Exhibit 10.1

EXECUTION VERSION

 

 

 

AMENDED AND RESTATED TERM LOAN AGREEMENT

dated as of

November 4, 2014

between

TRIVASCULAR TECHNOLOGIES, INC.

and

TRIVASCULAR, INC.

as Borrowers,

The SUBSIDIARY GUARANTORS from Time to Time Party Hereto,

and

The LENDERS from Time to Time Party Hereto,

as Lenders

 

 

 

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TABLE OF CONTENTS

 

     Page  

SECTION 1     DEFINITIONS

     1     

1.01

  Certain Defined Terms      1     

1.02

  Accounting Terms and Principles      20     

1.03

  Interpretation      20     

1.04

  Changes to GAAP      20     

1.05

  Amendment and Restatement and Continuing Security      21   

SECTION 2     THE COMMITMENT

     22     

2.01

  Commitments      22     

2.02

  Borrowing Procedures      22     

2.03

  Fees      22     

2.04

  Notes      22     

2.05

  Use of Proceeds      22     

2.06

  Defaulting Lenders      23     

2.07

  Substitution of Lenders      24   

SECTION 3     PAYMENTS OF PRINCIPAL AND INTEREST

     25     

3.01

  Repayment      25     

3.02

  Interest      25     

3.03

  Prepayments      25   

SECTION 4     PAYMENTS, ETC

     28     

4.01

  Payments      28     

4.02

  Computations      28     

4.03

  Notices      28     

4.04

  Set-Off      28   

SECTION 5     YIELD PROTECTION, ETC

     29     

5.01

  Additional Costs      29     

5.02

  Reserved      30     

5.03

  Illegality      30     

5.04

  Reserved      30     

5.05

  Taxes      30   

SECTION 6     CONDITIONS PRECEDENT

     33      6.01   Conditions to Second Borrowing      33   

 

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TABLE OF CONTENTS

(continued)

 

     Page     6.02   Conditions to Third Borrowing      35      6.03  
Conditions to Each Borrowing      36    SECTION 7     REPRESENTATIONS AND
WARRANTIES      37      7.01   Power and Authority      37      7.02  
Authorization; Enforceability      37      7.03   Governmental and Other
Approvals; No Conflicts      37      7.04   Financial Statements; Material
Adverse Change      37      7.05   Properties      38      7.06   No Actions or
Proceedings      41      7.07   Compliance with Laws and Agreements      42     
7.08   Taxes      42      7.09   Full Disclosure      42      7.10   Regulation
     42      7.11   Solvency      42      7.12   Subsidiaries      42      7.13
  Indebtedness and Liens      42      7.14   Material Agreements      43     
7.15   Restrictive Agreements      43      7.16   Real Property      43     
7.17   Pension Matters      43      7.18   Collateral; Security Interest      44
     7.19   Regulatory Approvals      44      7.20   Small Business Concern     
44      7.21   Update of Schedules      44    SECTION 8     AFFIRMATIVE
COVENANTS      44      8.01   Financial Statements and Other Information      45
     8.02   Notices of Material Events      46      8.03   Existence; Conduct of
Business      48      8.04   Payment of Obligations      48      8.05  
Insurance      48      8.06   Books and Records; Inspection Rights      49     
8.07   Compliance with Laws and Other Obligations      49   

 

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TABLE OF CONTENTS

(continued)

 

     Page     8.08   Maintenance of Properties, Etc      49      8.09   Licenses
     51      8.10   Action under Environmental Laws      51      8.11   Use of
Proceeds      51      8.12   Certain Obligations Respecting Subsidiaries;
Further Assurances      51      8.13   Termination of Non-Permitted Liens     
52      8.14   Intellectual Property      53      8.15   Post-Closing Items     
53    SECTION 9     NEGATIVE COVENANTS      54      9.01   Indebtedness      54
     9.02   Liens      55      9.03   Fundamental Changes and Acquisitions     
57      9.04   Lines of Business      57      9.05   Investments      57     
9.06   Restricted Payments      58      9.07   Payments of Indebtedness      59
     9.08   Change in Fiscal Year      59      9.09   Sales of Assets, Etc     
59      9.10   Transactions with Affiliates      60      9.11   Restrictive
Agreements      60      9.12   Amendments to Material Agreements      61     
9.13   Preservation of Santa Rosa Lease; Operating Leases      61      9.14  
Sales and Leasebacks      62      9.15   Hazardous Material      62      9.16  
Accounting Changes      62      9.17   Compliance with ERISA      62      9.18  
Foreign Subsidiaries Excess Cash      63    SECTION 10     FINANCIAL COVENANTS
     63      10.01   Minimum Revenue      63      10.02   Cure Right      63   
  10.03   Minimum Cash      64    SECTION 11     EVENTS OF DEFAULT      64   

 

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TABLE OF CONTENTS

(continued)

 

     Page     11.01   Events of Default      64      11.02   Remedies      67   

SECTION 12     MISCELLANEOUS

     67      12.01   No Waiver      67      12.02   Notices      67      12.03  
Expenses, Indemnification, Etc      68      12.04   Amendments, Etc      69     
12.05   Successors and Assigns      69      12.06   Survival      71      12.07
  Captions      72      12.08   Counterparts      72      12.09   Governing Law
     72      12.10   Jurisdiction, Service of Process and Venue      72     
12.11   Waiver of Jury Trial      72      12.12   Waiver of Immunity      73   
  12.13   Entire Agreement      73      12.14   Severability      73      12.15
  No Fiduciary Relationship      73      12.16   Confidentiality      73     
12.17   USA PATRIOT Act      73      12.18   Maximum Rate of Interest      74   
  12.19   Co-Borrower Provisions      74    SECTION 13     GUARANTEE      76   
  13.01   The Guarantee      76      13.02   Obligations Unconditional      77
     13.03   Reinstatement      77      13.04   Subrogation      78      13.05  
Remedies      78      13.06   Instrument for the Payment of Money      78     
13.07   Continuing Guarantee      78      13.08   Rights of Contribution      78
     13.09   General Limitation on Guarantee Obligations      79   

 

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TABLE OF CONTENTS

(continued)

 

     Page     13.10   Additional Waivers      79   

SCHEDULES AND EXHIBITS

 

Schedule 1

   -    Commitments and Warrants

Schedule 3.03(b)(ii)

   -    Excluded Shareholders

Schedule 7.05(b)

   -    Certain Intellectual Property

Schedule 7.05(c)

