority perfected
security interest in favor of Agent, for the ratable benefit of Lenders, in the
IP Proceeds (as defined in Exhibit A) pertaining thereto. Borrower shall
promptly provide to Agent and each Lender copies of all applications that it
files for patents or for the registration of trademarks, servicemarks,
copyrights or mask works.

(iii) In connection with the development, testing, manufacture, marketing or
sale of each and any Product by a Credit Party, such Credit Party shall comply
fully and completely in all respects with all Required Permits at all times
issued by any Governmental Authority the noncompliance with which could have a
Material Adverse Change, specifically including the FDA, with respect to such
development, testing, manufacture, marketing or sales of such Product by such
Credit Party as such activities are at any such time being conducted by such
Credit Party.

(iv) If, after the Closing Date, Borrower acquires and/or develops any new
Registered Intellectual Property, or enters or becomes bound by any additional
license or

 

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sublicense agreement or other agreement with respect to rights in Intellectual
Property (other than over-the-counter software that is commercially available to
the public), and upon any other material change in Borrower’s Material
Intangible Property from that listed on the Intangible Assets Schedule, then
together with the next Compliance Certificate required to be delivered after
such event under this Agreement for a calendar month ending
March 31, June 30, September 30 or December 31, Borrower shall deliver to Agent
and each Lender an updated Intangible Assets Schedule reflecting same. Borrower
shall take such steps as Agent or the Required Lenders request to obtain the
consent of, or waiver by, any person whose consent or waiver is necessary for
(x) all licenses or agreements to be deemed “Collateral” and for Agent to have a
security interest in it that might otherwise be restricted or prohibited by Law
or by the terms of any such license or agreement, whether now existing or
entered into in the future, and (y) Agent to have the ability in the event of a
liquidation of any Collateral to dispose of such Collateral in accordance with
Agent’s rights and remedies under this Agreement and the other Financing
Documents.

(v) If, after the Closing Date, Borrower determines to manufacture, sell,
develop, test or market any new Product, then together with the next Compliance
Certificate required to be delivered after such determination under this
Agreement for a calendar month ending March 31, June 30, September 30 or
December 31, Borrower shall give written notice to Agent and each Lender of such
determination (which shall include a brief description of such Product, plus a
list of all Required Permits relating to such new Product (and a copy of such
Required Permits if requested by Agent or such Lender) and/or Borrower’s
manufacture, sale, development, testing or marketing thereof issued or
outstanding as of the date of such notice), along with a copy of an updated
Intangible Assets Schedule, Products Schedule and Required Permits Schedule;
provided, however, that if Borrower shall at any time obtain any new or
additional Required Permits from the FDA, DEA, or parallel state or local
authorities, or foreign counterparts of the FDA, DEA, or parallel state or local
authorities, with respect to any Product which has previously been disclosed to
Agent or any Lender, then together with the next Compliance Certificate required
to be delivered under this Agreement for a calendar month ending
March 31, June 30, September 30 or December 31, Borrower shall provide Agent and
each Lender with a copy of an updated Required Permits Schedule reflecting such
new or additional Required Permits (along with a copy thereof if requested by
Agent or such Lender).

(e) In addition to the events listed in Article 10, any one of the following
shall also constitute an Event of Default under this Agreement: (i) the order by
FDA or similar Governmental Authority to withdraw any Product or Product
category from the market or to enjoin Borrower, its Subsidiaries or any
representative of Borrower or its Subsidiaries from manufacturing, marketing,
selling or distributing any Product or Product category that could reasonably be
expected to result in Material Adverse Change, (ii) the decision by any DEA,
FDA, or any other Governmental Authority to revoke, suspend, reject, withdraw,
limit, or restrict any Required Permit held by Borrower, its Subsidiaries or any
representative of Borrower or its Subsidiaries, which, in each case, could
reasonably be expected to result in a Material Adverse Change, (iii) the
commencement of any enforcement action against Borrower, its Subsidiaries or any
representative of Borrower or its Subsidiaries (with respect to the business of
Borrower or its Subsidiaries) by DEA, FDA, or any other Governmental Authority
that could reasonably be expected to result in a Material Adverse Change,
(iv) the recall of any Products from the market, the voluntary withdrawal of any
Products from the market, or actions to discontinue the sale of any Products
which could reasonably be expected to result in a Material Adverse Change, or
(v) the occurrence of adverse test results in connection with a Product which
could reasonably be expected to result in a Material Adverse Change.

 

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  9 AMENDMENT AND RESTATEMENT; NO NOVATION

9.1 On the Closing Date upon the satisfaction of the conditions precedent in
Section 3.1, the Existing Credit Agreement shall be amended and restated in its
entirety as set forth herein. The Existing Loan outstanding on the Closing Date
shall be reallocated in accordance with the terms set forth in Section 2.3 and
this Article 9.

9.2 The parties hereto acknowledge and agree that (i) this Agreement and the
other Financing Documents, whether executed and delivered in connection herewith
or otherwise, do not constitute a novation or termination of the Existing
Obligations under the Existing Credit Agreement as in effect prior to the
Closing Date and which remain outstanding and are in all respects continuing (on
the terms as amended and restated hereby), (ii) the Liens and security interests
as granted under the Existing Credit Agreement and other Existing Financing
Documents securing payment of such Existing Obligations are in all respects
continuing and in full force and effect after giving effect to this Agreement
and the transactions contemplated hereby and all such Liens granted to the
Existing Agent shall be deemed to constitute Liens granted to the Agent on
behalf of the Lenders under this Agreement, (iii) references in the Existing
Financing Documents or the Financing Documents to the “Credit Agreement” shall
be deemed to be references to this Agreement (as the same may be amended,
restated, supplemented or otherwise modified from time to time), and to the
extent necessary to effect the foregoing, each such Financing Document is hereby
deemed amended accordingly, (iv) all of the terms and provisions of the Existing
Credit Agreement shall continue to apply for the period prior to the Closing
Date, including any determinations of payment dates, interest rates, Events of
Default or any amount that may be payable to the Agent or the Lenders (or their
assignees or replacements hereunder), (v) the Existing Obligations under the
Existing Credit Agreement shall continue to be paid or prepaid on or prior to
the Closing Date on the terms set forth in the Existing Credit Agreement, and
shall from and after the Closing Date continue to be owing and be subject to the
terms of this Agreement, (vi) all references in the Financing Documents to the
“Lenders” or a “Lender” shall be deemed to refer to such terms as defined in
this Agreement, and to the extent necessary to effect the foregoing, each such
Financing Document is hereby deemed amended accordingly and (vii) any Defaults
or Events of Default that are continuing under the Existing Credit Agreement
shall constitute Defaults or Events of Default under this Agreement unless the
same shall have been specifically waived in writing in accordance with this
Agreement, and to the extent necessary to effect the foregoing, each such
Financing Document is hereby deemed amended accordingly.

9.3 The Borrower, Credit Parties, Agent and Lenders acknowledge and agree that
all principal, interest, fees, costs, reimbursable expenses and indemnification
obligations accruing or arising under or in connection with the Existing Credit
Agreement which remain unpaid and outstanding as of the Closing Date shall be
and remain outstanding and payable as an Obligation under the terms of this
Agreement and the other Financing Documents.

9.4 The parties hereto agree that as of the Closing Date, (i) the Lenders
signatory hereto shall become “Lenders” under this Agreement and the other
Financing Documents and (ii) each Lender shall have the Applicable Commitment
set forth on the Credit Facility Schedule. Borrower

 

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hereby directs Agent to apply the proceeds of the Credit Extension made on the
Closing Date to the reallocation in accordance with Section 2.3 on the Closing
Date of certain outstanding obligations of the Borrower owing to the Existing
Lenders and the payment of certain fees and expenses relating thereto, as more
specifically set forth in the disbursement letter referred to in the Closing
Deliveries Schedule.

9.5 Each Credit Party hereby ratifies the Existing Financing Documents (as
amended hereby and in connection herewith) and Warrants and acknowledges and
reaffirms (i) that it is bound by all terms thereunder applicable to it and
(ii) that it is responsible for the observance and full performance of its
respective obligations thereunder.

9.6 Notwithstanding anything to the contrary contained in the Existing Credit
Agreement or this Article 9, each Existing Lender hereby waives any Applicable
Prepayment Fee (under and as defined in the Existing Credit Agreement) payable
to such Existing Lender under Section 2.3(d) of the Existing Credit Agreement
solely as a result of the amendment and restatement of the Existing Credit
Agreement.

 

  10 EVENTS OF DEFAULT

10.1 Events of Default. The occurrence of any of the following conditions and/or
events, whether voluntary or involuntary, by operation of law or otherwise,
shall constitute an “Event of Default” and Credit Parties shall thereupon be in
default under this Agreement and each of the other Financing Documents:

(a) Borrower fails to (i) make any payment of principal or interest on any
Credit Extension on its due date, or (ii) pay any other Obligations within three
(3) Business Days after such Obligations are due and payable (which three
(3) Business Day grace period shall not apply to payments due on the Maturity
Date or the date of acceleration pursuant to Section 10.2 hereof);

(b) Any Credit Party defaults in the performance of or compliance with any term
contained in this Agreement or in any other Financing Document (other than
occurrences described in other provisions of this Section 10.1 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 Credit Party or waived by Agent within ten
(10) days after the earlier of (i) the date of receipt by any Borrower of notice
from Agent or Required Lenders of such default, or (ii) the date an officer of
such Credit Party becomes aware, or through the exercise of reasonable diligence
should have become aware, of such default;

(c) Any Credit Party defaults in the performance of or compliance with any term
contained in Section 6.2, 6.4, 6.5, 6.6, 6.8 or 6.10 or Article 7 or Article 8;

(d) Any representation, warranty, certification or statement made by any Credit
Party or any other Person acting for or on behalf of a Credit Party (i) in any
Financing Document or in any certificate, financial statement or other document
delivered pursuant to any Financing Document or (ii) to induce Agent and/or
Lenders to enter into this Agreement or any Financing Document is incorrect in
any respect (or in any material respect if such representation, warranty,
certification or statement is not by its terms already qualified as to
materiality) when made (or deemed made);

 

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(e) (i) any Credit Party defaults under or breaches any Material Agreement
(after any applicable grace period contained therein), or a Material Agreement
shall be terminated by a third party or parties party thereto prior to the
expiration thereof, or there is a loss of a material right of a Credit Party
under any Material Agreement to which it is a party, in each case which could
reasonably be expected to result in a Material Adverse Change, (ii) (A) any
Credit Party fails to make (after any applicable grace period) any payment when
due (whether due because of scheduled maturity, required prepayment provisions,
acceleration, demand or otherwise) on any Indebtedness (other than the
Obligations) of such Credit Party or such Subsidiary having an aggregate
principal amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than Two Hundred Fifty Thousand Dollars ($250,000)
(“Material Indebtedness”), (B) any other event shall occur or condition shall
exist under any contractual obligation relating to any such Material
Indebtedness, if the effect of such event or condition is to accelerate, or to
permit the acceleration of (without regard to any subordination terms with
respect thereto), the maturity of such Material Indebtedness or (C) any such
Material Indebtedness shall become or be declared to be due and payable, or be
required to be prepaid, redeemed, defeased or repurchased (other than by a
regularly scheduled required prepayment), prior to the stated maturity thereof,
(iii) any Credit Party defaults (beyond any applicable grace period) under any
obligation for payments due or other material obligation under any lease
agreement for such Credit Party’s principal place of business or any place of
business that meets the criteria for the requirement of an Access Agreement
under Section 7.2 or for which an Access Agreement exists or was required to be
delivered, (iv) any Borrower makes any payment on account of any Indebtedness
that has been subordinated to any of the Obligations, other than payments
specifically permitted by the terms of such subordination;

(f) (i) any Credit Party shall generally not pay its debts as such debts become
due, shall admit in writing its inability to pay its debts generally, shall make
a general assignment for the benefit of creditors, or shall cease doing business
as a going concern, (ii) any proceeding shall be instituted by or against any
Credit Party seeking to adjudicate it a bankrupt or insolvent or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, composition of it or its debts or any similar order, in each case under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors or seeking the entry of an order for relief or the appointment of a
custodian, receiver, trustee, conservator, liquidating agent, liquidator, other
similar official or other official with similar powers, in each case for it or
for any substantial part of its property and, in the case of any such
proceedings instituted against (but not by or with the consent of) such Credit
Party, either such proceedings shall remain undismissed or unstayed for a period
of thirty (30) days or more or any action sought in such proceedings shall occur
or (iii) any Credit Party shall take any corporate or similar action or any
other action to authorize any action described in clause (i) or (ii) above;

(g) (i) The service of process seeking to attach, execute or levy upon, seize or
confiscate any Collateral Account, any Intellectual Property, or any funds of
any Credit Party on deposit with Agent, any Lender or any Affiliate of Agent or
any Lender, or (ii) a notice of lien, levy, or assessment is filed against any
assets of a Credit Party by any government agency, and the same under subclauses
(i) and (ii) hereof are not discharged or stayed (whether through the posting of
a bond or otherwise) prior to the earlier to occur of twenty (20) days after the
occurrence thereof or such action becoming effective;

 

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(h) (i) any court order enjoins, restrains, or prevents Borrower from conducting
any material part of its business, (ii) the institution by any Governmental
Authority of criminal proceedings against any Credit Party, or (iii) one or more
judgments or orders for the payment of money (not paid or fully covered by
insurance and as to which the relevant insurance company has acknowledged
coverage in writing) aggregating in excess of $100,000 shall be rendered against
any or all Credit Parties and either (A) enforcement proceedings shall have been
commenced by any creditor upon any such judgments or orders, or (B) there shall
be any period of ten (10) 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 Lien created by any of the Financing Documents shall at any time fail to
constitute a valid and perfected Lien on all of the Collateral purported to be
encumbered thereby, subject to no prior or equal Lien except Permitted Liens, or
any Credit Party shall so assert; any provision of any Financing Document shall
fail to be valid and binding on, or enforceable against, a Credit Party, or any
Credit Party shall so assert;

(j) A Change in Control occurs or any Credit Party or direct or indirect equity
owner in a Credit Party shall enter into agreement which contemplates a Change
in Control;

(k) Any Required Permit shall have been (i) revoked, rescinded, suspended,
modified in an adverse manner or not renewed in the Ordinary Course of Business
for a full term, or (ii) subject to any decision by a Governmental Authority
that designates a hearing with respect to any applications for renewal of any of
such Required Permit or that could result in the Governmental Authority taking
any of the actions described in clause (i) above, and such decision or such
revocation, rescission, suspension, modification or non-renewal (A) causes, or
could reasonably be expected to cause, a Material Adverse Change, or
(B) adversely affects the legal qualifications of any Credit Party to hold such
Required Permit in any applicable jurisdiction and such revocation, rescission,
suspension, modification or non-renewal could reasonably be expected to affect
the status of or legal qualifications of any Credit Party to hold any Required
Permit in any other jurisdiction in such a manner as could reasonably be
expected to cause a Material Adverse Change;

(l) If any Borrower is or becomes an entity whose equity is registered with the
SEC, and/or is publicly traded on and/or registered with a public securities
exchange, such Borrower’s equity fails to remain registered with the SEC in good
standing, and/or such equity fails to remain publicly traded on and registered
with a public securities exchange; or

(m) The occurrence of a Material Adverse Change.

Notwithstanding the foregoing, if a Credit Party fails to comply with any same
provision of this Agreement two (2) times in any twelve (12) month period and
Agent has given to any Borrower in connection with each such failure any notice
to which Borrower would be entitled under this Section 10.1 before such failure
could become an Event of Default, then all subsequent failures by a Credit Party
to comply with such provision of this Agreement shall effect an immediate Event
of

 

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Default (without the expiration of any applicable cure period) with respect to
all subsequent failures by a Credit Party to comply with such provision of this
Agreement, and Agent thereupon may exercise any remedy set forth in this Article
10 without affording Borrower any opportunity to cure such Event of Default.

All cure periods provided for in this Section 10.1 shall run concurrently with
any cure period provided for in any applicable Financing Documents under which
the default occurred.

10.2 Rights and Remedies.

(a) Upon the occurrence and during the continuance of an Event of Default, Agent
may, and at the written direction of any Lender shall, without notice or demand,
do any or all of the following: (i) deliver notice of the Event of Default to
Borrower, (ii) by notice to any Borrower declare all Obligations immediately due
and payable (but if an Event of Default described in Section 10.1(f) occurs all
Obligations shall be immediately due and payable without any action by Agent or
the Lenders), or (iii) by notice to any Borrower suspend or terminate the
obligations, if any, of the Lenders to advance money or extend credit for
Borrower’s benefit under this Agreement or under any other agreement between any
Credit Party and Agent and/or the Lenders (but if an Event of Default described
in Section 10.1(f) occurs all obligations, if any, of the Lenders to advance
money or extend credit for Borrower’s benefit under this Agreement or under any
other agreement between Borrower and Agent and/or the Lenders shall be
immediately terminated without any action by Agent or the Lenders).

(b) Without limiting the rights of Agent and Lenders set forth in
Section 10.2(a) above, upon the occurrence and during the continuance of an
Event of Default, Agent shall have the right, without notice or demand, to do
any or all of the following:

(i) with or without legal process, enter any premises where the Collateral may
be and take possession of and remove the Collateral from the premises or store
it on the premises, and foreclose upon and/or sell, lease or liquidate, the
Collateral, in whole or in part;

(ii) apply to the Obligations (A) any balances and deposits of any Credit Party
that Agent or any Lender or any Affiliate of Agent or a Lender holds or
controls, or (B) any amount held or controlled by Agent or any Lender or any
Affiliate of Agent or a Lender owing to or for the credit or the account of any
Credit Party;

(iii) settle, compromise or adjust and grant releases with respect to disputes
and claims directly with Account Debtors for amounts on terms and in any order
that Agent considers advisable, notify any Person owing any Credit Party money
of Agent’s security interest in such funds, and verify the amount of such
Account;

(iv) make any payments and do any acts it considers necessary or reasonable to
protect the Collateral and/or its security interest in the Collateral. Borrower
shall assemble the Collateral if Agent requests and make it available as Agent
designates. Agent may also render any or all of the Collateral unusable at a
Credit Party’s premises and may dispose of such Collateral on such premises
without liability for rent or costs. Borrower grants Agent a license to enter
and occupy any of its premises, without charge, to exercise any of Agent’s
rights or remedies;

 

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(v) pay, purchase, contest, or compromise any Lien which appears to be prior or
superior to its security interest and pay all expenses incurred;

(vi) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale,
and/or advertise for sale, the Collateral. Agent is hereby granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower’s labels, patents, copyrights, mask works, rights of use of any name,
trade secrets, trade names, trademarks, service marks, and advertising matter,
or any similar property as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral (and including
in such license access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof) and, in connection with Agent’s exercise of its
rights under this Article 10, Borrower’s rights under all licenses and all
franchise agreements shall be deemed to inure to Agent for the benefit of the
Lenders;

(vii) place a “hold” on any account maintained with Agent or the Lenders or any
Affiliate of Agent or a Lender and/or deliver a notice of exclusive control, any
entitlement order, or other directions or instructions pursuant to any Control
Agreement or similar agreements providing control of any Collateral;

(viii) demand and receive possession of the Books of Borrower and the other
Credit Parties; and

(ix) exercise all other rights and remedies available to Agent under the
Financing Documents or at law or equity, including all remedies provided under
the Code (including disposal of the Collateral pursuant to the terms thereof).

10.3 Notices. Any notice that Agent is required to give to a Credit Party under
the Code of the time and place of any public sale or the time after which any
private sale or other intended disposition of the Collateral is to be made shall
be deemed to constitute reasonable notice if such notice is given in accordance
with this Agreement at least five (5) days prior to such action.

10.4 Protective Payments. If any Credit Party fails to pay or perform any
covenant or obligation under this Agreement or any other Financing Document,
Agent may pay or perform such covenant or obligation, and all amounts so paid by
Agent are Protective Advances and immediately due and payable, bearing interest
at the then highest applicable rate for the Credit Facilities hereunder, and
secured by the Collateral. No such payments or performance by Agent shall be
construed as an agreement to make similar payments or performance in the future
or constitute Agent’s waiver of any Event of Default.

10.5 Liability for Collateral No Waiver; Remedies Cumulative. So long as Agent
and the Lenders comply with reasonable banking practices regarding the
safekeeping of the Collateral in the possession or under the control of Agent
and the Lenders, Agent and the Lenders shall not be liable or responsible for:
(a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral;
(c) any diminution in the value of the Collateral; or (d) any act or default of
any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of
loss, damage or destruction of the Collateral. Agent’s failure, at any time or
times, to require strict performance by Borrower of any provision of this
Agreement or any other Financing Document shall not waive, affect, or

 

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diminish any right of Agent thereafter to demand strict performance and
compliance herewith or therewith. No waiver hereunder shall be effective unless
signed by Agent and then is only effective for the specific instance and purpose
for which it is given. Agent’s rights and remedies under this Agreement and the
other Financing Documents are cumulative. Agent has all rights and remedies
provided under the Code, by Law, or in equity. Agent’s exercise of one right or
remedy is not an election, and Agent’s waiver of any Event of Default is not a
continuing waiver. Agent’s delay in exercising any remedy is not a waiver,
election, or acquiescence.

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

10.7 Waivers.

(a) Except as otherwise provided for in this Agreement and to the fullest extent
permitted by applicable law, each Borrower waives: (i) presentment, demand and
protest, and notice of presentment, dishonor, intent to accelerate,
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all Financing Documents and hereby
ratifies and confirms whatever Agent or Lenders may do in this regard; (ii) all
rights to notice and a hearing prior to Agent’s or any Lender’s entry upon the
premises of a Borrower, the taking possession or control of, or to Agent’s or
any Lender’s replevy, attachment or levy upon, any Collateral or any bond or
security which might be required by any court prior to allowing Agent or any
Lender to exercise any of its remedies; and (iii) the benefit of all valuation,
appraisal and exemption Laws. Each Borrower acknowledges that it has been
advised by counsel of its choices and decisions with respect to this Agreement,
the other Financing Documents and the transactions evidenced hereby and thereby.

 

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(b) Each Borrower for itself and all its successors and assigns, (i) agrees that
its liability shall not be in any manner affected by any indulgence, extension
of time, renewal, waiver, or modification granted or consented to by Lender;
(ii) consents to any indulgences and all extensions of time, renewals, waivers,
or modifications that may be granted by Agent or any Lender with respect to the
payment or other provisions of the Financing Documents, and to any substitution,
exchange or release of the Collateral, or any part thereof, with or without
substitution, and agrees to the addition or release of any Borrower, endorsers,
guarantors, or sureties, or whether primarily or secondarily liable, without
notice to any other Borrower and without affecting its liability hereunder;
(iii) agrees that its liability shall be unconditional and without regard to the
liability of any other Borrower, Agent or any Lender for any tax on the
indebtedness; and (iv) to the fullest extent permitted by law, expressly waives
the benefit of any statute or rule of law or equity now provided, or which may
hereafter be provided, which would produce a result contrary to or in conflict
with the foregoing.

(c) To the extent that Agent or any Lender may have acquiesced in any
noncompliance with any requirements or conditions precedent to the closing of
the Credit Facilities or to any subsequent disbursement of Credit Extensions,
such acquiescence shall not be deemed to constitute a waiver by Agent or any
Lender of such requirements with respect to any future Credit Extensions and
Agent may at any time after such acquiescence require Borrower to comply with
all such requirements. Any forbearance by Agent or a Lender in exercising any
right or remedy under any of the Financing Documents, or otherwise afforded by
applicable law, including any failure to accelerate the maturity date of the
Credit Facilities, shall not be a waiver of or preclude the exercise of any
right or remedy nor shall it serve as a novation of the Financing Documents or
as a reinstatement of the Obligations or a waiver of such right of acceleration
or the right to insist upon strict compliance of the terms of the Financing
Documents. Agent’s or any Lender’s acceptance of payment of any sum secured by
any of the Financing Documents after the due date of such payment shall not be a
waiver of Agent’s and such Lender’s right to either require prompt payment when
due of all other sums so secured or to declare a default for failure to make
prompt payment. The procurement of insurance or the payment of taxes or other
Liens or charges by Agent as the result of an Event of Default shall not be a
waiver of Agent’s right to accelerate the maturity of the Obligations, nor shall
Agent’s receipt of any condemnation awards, insurance proceeds, or damages under
this Agreement operate to cure or waive any Credit Party’s default in payment of
sums secured by any of the Financing Documents.

(d) Without limiting the generality of anything contained in this Agreement or
the other Financing Documents, each Borrower agrees that if an Event of Default
is continuing (i) Agent and Lenders shall not be subject to any “one action” or
“election of remedies” law or rule, and (ii) all Liens and other rights,
remedies or privileges provided to Agent or Lenders shall remain in full force
and effect until Agent or Lenders have exhausted all remedies against the
Collateral and any other properties owned by Borrower and the Financing
Documents and other security instruments or agreements securing the Obligations
have been foreclosed, sold and/or otherwise realized upon in satisfaction of
Borrower’s obligations under the Financing Documents.

(e) Neither Agent nor any Lender shall be under any obligation to marshal any
assets in payment of any or all of the Obligations. Nothing contained herein or
in any other Financing Document shall be construed as requiring Agent or any
Lender to resort to any part of the Collateral for the satisfaction of any of
Borrower’s obligations under the Financing Documents

 

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in preference or priority to any other Collateral, and Agent may seek
satisfaction out of all of the Collateral or any part thereof, in its absolute
discretion in respect of Borrower’s obligations under the Financing Documents.
To the fullest extent permitted by law, each Borrower, for itself and its
successors and assigns, waives in the event of foreclosure of any or all of the
Collateral any equitable right otherwise available to any Credit Party which
would require the separate sale of any of the Collateral or require Agent or
Lenders to exhaust their remedies against any part of the Collateral before
proceeding against any other part of the Collateral; and further in the event of
such foreclosure each Borrower does hereby expressly consent to and authorize,
at the option of Agent, the foreclosure and sale either separately or together
of each part of the Collateral.

10.8 Injunctive Relief. The parties acknowledge and agree that, in the event of
a breach or threatened breach of any Credit Party’s obligations under any
Financing Documents, Agent and Lenders may have no adequate remedy in money
damages and, accordingly, shall be entitled to an injunction (including, without
limitation, a temporary restraining order, preliminary injunction, writ of
attachment, or order compelling an audit) against such breach or threatened
breach, including, without limitation, maintaining any cash management and
collection procedure described herein. However, no specification in this
Agreement of a specific legal or equitable remedy shall be construed as a waiver
or prohibition against any other legal or equitable remedies in the event of a
breach or threatened breach of any provision of this Agreement. Each Credit
Party waives, to the fullest extent permitted by law, the requirement of the
posting of any bond in connection with such injunctive relief. By joining in the
Financing Documents as a Credit Party, each Credit Party specifically joins in
this Section 10.8 as if this Section 10.8 were a part of each Financing Document
executed by such Credit Party.

 

  11 NOTICES

All notices, consents, requests, approvals, demands, or other communication
(collectively, “Communication”) by any party to this Agreement or any other
Financing Document must be in writing and shall be deemed to have been validly
served, given, or delivered: (a) upon the earlier of actual receipt and three
(3) Business Days after deposit in the U.S. mail, first class, registered or
certified mail return receipt requested, with proper postage prepaid; (b) upon
transmission, when sent by electronic mail (if an email address is specified
herein) or facsimile transmission; (c) one (1) Business Day after deposit with a
reputable overnight courier with all charges prepaid; or (d) when delivered, if
hand-delivered by messenger, all of which shall be addressed to the party to be
notified and sent to the address, facsimile number, or email address indicated
below. Any of Agent, Lender or Borrower may change its mailing or electronic
mail address or facsimile number by giving the other party written notice
thereof in accordance with the terms of this Article 11.

If to Borrower:

Ocular Therapeutix, Inc.

36 Crosby Drive, Ste. 101

Bedford, MA 01730

Attention: Chief Financial Officer, Brad Smith

Fax: (781) 357-4001

E-Mail: bsmith@ocutx.com

 

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If to Agent or MidCap (or any of its Affiliates or Approved Funds) as a Lender:

MidCap Funding III Trust

c/o MidCap Financial Services, LLC, as servicer

7255 Woodmont Ave, Suite 200

Bethesda, MD 20814

Attn: Account Manager for Ocular transaction

Facsimile: 301-941-1450

Email: notices@midcapfinancial.com

with a copy to:

MidCap Funding III Trust

c/o MidCap Financial Services, LLC, as servicer

7255 Woodmont Ave, Suite 200

Bethesda, MD 20814

Attn: Legal

Facsimile: 301-941-1450

Email: legalnotices@midcapfinancial.com

If to any Lender other than Midcap: at the address set forth on the signature
pages to this Agreement or provided to Borrower as a notice address for such
Lender in connection with any assignment hereunder.

 

  12 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER; CONFESSION OF JUDGMENT

12.1 THIS AGREEMENT, EACH SECURED PROMISSORY NOTE AND EACH OTHER FINANCING
DOCUMENT, AND THE RIGHTS, REMEDIES AND OBLIGATIONS OF THE PARTIES HERETO AND
THERETO, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS
AGREEMENT OR SUCH FINANCING DOCUMENT, THE RELATIONSHIP OF THE PARTIES, AND/OR
THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES AND
ALL OTHER MATTERS RELATING HERETO, THERETO OR ARISING THEREFROM (WHETHER
SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE), SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MARYLAND,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS. NOTWITHSTANDING THE
FOREGOING, AGENT AND LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR
PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION WHICH AGENT AND LENDERS (IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 12.1) DEEM NECESSARY OR APPROPRIATE TO REALIZE ON THE COLLATERAL OR TO
OTHERWISE ENFORCE AGENT’S AND LENDERS’ RIGHTS AGAINST BORROWER OR ITS PROPERTY.
BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER HEREBY WAIVES ANY
OBJECTION THAT IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,

 

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IMPROPER VENUE, OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. BORROWER
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINTS, AND OTHER PROCESS
ISSUED IN SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINTS, AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN ARTICLE 11 OF THIS AGREEMENT
AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER TO OCCUR OF
BORROWER’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S.
MAIL, PROPER POSTAGE PREPAID.