   -    Material Intellectual Property

Schedule 7.06

   -    Certain Litigation

Schedule 7.08

   -    Taxes

Schedule 7.12

   -    Information Regarding Subsidiaries

Schedule 7.13(b)-1

   -    Existing Indebtedness of each Borrower and its Subsidiaries

Schedule 7.13(b)-2

   -    Liens Granted by the Obligors

Schedule 7.14

   -    Material Agreements of each Borrower and each of its Subsidiaries

Schedule 7.15

   -    Permitted Restrictive Agreements

Schedule 7.16

   -    Real Property Owned or Leased by Borrower or any Subsidiary

Schedule 7.17

   -    Pension Matters

Schedule 9.05

   -    Existing Investments

Schedule 9.10

   -    Transactions with Affiliates

Schedule 9.14

   -    Permitted Sales and Leasebacks

Exhibit A

   -    Form of Guarantee Assumption Agreement

Exhibit B

   -    Form of Notice of Borrowing

Exhibit C-1

   -    Form of Term Loan Note

Exhibit C-2

   -    Form of PIK Loan Note

Exhibit D

   -    Form of U.S. Tax Compliance Certificate

Exhibit E

   -    Form of Compliance Certificate

 

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AMENDED AND RESTATED TERM LOAN AGREEMENT, dated as of November 4, 2014, among
TRIVASCULAR TECHNOLOGIES, INC. (formerly TV2 HOLDING COMPANY), a Delaware
corporation (“Holdings”), TriVascular, Inc., a California corporation
(“TriVascular” and, together with Holdings, the “Borrowers”), the SUBSIDIARY
GUARANTORS from time to time party hereto, the Control Agent and the Lenders
from time to time party hereto.

WITNESSETH:

WHEREAS, the Borrowers and the Lenders are parties to a Term Loan Agreement
dated as of October 12, 2012 (the “Existing Term Loan Agreement”), pursuant to
which the Lenders, from an aggregate term loan commitment of $50,000,000, have
extended term loans in the original principal amount of $40,000,000 (inclusive
of all accrued and unpaid interest, whether cash or payment-in-kind, the
“Existing Term Loans”) to the Borrowers on October 30, 2012 (the “Prior Closing
Date”).

WHEREAS, the Borrowers have requested the full repayment and conversion of the
Existing Term Loans and the amendment and restatement of the Existing Term Loan
Agreement for the Lenders to extend or continue to extend credit in the form of
term loans to the Borrowers in an aggregate principal amount of up to the
Commitment (as defined hereafter), which Existing Term Loans shall be deemed
repaid on the date hereof upon their conversion into new Loans hereunder on the
date hereof by the Lenders.

WHEREAS, the parties hereto acknowledge that as of the date hereof, following
the payment of accrued cash interest of $469,429.41 by the Borrowers to the
Lenders, the Existing Term Loans to be converted into new Loans hereunder shall
be in an amount equal to $42,088,283.03.

WHEREAS, to effect such repayment and conversion of the Existing Term Loans and
such extensions of credit, the parties have agreed to amend and restate the
Existing Term Loan Agreement in its entirety to make certain changes as more
fully set forth herein, which amendment and restatement shall become effective
on the date hereof, to provide for term loans from the Lenders to the Borrowers
in an aggregate principal amount up to the Commitment (as defined hereafter).

Accordingly, the parties agree as follows:

SECTION 1

DEFINITIONS

1.01 Certain Defined Terms. As used herein, the following terms have the
following respective meanings:

“Accounting Change Notice” has the meaning set forth in Section 1.04(a).

“Act” has the meaning set forth in Section 12.17.

 

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“Acquisition” means any transaction, or any series of related transactions, by
which any Person directly or indirectly, by means of a take-over bid, tender
offer, amalgamation, merger, purchase of assets, or similar transaction having
the same effect as any of the foregoing, (a) acquires any business or all or
substantially all of the assets of any Person engaged in any business,
(b) acquires control of securities of a Person engaged in a business
representing more than 50% of the ordinary voting power for the election of
directors or other governing body if the business affairs of such Person are
managed by a board of directors or other governing body, or (c) acquires control
of more than 50% of the ownership interest in any Person engaged in any business
that is not managed by a board of directors or other governing body.

“Affected Lender” has the meaning set forth in Section 2.07(a).

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

“Agreement” means this Amended and Restated Term Loan Agreement, including the
schedules and exhibits hereto, as the same may be from time to time further
modified, amended, restated, amended and restated and/or supplemented.

“Asset Sale” is defined in Section 9.09.

“Asset Sale Net Proceeds” means the aggregate amount of the cash proceeds
received from any Asset Sale, net of any bona fide costs incurred in connection
with such Asset Sale, plus, with respect to any non-cash proceeds of an Asset
Sale, the fair market value of such non cash proceeds as determined by the
Majority Lenders, acting reasonably.

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an assignee of such Lender.

“Bankruptcy Code” means Title II of the United States Code entitled
“Bankruptcy.”

“Benefit Plan” means any employee benefit plan as defined in Section 3(3) of
ERISA (whether governed by the laws of the United States or otherwise) to which
any Obligor or Subsidiary thereof incurs or otherwise has any obligation or
liability, contingent or otherwise.

“Borrowers” has the meaning set forth in the introduction hereto.

“Borrower Party” has the meaning set forth in Section 12.03(b).

“Borrowing” means a borrowing under this Agreement consisting of Loans made on
the same day by the Lenders according to their respective Commitments (including
without limitation a borrowing of a PIK Loan).

“Borrowing Date” means the date of the Borrowing.

“Borrowing Notice Date” means, (i) in the case of the Second Borrowing, the date
hereof and, (ii) in the case of the Third Borrowing, a date that is at least
twenty Business Days prior to the Borrowing Date of such Borrowing, which
Borrowing Notice Date shall be no later than February 29, 2016.

 

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“Business Day” means a day (other than a Saturday or Sunday) on which commercial
banks are not authorized or required to close in New York City or San Francisco.

“Capital Lease Obligations” means, as to any Person, the obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal Property which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP and, for purposes of this Agreement, the amount
of such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP.

“Change of Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group of Persons acting
jointly or otherwise in concert of capital stock representing more than 30% of
the aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Holdings, (b) during any period of twelve (12) consecutive
calendar months, the occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Holdings by Persons who were neither
(i) nominated by the board of directors of the Holdings, nor (ii) appointed by
directors so nominated, (c) the acquisition of direct or indirect Control of the
Holdings by any Person or group of Persons acting jointly or otherwise in
concert; in each case whether as a result of a tender or exchange offer, open
market purchases, privately negotiated purchases or otherwise, or (d) the
failure of Holdings to own and control 100% of the issued and outstanding equity
interests in TriVascular; provided that the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Excluded Shareholder of capital
stock representing more than 30% but less than 50% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of the
Holdings shall not be deemed a Change of Control event.

“Claims” includes claims, demands, complaints, grievances, actions,
applications, suits, causes of action, orders, charges, indictments,
prosecutions, informations (brought by a public prosecutor without grand jury
indictment) or other similar processes, assessments or reassessments.

“Closing Date” means the later of (i) November 21, 2014, and (ii) the date as of
which the Lenders notify the Borrowers that the conditions precedent set forth
in Section 6.01 have been satisfied or waived.

“CMI” means Century Medical, Inc., a Japan corporation.