12.2 TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER, AGENT AND
LENDERS EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE FINANCING DOCUMENTS OR ANY
CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER
CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS
AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

12.3 Borrower, Agent and each Lender agree that each Credit Extension (including
those made on the Closing Date) shall be deemed to be made in, and the
transactions contemplated hereunder and in any other Financing Document shall be
deemed to have been performed in, the State of Maryland.

12.4 CONFESSION OF JUDGMENT. UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, EACH
BORROWER AUTHORIZES ANY ATTORNEY ADMITTED TO PRACTICE BEFORE ANY COURT OF RECORD
IN THE UNITED STATES OR THE CLERK OF SUCH COURT TO APPEAR ON BEHALF OF SUCH
BORROWER IN ANY COURT IN ONE OR MORE PROCEEDINGS, OR BEFORE ANY CLERK THEREOF OR
PROTHONOTARY OR OTHER COURT OFFICIAL, AND TO CONFESS JUDGMENT AGAINST BORROWER
IN FAVOR OF AGENT (FOR THE BENEFIT OF ALL LENDERS) IN THE FULL AMOUNT DUE ON
THIS AGREEMENT (INCLUDING PRINCIPAL, ACCRUED INTEREST AND ANY AND ALL CHARGES,
FEES AND COSTS) PLUS ATTORNEYS’ FEES EQUAL TO FIFTEEN PERCENT (15%) OF THE
AMOUNT DUE (EXCEPT THAT AGENT SHALL NOT SEEK TO COLLECT AN AMOUNT IN EXCESS OF
ITS ACTUAL ATTORNEYS’ FEES), PLUS COURT COSTS, ALL WITHOUT PRIOR NOTICE OR
OPPORTUNITY OF SUCH BORROWER FOR PRIOR HEARING. EACH BORROWER AGREES AND
CONSENTS THAT VENUE AND JURISDICTION SHALL BE PROPER IN THE CIRCUIT COURT OF ANY
COUNTY OF THE STATE OF MARYLAND. THE AUTHORITY AND POWER TO APPEAR FOR AND ENTER
JUDGMENT AGAINST A BORROWER SHALL NOT BE EXHAUSTED BY ONE OR MORE EXERCISES
THEREOF, OR BY ANY IMPERFECT EXERCISE THEREOF, AND SHALL NOT BE EXTINGUISHED BY
ANY JUDGMENT ENTERED PURSUANT THERETO; SUCH AUTHORITY AND POWER MAY BE EXERCISED
ON ONE OR MORE OCCASIONS FROM TIME TO TIME, IN THE SAME OR DIFFERENT
JURISDICTIONS, AS OFTEN AS AGENT SHALL DEEM NECESSARY, CONVENIENT, OR PROPER.

 

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  13 GENERAL PROVISIONS

13.1 Successors and Assigns.

(a) This Agreement binds and is for the benefit of the successors and permitted
assigns of each party. Borrower may not assign this Agreement or any rights or
obligations under it without Agent’s and each Lender’s prior written consent
(which may be granted or withheld in Agent’s or such Lender’s discretion). Any
Lender may at any time assign to one or more Eligible Assignees all or any
portion of such Lender’s Applicable Commitment and/or Credit Extensions,
together with all related obligations of such Lender hereunder. Borrower and
Agent shall be entitled to continue to deal solely and directly with such Lender
in connection with the interests so assigned until Agent shall have received and
accepted an effective assignment agreement in form and substance acceptable to
Agent, executed, delivered and fully completed by the applicable parties
thereto, and shall have received such other information regarding such Eligible
Assignee as Agent reasonably shall require. Notwithstanding anything set forth
in this Agreement to the contrary, any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided, however, that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto. If
requested by Agent, Borrower agrees to (i) execute any documents reasonably
required to effectuate and acknowledge each assignment of an Applicable
Commitment or Credit Extension to an assignee hereunder, (ii) make Borrower’s
management available to meet with Agent and prospective participants and
assignees of Applicable Commitments or Credit Extensions and (iii) assist Agent
or the Lenders in the preparation of information relating to the financial
affairs of Borrower as any prospective participant or assignee of an Applicable
Commitment or Credit Extension reasonably may request.

(b) From and after the date on which the conditions described above have been
met, (i) such Eligible Assignee shall be deemed automatically to have become a
party hereto and, to the extent of the interests assigned to such Eligible
Assignee pursuant to such assignment agreement, shall have the rights and
obligations of a Lender hereunder, and (ii) the assigning Lender, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
assignment agreement, shall be released from its rights and obligations
hereunder (other than those that survive termination). Upon the request of the
Eligible Assignee (and, as applicable, the assigning Lender) pursuant to an
effective assignment agreement, each Borrower shall execute and deliver to Agent
for delivery to the Eligible Assignee (and, as applicable, the assigning Lender)
secured notes in the aggregate principal amount of the Eligible Assignee’s
Credit Extensions or Applicable Commitments (and, as applicable, secured
promissory notes in the principal amount of that portion of the principal amount
of the Credit Extensions or Applicable Commitments retained by the assigning
Lender).

(c) Agent, through its servicer, acting solely for this purpose as an agent of
Borrower, shall maintain at its servicer’s offices located in Bethesda, Maryland
a copy of each

 

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assignment agreement delivered to it and a Register for the recordation of the
names and addresses of each Lender, and the commitments of, and principal amount
(and stated interest) of the Credit Extensions owing to, such Lender pursuant to
the terms hereof (the “Register”). The entries in such Register shall be
conclusive, and Borrower, Agent and Lenders may treat each Person whose name is
recorded therein pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. Such
Register shall be available for inspection by Borrower and any Lender, at any
reasonable time upon reasonable prior notice to Agent. Each Lender that sells a
participation shall, acting solely for this purpose as an agent of the Borrower
maintain a register on which it enters the name and address of each participant
and the principal amounts (and stated interest) of each participant’s interest
in the Obligations (each, a “Participant Register”). The entries in the
Participant Registers shall be conclusive. Each Participant Register shall be
available for inspection by Borrower and the Agent at any reasonable time upon
reasonable prior notice to the applicable Lender; provided, that no Lender shall
have any obligation to disclose all or any portion of the Participant Register
(including the identity of any Participant or any information relating to a
Participant’s interest in any commitments, loans, letters of credit or its other
obligations under any Loan Document) to any Person (including Borrower) except
to the extent that such disclosure is necessary to establish that such
commitment, loan, letter of credit or other obligation is in registered form
under Section 5f. 103-1(c) of the United States Treasury Regulations.

(d) Notwithstanding anything to the contrary contained in this Agreement, the
Credit Extensions (including any Secured Promissory Notes evidencing such Credit
Extensions) are registered obligations, the right, title and interest of the
Lenders and their assignees in and to such Credit Extensions shall be
transferable only upon notation of such transfer in the Register and no
assignment thereof shall be effective until recorded therein. This Agreement
shall be construed so that the Credit Extensions are at all times maintained in
“registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2)
of the Internal Revenue Code of 1986 as amended and Section 5f.103-1(c) of the
United States Treasury Regulations.

13.2 Indemnification.

(a) Borrower hereby agrees to promptly pay (i) all costs and expenses of Agent
(including, without limitation, the fees, costs and expenses of counsel to, and
independent appraisers and consultants retained by Agent) in connection with the
examination, review, due diligence investigation, documentation, negotiation,
closing and syndication of the transactions contemplated by the Financing
Documents, in connection with the performance by Agent of its rights and
remedies under the Financing Documents and in connection with the continued
administration of the Financing Documents including (A) any amendments,
modifications, consents and waivers to and/or under any and all Financing
Documents, and (B) any periodic public record searches conducted by or at the
request of Agent (including, without limitation, title investigations, UCC
searches, fixture filing searches, judgment, pending litigation and tax lien
searches and searches of applicable corporate, limited liability, partnership
and related records concerning the continued existence, organization and good
standing of certain Persons); (ii) without limitation of the preceding clause
(i), all costs and expenses of Agent in connection with the creation, perfection
and maintenance of Liens pursuant to the Financing Documents; (iii) without
limitation of the preceding clause (i), all costs and expenses of Agent in
connection with (A) protecting, storing, insuring, handling, maintaining or
selling any Collateral, (B) any litigation,

 

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dispute, suit or proceeding relating to any Financing Document, and (C) any
workout, collection, bankruptcy, insolvency and other enforcement proceedings
under any and all of the Financing Documents; and (iv) all costs and expenses
incurred by Agent or Lenders in connection with any litigation, dispute, suit or
proceeding relating to any Financing Document and in connection with any
workout, collection, bankruptcy, insolvency and other enforcement proceedings
under any and all Financing Documents, whether or not Agent or Lenders are a
party thereto.

(b) Borrower hereby agrees to indemnify, pay and hold harmless Agent and Lenders
and the officers, directors, employees, trustees, agents, investment advisors,
collateral managers, servicers, and counsel of Agent and Lenders (collectively
called the “Indemnitees”) from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including the fees and
disbursements of counsel for such Indemnitee) in connection with any
investigative, response, remedial, administrative or judicial matter or
proceeding, whether or not such Indemnitee shall be designated a party thereto
and including any such proceeding initiated by or on behalf of a Credit Party,
and the reasonable expenses of investigation by engineers, environmental
consultants and similar technical personnel and any commission, fee or
compensation claimed by any broker (other than any broker retained by Agent or
Lenders) asserting any right to payment for the transactions contemplated
hereby, which may be imposed on, incurred by or asserted against such Indemnitee
as a result of or in connection with the transactions contemplated hereby and
the use or intended use of the proceeds of the Credit Facilities, except that
Borrower shall have no obligation hereunder to an Indemnitee with respect to any
liability resulting from the gross negligence or willful misconduct of such
Indemnitee, as determined by a final non-appealable judgment of a court of
competent jurisdiction. To the extent that the undertaking set forth in the
immediately preceding sentence may be unenforceable, Borrower shall contribute
the maximum portion which it is permitted to pay and satisfy under applicable
Law to the payment and satisfaction of all such indemnified liabilities incurred
by the Indemnitees or any of them. No Indemnitee 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 the other
Financing Documents or the transactions contemplated hereby or thereby.

(c) Notwithstanding any contrary provision in this Agreement, the obligations of
Borrower under this Section 13.2 shall survive the payment in full of the
Obligations and the termination of this Agreement. NO INDEMNITEE SHALL BE
RESPONSIBLE OR LIABLE TO ANY CREDIT PARTY OR TO ANY OTHER PARTY TO ANY FINANCING
DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY OTHER PERSON
ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER THIS AGREEMENT OR ANY OTHER
FINANCING DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED
HEREUNDER OR THEREUNDER.

13.3 Time of Essence. Time is of the essence for the payment and performance of
the Obligations in this Agreement.

 

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

13.5 Correction of Financing Documents. Agent and the Lenders may correct patent
errors and fill in any blanks in this Agreement and the other Financing
Documents consistent with the agreement of the parties.

13.6 Integration. This Agreement and the Financing Documents represent the
entire agreement about this subject matter and supersede prior negotiations or
agreements. All prior agreements, understandings, representations, warranties,
and negotiations between the parties about the subject matter of this Agreement
and the Financing Documents merge into this Agreement and the Financing
Documents.

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

13.8 Survival. All covenants, representations and warranties made in this
Agreement continue in full force until this Agreement has terminated pursuant to
its terms and all Obligations (other than inchoate indemnity obligations and any
other obligations which, by their terms, are to survive the termination of this
Agreement) have been satisfied. The obligation of Borrower in Section 13.2 to
indemnify each Lender and Agent shall survive until the statute of limitations
with respect to such claim or cause of action shall have run. All powers of
attorney and appointments of Agent or any Lender as Borrower’s attorney in fact
hereunder, and all of Agent’s and Lenders’ rights and powers in respect thereof,
are coupled with an interest, are irrevocable until all Obligations (other than
inchoate indemnity obligations and any other obligations which, by their terms,
are to survive the termination of this Agreement) have been fully repaid and
performed and Agent’s and the Lenders’ obligation to provide Credit Extensions
terminates.

13.9 Confidentiality. In handling any confidential information of Borrower, each
of the Lenders and Agent shall use all reasonable efforts to maintain, in
accordance with its customary practices, the confidentiality of information
obtained by it pursuant to any Financing Document and designated in writing by
any Credit Party as confidential, but disclosure of information may be made:
(a) to the Lenders’ and Agent’s Subsidiaries or Affiliates; (b) to prospective
transferees or purchasers of any interest in the Credit Extensions; (c) as
required by Law, regulation, subpoena, order or other legal, administrative,
governmental or regulatory request; (d) to regulators or as otherwise required
in connection with an examination or audit, or to any nationally recognized
rating agency; (e) as Agent or any Lender considers appropriate in exercising
remedies under the Financing Documents; (f) to financing sources that are
advised of the confidential nature of such information and are instructed to
keep such information confidential; (g) to third party service providers of the
Lenders and/or Agent so long as such service providers are bound to such Lender
or Agent by obligations of confidentiality; (h) to the extent necessary or
customary for inclusion in league table measurements; and (i) in connection with
any litigation or other proceeding to which such Lender or Agent or any of their
Affiliates is a party or bound, or to the extent necessary to respond to public
statements or disclosures by Credit Parties or their Affiliates referring to a

 

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Lender or Agent or any of their Affiliates. Confidential information does not
include information that either: (i) is in the public domain or in the Lenders’
and/or Agent’s possession when disclosed to the Lenders and/or Agent, or becomes
part of the public domain after disclosure to the Lenders and/or Agent; or
(ii) is disclosed to the Lenders and/or Agent by a third party, if the Lenders
and/or Agent does not know that the third party is prohibited from disclosing
the information. Agent and/or Lenders may use confidential information for any
purpose, including, without limitation, for the development of client databases,
reporting purposes, and market analysis, so long as Agent and/or Lenders, as
applicable, do not disclose Borrower’s identity or the identity of any Person
associated with Borrower unless otherwise permitted by this Agreement. The
provisions of the immediately preceding sentence shall survive the termination
of this Agreement. The agreements provided under this Section 13.9 supersede all
prior agreements, understanding, representations, warranties, and negotiations
between the parties about the subject matter of this Section 13.9.

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

13.11 Publicity. Borrower will not directly or indirectly publish, disclose or
otherwise use in any public disclosure, advertising material, promotional
material, press release or interview, any reference to the name, logo or any
trademark of Agent or any Lender or any of their Affiliates or any reference to
this Agreement or the financing evidenced hereby, in any case except as required
by applicable Law, subpoena or judicial or similar order, in which case Borrower
shall endeavor to give Agent prior written notice of such publication or other
disclosure. Each Lender and Borrower hereby authorizes each Lender to publish
the name of such Lender and Borrower, the existence of the financing
arrangements referenced under this Agreement, the primary purpose and/or
structure of those arrangements, the amount of credit extended under each
facility, the title and role of each party to this Agreement, and the total
amount of the financing evidenced hereby in any “tombstone”, comparable
advertisement or press release which such Lender elects to submit for
publication. In addition, each Lender and Borrower agrees that each Lender may
provide lending industry trade organizations with information necessary and
customary for inclusion in league table measurements after the Closing Date.
With respect to any of the foregoing, such authorization shall be subject to
such Lender providing Borrower and the other Lenders with an opportunity to
review and confer with such Lender regarding, and approve, the contents of any
such tombstone, advertisement or information, as applicable, prior to its
initial submission for publication, but subsequent publications of the same
tombstone, advertisement or information shall not require Borrower’s approval.

 

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

13.13 Approvals. Unless expressly provided herein to the contrary, any approval,
consent, waiver or satisfaction of Agent or Lenders with respect to any matter
that is the subject of this Agreement or the other Financing Documents may be
granted or withheld by Agent and Lenders in their sole and absolute discretion
and credit judgment.

13.14 Amendments; Required Lenders; Inter-Lender Matters.

(a) No amendment, modification, termination or waiver of any provision of this
Agreement or any other Financing Document, no approval or consent thereunder, or
any consent to any departure by Borrower therefrom (in each case, other than
amendments, waivers, approvals or consents deemed ministerial by Agent), shall
in any event be effective unless the same shall be in writing and signed by
Borrower, Agent and Required Lenders. Except as set forth in clause (b) below,
all such amendments, modifications, terminations or waivers requiring the
consent of the “Lenders” shall require the written consent of Required Lenders.

(b) No amendment, modification, termination or waiver of any provision of this
Agreement or any other Financing Document shall, unless in writing and signed by
Agent and by each Lender directly affected thereby: (i) increase or decrease the
Applicable Commitment of any Lender (which shall be deemed to affect all
Lenders), (ii) reduce the principal of or rate of interest on any Obligation or
the amount of any fees payable hereunder, (iii) postpone the date fixed for or
waive any payment of principal of or interest on any Credit Extension, or any
fees or reimbursement obligation hereunder, (iv) release all or substantially
all of the Collateral, or consent to a transfer of any of the Intellectual
Property, in each case, except as otherwise expressly permitted in the Financing
Documents (which shall be deemed to affect all Lenders), (v) subordinate the
lien granted in favor of Agent securing the Obligations (which shall be deemed
to affect all Lenders, except as otherwise provided below), (vi) release a
Credit Party from, or consent to a Credit Party’s assignment or delegation of,
such Credit Party’s obligations hereunder and under the other Financing
Documents or any Guarantor from its guaranty of the Obligations (which shall be
deemed to affect all Lenders) or (vii) amend, modify, terminate or waive this
Section 13.14(b) or the definition of “Required Lenders” or “Pro Rata Share” or
any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the consent of each
Lender. For purposes of the foregoing, no Lender shall be deemed affected by
(i) waiver of the imposition of the Default Rate or imposition of the Default
Rate to only a portion of the Obligations, (ii) waiver of the accrual of late
charges, (iii) waiver of any fee solely payable to Agent under the Financing
Documents, (iv) subordination of a lien granted in favor of Agent provided such
subordination is limited to equipment being financed by a third party providing
Permitted Indebtedness. Notwithstanding any provision in this Section 13.14 to
the contrary, no amendment, modification, termination or waiver affecting or
modifying the rights or obligations of Agent hereunder shall be effective unless
signed by Agent and Required Lenders

 

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(c) Agent shall not grant its written consent to any deviation or departure by
Borrower or any Credit Party from the provisions of Article 7 without the prior
written consent of the Required Lenders. Required Lenders shall have the right
to direct Agent to take any action described in Section 10.2(b). Upon the
occurrence of any Event of Default, Agent shall have the right to exercise any
and all remedies referenced in Section 10.2 without the written consent of
Required Lenders following the occurrence of an “Exigent Circumstance” (as
defined below). Any reference in this Agreement to an allocation between or
sharing by the Lenders of any right, interest or obligation “ratably,”
“proportionally” or in similar terms shall refer to Pro Rata Share unless
expressly provided otherwise. As used in this Section 13.14(c), “Exigent
Circumstance” means any event or circumstance that, in the reasonable judgment
of Agent, imminently threatens the ability of Agent to realize upon all or any
material portion of the Collateral, such as, without limitation, fraudulent
removal, concealment, or abscondment thereof, destruction or material waste
thereof, or failure of Borrower after reasonable demand to maintain or reinstate
adequate casualty insurance coverage, or which, in the judgment of Agent, could
result in a material diminution in value of the Collateral.

13.15 Borrower Liability. If there is more than one entity comprising Borrower,
then (a) any Borrower may, acting singly, request Credit Extensions hereunder,
(b) each Borrower hereby appoints the other as agent for the other for all
purposes hereunder, including with respect to requesting Credit Extensions
hereunder, (c) each Borrower shall be jointly and severally obligated to pay and
perform all obligations under the Financing Documents, including, but not
limited to, the obligation to repay all Credit Extensions made hereunder and all
other Obligations, regardless of which Borrower actually receives said Credit
Extensions, as if each Borrower directly received all Credit Extensions, and
(d) each Borrower waives (i) any suretyship defenses available to it under the
Code or any other applicable law, and (ii) any right to require the Lenders or
Agent to: (A) proceed against any Borrower or any other person; (B) proceed
against or exhaust any security; or (C) pursue any other remedy. The Lenders or
Agent may exercise or not exercise any right or remedy they have against any
Credit Party or any security (including the right to foreclose by judicial or
non-judicial sale) without affecting any other Credit Party’s liability or any
Lien against any other Credit Party’s assets. Notwithstanding any other
provision of this Agreement or other related document, until payment in full of
the Obligations and termination of the Applicable Commitments, each Borrower
irrevocably waives all rights that it may have at law or in equity (including,
without limitation, any law subrogating Borrower to the rights of the Lenders
and Agent under this Agreement) to seek contribution, indemnification or any
other form of reimbursement from any other Credit Party, or any other Person now
or hereafter primarily or secondarily liable for any of the Obligations, for any
payment made by any Credit Party with respect to the Obligations in connection
with this Agreement or otherwise and all rights that it might have to benefit
from, or to participate in, any security for the Obligations as a result of any
payment made by a Credit Party with respect to the Obligations in connection
with this Agreement or otherwise. Any agreement providing for indemnification,
reimbursement or any other arrangement prohibited under this Section 13.15 shall
be null and void. If any payment is made to a Credit Party in contravention of
this Section 13.15, such Credit Party shall hold such payment in trust for the
Lenders and Agent and such payment shall be promptly delivered to Agent for
application to the Obligations, whether matured or unmatured.

13.16 Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective should any petition or other proceeding be filed by or
against any Credit Party for

 

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liquidation or reorganization, should any Credit Party become insolvent or make
an assignment for the benefit of any creditor or creditors or should an interim
receiver, receiver, receiver and manager or trustee be appointed for all or any
significant part of any Credit Party’s assets, and shall continue to be
effective or to be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee of the Obligations, whether as a fraudulent preference reviewable
transaction or otherwise, all as though such payment or performance had not been
made. In the event that any payment, or any part thereof, is rescinded, reduced,
restored or returned, the Obligations shall be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or returned.

13.17 USA PATRIOT Act Notification. Agent (for itself and not on behalf of any
Lender) and each Lender hereby notifies each Borrower that pursuant to the
requirements of the USA PATRIOT Act, it is required to obtain, verify and record
certain information and documentation that identifies Borrower, which
information includes the name and address of Borrower and such other information
that will allow Agent or such Lender, as applicable, to identify Borrower in
accordance with the USA PATRIOT Act.

13.18 Warrants. Notwithstanding anything to the contrary herein, any warrants
issued to the Lenders by any Credit Party, the stock issuable thereunder, any
equity securities purchased by Lenders, any amounts paid thereunder, any
dividends, and any other rights in connection therewith shall not be subject to
the terms and conditions of this Agreement. Nothing herein shall affect any
Lender’s rights under any such warrants, stock, or other equity securities to
administer, manage, transfer, assign, or exercise such warrants, stock, or other
equity securities for its own account.

 

  14 AGENT

14.1 Appointment and Authorization of Agent. Each Lender hereby irrevocably
appoints, designates and authorizes Agent to take such action on its behalf
under the provisions of this Agreement and each other Financing Document and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement or any other Financing Document, together with such
powers as are reasonably incidental thereto. The provisions of this Article 14
are solely for the benefit of Agent and Lenders and none of Credit Parties nor
any other Person shall have any rights as a third party beneficiary of any of
the provisions hereof. The duties of Agent shall be mechanical and
administrative in nature. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Financing Document, Agent shall not
have any duties or responsibilities, 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 Financing Document or otherwise exist against Agent. Without limiting the
generality of the foregoing sentence, the use of the term “agent” herein and in
the other Financing Documents with reference to Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties. Without limiting the
generality of the foregoing, Agent shall have the sole and exclusive right and
authority (to the exclusion of the Lenders), and is hereby authorized, to
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each Lender for purposes of the perfection of all liens created by the Financing
Documents and all other purposes stated therein, (b) manage, supervise and
otherwise deal with the Collateral, (c) take such other action as is necessary
or desirable to maintain the perfection and priority of the liens created or
purported to be created by the Financing Documents, (d) except as may be
otherwise specified in any Financing Document, exercise all remedies given to
Agent and the other Lenders with respect to the Collateral, whether under the
Financing Documents, applicable law or otherwise and (e) execute any amendment,
consent or waiver under the Financing Documents on behalf of any Lender that has
consented in writing to such amendment, consent or waiver; provided, however,
that Agent hereby appoints, authorizes and directs each Lender to act as
collateral sub-agent for Agent and the Lenders for purposes of the perfection of
all liens with respect to the Collateral, including any deposit account
maintained by a Credit Party with, and cash and cash equivalents held by, such
Lender, and may further authorize and direct the Lenders to take further actions
as collateral sub-agents for purposes of enforcing such liens or otherwise to
transfer the Collateral subject thereto to Agent, and each Lender hereby agrees
to take such further actions to the extent, and only to the extent, so
authorized and directed.

14.2 Successor Agent.

(a) Agent may at any time assign its rights, powers, privileges and duties
hereunder to (i) another Lender, or (ii) any Person to whom Agent, in its
capacity as a Lender, has assigned (or will assign, in conjunction with such
assignment of agency rights hereunder) fifty percent (50%) or more of the Credit
Extensions or Applicable Commitments then held by Agent (in its capacity as a
Lender), in each case without the consent of the Lenders or Borrower. Following
any such assignment, Agent shall give notice to the Lenders and Borrower. An
assignment by Agent pursuant to this subsection (a) shall not be deemed a
resignation by Agent for purposes of subsection (b) below.

(b) Without limiting the rights of Agent to designate an assignee pursuant to
subsection (a) above, Agent may at any time give notice of its resignation to
the Lenders and Borrower. Upon receipt of any such notice of resignation,
Required Lenders shall have the right to appoint a successor Agent. If no such
successor shall have been so appointed by Required Lenders and shall have
accepted such appointment within ten (10) Business Days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent; provided, however, that if Agent shall
notify Borrower and the Lenders that no Person has accepted such appointment,
then such resignation shall nonetheless become effective in accordance with such
notice from Agent that no Person has accepted such appointment and, from and
following delivery of such notice, (i) the retiring Agent shall be discharged
from its duties and obligations hereunder and under the other Financing
Documents, and (ii) all payments, communications and determinations provided to
be made by, to or through Agent shall instead be made by or to each Lender
directly, until such time as Required Lenders appoint a successor Agent as
provided for above in this subsection (b).

(c) Upon (i) an assignment permitted by subsection (a) above, or (ii) the
acceptance of a successor’s appointment as Agent pursuant to subsection
(b) above, such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring (or retired) Agent, and
the retiring Agent shall be discharged from all of its duties and obligations
hereunder and under the other Financing Documents (if not already discharged

 

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therefrom as provided above in this subsection (c)). The fees payable by
Borrower to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between Borrower and such successor. After
the retiring Agent’s resignation hereunder and under the other Financing
Documents, the provisions of this Article 14 shall continue in effect for the
benefit of such retiring Agent and its sub-agents in respect of any actions
taken or omitted to be taken by any of them while the retiring Agent was acting
or was continuing to act as Agent.

14.3 Delegation of Duties. Agent may execute any of its duties under this
Agreement or any other Financing Document by or through its, or its Affiliates’,
agents, employees or attorneys-in-fact and shall be entitled to obtain and rely
upon the 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 or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct. Any such Person to whom Agent
delegates a duty shall benefit from this Article 14 to the extent provided by
Agent.

14.4 Liability of Agent. Except as otherwise provided herein, no “Agent-Related
Person” (as defined below) shall (a) 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 Financing Document or the transactions contemplated hereby (except for its
own gross negligence or willful misconduct in connection with its duties
expressly set forth herein), or (b) be responsible in any manner to any Lender
or participant for any recital, statement, representation or warranty made by
any Credit Party or any officer thereof, contained herein or in any other
Financing 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 Financing Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Financing Document, or for any failure of any Credit Party or any
other party to any Financing Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
or participant 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 Financing Document, or to inspect the Collateral, other properties or
books or records of any Credit Party or any Affiliate thereof. The term
“Agent-Related Person” means the Agent, together with its Affiliates, and the
officers, directors, employees, agents, advisors, auditors and attorneys-in-fact
of such Persons; provided, however, that no Agent-Related Person shall be an
Affiliate of Borrower.

14.5 Reliance by Agent. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation 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 Borrower), independent
accountants and other experts selected by Agent. Agent shall be fully justified
in failing or refusing to take any action under any Financing Document (a) if
such action would, in the opinion of Agent, be contrary to law or any Financing
Document, (b) if such action would, in the opinion of Agent, expose Agent to any
potential liability under any law, statute or regulation or (c) if Agent shall
not first have received such advice or concurrence of all Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which

 

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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 Financing Document in accordance with
a request or consent of all Lenders (or Required Lenders where authorized
herein) and such request and any action taken or failure to act pursuant thereto
shall be binding upon all the Lenders.

14.6 Notice of Default. Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default and/or Event of Default, unless Agent shall have
received written notice from a Lender or Borrower, describing such default or
Event of Default. Agent will notify the Lenders of its receipt of any such
notice. While an Event of Default has occurred and is continuing, Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Event of Default as Agent shall deem advisable or in the
best interest of the Lenders, including without limitation, satisfaction of
other security interests, liens or encumbrances on the Collateral not permitted
under the Financing Documents, payment of taxes on behalf of Borrower or any
other Credit Party, payments to landlords, warehouseman, bailees and other
Persons in possession of the Collateral and other actions to protect and
safeguard the Collateral, and actions with respect to insurance claims for
casualty events affecting a Credit Party and/or the Collateral.

14.7 Credit Decision; Disclosure of Information by Agent. Each Lender
acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by Agent hereafter taken, including any consent
to and acceptance of any assignment or review of the affairs of Borrower or any
Affiliate thereof, shall be deemed to constitute any representation or warranty
by any Agent-Related Person to any Lender as to any matter, including whether
Agent-Related Persons have disclosed material information in their possession.
Each Lender represents to Agent that it has, independently and without reliance
upon any Agent-Related Person 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 the Credit Parties, and all applicable bank or other
regulatory Laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to Borrower
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person 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 Financing Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrower. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by Agent herein, Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of any Credit Party which may
come into the possession of any Agent-Related Person.