“CMI Loan Agreement” means the Loan Agreement, dated as of January 1, 2014,
among Holdings, TriVascular, the subsidiary guarantors from time to time party
thereto, and CMI, as amended by that First Amendment to Loan Agreement, dated as
of November 4, 2014.

“CMI Subordination Agreement” means the Subordination Agreement, dated as of
January 10, 2014, among the Lenders and CMI.

 

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“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time.

“Collateral” means the collateral provided for in the Security Documents.

“Commitment” means, with respect to each Lender, the obligation of such Lender
to make Loans to the Borrowers in accordance with the terms and conditions of
this Agreement, which commitment is in the amount set forth opposite such
Lender’s name on Schedule 1 under the caption “Commitment”, as such Schedule may
be amended from time to time. The aggregate Commitments on the date hereof are
set forth on Schedule 1. For purposes of clarification, the amount of any PIK
Loans shall not reduce the amount of the available Commitment.

“Commitment Period” means the period from and including the date hereof and
through and including March 28, 2016.

“Commodity Account” is defined in the Security Agreement.

“Compliance Certificate” has the meaning given to such term in Section 8.01(c).

“Contracts” means contracts, licenses, leases, agreements, obligations,
promises, undertakings, understandings, arrangements, documents, commitments,
entitlements or engagements under which a Person has, or will have, any
liability or contingent liability (in each case, whether written or oral,
express or implied).

“Control” means, in respect of a particular Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ability to exercise voting power,
by contract or otherwise. “Controlling” and “Controlled” have meanings
correlative thereto.

“Control Agent” is defined in the Security Agreement.

“Copyright” is defined in the Security Agreement.

“CRPC” means Capital Royalty Partners II (Cayman) L.P.

“CRPPF” means Capital Royalty Partners II – Parallel Fund “A” L.P.

“CRPPFC” means Capital Royalty Partners II – Parallel Fund “B” (Cayman) L.P.

“Cure Amount” has the meaning set forth in Section 10.02(b).

“Cure Right” has the meaning set forth in Section 10.02(a)(ii).

“Default” means any Event of Default and any event that, upon the giving of
notice, the lapse of time or both, would constitute an Event of Default.

“Defaulting Lender” means, subject to Section 2.06, any Lender that (a) has
failed to perform any of its funding obligations hereunder, including in respect
of its Loans, within three

 

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(3) Business Days of the date required to be funded by it hereunder, (b) has
notified the Borrower or any Lender that it does not intend to comply with its
funding obligations or has made a public statement to that effect with respect
to its funding obligations hereunder or under other agreements in which it
commits to extend credit, or (c) has, or has a direct or indirect parent company
that has, (i) become the subject of an Insolvency Proceeding, (ii) had a
receiver, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or a custodian appointed for it, or (iii) taken any action in
furtherance of, or indicated its consent to, approval of or acquiescence in any
such proceeding or appointment; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any equity interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority.

“Deposit Account” is defined in the Security Agreement.

“Dollars” and “$” means lawful money of the United States of America.

“Domestic Subsidiary” means any Subsidiary that is a corporation, limited
liability company, partnership or similar business entity incorporated, formed
or organized under the laws of the United States, any State of the United States
or the District of Columbia.

“Eligible Transferee” means and includes a commercial bank, an insurance
company, a finance company, a financial institution, any investment fund that
invests in loans or any other “accredited investor” (as defined in Regulation D
of the Securities Act) that is principally in the business of managing
investments or holding assets for investment purposes; provided that “Eligible
Transferee” shall not include any Person that is principally in the business of
managing investments or holding assets for investment purposes that has a board
participation right in a company that produces, markets or sells, or develops a
program to market or sell, a marketed or Phase III product in competition with
the Borrowers.

“Environmental Law” means any federal, state, provincial or local governmental
law, rule, regulation, order, writ, judgment, injunction or decree relating to
pollution or protection of the environment or the treatment, storage, disposal,
release, threatened release or handling of hazardous materials, and all local
laws and regulations related to environmental matters and any specific
agreements entered into with any competent authorities which include commitments
related to environmental matters.

“Equity Cure Right” has the meaning set forth in Section 10.02(a)(i).

“Equity Interest” shall mean, with respect to any Person, any and all shares,
interests, participations or other equivalents, including membership interests
(however designated, whether voting or nonvoting), of equity of such Person,
including, if such Person is a partnership, partnership interests (whether
general or limited) and any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of property of, such partnership, but excluding debt securities
convertible or exchangeable into such equity.

“Equivalent Amount” means, with respect to an amount denominated in one
currency, the amount in another currency that could be purchased by the amount
in the first currency determined by reference to the Exchange Rate at the time
of determination.

 

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“ERISA” means the United States Employee Retirement Income Security Act of 1974,
as amended.

“ERISA Affiliate” means, collectively, any Obligor, Subsidiary thereof, and any
Person under common control, or treated as a single employer, with any Obligor
or Subsidiary thereof, within the meaning of Section 414(b), (c), (m) or (o) of
the Code.

“ERISA Event” means (i) a reportable event as defined in Section 4043 of ERISA
with respect to a Title IV Plan, excluding, however, such events as to which the
PBGC by regulation has waived the requirement of Section 4043(a) of ERISA that
it be notified within 30 days of the occurrence of such event; (ii) the
applicability of the requirements of Section 4043(b) of ERISA with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, to any Title
IV Plan where an event described in paragraph (9), (10), (11), (12) or (13) of
Section 4043(c) of ERISA is reasonably expected to occur with respect to such
plan within the following 30 days; (iii) a withdrawal by any Loan Party or any
ERISA Affiliate thereof from a Title IV Plan or the termination of any Title IV
Plan resulting in liability under Sections 4063 or 4064 of ERISA; (iv) the
withdrawal of any Loan Party or any ERISA Affiliate thereof in a complete or
partial withdrawal (within the meaning of Section 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefore, or the
receipt by any Loan Party or any ERISA Affiliate thereof of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA; (v) the filing of a notice of intent to
terminate, the treatment of a plan amendment as a termination under Section 4041
or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Title IV Plan or Multiemployer Plan; (vi) the imposition of liability on any
Loan Party or any ERISA Affiliate thereof pursuant to Sections 4062(e) or 4069
of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the
failure by any Loan Party or any ERISA Affiliate thereof to make any required
contribution to a Plan, or the failure to meet the minimum funding standard of
Section 412 of the Code with respect to any Title IV Plan (whether or not waived
in accordance with Section 412(c) of the Code) or the failure to make by its due
date a required installment under Section 430 of the Code with respect to any
Title IV Plan or the failure to make any required contribution to a
Multiemployer Plan; (viii) the determination that any Title IV Plan is
considered an at-risk plan or a plan in endangered to critical status within the
meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of
ERISA; (ix) an event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan;
(x) the imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party
or any ERISA Affiliate thereof; (xi) an application for a funding waiver under
Section 303 of ERISA or an extension of any amortization period pursuant to
Section 412 of the Code with respect to any Title IV Plan; (xii) the occurrence
of an act or omission which could give rise to the imposition on any Loan Party
or any ERISA Affiliate thereof of fines, penalties, taxes or related charges
under Sections 409, 502(c), (i) or (1) or 4071 of ERISA; (xiii) the assertion of
a material claim (other than routine claims for benefits) against any Plan or
the assets thereof, or against any Loan Party or any

 

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Subsidiary thereof in connection with any such plan; (xiv) receipt from the IRS
of notice of the failure of any Qualified Plan to qualify under Section 401(a)
of the Code, or the failure of any trust forming part of any Qualified Plan to
fail to qualify for exemption from taxation under Section 501(a) of the Code; or
(xv) the imposition of any lien (or the fulfillment of the conditions for the
imposition of any lien) on any of the rights, properties or assets of any Loan
Party or any ERISA Affiliate thereof, in either case pursuant to Title I or IV,
including Section 302(f) or 303(k) of ERISA or to Section 401(a)(29) or 430(k)
of the Code.

“Event of Default” has the meaning set forth in Section 11.01.

“Exchange Rate” means the rate at which any currency (the “Pre-Exchange
Currency”) may be exchanged into another currency (the “Post-Exchange
Currency”), as set forth on such date on the relevant Reuters screen at or about
11:00 a.m. (Central time) on such date. In the event that such rate does not
appear on the Reuters screen, the “Exchange Rate” with respect to exchanging
such Pre-Exchange Currency into such Post-Exchange Currency shall be determined
by reference to such other publicly available service for displaying exchange
rates as may be agreed upon by the Borrowers and the Majority Lenders or, in the
absence of such agreement, such Exchange Rate shall instead be determined by the
Majority Lenders by any reasonable method as they deem applicable to determine
such rate, and such determination shall be conclusive absent manifest error.

“Excluded Shareholder” means any of the shareholders of Holdings that hold
Equity Interests in Holdings as at the date hereof and that are listed on
Schedule 3.03(b)(ii) hereto, but shall not include any of their portfolio
companies or limited partners.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient: (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes and branch profits Taxes, in each case imposed as a result of
such Recipient being organized under the laws of, or having its principal office
or, in the case of any Lender, its applicable lending office located in, the
jurisdiction imposing such Tax, (b) Other Connection Taxes, (c) U.S. federal
withholding Taxes that are imposed on amounts payable to a Lender to the extent
that the obligation to withhold amounts existed on the date that such Lender
became a “Lender” under this Agreement, except in each case to the extent such
Lender is a direct or indirect assignee of any other Lender that was entitled,
at the time the assignment of such other Lender became effective, as a result of
a change in law prior to the time of the assignment, to receive additional
amounts under Section 5.05, (d) any Taxes imposed in connection with FATCA, and
(e) Taxes attributable to such Recipient’s failure to comply with Section
5.05(e).

“Existing Term Loan Agreement” has the meaning set forth in the recitals hereto.

“Existing Term Loans” has the meaning set forth in the recitals hereto.

“Expense Cap” has the meaning set forth in the Fee Letter.

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

 

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“Fee Letter” means that fee letter agreement dated as of the date hereof between
Borrowers and the Lenders party thereto.

“First Borrowing” means the first Borrowing under this Agreement by the
conversion of the Existing Term Loans on the date hereof.

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

“Foreign Subsidiary” means a Subsidiary of a Borrower that is not a Domestic
Subsidiary.

“GAAP” means generally accepted accounting principles in the United States of
America, as in effect from time to time, set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants, in the statements and pronouncements of the
Financial Accounting Standards Board and in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession that are applicable to the circumstances as of the date of
determination. Subject to Section 1.02, all references to “GAAP” shall be to
GAAP applied consistently with the principles used in the preparation of the
financial statements described in Section 7.04(a).

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

“Governmental Authority” means any nation, government, branch of power (whether
executive, legislative or judicial), state, province or municipality or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, monetary, regulatory or administrative functions of or pertaining to
government, including without limitation regulatory authorities, governmental
departments, agencies, commissions, bureaus, officials, ministers, courts,
bodies, boards, tribunals and dispute settlement panels, and other law-, rule-
or regulation-making organizations or entities of any State, territory, county,
city or other political subdivision of the United States.

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

 

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“Guarantee Assumption Agreement” means a Guarantee Assumption Agreement
substantially in the form of Exhibit A by an entity that, pursuant to
Section 8.12(a), is required to become a “Subsidiary Guarantor” hereunder in
favor of the Lenders.

“Guaranteed Obligations” has the meaning set forth in Section 13.01.

“Hazardous Material” means any substance, element, chemical, compound, product,
solid, gas, liquid, waste, by-product, pollutant, contaminant or material which
is hazardous or toxic, and includes, without limitation, (a) asbestos,
polychlorinated biphenyls and petroleum (including crude oil or any fraction
thereof) and (b) any material classified or regulated as “hazardous” or “toxic”
or words of like import pursuant to an Environmental Law.

“Hedging Agreement” means any interest rate exchange agreement, foreign currency
exchange agreement, commodity price protection agreement or other interest or
currency exchange rate or commodity price hedging arrangement.

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or obligations of such Person with respect to
deposits or advances of any kind by third parties, in each case, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person upon which interest charges are
customarily paid, (d) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person,
(e) all obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed,
(g) all Guarantees by such Person of Indebtedness of others, (h) all Capital
Lease Obligations of such Person, (i) all obligations, contingent or otherwise,
of such Person as an account party in respect of letters of credit and letters
of guaranty (j) obligations under any Hedging Agreement currency swaps,
forwards, futures or derivatives transactions, and (k) all obligations,
contingent or otherwise, of such Person in respect of bankers’ acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Party” has the meaning set forth in Section 12.03(b).

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any Obligation and (b) to
the extent not otherwise described in clause (a), Other Taxes.

“Insolvency Proceeding” means (i) any case, action or proceeding before any
court or

 

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other Governmental Authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief of debtors, or
(ii) any general assignment for the benefit of creditors, composition,
marshaling of assets for creditors, or other, similar arrangement in respect of
any Person’s creditors generally or any substantial portion of such Person’s
creditors, in each case undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code.

“Intellectual Property” means all Patents, Trademarks, Copyright, and Technical
Information, whether registered or not, domestic and foreign. Intellectual
Property shall include all:

applications or registrations relating to such Intellectual Property;

rights and privileges arising under applicable Laws with respect to such
Intellectual Property;

rights to sue for past, present or future infringements of such Intellectual
Property; and

rights of the same or similar effect or nature in any jurisdiction corresponding
to such Intellectual Property throughout the world.

“Interest-Only Period” means the period from and including the date hereof and
through and including the sixteenth Payment Date following the date hereof.