14.8 Indemnification of Agent. Whether or not the transactions contemplated
hereby are consummated, each Lender shall, severally and pro rata based on its
respective Pro Rata Share, indemnify upon demand each Agent-Related Person (to
the extent not reimbursed by or on behalf of Borrower and without limiting the
obligation of Borrower to do so), and hold harmless each Agent-Related Person
from and against any and all Indemnified Liabilities (which shall not

 

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include legal expenses of Agent incurred in connection with the closing of the
transactions contemplated by this Agreement) incurred by it; provided, however,
that no Lender shall be liable for the payment to any Agent-Related Person of
any portion of such Indemnified Liabilities to the extent determined in a
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person’s own gross negligence or willful misconduct; provided,
however, that 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 14.8. Without limitation of the foregoing, each Lender
shall, severally and pro rata based on its respective Pro Rata Share, reimburse
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Protective Advances incurred after the closing of the transactions
contemplated by this Agreement) incurred by Agent (in its capacity as Agent, and
not as a Lender) 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 Financing Document,
or any document contemplated by or referred to herein, to the extent that Agent
is not reimbursed for such expenses by or on behalf of Borrower. The undertaking
in this Section 14.8 shall survive the payment in full of the Obligations, the
termination of this Agreement and the resignation of Agent.

14.9 Agent in its Individual Capacity. With respect to its Credit Extensions,
MidCap shall have the same rights and powers under this Agreement as any other
Lender and may exercise such rights and powers as though it were not Agent, and
the terms “Lender” and “Lenders” include MidCap in its individual capacity.
MidCap and its Affiliates may lend money to, invest in, and generally engage in
any kind of business with, any Credit Party and any of their Affiliates and any
person who may do business with or own securities of any Credit Party or any of
their Affiliates, all as if MidCap were not Agent and without any duty to
account therefor to Lenders. MidCap and its Affiliates may accept fees and other
consideration from a Credit Party for services in connection with this Agreement
or otherwise without having to account for the same to Lenders. Each Lender
acknowledges the potential conflict of interest between MidCap as a Lender
holding disproportionate interests in the Credit Extensions and MidCap as Agent,
and expressly consents to, and waives, any claim based upon, such conflict of
interest.

14.10 Agent May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to any Credit
Party, Agent (irrespective of whether the principal of any Credit Extension,
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether Agent shall have made any demand on such Credit
Party) shall be entitled and empowered, by intervention in such proceeding or
otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Credit Extensions and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders and Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Lenders and Agent and their respective agents and counsel and all other
amounts due the Lenders and Agent allowed in such judicial proceeding); and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

 

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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Agent and, in the event that Agent shall
consent to the making of such payments directly to the Lenders, to pay to Agent
any amount due for the reasonable compensation, expenses, disbursements and
advances of Agent and its agents and counsel, including Protective Advances. To
the extent that Agent fails timely to do so, each Lender may file a claim
relating to such Lender’s claim.

14.11 Collateral and Guaranty Matters. The Lenders irrevocably authorize Agent,
at its option and in its discretion, to release (a) any Credit Party and any
Lien on any Collateral granted to or held by Agent under any Financing Document
upon the date that all Obligations due hereunder have been fully and
indefeasibly paid in full and no Applicable Commitments or other obligations of
any Lender to provide funds to Borrower under this Agreement remain outstanding,
and (b) any Lien on any Collateral that is transferred or to be transferred as
part of or in connection with any transfer permitted hereunder or under any
other Financing Document. Upon request by Agent at any time, all Lenders will
confirm in writing Agent’s authority to release its interest in particular types
or items of Collateral pursuant to this Section 14.11.

14.12 Advances; Payments; Non-Funding Lenders.

(a) Advances; Payments. If Agent receives any payment for the account of Lenders
on or prior to 11:00 a.m. (New York time) on any Business Day, Agent shall pay
to each applicable Lender such Lender’s Pro Rata Share of such payment on such
Business Day. If Agent receives any payment for the account of Lenders after
11:00 a.m. (New York time) on any Business Day, Agent shall pay to each
applicable Lender such Lender’s Pro Rata Share of such payment on the next
Business Day. To the extent that any Lender has failed to fund any Credit
Extension (a “Non-Funding Lender”), Agent shall be entitled to set-off the
funding short-fall against that Non-Funding Lender’s Pro Rata Share of all
payments received from Borrower.

(b) Return of Payments.

(i) If Agent pays an amount to a Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by Agent from a
Credit Party and such related payment is not received by Agent, then Agent will
be entitled to recover such amount (including interest accruing on such amount
at the Federal Funds Rate for the first Business Day and thereafter, at the rate
otherwise applicable to such Obligation) from such Lender on demand without
set-off, counterclaim or deduction of any kind.

(ii) If Agent determines at any time that any amount received by Agent under
this Agreement must be returned to a Credit Party or paid to any other person
pursuant to any insolvency law or otherwise, then, notwithstanding any other
term or condition of this Agreement or any other Financing Document, Agent will
not be required to distribute any portion thereof to any Lender. In addition,
each Lender will repay to Agent on demand any portion of such amount that Agent
has distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to a Credit Party or such other person, without
set-off, counterclaim or deduction of any kind.

 

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14.13 Miscellaneous.

(a) Neither Agent nor any Lender shall be responsible for the failure of any
Non-Funding Lender to make a Credit Extension or make any other advance required
hereunder. The failure of any Non-Funding Lender to make any Credit Extension or
any payment required by it hereunder shall not relieve any other Lender (each
such other Lender, an “Other Lender”) of its obligations to make the Credit
Extension or payment required by it, but neither any Other Lender nor Agent
shall be responsible for the failure of any Non-Funding Lender to make a Credit
Extension or make any other payment required hereunder. Notwithstanding anything
set forth herein to the contrary, a Non-Funding Lender shall not have any voting
or consent rights under or with respect to any Financing Document or constitute
a “Lender” (or be included in the calculation of “Required Lender” hereunder)
for any voting or consent rights under or with respect to any Financing
Document. At Borrower’s request, Agent or a person reasonably acceptable to
Agent shall have the right with Agent’s consent and in Agent’s sole discretion
(but shall have no obligation) to purchase from any Non-Funding Lender, and each
Non-Funding Lender agrees that it shall, at Agent’s request, sell and assign to
Agent or such person, all of the Applicable Commitments and all of the
outstanding Credit Extensions of that Non-Funding Lender for an amount equal to
the principal balance of the Credit Extensions held by such Non-Funding Lender
and all accrued interest and fees with respect thereto through the date of sale,
such purchase and sale to be consummated pursuant to an executed assignment
agreement reasonably acceptable to Agent.

(b) Each Lender shall promptly remit to the other Lenders such sums as may be
necessary to ensure the ratable repayment of each Lender’s portion of any Credit
Extension and the ratable distribution of interest, fees and reimbursements paid
or made by any Credit Party. Notwithstanding the foregoing, if this Agreement
requires payments of principal and interest to be made directly to the Lenders,
a Lender receiving a scheduled payment shall not be responsible for determining
whether the other Lenders also received their scheduled payment on such date;
provided, however, if it is determined that a Lender received more than its
ratable share of scheduled payments made on any date or dates, then such Lender
shall remit to the Agent (for Agent to redistribute to itself and the Lenders in
a manner to ensure the payment to Agent of any sums due Agent hereunder and the
ratable repayment of each Lender’s portion of any Credit Extension and the
ratable distribution of interest, fees and reimbursements) such sums as may be
necessary to ensure the ratable payment of such scheduled payments, as
instructed by Agent. If any payment or distribution of any kind or character,
whether in cash, properties or securities and whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise, shall be received by
a Lender in excess of its ratable share, then (i) the portion of such payment or
distribution in excess of such Lender’s ratable share shall be received by such
Lender in trust for application to the payments of amounts due on the other
Lender’s claims, or, in the case of Collateral, shall hold such Collateral for
itself and as agent and bailee for the Agent and other Lenders and (ii) such
Lender shall promptly advise the Agent of the receipt of such payment, and,
within five (5) Business Days of such receipt and, in the case of payments and
distributions, such Lender shall purchase (for cash at face value) from the
other Lenders (through the Agent), without recourse, such participations in the
Credit Extension made by the other Lenders as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them in
accordance with the respective Pro Rata Shares of the Lenders; provided,
however, that if all or any portion of such excess payment is thereafter
recovered by or on behalf of a Credit Party from

 

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such purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest; provided,
however, that the provisions of this Section 14.13(b) shall not be construed to
apply to (x) any payment made by a Credit Party pursuant to and in accordance
with the express terms of this Agreement or the other Financing Documents, or
(y) any payment obtained by a Lender as consideration for the assignment of or
sale of a participation in any of its Applicable Commitment pursuant to
Section 13.1. Borrower agrees that any Lender so purchasing a participation from
another Lender pursuant to this Section 14.13(b) may exercise all its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation. No documentation other than notices and the like shall be
required to implement the terms of this Section 14.13(b). The Agent shall keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased pursuant to this Section 14.13(b) and shall in each
case notify the Lenders following any such purchases.

 

  15 DEFINITIONS

In addition to any terms defined elsewhere in this Agreement, or in any schedule
or exhibit attached hereto, as used in this Agreement, the following terms have
the following meanings:

“Access Agreement” means a landlord consent, bailee letter or warehouseman’s
letter, in form and substance reasonably satisfactory to Agent, in favor of
Agent executed by such landlord, bailee or warehouseman, as applicable, for any
third party location.

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

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

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

“Agent” means, MidCap, not in its individual capacity, but solely in its
capacity as agent on behalf of and for the benefit of the Lenders, together with
its successors and assigns.

“Agreement” has the meaning given it in the preamble of this Agreement.

“Anti-Terrorism Laws” means any Laws relating to terrorism or money laundering,
including Executive Order No. 13224 (effective September 24, 2001), the USA
PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act, and the
Laws administered by OFAC.

“Applicable Commitment” has the meaning given it in Section 2.2.

“Applicable Interest Rate” means a per annum rate of interest equal to eight and
25/100 percent (8.25%).

 

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

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

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

“Borrower” mean the entity(ies) described in the first paragraph of this
Agreement and each of their successors and permitted assigns. The term “each
Borrower” shall refer to each Person comprising the Borrower if there is more
than one such Person, or the sole Borrower if there is only one such Person. The
term “any Borrower” shall refer to any Person comprising the Borrower if there
is more than one such Person, or the sole Borrower if there is only one such
Person.

“Borrowing Resolutions” means, with respect to any Person, those resolutions, in
form and substance satisfactory to Agent, adopted by such Person’s Board of
Directors or other appropriate governing body and delivered by such Person to
Agent approving the Financing Documents to which such Person is a party and the
transactions contemplated thereby, as well as any other approvals as may be
necessary or desired to approve the entering into the Financing Documents or the
consummation of the transactions contemplated thereby or in connection
therewith.

“Business Day” means any day that is not (a) a Saturday or Sunday or (b) a day
on which Agent is closed.

“Change in Control” means any event, transaction, or occurrence as a result of
which (a) Preferred Investors cease to own and control all of the economic and
voting rights associated with ownership of at least fifty percent (50%) of the
outstanding securities of all classes of the Borrower on a fully diluted basis
(other than by the sale of Borrower’s equity securities in or following an
initial public offering; provided that upon the sale of Borrower’s equity
securities in an initial public offering, a Change in Control under this clause
(a) shall occur when any “person” (as such

 

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term is defined in Sections 3(a)(9) and 13(d)(3) of the Exchange Act), other
than a trustee or other fiduciary holding securities under an employee benefit
plan of Borrower, is or becomes a beneficial owner (within the meaning Rule
13d-3 promulgated under the Exchange Act), directly or indirectly, of securities
of Borrower, representing twenty-five percent (25%) or more of the combined
voting power of Borrower’s then outstanding securities); (b) during any period
of twelve consecutive calendar months, individuals who at the beginning of such
period constituted the board of directors or managers of Borrower (together with
any new directors or managers whose election by the board of directors or
managers of Borrower was approved by a vote of not less than two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason other than death or disability to constitute a
majority of the directors then in office; (c) the occurrence of any “change in
control” or any term of similar effect under any Material Agreement;
(d) Borrower ceases to own and control, directly or indirectly, all of the
economic and voting rights associated with the outstanding voting capital stock
(or other voting equity interest) of each of its Subsidiaries; or (e) any of the
chief executive officer, the chief financial officer or the chief scientific
officer of Borrower as of the date hereof shall cease to be involved in the day
to day operations (including research and development) or management of the
business of Borrower, and a successor of such officer reasonably acceptable to
Agent is not appointed on terms reasonably acceptable to Agent within 90 days of
such cessation or involvement.

“Closing Date” has the meaning given it in the preamble of this Agreement.

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

“Collateral” means all property, now existing or hereafter acquired, mortgaged
or pledged to, or purported to be subjected to a Lien in favor of, Agent, for
the benefit of Agent and Lenders, pursuant to this Agreement and the other
Financing Documents, including, without limitation, all of the property
described in Exhibit A hereto.

“Collateral Account” means any Deposit Account, Securities Account or Commodity
Account.

“Commitment Commencement Date” has the meaning given it in the Credit Facility
Schedule.

“Commitment Termination Date” has the meaning given it in the Credit Facility
Schedule.

 

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

“Communication” has the meaning given it in Article 11.

“Compliance Certificate” means a certificate, duly executed by an authorized
officer of Borrower, appropriately completed and substantially in the form of
Exhibit B.

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

“Control Agreement” means any control agreement entered into among the
depository institution at which Borrower maintains a Deposit Account or the
securities intermediary or commodity intermediary at which Borrower maintains a
Securities Account or a Commodity Account, Borrower, and Agent pursuant to which
Agent obtains control (within the meaning of the Code) for the benefit of the
Lenders over such Deposit Account, Securities Account or Commodity Account.

“Credit Extension” means an advance or disbursement of proceeds to or for the
account of Borrower in respect of a Credit Facility.

“Credit Extension Form” means that certain form attached hereto as Exhibit C, as
the same may be from time to time revised by Agent.

“Credit Facility” means a credit facility specified on the Credit Facility
Schedule.

“Credit Party” means any Borrower, any Guarantor under a guarantee of the
Obligations or any part thereof, and any other Person (other than Agent, a
Lender or a participant of a Lender), whether now existing or hereafter acquired
or formed, that becomes obligated as a borrower, guarantor, surety, indemnitor,
pledgor, assignor or other obligor under any Financing Document, and any Person
whose equity interests or portion thereof have been pledged or hypothecated to
Agent under any Financing Document; and “Credit Parties” means all such Persons,
collectively.

“Default” means any fact, event or circumstance which with notice or passage of
time or both, could constitute an Event of Default.

“Default Rate” has the meaning given it in Section 2.6(b).

 

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

“Designated Funding Account” is Borrower’s Deposit Account, account number
3300540510, maintained with Silicon Valley Bank and over which Agent has been
granted control for the ratable benefit of all Lenders.

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

“Draw Period” means, for each Credit Facility, the period commencing on the
Commitment Commencement Date and ending on the Commitment Termination Date.