“Interest Period” means, with respect to each Borrowing, (i) initially, the
period commencing on and including the Borrowing Date thereof and ending on and
excluding the next Payment Date, and, (ii) thereafter, each period beginning on
and including the last day of the immediately preceding Interest Period and
ending on and excluding the next succeeding Payment Date; provided that the term
“Interest Period” shall include any period selected by the Majority Lenders from
time to time in accordance with the definition of “Default Rate”.

“Invention” means any novel, inventive and useful art, apparatus, method,
process, machine (including article or device), manufacture or composition of
matter, or any novel, inventive and useful improvement in any art, method,
process, machine (including article or device), manufacture or composition of
matter.

“Investment” means, for any Person: (a) the acquisition (whether for cash,
property, services or securities or otherwise) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other securities of any
other Person or any agreement to make any such acquisition (including any “short
sale” or any sale of any securities at a time when such securities are not owned
by the Person entering into such sale); (b) the making of any deposit with, or
advance, loan or other extension of credit to, any other Person (including the
purchase of property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such property to such Person), but
excluding any such advance, loan or extension of credit having a term not
exceeding 90 days arising in connection with the sale of inventory or supplies
by such Person in the ordinary course of business; (c) the entering into of any
Guarantee of, or other contingent obligation with respect to, Indebtedness or
other liability of any other Person and (without duplication) any amount
committed to be advanced, lent or extended to such Person; or (d) the entering
into of any Hedging Agreement.

 

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“IRS” means the U.S. Internal Revenue Service or any successor agency, and to
the extent relevant, the U.S. Department of the Treasury.

“Knowledge” means the actual knowledge of any Responsible Officer of any Person
or, so long as he is employed by the Borrowers or their Subsidiaries, the actual
knowledge of Michael Chobotov so long as he is an executive officer of a
Borrower.

“Landlord Consent” means each landlord consent with respect to the Borrowers’
leased locations duly executed and delivered by the Borrowers in connection with
this Agreement.

“Laws” means, collectively, all international, foreign, federal, state,
provincial, territorial, municipal and local statutes, treaties, rules,
guidelines, regulations, ordinances, codes and administrative or judicial
precedents or authorities, including the interpretation or administration
thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and all applicable administrative
orders, directed duties, requests, licenses, authorizations and permits of, and
agreements with, any Governmental Authority, in each case whether or not having
the force of law.

“Leasehold Deed of Trust” means each leasehold deed of trust with respect to the
Borrowers’ leased locations duly executed and delivered by the Borrowers in
connection with this Agreement.

“Lenders” means Capital Royalty Partners II L.P., PIOP, CRPPF, CRPC and CRPPFC,
together with their successors and each assignee of a Lender pursuant to
Section 12.05(b) and “Lender” means any one of them.

“Lien” means any mortgage, lien, pledge, charge, encumbrance or other security
interest, leases, title retention agreements, mortgages, restrictions,
easements, rights-of-way, options or adverse claims (of ownership or possession)
or encumbrances of any kind or character whatsoever or any preferential
arrangement that has the practical effect of creating a security interest.

“Liquidity” means the balance of unencumbered (other than by Liens securing the
Obligations) cash and Permitted Cash Equivalent Investments (which for greater
certainty shall not include any undrawn credit lines), in each case, to the
extent held in an account over which the Lenders have a first priority perfected
security interest.

“Loan” means (i) each loan advanced by a Lender pursuant to Section 2.01 and
(ii) each PIK Loan deemed to have been advanced by a Lender pursuant to
Section 3.02(d). For purposes of clarification, any calculation of the aggregate
outstanding principal amount of Loans on any date of determination shall include
both the aggregate principal amount of loans advanced pursuant to Section 2.01
and not yet repaid, and all PIK Loans deemed to have been advanced and not yet
repaid, on or prior to such date of determination.

“Loan Documents” means, collectively, this Agreement, the Notes, the Security

 

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Documents, each Warrant, the Fee Letter, any subordination agreement or any
intercreditor agreement entered into by Lenders with any other creditors of
Obligors, including the CMI Subordination Agreement, and any other present or
future document, instrument, agreement or certificate executed by Obligors for
the benefit of Lenders in connection with this Agreement or any of the other
Loan Documents, all as amended, restated, or otherwise modified.

“Loss” means judgments, debts, liabilities, expenses, costs, damages or losses,
contingent or otherwise, whether liquidated or unliquidated, matured or
unmatured, disputed or undisputed, contractual, legal or equitable, including
loss of value, professional fees, including fees and disbursements of legal
counsel on a full indemnity basis, and all costs incurred in investigating or
pursuing any Claim or any proceeding relating to any Claim.

“Majority Lenders” means, at any time, Lenders having at such time in excess of
50% of the aggregate Commitments (or, if such Commitments are terminated, the
outstanding principal amount of the Loans) then in effect, ignoring, in such
calculation, the Commitments of and outstanding Loans owing to any Defaulting
Lender.

“Margin Stock” means “margin stock” within the meaning of Regulations U and X.

“Material Adverse Change” and “Material Adverse Effect” mean (A) a material
adverse change in or effect on (i) the business, condition (financial or
otherwise), operations, performance, or Property of any Borrower and its
Subsidiaries taken as a whole, (ii) the ability of any Obligor to perform its
obligations under the Loan Documents, (iii) the legality, validity, binding
effect or enforceability of the Loan Documents or the rights and remedies of the
Lenders under any of the Loan Documents, or (B) any material breach of, or
“event of default” or similar event by any Obligor under, any Material
Agreement.

“Material Agreements” means the agreements which are listed in Schedule 7.14 and
all other agreements held by the Obligors from time to time, the absence or
termination of any of which would reasonably be expected to result in a Material
Adverse Effect, provided however that “Material Agreements” exclude all:
(i) licenses implied by the sale of a product; (ii) paid-up licenses for
commonly available software programs under which an Obligor is the licensee; and
(iii) non-disclosure agreements. “Material Agreement” means any one such
agreement.

“Material Indebtedness” means, at any time, any Indebtedness of any Obligor the
outstanding principal amount of which, individually or in the aggregate, exceeds
$1,500,000 (or the Equivalent Amount in other currencies).

“Material Intellectual Property” means, the Obligor Intellectual Property
described in Schedule 7.05(c) and any other Obligor Intellectual Property after
the date hereof the loss of which could reasonably be expected to have a
Material Adverse Effect.

“Maturity Date” means the earlier to occur of (i) the twenty-third Payment Date
following the date hereof, and (ii) the date on which the Loans are accelerated
pursuant to Section 11.02.

“Maximum Rate” has the meaning set forth in Section 12.18.

 

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“Multiemployer Plan” means any multiemployer plan, as defined in
Section 400l(a)(3) of ERISA, to which any ERISA Affiliate incurs or otherwise
has any obligation or liability, contingent or otherwise.

“Non-Consenting Lender” has the meaning set forth in Section 2.07(a).

“Non-Disclosure Agreement” has the meaning set forth in Section 12.16.

“Note” means a promissory note executed and delivered by the Borrowers to the
Lenders in accordance with Section 2.04 or 3.02(d).

“Notice of Borrowing” has the meaning given to such term in Section 2.02.

“Obligations” means, with respect to any Obligor, all amounts, obligations,
liabilities, covenants and duties of every type and description owing by such
Obligor to any Lender, any other indemnitee hereunder or any participant,
arising out of, under, or in connection with, any Loan Document, whether direct
or indirect (regardless of whether acquired by assignment), absolute or
contingent, due or to become due, whether liquidated or not, now existing or
hereafter arising and however acquired, and whether or not evidenced by any
instrument or for the payment of money, including, without duplication, (i) if
such Obligor is a Borrower, all Loans, (ii) all interest, whether or not
accruing after the filing of any petition in bankruptcy or after the
commencement of any insolvency, reorganization or similar proceeding, and
whether or not a claim for post-filing or post-petition interest is allowed in
any such proceeding, and (iii) all other fees, expenses (including fees, charges
and disbursement of counsel), interest, commissions, charges, costs,
disbursements, indemnities and reimbursement of amounts paid and other sums
chargeable to such Obligor under any Loan Document.

“Obligor Intellectual Property” means Intellectual Property owned by or licensed
to any of the Obligors.

“Obligors” means, collectively, the Borrowers and the Subsidiary Guarantors and
their respective successors and permitted assigns.

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

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 5.05(g)).

 

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“Participant” has the meaning set forth in Section 12.05(e).

“Patents” is defined in the Security Agreement.

“Payment Date” means each March 31, June 30, September 30, December 31 and the
Maturity Date, commencing on the first such date to occur following the first
Borrowing Date; provided that, if any such date shall occur on a day that is not
a Business Day, the applicable Payment Date shall be the next preceding Business
Day.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

“Permitted Acquisition” means any acquisition by a Borrower or any of its
wholly-owned Subsidiaries, whether by purchase, merger or otherwise, of all or
substantially all of the assets of, all of the Equity Interests of, or a
business line or unit or a division of, any Person; provided that:

(a) immediately prior to, and after giving effect thereto, no Default or Event
of Default shall have occurred and be continuing or would result therefrom;

(b) all transactions in connection therewith shall be consummated, in all
material respects, in accordance with all applicable Laws and in conformity with
all applicable Governmental Approvals;

(c) in the case of the acquisition of all of the Equity Interests of such
Person, all of the Equity Interests (except for any such securities in the
nature of directors’ qualifying shares required pursuant to applicable Law)
acquired, or otherwise issued by such Person or any newly formed Subsidiary of
the Borrower in connection with such acquisition shall be owned 100% by the
Borrower, a Subsidiary Guarantor or any other Subsidiary, and the Borrower shall
have taken, or caused to be taken, as of the date such Person becomes a
Subsidiary of the Borrower, each of the actions set forth in Section 8.12, if
applicable;

(d) the Borrower and its Subsidiaries shall be in compliance with the financial
covenants set forth in Section 10.01 on a pro forma basis after giving effect to
such acquisition; and

(e) such Person (in the case of an acquisition of Equity Interests) or assets
(in the case of an acquisition of assets or a division) (i) shall be engaged or
used, as the case may be, in the same business or lines of business in which the
Borrower and/or its Subsidiaries are engaged or (ii) shall have a similar
customer base as the Borrower and/or its Subsidiaries.

“Permitted Cash Equivalent Investments” means (i) marketable direct obligations
issued or guaranteed by the United States or any agency or any State thereof
having maturities of not more than two (2) years from the date of acquisition,
(ii) commercial paper maturing no more than two (2) years after its creation and
having a rating of at least A-1 or P-1 from either

 

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Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.,
(iii) corporate notes and bonds maturing no more than two (2) years after their
creation and having a rating of at least A- or A3 from either Standard & Poor’s
Ratings Group or Moody’s Investors Service, Inc., and (iv) certificates of
deposit maturing no more than two (2) years from the date of investment therein.

“Permitted Convertible Subordinated Debt” means Indebtedness:

(i) that is governed by documentation containing representations, warranties,
covenants and events of default no more burdensome or restrictive than those
contained in the Loan Documents, (ii) owing to equity owners of the Borrowers
that is convertible into equity securities of the Borrowers, (iii) in respect of
which no cash payments of principal are required prior to the Maturity Date
other than cash payments made in lieu of fractional shares in connection with
the conversion of such Indebtedness into equity securities of the Borrowers,
(iv) in respect of which the holders have agreed in favor of Borrowers and
Lenders that (A) prior to the date on which the Commitments have expired or been
terminated and all Obligations (other than the Warrant Obligations) have been
paid in full indefeasibly in cash, such holders will not exercise any remedies
available to them in respect of such Indebtedness, and (B) all Liens (if any)
securing such Indebtedness are subordinated to the Liens securing the
Obligations, and (v) that has a cash interest rate of less than or equal to
5% per annum.

“Permitted Indebtedness” means any Indebtedness permitted under Section 9.01.

“Permitted Liens” has the meaning set forth in Section 9.02.

“Permitted Priority Debt” means Indebtedness of TriVascular, in an amount not to
exceed at any time 80% of the face amount at such time of TriVascular’s eligible
accounts receivable; provided that (a) such Indebtedness, if secured, is secured
solely by the TriVascular’s accounts receivable, inventory and cash proceeds
thereof, and (b) the holders or lenders thereof have executed and delivered to
Lenders an intercreditor agreement reasonably satisfactory to the Majority
Lenders.

“Permitted Refinancing” means, with respect to any Indebtedness, any extensions,
renewals and replacements of such Indebtedness; provided that such extension,
renewal or replacement (i) shall not increase the outstanding principal amount
of such Indebtedness, (ii) contains terms relating to outstanding principal
amount, amortization, maturity, collateral (if any) and subordination (if any),
and other material terms taken as a whole no less favorable in any material
respect to any Borrower and its Subsidiaries or the Lenders than the terms of
any agreement or instrument governing such existing Indebtedness, (iii) shall
have an applicable interest rate which does not exceed the rate of interest of
the Indebtedness being replaced, and (iv) shall not contain any new requirement
to grant any lien or security or to give any guarantee that was not an existing
requirement of such Indebtedness.

“Permitted Restrictive Agreements” has the meaning set forth in Section 7.15.

“Person” means any individual, corporation, company, voluntary association,
partnership, limited liability company, joint venture, trust, unincorporated
organization or Governmental Authority or other entity of whatever nature.

 

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“PIK Loan” has the meaning set forth in Section 3.02(d).

“PIK Period” means the period beginning on the date hereof and ending on the
earlier to occur of (i) the sixteenth (16th) Payment Date after the date hereof
and (ii) the date on which any Event of Default shall have occurred (provided
that if such Event of Default shall have been cured or waived, the PIK Period
shall resume until the earlier to occur of the next Event of Default and the
sixteenth (16th) Payment Date after the date hereof).

“PIOP” means Parallel Investment Opportunities Partners II L.P., a Delaware
limited partnership.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which any Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Post-Default Rate” has the meaning set forth in Section 3.02(b).