“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund, and (d) any other Person (other than a natural person) approved
by Agent; provided, however, that notwithstanding the foregoing, “Eligible
Assignee” shall not include any Credit Party or any Subsidiary of a Credit
Party. Notwithstanding the foregoing, in connection with assignments by a Lender
due to a forced divestiture at the request of any regulatory agency, the
restrictions set forth herein shall not apply and Eligible Assignee shall mean
any Person or party becoming an assignee incident to such forced divestiture.

“Environmental Law” means all any law (statutory or common), ordinance, treaty,
rule, regulation, order, policy, other legal requirement or determination of an
arbitrator or of a Governmental Authority and/or Required Permits imposing
liability or standards of conduct for or relating to the regulation and
protection of human health, safety, the workplace, the environment and natural
resources, and including public notification requirements and environmental
transfer of ownership, notification or approval statutes.

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

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

“Event of Default” has the meaning given it in Section 10.1.

“Exigent Circumstance” has the meaning given it in Section 13.14.

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to Agent on such day on such transactions as determined by
Agent in a commercially reasonable manner.

“Fee Letters” means, collectively, the fee letter agreements among Borrower and
Agent and Borrower and each Lender.

 

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“Financing Documents” means, collectively, this Agreement, the Perfection
Certificate, the Fee Letter(s), each note and guarantee executed by one or more
Credit Parties in connection with the indebtedness governed by this Agreement,
and each other present or future agreement executed by one or more Credit
Parties and, or for the benefit of, the Lenders and/or Agent in connection with
this Agreement, all as amended, restated, or otherwise modified from time to
time.

“Foreign Lender” has the meaning given it in Section 2.6(h)(iii).

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

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

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

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization.

“Guarantor” means any present or future guarantor of the Obligations.

“Hazardous Materials” means petroleum and petroleum products and compounds
containing them, including gasoline, diesel fuel and oil; explosives, flammable
materials; radioactive materials; polychlorinated biphenyls and compounds
containing them; lead and lead-based paint; asbestos or asbestos-containing
materials; underground or above-ground storage tanks, whether empty or
containing any substance; any substance the presence of which is prohibited by
any Laws; toxic mold, any substance that requires special handling; and any
other material or substance now or in the future defined as a “hazardous
substance,” “hazardous

 

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material,” “hazardous waste,” “toxic substance,” “toxic pollutant,”
“contaminant,” “pollutant” or other words of similar import within the meaning
of any Environmental Law, including: (a) any “hazardous substance” defined as
such in (or for purposes of) CERCLA, or any so-called “superfund” or “superlien”
Law, including the judicial interpretation thereof; (b) any “pollutant or
contaminant” as defined in 42 U.S.C.A. § 9601(33); (c) any material now defined
as “hazardous waste” pursuant to 40 C.F.R. Part 260; (d) any petroleum or
petroleum by-products, including crude oil or any fraction thereof; (e) natural
gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for
fuel; (f) any “hazardous chemical” as defined pursuant to 29 C.F.R. Part 1910;
(g) any toxic or harmful substances, wastes, materials, pollutants or
contaminants (including, without limitation, asbestos, polychlorinated biphenyls
(“PCB’s”), flammable explosives, radioactive materials, infectious substances,
materials containing lead-based paint or raw materials which include hazardous
constituents); and (h) any other toxic substance or contaminant that is subject
to any Environmental Laws or other past or present requirement of any
Governmental Authority.

“Hazardous Materials Contamination” means contamination (whether now existing or
hereafter occurring) of the improvements, buildings, facilities, personalty,
soil, groundwater, air or other elements on or of the relevant property by
Hazardous Materials, or any derivatives thereof, or on or of any other property
as a result of Hazardous Materials, or any derivatives thereof, generated on,
emanating from or disposed of in connection with the relevant property.

“Indebtedness” means (a) indebtedness for borrowed money (including the
Obligations) or the deferred price of property or services, such as
reimbursement and other obligations for surety bonds and letters of credit,
(b) obligations evidenced by notes, bonds, debentures or similar instruments,
(c) capital lease obligations, (d) non-contingent obligations of such Person to
reimburse any bank or other Person in respect of amounts paid under a letter of
credit, banker’s acceptance or similar instrument, (e) equity securities of such
Person subject to repurchase or redemption other than at the sole option of such
Person, (f) obligations secured by a Lien on any asset of such Person, whether
or not such obligation is otherwise an obligation of such Person,
(g) “earnouts”, purchase price adjustments, profit sharing arrangements,
deferred purchase money amounts and similar payment obligations or continuing
obligations of any nature of such Person arising out of purchase and sale
contracts, (h) all Indebtedness of others guaranteed by such Person,
(i) off-balance sheet liabilities and/or pension plan or multiemployer plan
liabilities of such Person, (j) obligations arising under non-compete
agreements, (k) obligations arising under bonus, deferred compensation,
incentive compensation or similar arrangements, other than those arising in the
Ordinary Course of Business, and (l) Contingent Obligations.

“Indemnified Liabilities” means those liabilities described in Section 13.2(a)
and (b).

“Indemnitee” has the meaning given it in Section 13.2.

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

 

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“Intellectual Property” includes without limitation, all copyright rights,
copyright applications, copyright registrations and like protections in each
work of authorship and derivative work, whether published or unpublished, any
patents, 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.

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

“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 of all
or substantially all of the assets of another Person, or of any business,
Product, business line or product line, division or other unit operation of any
Person or (c) make or purchase any advance, loan, extension of credit or capital
contribution to, or any other investment in, any Person.

“Joinder Requirements” has the meaning set forth in Section 6.8.

“Laws” means any and all federal, state, provincial, territorial, local and
foreign statutes, laws, judicial decisions, regulations, guidance, guidelines,
ordinances, rules, judgments, orders, decrees, codes, plans, injunctions,
permits, concessions, grants, franchises, governmental agreements and
governmental restrictions, whether now or hereafter in effect, which are
applicable to any Credit Party in any particular circumstance.

“Lender” means any one of the Lenders.

“Lenders” means the Persons identified on the Credit Facility Schedule as
amended from time to time to reflect assignments made in accordance with this
Agreement.

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

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

“Material Adverse Change” means (a) a material impairment in the perfection or
priority of the Agent’s Lien (or any Lender’s Lien therein to the extent
provided for in the Financing Documents) in the Collateral; (b) a material
impairment in the value of the Collateral; (c) a material adverse change in the
business, operations, or condition (financial or otherwise) of any Credit Party;
or (d) a material impairment of the prospect of repayment of any portion of the
Obligations.

 

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“Material Agreement” means (a) the agreements listed in the Disclosure Schedule,
(b) each agreement or contract to which a Credit Party is a party relating to
licensure of Intellectual Property or development of Products or Intellectual
Property, and (c) any agreement or contract to which such Credit Party or its
Subsidiaries is a party the termination of which could reasonably be expected to
result in a Material Adverse Change.

“Material Indebtedness” has the meaning given it in Section 10.1.

“Maturity Date” means December 1, 2019.

“Maximum Lawful Rate” has the meaning given it in Section 2.6(g).

“MidCap” has the meaning given it in the preamble of this Agreement.

“Obligations” means all of Borrower’s obligations to pay when due any debts,
principal, interest, Protective Advances, fees, indemnities and other amounts
Borrower owes the Agent or Lenders now or later, under this Agreement or the
other Financing Documents, including, without limitation, interest accruing
after Insolvency Proceedings begin (whether or not allowed) and debts,
liabilities, or obligations of Borrower assigned to the Lenders and/or Agent,
and the payment and performance of each other Credit Party’s covenants and
obligations under the Financing Documents. “Obligations” does not include
obligations under any warrants issued to Agent or a Lender.

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

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

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

“Ordinary Course of Business” means, in respect of any transaction involving any
Credit Party, the ordinary course of business of such Credit Party, as conducted
by such Credit Party in accordance with past practices, which shall in any event
be at arms-length.

“Payment Date” means the first calendar day of each calendar month.

 

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“Perfection Certificate” means the Perfection Certificate delivered to Agent as
of the Closing Date, together with any amendments thereto required under this
Agreement.

“Permitted Contingent Obligations” means (a) Contingent Obligations resulting
from endorsements for collection or deposit in the Ordinary Course of Business;
(b) 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 Twenty-Five Thousand Dollars ($25,000) in the
aggregate at any time outstanding; (c) Contingent Obligations arising under
indemnity agreements with title insurers; (d) Contingent Obligations arising
with respect to customary indemnification obligations in favor of purchasers in
connection with dispositions of personal property assets permitted under Article
7; (e) 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;
and (f) other Contingent Obligations not permitted by clauses (a) through
(e) above, not to exceed $25,000 in the aggregate at any time outstanding.

“Permitted Indebtedness” means: (a) Borrower’s Indebtedness to the Lenders and
Agent under this Agreement and the other Financing Documents; (b) Indebtedness
existing on the Closing Date and described on the Disclosure Schedule;
(c) Indebtedness secured by Permitted Liens; (d) [reserved]; (e) unsecured
Indebtedness to trade creditors incurred in the Ordinary Course of Business;
(f) Permitted Contingent Obligations; (g) extensions, refinancings,
modifications, amendments and restatements of any items of Permitted
Indebtedness (b) and (c) above, provided, however, that the principal amount
thereof is not increased or the terms thereof are not modified to impose more
burdensome terms upon the obligors thereunder; and (h) Indebtedness consisting
of intercompany loans and advances made by any Borrower to any other Borrower,
provided that (1) the obligations of the Borrower under such intercompany loan
shall be subordinated at all times to the Obligations of the Borrower hereunder
or under the other Financing Documents in a manner satisfactory to Agent and
(2) to the extent that such Indebtedness is evidenced by a promissory note or
other written instrument, Borrower shall pledge and deliver to Agent, for the
benefit of itself and the Lenders, the original promissory note or instrument,
as applicable, along with an endorsement in blank in form and substance
satisfactory to Agent.

“Permitted Investments” means: (a) Investments existing on the Closing Date and
described on the Disclosure Schedule; (b) Investments consisting of cash
equivalents; (c) any Investments in liquid assets permitted by Borrower’s
investment policy, as amended from time to time, provided that such investment
policy (and any such amendment thereto) has been approved in writing by Agent
(provided, that, under no circumstances shall Borrower be permitted to invest in
or hold Margin Stock); (d) Investments consisting of the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of any Credit Party; (e) Investments consisting of deposit
accounts or securities accounts in which the Agent has a first priority
perfected security interest except as otherwise provided by Section 6.6;
(f) Investments in Subsidiaries solely to the extent permitted pursuant to
Section 6.8; (g) Investments consisting of (i) travel advances and employee
relocation loans and other employee loans and advances in the Ordinary Course of
Business, and (ii) loans to employees, officers or directors relating to the

 

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purchase of equity securities of Borrower or its Subsidiaries pursuant to
employee stock purchase plans or agreements approved by Borrower’s board of
directors; (h) 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; and (i) Investments
consisting of intercompany Indebtedness in accordance with and to the extent
permitted by clause (h) of the definition of “Permitted Indebtedness”.

“Permitted Liens” means: (a) Liens existing on the Closing Date and shown on the
Disclosure Schedule or arising under this Agreement and the other Financing
Documents; (b) purchase money Liens securing no more than One Million Five
Hundred Thousand Dollars ($1,500,000) in the aggregate amount outstanding (i) on
Equipment acquired or held by a Credit Party incurred for financing the
acquisition of the Equipment, or (ii) existing on Equipment when acquired, if
the Lien is confined to the property and improvements and the proceeds of the
Equipment; (c) Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith and for which
adequate reserves are maintained on the Books of the Credit Party against whose
asset such Lien exists, provided that no notice of any such Lien has been filed
or recorded under the Internal Revenue Code of 1986, as amended, and the
treasury regulations adopted thereunder; (d) statutory Liens securing claims or
demands of materialmen, mechanics, carriers, warehousemen, landlords and other
Persons imposed without action of such parties, provided that they have no
priority over any of Agent’s Lien and the aggregate amount of such Liens for all
Credit Parties does not any time exceed Twenty-Five Thousand Dollars ($25,000);
(e) leases or subleases of real property granted in the Ordinary Course of
Business, and leases, subleases, non-exclusive licenses or sublicenses of
property (other than real property or Intellectual Property) granted in the
Ordinary Course of Business, if the leases, subleases, licenses and sublicenses
do not prohibit granting Agent a security interest; (f) banker’s liens, rights
of set-off and Liens in favor of financial institutions incurred made in the
Ordinary Course of Business arising in connection with a Credit Party’s
Collateral Accounts provided that such Collateral Accounts are subject to a
Control Agreement to the extent required hereunder; (g) Liens to secure payment
of workers’ compensation, employment insurance, old-age pensions, social
security and other like obligations incurred in the Ordinary Course of Business
(other than Liens imposed by ERISA); (h) Liens arising from judgments, decrees
or attachments in circumstances not constituting an Event of Default;
(i) easements, reservations, rights-of-way, restrictions, minor defects or
irregularities in title and similar charges or encumbrances affecting real
property not constituting a Material Adverse Change; (j) Liens incurred in the
extension, renewal or refinancing of the indebtedness secured by Liens described
in (a) and (b) above, but any extension, renewal or replacement Lien must be
limited to the property encumbered by the existing Lien and the principal amount
of the Indebtedness may not increase; and (k) Liens in favor of Silicon Valley
Bank on cash and/or securities in connection with the provision by Silicon
Valley Bank to Borrower of cash management services (including, without
limitation, merchant services, direct deposit of payroll, business credit cards
and check cashing services) and letters of credit, in an aggregate amount not to
exceed at any time the lesser of (1) the amount outstanding for such cash
management services and letters of credit and (2) Four Hundred Thousand Dollars
($400,000.00).

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

 

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“Preferred Investors” means Baxter Healthcare Corporation, Versant, SV Life
Sciences Fund IV, L.P., Polaris Ventures, and CHV.

“Pro Rata Share” means, as determined by Agent, with respect to each Credit
Facility and Lender holding an Applicable Commitment or Credit Extensions in
respect of such Credit Facility, a percentage (expressed as a decimal, rounded
to the ninth decimal place) determined by dividing (a) in the case of
fully-funded Credit Facilities, the amount of Credit Extensions held by such
Lender in such Credit Facility by the aggregate amount of all outstanding Credit
Extensions for such Credit Facility, and (b) in the case of Credit Facilities
that are not fully-funded, the amount of Credit Extensions and unfunded
Applicable Commitments held by such Lender in such Credit Facility by the
aggregate amount of all outstanding Credit Extensions and unfunded Applicable
Commitments for such Credit Facility.

“Protective Advances” means all audit fees and expenses, costs, and expenses
(including reasonable attorneys’ fees and expenses) of Agent and Lenders for
preparing, amending, negotiating, administering, defending and enforcing the
Financing Documents and the Warrants (including, without limitation, those
incurred in connection with appeals or Insolvency Proceedings) or otherwise
incurred by Agent or the Lenders in connection with the Financing Documents and
the Warrants.

“Register” has the meaning given it in Section 13.1(d).