“Prepayment Premium” has the meaning set forth in Section 3.03(a).

“Prior Closing Date” has the meaning set forth in the recitals hereto.

“Product” means ovation abdominal stent graft system or its successors, in a
form that is substantially similar to that as described in Pre-Market Approval
Application P120006 (or improvements thereto) for general indicated use and
without a humanitarian device exemption.

“Property” of any Person means any property or assets, or interest therein, of
such Person.

“Proportionate Share” means, with respect to any Lender, the percentage obtained
by dividing (a) the sum of the Commitment (or, if the Commitments are
terminated, the outstanding principal amount of the Loans) of such Lender then
in effect by (b) the sum of the Commitments (or, if the Commitments are
terminated, the outstanding principal amount of the Loans) of all Lenders then
in effect.

“Qualified Plan” means an employee benefit plan (as defined in Section 3(3) of
ERISA) other than a Multiemployer Plan (i) that is or was at any time maintained
or sponsored by any Loan Party or any ERISA Affiliate thereof or to which any
Loan Party or any ERISA Affiliate thereof has ever made, or was ever obligated
to make, contributions, and (ii) that is intended to be tax qualified under
Section 401(a) of the Code.

“Real Property Security Documents” means any Landlord Consent and any Leasehold
Deed of Trust, and any mortgage or deed of trust or any other real property
security document executed or required hereunder or under the Security Agreement
to be executed by any Obligor and granting a security interest in real Property
owned or leased (as tenant) by any Obligor in favor of the Lenders.

 

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“Recipient” means any Lender or any other recipient of any payment to be made by
or on account of any Obligation.

“Redemption Date” has the meaning set forth in Section 3.03(a).

“Redemption Price” has the meaning set forth in Section 3.03(a).

“Register” has the meaning set forth in Section 12.05(d).

“Regulation T” means Regulation T of the Board of Governors of the Federal
Reserve System, as amended.

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System, as amended.

“Regulation X” means Regulation X of the Board of Governors of the Federal
Reserve System, as amended.

“Regulatory Approvals” means any registrations, licenses, authorizations,
permits or approvals issued by any Governmental Authority and applications or
submissions related to any of the foregoing.

“Requirement of Law” means, as to any Person, any statute, law, treaty, rule or
regulation or determination, order, injunction or judgment of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its Properties or revenues.

“Responsible Officer” of any Borrower means the President, chief executive
officer or chief financial officer of such Borrower.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interest of any
Borrower or any of its Subsidiaries, or any payment (whether in cash, securities
or other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such shares of capital stock of any Borrower or any of its Subsidiaries
or any option, warrant or other right to acquire any such shares of capital
stock of any Borrower or any of its Subsidiaries.

“Revenue” of a Person means all revenue properly recognized under GAAP,
consistently applied, less all rebates, discounts and other price allowances.

“Santa Rosa Facility” means the premises located at 3910 Brickway Boulevard,
Santa Rosa, California, which are leased by Borrower pursuant to the Santa Rosa
Lease.

“Santa Rosa Lease” means that certain Lease Agreement dated June 16, 2005
between TriVascular, Inc. (as successor in interest to Boston Scientific
Corporation and Boston Scientific Santa Rosa Corp.) and Sonoma Airport
Properties, LLC (as successor in interest to Carmel River, LLC, Carlsen
Investments, LLC, and Rieger Investments, LLC) (“Santa Rosa

 

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Landlord”), as amended by the Consent, Assignment, First Amendment to Lease and
Non-Disturbance Agreement dated March 28, 2008, as further amended by the Second
Amendment to Lease, dated December 2011.

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

“SBIC” means Small Business Investment Company.

“SBIC Act” means Small Business Investment Act of 1958, as amended.

“SEC” means Securities and Exchange Commission.

“Second Borrowing” means the second Borrowing under this Agreement on the
Closing Date.

“Security Agreement” means the Security Agreement, dated as of October 12, 2012,
among the Obligors and the Lenders, granting a security interest in the
Obligors’ personal Property in favor of the Lenders.

“Security Documents” means, collectively, the Security Agreement, each
Short-Form IP Security Agreement, each Real Property Security Document, and each
other security document, control agreement or financing statement required or
recommended to perfect Liens in favor of the Lenders.

“Securities Account” is defined in the Security Agreement.

“Short-Form IP Security Agreements” means short-form copyright, patent or
trademark (as the case may be) security agreements entered into by one or more
Obligors in favor of the Lenders, each in form and substance satisfactory to the
Majority Lenders (and as amended, modified or replaced from time to time).

“Solvent” means, with respect to any Person at any time, that (a) the present
fair saleable value of the Property of such Person is greater than the total
amount of liabilities (including contingent liabilities) of such Person, (b) the
present fair saleable value of the Property of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, and (c) such Person has not incurred
and does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature.

“Specified Financial Covenants” has the meaning set forth in Section 10.02(a).

“Subordinated Debt Cure Right” has the meaning set forth in Section
10.02(a)(ii).

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other

 

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entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.

“Subsidiary Guarantors” means each of the Subsidiaries of the Borrowers
identified under the caption “SUBSIDIARY GUARANTORS” on the signature pages
hereto and each Subsidiary of any Borrower that becomes, or is required to
become, a “Subsidiary Guarantor” after the date hereof pursuant to
Section 8.12(a) or (b).

“Substitute Lender” has the meaning set forth in Section 2.07(a).

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

“Technical Information” means all trade secrets and other proprietary or
confidential information, public information, non-proprietary know-how, any
information of a scientific, technical, or business nature in any form or
medium, standards and specifications, conceptions, ideas, innovations,
discoveries, Invention disclosures, all documented research, developmental,
demonstration or engineering work and all other information, data, plans,
specifications, reports, summaries, experimental data, manuals, models, samples,
know-how, technical information, systems, methodologies, computer programs,
information technology and any other information.

“Third Borrowing” means the third Borrowing under this Agreement upon
satisfaction of the conditions precedent set forth in Section 6.02.

“Third Borrowing Minimum Revenue” has the meaning set forth in Section 6.02(a).

“Title IV Plan” means an employee benefit plan (as defined in Section 3(3) of
ERISA) other than a Multiemployer Plan (i) that is or was at any time maintained
or sponsored by any Credit Party or any ERISA Affiliate thereof or to which any
Loan Party or any ERISA Affiliate thereof has ever made, or was obligated to
make, contributions, and (ii) that is or was subject to Section 412 of the Code,
Section 302 of ERISA or Title IV of ERISA.

“Trademarks” is defined in the Security Agreement.

“Transactions” means the execution, delivery and performance by each Obligor of
this Agreement and the other Loan Documents to which such Obligor is intended to
be a party and the Borrowings (and the use of the proceeds of the Loans).

“U.S. Person” means a “United States Person” within the meaning of
Section 7701(a)(30) of the Code.