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

“Required Lenders” means, unless all of the Lenders and Agent agree otherwise in
writing, Lenders having (a) more than sixty percent (60%) of the Applicable
Commitments of all Lenders, or (b) if such Applicable Commitments have expired
or been terminated, more than sixty percent (60%) of the aggregate outstanding
principal amount of the Credit Extensions.

“Required Permit” means all licenses, certificates, accreditations, product
clearances or approvals, provider numbers or provider authorizations, supplier
numbers, provider numbers, marketing authorizations, other authorizations,
registrations, permits, consents and approvals of a Credit Party (a) 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, or (b) issued by any
Person from which Borrower or any of its Subsidiaries have received an
accreditation. Without limiting the generality of the foregoing, “Required
Permits” includes any Drug Application (including without limitation, at any
point in time, all licenses, approvals and permits issued by the FDA or any
other applicable Governmental Authority necessary for the testing, manufacture,
marketing or sale of any Product by any applicable Borrower(s) as such
activities are being conducted by such Borrower 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 Borrower’s or any Subsidiary’s business.

 

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“Reserve Percentage” means, on any day, for any Lender, the maximum percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor Governmental Authority) for determining the reserve requirements
(including any basic, supplemental, marginal, or emergency reserves) that are in
effect on such date with respect to eurocurrency funding (currently referred to
as “eurocurrency liabilities”) of that Lender, but so long as such Lender is not
required or directed under applicable regulations to maintain such reserves, the
Reserve Percentage shall be zero.

“Responsible Officer” means any of the President and Chief Executive Officer or
Chief Financial Officer of Borrower.

“Secretary’s Certificate” means, with respect to any Person, a certificate, in
form and substance satisfactory to Agent, executed by such Person’s secretary on
behalf of such Person certifying that (a) such Person has the authority to
execute, deliver, and perform its obligations under each of the Financing
Documents to which it is a party, (b) that attached as Exhibit A to such
certificate is a true, correct, and complete copy of the Borrower Resolutions
then in full force and effect authorizing and ratifying the execution, delivery,
and performance by such Person of the Financing Documents to which it is a
party, (c) the name(s) of the Person(s) authorized to execute the Financing
Documents on behalf of such Person, together with a sample of the true
signature(s) of such Person(s), and (d) that Agent and the Lenders may
conclusively rely on such certificate unless and until such Person shall have
delivered to Agent a further certificate canceling or amending such prior
certificate.

“Secured Promissory Note” has the meaning given it in Section 2.7.

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

“Stated Rate” has the meaning given it in Section 2.6(g).

“Subordination Agreement” means a subordination, intercreditor, or other similar
agreement in form and substance, and on terms, approved by Agent in writing.

“Subsidiary” means, with respect to any Person, any Person of which more than
fifty percent (50.0%) of the voting stock or other equity interests (in the case
of Persons other than corporations) is owned or controlled, directly or
indirectly, by such Person.

“Taxes” has the meaning given it in Section 2.6(h).

“Transfer” has the meaning given it in Section 7.1.

“Warrants” means collectively (i) the Warrant to Purchase Stock in favor of
MidCap, and (ii) the Warrant to Purchase Stock in favor of Silicon Valley Bank,
each issued as of the Original Closing Date.

 

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[SIGNATURES APPEAR ON FOLLOWING PAGE(S)]

 

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IN WITNESS WHEREOF, intending that this instrument constitute an instrument
executed and delivered under seal, the parties hereto have caused this Agreement
to be executed as of the Closing Date.

 

BORROWER: OCULAR THERAPEUTIX, INC. By:  

/s/ Brad Smith

  (SEAL) Name:   Brad Smith   Title:   Chief Financial Officer  

 

OCULAR THERAPEUTIX, INC.

AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

SIGNATURE PAGE

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

AGENT:

MIDCAP FUNDING III TRUST,

as Agent for Lenders

By:   Apollo Capital Management, L.P.,   its investment manager By:   Apollo
Capital Management GP, LLC,   its general partner By:  

/s/ Maurice Amsellem

  (SEAL) Name:   Maurice Amsellem   Title:   Authorized Signatory  

[Signatures continued on following page]

 

OCULAR THERAPEUTIX, INC.

AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

SIGNATURE PAGE

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

LENDERS: MIDCAP FUNDING III TRUST By:   Apollo Capital Management, L.P.,   its
investment manager By:   Apollo Capital Management GP, LLC,   its general
partner By:   /s/ Maurice Amsellem                     (SEAL) Name:   Maurice
Amsellem Title:   Authorized Signatory

[Signatures continued on following page]

 

OCULAR THERAPEUTIX, INC.

AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

SIGNATURE PAGE

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

SILICON VALLEY BANK By:  

/s/ Clark Hayes

  (SEAL) Name:   Clark Hayes   Title:   Director, Healthcare and Life Sciences  

[Signatures continued on following page]

 

OCULAR THERAPEUTIX, INC.

AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

SIGNATURE PAGE

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

FLEXPOINT MCLS SPV LLC By:  

/s/ Daniel Edelman

  (SEAL) Name:   Daniel Edelman   Title:   Vice President  

 

OCULAR THERAPEUTIX, INC.

AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

SIGNATURE PAGE

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

EXHIBITS AND SCHEDULES

 

EXHIBITS    Exhibit A    Collateral Exhibit B    Form of Compliance Certificate
Exhibit C    Credit Extension Form

SCHEDULES

Credit Facility Schedule

Amortization Schedule (for each Credit Facility)

Post-Closing Obligations Schedule

Closing Deliveries Schedule

Disclosure Schedule

Intangible Assets Schedule

Products Schedule

Required Permits Schedule

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

EXHIBIT A

COLLATERAL

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

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

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

Notwithstanding the foregoing, except as provided below, the Collateral shall
not include any Intellectual Property of any Credit Party, whether now owned or
hereafter acquired, except to the extent that it is necessary under applicable
law to have a Lien and security interest in any such Intellectual Property in
order to have a perfected Lien and security interest in and to IP Proceeds
(defined below), and for the avoidance of any doubt, the Collateral shall
include, and Agent shall have a Lien and security interest in, (i) all IP
Proceeds, and (ii) all payments with respect to IP Proceeds that are received
after the commencement of a bankruptcy or insolvency proceeding. The term “IP
Proceeds” means, collectively, all cash, Accounts, license and royalty fees,
claims, products, awards, judgments, insurance claims, and other revenues,
proceeds or income, arising out of, derived from or relating to any Intellectual
Property of any Credit Party, and any claims for damage by way of any past,
present or future infringement of any Intellectual Property of any Credit Party
(including, without limitation, all cash, royalty fees, other proceeds, Accounts
and General Intangibles that consist of rights of payment to or on behalf of a
Credit Party and the proceeds from the sale, licensing or other disposition of
all or any part of, or rights in, any Intellectual Property by or on behalf of a
Credit Party).

Pursuant to the terms of a certain negative pledge arrangement with Agent and
Lenders, Borrower has agreed not to encumber any of its Intellectual Property
without Agent’s and Lenders’ prior written consent.

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

EXHIBIT B

COMPLIANCE CERTIFICATE

 

TO:      MidCap Funding III Trust, as Agent FROM:      Ocular Therapeutix Inc.
DATE:                  , 201  

The undersigned authorized officer of Ocular Therapeutix, Inc., a Delaware
corporation (“Borrower”), certifies that under the terms and conditions of the
Amended and Restated Credit and Security Agreement between Borrower, Agent and
the Lenders (as amended, restated, supplemented, replaced or otherwise modified
from time to time, the “Agreement”):

(1) Borrower is in complete compliance with all required covenants for the month
ending             , 201  , except as noted below;

(2) there are no Events of Default;

(3) all representations and warranties in the Agreement are true and correct in
all material respects on this date except as noted below; 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;

(4) Each of Borrower and the other Credit Parties has timely filed all required
tax returns and reports, and has timely paid all foreign, federal, state and
local taxes, assessments, deposits and contributions owed except as otherwise
permitted pursuant to the terms of the Agreement; and

(5) 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 Agent.

For Compliance Certificates delivered in respect of any month ending
March 31, June 30, September 30, and December 31, attached hereto are proposed
updates (if any) to the Disclosure Schedule, Intangible Assets Schedule,
Required Permits Schedule, and Products Schedule, to the extent required by the
Agreement.

Attached are the required documents supporting the certifications set forth in
this Compliance Certificate. The undersigned certifies, in his/her capacity as
an officer of the Borrower, that these are prepared in accordance with GAAP
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. The undersigned acknowledges, in his/her
capacity as an officer of Borrower, that no borrowings may be requested at any
time or date of determination that Borrower is not in compliance with any of the
terms of the Agreement, and that compliance is determined not just at the date
this certificate is delivered. Capitalized terms used but not otherwise defined
herein shall have the meanings given them in the Agreement.

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

Please indicate compliance status by circling Yes/No under “Complies” column.

 

Reporting Covenant

  

Required

   Complies Monthly Financial Statements    Monthly within 30 days   
Yes        No Audited Financial Statements    Annually within 180 days after FYE
   Yes        No Board Approved Projections    Annually within 60 days after FYE
   Yes        No Compliance Certificate    Monthly within 30 days   
Yes        No

The following are the exceptions with respect to the certification above: (If no
exceptions exist, state “No exceptions to note.”)

 

 

 

 

 

OCULAR THERAPEUTIX, INC.     AGENT USE ONLY       Received by:  

 

By:  

 

    AUTHORIZED SIGNER Name:  

 

    Date:   Title:  

 

     

      Verified:  

 

      AUTHORIZED SIGNER       Date:         Compliance
Status:        Yes        No

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

EXHIBIT C CREDIT EXTENSION FORM

DEADLINE IS NOON E.S.T.

Date:             , 201  

 

LOAN ADVANCE:

     

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

 

From Account #                                                                  
     

    To Account #                                
                                                              (Loan Account #)  
  (Deposit Account #)

Amount of Advance $                                                             

     

 

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

 

Authorized Signature:                       
                                              

    Phone Number:                            
                                                         

Print Name/Title:                         
                                                      

     

 

OUTGOING WIRE REQUEST:

  

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

Beneficiary Name:                         
                                         
                                         
                                         
                                                                         

                                                                            
                     Amount of Wire: $                                         
                                         
                                       

Beneficiary Lender:                                        
                                         

                                                                               
                     Account Number:                                        
                                         
                                           

City and State:                                        
                                                   

  

Beneficiary Lender Transit (ABA) #:                                        
                 

   Beneficiary Lender Code (Swift, Sort, Chip, etc.):                        
                

(For International Wire Only)

  

Intermediary Lender:                                        
                                       

   Transit (ABA) #:                                 
                                                       

For Further Credit to:                                        
                                         
                                         
                                         
                                                        

Special Instruction:                                       
                                         
                                         
                                         
                                                             

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

 

    Authorized Signature:                    
                                                        

   2nd Signature (if required):                     
                                                       

    Print Name/Title:                     
                                                             

   Print Name/Title:                                  
                                                      

    Telephone #:                                                                
                        

   Telephone #:                                   
                                                           

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

CREDIT FACILITY SCHEDULE

The following Credit Facilities are specified on this Credit Facility Schedule:

Credit Facility #1:

Credit Facility and Type: Term

Lenders for and their respective Applicable Commitments to this Credit Facility:

 

Lender

   Applicable Commitment

MidCap Funding III Trust

   $5,935,645.06

Silicon Valley Bank

   $7,800,000.00

Flexpoint MCLS SPV LLC

   $1,864,354.94

The following defined terms apply to this Credit Facility:

Applicable Prepayment Fee: means the following amount, calculated as of the date
(the “Accrual Date”) that the Applicable Prepayment Fee becomes payable in the
case of prepayments required under the Financing Documents or the date any
voluntary prepayment is made: (a) for an Accrual Date on or after the Closing
Date through and including the date which is twelve (12) months after the
Closing Date, three and one quarter percent (3.25%) multiplied by the amount of
the outstanding principal of the Credit Extension prepaid or required to be
prepaid (whichever is greater); (b) for an Accrual Date after the date which is
twelve (12) months after the Closing Date through and including the date which
is twenty-four (24) months after the Closing Date, two percent
(2.00%) multiplied by the amount of the outstanding principal of the Credit
Extension prepaid or required to be prepaid (whichever is great); (c) for an
Accrual Date after the date which is twenty-four (24) months after the Closing
Date and through and including the date immediately preceding the Maturity Date,
one percent (1.00%) multiplied by the amount of the outstanding principal of the
Credit Extension prepaid or required to be prepaid (whichever is greater).

Closed Period: not applicable.

Commitment Commencement Date: the Closing Date

Commitment Termination Date: the earliest to occur of (a) the close of the
Business Day following the Closing Date, (b) an Event of Default, (c) the
existence of any Default, or (d) the Maturity Date.

Minimum Credit Extension Amount: $15,600,000

Permitted Purpose: not applicable.

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

AMORTIZATION SCHEDULE

Commencing on January 1, 2017, and continuing on the first day of each calendar
month thereafter, an amount per month equal to the total amount of Credit
Extensions made under all Credit Facilities divided by thirty-six (36) months.

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

POST-CLOSING OBLIGATIONS SCHEDULE

Borrower shall satisfy and complete each of the following obligations, or
provide Agent each of the items listed below, as applicable, on or before the
date indicated below, all to the satisfaction of Agent in its sole and absolute
discretion:

 

1. None.

Borrower’s failure to complete and satisfy any of the above obligations on or
before the date indicated above, or Borrower’s failure to deliver any of the
above listed items on or before the date indicated above, shall constitute an
immediate and automatic Event of Default.

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

CLOSING DELIVERIES SCHEDULE

 

1. duly executed original signatures to the Financing Documents to which
Borrower is a party;

 

2. duly executed original Secured Promissory Notes in favor of each Lender so
requesting with a face amount equal to such Lender’s Applicable Commitment under
each Credit Facility;

 

3. the Operating Documents of Borrower and good standing certificates of
Borrower certified by the Secretary of State of the state(s) of organization of
Borrower as of a date no earlier than thirty (30) days prior to the Closing
Date;

 

4. good standing certificates dated as of a date no earlier than thirty
(30) days prior to the Closing Date to the effect that Borrower is qualified to
transact business in all states in which the nature of Borrower’s business so
requires;

 

5. duly executed original signatures to the completed Borrowing Resolutions for
Borrower;

 

6. certified copies, dated as of a recent date, of financing statement searches,
as Agent shall request, accompanied by written evidence (including any UCC
termination statements) that the Liens indicated in any such financing
statements either constitute Permitted Liens or have been or, in connection with
the initial Credit Extension, will be terminated or released;

 

7. a legal opinion of Borrower’s counsel dated as of the Closing Date together
with the duly executed original signatures thereto;

 

8. evidence satisfactory to Agent that the insurance policies required by
Article 6 are in full force and effect, together with appropriate evidence
showing loss payable and/or additional insured clauses or endorsements in favor
of Agent, for the ratable benefit of the Lenders;

 

9. payment of the fees and expenses of Agent and Lenders then accrued, including
pursuant to the Fee Letters;

 

10. a duly executed original Secretary’s Certificate dated as of the Closing
Date which includes copies of the completed Borrowing Resolutions for Borrower;

 

11. timely receipt by the Agent of an executed disbursement letter;

 

12. a certificate executed by a Responsible Officer of Borrower, in form and
substance satisfactory to Agent, which shall, among other things, certify as to
certain conditions to the funding of the Credit Extensions on the Closing Date;
and

 

13. evidence that (i) the Liens securing Indebtedness owed by Borrower to The
Harvard Drug Group, L.L.C. have been terminated and (ii) filings evidencing the
perfection of such Liens, including without limitation the financing statement
with filing number 2014 2393502 filed in favor of The Harvard Drug Group,
L.L.C., has been terminated.

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

DISCLOSURE SCHEDULE

Scheduled Permitted Liens

 

Debtor

 

Secured Party

 

Collateral

 

State and

Jurisdiction

 

Filing Date and
Number (include

original file date
and continuations,

amendments, etc.)

None

                               

Scheduled Permitted Indebtedness

 

Debtor

 

Creditor

 

Amount of Indebtedness

outstanding as of         

    ,         

 

Maturity Date

None

                       

Scheduled Material Agreements

 

Debtor

 

Type of Investment

 

Date

 

Amount Outstanding as

of                     

None

                       

Scheduled Material Agreements

1. Amended and Restated License Agreement, dated January 27, 2012, between the
Borrower and Incept LLC (the “Incept Agreement”).

2. Lease Agreement dated September 2, 2009, by and between the Borrower and
RAR2-Crosby Corporate Center QRS, Inc., as amended.

3.

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

Scheduled Litigation

 

1. None

 

2.

 

3.

Scheduled ownership interest in any Chattel Paper, letter of credit rights,
commercial tort claims, Instruments, documents or investment property

 

1. None

 

2.

 

3.

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

IN TANGIBLE ASSETS SCHEDULE

SUMMARY OF ACTIVE UNITED STATES PATENTS AND FOREIGN APPLICATIONS

EXCLUSIVELY LICENSED TO OCULAR THERAPEUTIX INC. IN ITS FIELD OF USE FROM

INCEPT LLC UNDER THE INCEPT AGREEMENT.

 

Ref No.

  

Matter

  

Pat. No.

(Issue Date) OR

Serial No.

(Filing Date)

  

Status

03-US-01    Composite Hydrogel Drug Delivery Systems   

6,632,457

(08-14-2003)

   Issued. Expires August 14, 2018. 03-US-02    Composite Hydrogel Drug Delivery
Systems   

7,413,752

(08-19-2008)

   Issued. Expires August 14, 2018. 03-US-03*    Composite Hydrogel Drug
Delivery Systems   

12/218,152

(07-11-2008)

   Issue Fee Due 12-28-2015 03-WO-CA*    Composite Hydrogel Drug Delivery
Systems   

2,339,482

(10-20-2009)

   Issued. Expires 8-13-2019. 03-WO-EP*    Composite Hydrogel Drug Delivery
Systems   

EP 99941154.9

(08-13-1999)

   In prosecution 03-WO-JP*    Composite Hydrogel Drug Delivery Systems   

4601169

(10-08-2010)

   Issued. Expires on August 13, 2019 04-US-01    Biocompatible Crosslinked
Polymers   

6,566,406

(05-20-2003)

   Issued. Expires Dec 4, 2019 04-US-02    Biocompatible Hydrogels Made With
Small Molecule Precursors   

8,003,705

(08-23-2011)

   Issued. Expires March 3, 2019 04-US-05    Biocompatible Polymers And
Hydrogels And Methods Of Use   

8,535,705

(09-17-2013)

   Issued. Expires August 3, 2024 04-WO-CA    Biocompatible Crosslinked Polymers
  

2,353,642

(11-10-2009)

   Issued. Expires Dec 3, 2019 06-US-01    Dehydrated Hydrogel Precursor-Based,
Tissue Adherent Compositions And Methods Of Use   

6,703,047

(03-09-2004)

   Issued. Expires Feb 2, 2021. 06-US-02    Dehydrated Hydrogel Precursor-Based,
Tissue Adherent Compositions And Methods Of Use   

8,512,749

(08-20-2013)

   Issued. Expires 3-29-2029 07-US-02    Crosslinking Agents And Methods And
Uses Therefore   

6,887,974

(05-03-2005)

   Issued. Expires 11-17-2018 07-US-03    Proteinaceous Gels Having
Visualization Agents And Methods Of Use Thereof   

7,211,651

(05-01-2007)

   Issued. 07-US-04    Crosslinked Albumin Hydrogels   

7,057,019

(06-06-2006)

   Issued. 07-US-07    Implantable Materials And Compositions   

8,557,535

(10-15-2013)

   Issued, expires 4-10-2021

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

Ref No.

  

Matter

  

Pat. No.

(Issue Date) OR

Serial No.

(Filing Date)

  

Status

10-US-01    Methods Of Using In Situ Hydration Articles For Sealing Of
Augmentation Of Tissue Or Vessels   

6,605,294

(8-12-2003)

   Issued, expires August 12, 2018 10-US-02    Methods Of Using In Situ
Hydration Articles For Sealing Of Augmentation Of Tissue Or Vessels   

7,648,713

(1-19-2010)

   Issued, expires August 11, 2020 12-US-01    Biocompatible Crosslinked
Polymers   

7,009,034

(03-07-2006)

   Issued, expires Nov 13, 2018 12-US-02    Biocompatible Crosslinked Polymers
With Visualization Agents   

7,332,566

(02-19-2008)

   Issued, expires Sep 22, 2017 12-US-03    Biocompatible Crosslinked Polymers
With Visualization Agents   

7,592,418

(09-22-2009)

   Issued, expires September 6, 2019 20-US-01    Compositions And Methods For
Controlled Drug Delivery From Biodegradable Hydrogels   

60/899,898

(02-06-2007)

   Perfected 28-US-01    Hydrogel Polymeric Compositions And Methods   

9,125,807

(09-08-2015)

   Issued, expires 7-22-2028 28-US-02    Hydrogel Polymeric Compositions And
Methods   

12/485,192

(06-16-2009)

   In prosecution 28-US-03    Hydrogel Polymeric Compositions And Methods   

14/470,081

(08-27-2014)

   In prosecution 28-WO-AU    Hydrogel Polymeric Compositions And Methods   

2008275786

(1-30-2014)

   Issued. Expires 5-14-2028 28-WO-EP    Hydrogel Polymeric Compositions And
Methods   

08754416.9

(05-14-2008)

   Awaiting exam 28-WO-JP    Hydrogel Polymeric Compositions And Methods   

5693954

(02-13-2015)

2010-516020

(05-14-2008)

   Issued. Expires 5-14-2028 30-US-01    Surgical Delivery System For Medical
Sealant   

7,862,538

(01-04-2011)

   Issued. Expires: March 22, 2028 36-US-01    Drug Delivery Through Punctum
Plugs   

61/152,081

(02-12-2009)

   Perfected 36-US-02    Drug Delivery Through Hydrogel Plugs   

8,409,606

(04-02-2013)

   Issued. Expires 5-14-2030 36-US-03    Drug Delivery Through Hydrogel Plugs   

8,563,027

(10-22-2013)

   Issued. Expires 2-12-2030

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

Ref No.

  

Matter

  

Pat. No.

(Issue Date) OR

Serial No.

(Filing Date)

  

Status

36-WO-AU    Drug Delivery Through Hydrogel Plugs   

2010213612

(08-13-2015)

   Issued 36-WO-CA    Drug Delivery Through Hydrogel Plugs   

2,750,242

(02-12-2010)

   Awaiting exam 36-WO-CN    Drug Delivery Through Hydrogel Plugs   

ZL 201080016295

(08-19-2015)

   Issued 36-WO-EP    Drug Delivery Through Hydrogel Plugs   

10741771.9

(02-12-2010)

2396070

(12-21-2012)

   In prosecution. 36-WO-IN    Drug Delivery Through Hydrogel Plugs   

6272/DELNP/2011

(02-12-2010)

   Awaiting exam 36-WO-JP    Drug Delivery Through Hydrogel Plugs   

2011-550256

(02-12-2010)

   In prosecution. 42-US-01    Method For Applying Flowable Hydrogels To A
Cornea   

8,961,501

(02-24-2015)

   Issued, expires 10-8-2032 50-US-01    Drug Delivery Systems and Applications
  

13/234,428

(09-16-2011)

   In prosecution. 52-US-01    Medical Organogel Processes And Compositions   

61/566,768

(12-05-2011)

   Perfected 52-US-02    Medical Organogel Processes And Compositions   

13/705,808

(12-05-2012)

   In prosecution. 52-US-03    Medical Organogel Processes And Compositions   

14/926,707

(10-29-2015)

   52-WO-AU    Medical Organogel Processes And Compositions   

2012347926

(12-05-2012)

   Awaiting exam 52-WO-CA    Medical Organogel Processes And Compositions   

2,858,161

(12-05-2012)

   Awaiting exam 52-WO-CN    Medical Organogel Processes And Compositions   

201280073745.X

(12-05-2012)

   Awaiting exam 52-WO-CN-HK    Medical Organogel Processes And Compositions   

15103895.3

(04-22-2015)

   Pending issuance of CN case 52-WO-EP    Medical Organogel Processes And
Compositions   

12856353.3

(12-05-2012)

   Awaiting exam 52-WO-IN    Medical Organogel Processes And Compositions   

4557/DELNP/2014

(12-05-2012)

   Awaiting exam

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

Ref No.

  

Matter

  

Pat. No.

(Issue Date) OR

Serial No.

(Filing Date)

  

Status

52-WO-JP    Medical Organogel Processes And Compositions   

2014-546028

(12-05-2012)

   Awaiting exam 52-WO-KR    Medical Organogel Processes And Compositions   

No. 10-2014-7018751

(12-05-2012)

   Awaiting exam 62-US-01    Hydrogel Drug Delivery Implants   

62/089,994

(12-10-2014)

   Filed 64-US-01    Ocular Hydrogels   

62/064,885

(10-16-2014)

   Filed 64-US-02    Ocular Gels Or Hydrogels And Microinjectors   

14/878,243

(10-08-2015)

   Awaiting exam. 64-WO-01    Ocular Gels or Hydrogels and Microinjectors   

PCT/US2015/054637

(10-8-2015)

   Pending 69-US-01    Drug Delivery From Hydrogels   

62/160,394

(5-12-2015)

   Filed 70-US-01    Improved Punctal Plugs   

62/195,580

(7-22-2015)

   Filed

 

* also licensed nonexclusively to GENZYME CORP.

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

Trademarks

 

Ref No. (Country)

  

Trademark

  

Registration
No.

(Issue Date)

  

Status

15-US-01 (United States)    RESURE   

4,135,965

(05/01/2012)

   Registered. 15-WO-01 (Australia)    RESURE   

1 050 699

(08-26-2010)

   Protection granted 02/16/11. 15-WO-01 (China)    RESURE   

1 050 699

(08-26-2010)

   Protection granted 08/08/11.

15-WO-01

(Czech Republic)

   RESURE   

1 050 699

(08-26-2010)

   Protection granted 05/06/11. 15-WO-01 (France)    RESURE   

1 050 699

(08-26-2010)

   Protection granted. 15-WO-01 (Germany)    RESURE   

1 050 699

(08-26-2010)

   Protection granted 2-25-11 15-WO-01 (Hungary)    RESURE   

1 050 699

(08-26-2010)

   Protection granted 06-29-11

15-WO-01

(Italy)

   RESURE   

1 050 699

(08-26-2010)

   Protection granted 08/01/11. 15-WO-01 (Japan)    RESURE   

1 050 699

(08-26-2010)

   Registered 9-16-11. 15-WO-01 (Korea)    RESURE   

1 050 699

(08-26-2010)

   Protection granted 9/1/11. Assigned Int’l Reg. No. 15-WO-01 (Poland)   
RESURE   

1 050 699

(08-26-2010)

   Protection granted 03/21/11. 15-WO-01 (Russia)    RESURE   

1 050 699

(08-26-2010)

   Protection granted 08/29/11. 15-WO-01 (Singapore)    RESURE   

1 050 699

(08-26-2010)

   Protection granted 01-19-2011. 15-WO-01 (Spain)    RESURE   

1 050 699

(08-26-2010)

   Protection granted 02-10-11.

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

Ref No. (Country)

  

Trademark

  

Registration No.

(Issue Date)

  

Status

15-WO-01

(United Kingdom)

   RESURE   

1 050 699

(08-26-2010)

   Protection granted 01-10-11.

22-US-01

(United States)

   OCULAR THERAPEUTIX logo   

86/412,904

(10-2-2014)

   In prosecution

N/A

(United States)

   DEXTENZA   

86425297

(10-16-14)

   Protection granted 05-19-15.

N/A

(United States)

   DEXOLVA   

86425301

(10-16-14)

   Protection granted 05-19-15.

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

INTANGIBLE ASSETS SCHEDULE (CONTINUED)

LICENSE AND SIMILAR AGREEMENTS

 

LICENSE # 1 [COMPLETE FOR EACH AGREEMENT] Name and Date of License Agreement:   
Amended and Restated License Agreement Borrower that is Licensee:    Ocular
Therapeutix, Inc. Name and address of Licensor:    Incept, LLC Expiration Date
of License    Perpetual Exclusive License [Y/N]?    Yes Restrictions on:   
Right to Grant a Lien [Y/N]?    No   

 

Right to Assign [Y/N]?

  

 

Yes, as part of a sale

  

 

Right to Sublicense [Y/N]?

  

 

Yes

Does Default or Termination Affect Agent’s Ability to sell

[Y/N]?

  

Describe Licensed Intellectual Property For This License

Name / Identifier of IP

  

Type of IP (e.g., patent, TM,

©, mask work)

  

Registration/ Publication or Application

Number

   Filing Date/Expiration Date                                             

 

LICENSE # 2 [COMPLETE FOR EACH AGREEMENT]

Name and Date of License Agreement:    Borrower that is Licensee:    Name and
address of Licensor:    Expiration Date of License    Exclusive License [Y/N]?
   Restrictions on:    Right to Grant a Lien       [Y/N]?       Right to Assign
[Y/N]?       Right to Sublicense [Y/N]?   

Does Default or Termination Affect Agent’s Ability to sell

[Y/N]?

     

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

Describe Licensed Intellectual Property For This License

Name / Identifier of IP

  

Type of IP (e.g., patent, TM,
©, mask work)

  

Registration/ Publication or Application

Number

   Filing Date/Expiration Date                                             

 

LICENSE # 3 [COMPLETE FOR EACH AGREEMENT]    Name and Date of License Agreement:
      Borrower that is Licensee:       Name and address of Licensor:      
Expiration Date of License       Exclusive License [Y/N]?       Restrictions on:
   Right to Grant a Lien [Y/N]?      

 

Right to Assign [Y/N]?

     

 

Right to Sublicense [Y/N]?

   Does Default or Termination Affect Agent’s Ability to sell [Y/N]?      

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

Describe Licensed Intellectual Property For This License

Name / Identifier of IP

   Type of IP (e.g., patent, TM,
©, mask work)    Registration/ Publication or Application Number   
Filing Date/Expiration Date                                             

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

PRODUCTS SCHEDULE

RESURE

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REQUIRED PERMITS SCHEDULE

Certificate of Compliance, Town of Bedford, Issued April 1, 2015