“Warrant” means each warrant to purchase capital stock of Holdings issued by
Holdings to the Lenders in connection with the transactions contemplated under
the Existing Term Loan Agreement.

 

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“Warrant Obligations” means, with respect to any Obligor, all Obligations
arising out of, under, or in connection with, any Warrants.

“Withdrawal Liability” means, at any time, any liability incurred (whether or
not assessed) by any ERISA Affiliate and not yet satisfied or paid in full at
such time with respect to any Multiemployer Plan pursuant to Section 4201 of
ERISA.

1.02 Accounting Terms and Principles. All accounting determinations required to
be made pursuant hereto shall, unless expressly otherwise provided herein, be
made in accordance with GAAP. All components of financial calculations made to
determine compliance with this Agreement, including Section 10, shall be
adjusted to include or exclude, as the case may be, without duplication, such
components of such calculations attributable to any Acquisition consummated
after the first day of the applicable period of determination and prior to the
end of such period, as determined in good faith by the Borrowers based on
assumptions expressed therein and that were reasonable based on the information
available to the Borrowers at the time of preparation of the Compliance
Certificate setting forth such calculations.

1.03 Interpretation. For all purposes of this Agreement, except as otherwise
expressly provided herein or unless the context otherwise requires, (a) the
terms defined in this Agreement include the plural as well as the singular and
vice versa; (b) words importing gender include all genders; (c) any reference to
a Section, Annex, Schedule or Exhibit refers to a Section of, or Annex, Schedule
or Exhibit to, this Agreement; (d) any reference to “this Agreement” refers to
this Agreement, including all Annexes, Schedules and Exhibits hereto, and the
words herein, hereof, hereto and hereunder and words of similar import refer to
this Agreement and its Annexes, Schedules and Exhibits as a whole and not to any
particular Section, Annex, Schedule, Exhibit or any other subdivision;
(e) references to days, months and years refer to calendar days, months and
years, respectively; (f) all references herein to “include” or “including” shall
be deemed to be followed by the words “without limitation”; (g) the word “from”
when used in connection with a period of time means “from and including” and the
word “until” means “to but not including”; and (h) accounting terms not
specifically defined herein shall be construed in accordance with GAAP (except
for the term “property” , which shall be interpreted as broadly as possible,
including, in any case, cash, securities, other assets, rights under contractual
obligations and permits and any right or interest in any property, except where
otherwise noted). Unless otherwise expressly provided herein, references to
organizational documents, agreements (including the Loan Documents) and other
contractual instruments shall be deemed to include all permitted (if applicable)
subsequent amendments, restatements, extensions, supplements and other
modifications thereto.

1.04 Changes to GAAP. If, after the date hereof, any change occurs in GAAP or in
the application thereof and such change would cause any amount required to be
determined for the purposes of the covenants to be maintained or calculated
pursuant to Section 8, 9 or 10 to be materially different than the amount that
would be determined prior to such change, then:

(a) the Borrowers will provide a detailed notice of such change (an “Accounting
Change Notice”) to the Lenders (which requirement will be deemed satisfied by
the description thereof in a Form 10-K, Form 10-Q or Form 8-K filed with the
SEC);

 

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(b) either the Borrowers or the Majority Lenders may indicate within 90 days
following the date of the Accounting Change Notice that they wish to revise the
method of calculating such financial covenants or amend any such amount, in
which case the parties will in good faith attempt to agree upon a revised method
for calculating the financial covenants;

(c) until the Borrowers and the Majority Lenders have reached agreement on such
revisions, (i) such financial covenants or amounts will be determined without
giving effect to such change and (ii) all financial statements, Compliance
Certificates and similar documents provided hereunder shall be provided together
with a reconciliation between the calculations and amounts set forth therein
before and after giving effect to such change in GAAP;

(d) if no party elects to revise the method of calculating the financial
covenants or amounts, then the financial covenants or amounts will not be
revised and will be determined in accordance with GAAP without giving effect to
such change; and

(e) any Event of Default arising as a result of such change which is cured by
operation of this Section 1.04 shall be deemed to be of no effect ab initio.

1.05 Amendment and Restatement and Continuing Security.

(a) As stated in the recitals hereof, this Agreement is intended to amend,
restate and supersede the Existing Term Loan Agreement, without novation. Upon
the date hereof, all references in any Loan Document and all other agreements,
documents and instruments delivered by the Borrowers, any Subsidiary Guarantor,
any of the Lenders or any other Person to (i) the “Term Loan Agreement” shall be
deemed to refer to this Amended and Restated Term Loan Agreement (except where
the context otherwise requires) and (ii) a “Lender” or the “Control Agent” shall
mean such terms as defined in this Amended and Restated Term Loan Agreement. As
to all periods occurring on or after the date hereof, all of the terms and
conditions set forth in the Existing Term Loan Agreement shall be of no further
force and effect; it being understood that all obligations of each Obligor under
the Existing Term Loan Agreement shall be governed by this Amended and Restated
Term Loan Agreement from and after the date hereof.

(b) The parties hereto acknowledge and agree that all principal, interest, fees,
costs, reimbursable expenses and indemnification obligations accruing or arising
under or in connection with the Existing Term Loan Agreement which remain unpaid
and outstanding as of the date hereof shall be and remain outstanding and
payable as an obligation under this Agreement and the other Loan Documents.

(c) The Borrowers hereby ratify, affirm and acknowledge all of their obligations
in respect of the Existing Term Loan Agreement, as amended and restated hereby,
and the related documents and agreements delivered by it thereunder.

(d) It is the intention of each of the parties hereto that the Existing Term
Loan Agreement be amended and restated by the provisions hereof so as to
preserve the perfection and priority of all security interests securing
indebtedness and obligations under the Existing Term Loan Agreement and that all
indebtedness and obligations of the Obligors hereunder shall be

 

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secured by the Security Documents and that this Agreement does not constitute a
novation of the obligations and liabilities existing under the Existing Term
Loan Agreement except to the extent superseded by this Amended and Restated Term
Loan Agreement after the date hereof. The Borrowers hereby confirm that the
validity, effect and enforceability of all Collateral and the guarantee of the
Obligations by any Subsidiary Guarantors shall remain unaffected by this
amendment and restatement. The parties agree that the Obligations secured by the
Collateral and the guarantee of any Subsidiary Guarantors shall include the
obligations under or in connection with this Amended and Restated Term Loan
Agreement.

SECTION 2

THE COMMITMENT

2.01 Commitments. Each Lender agrees severally, on and subject to the terms and
conditions of this Agreement (including Section 6), to make three (3) term loans
(provided that PIK Loans shall be deemed not to constitute “term loans” for
purposes of this Section 2.01) to the Borrowers, each on a Business Day during
the Commitment Period in Dollars in an aggregate principal amount for such
Lender not to exceed such Lender’s Commitment; provided, however, that at no
time shall any Lender be obligated to make a Loan in excess of such Lender’s
Proportionate Share of the amount by which the then effective Commitments
exceeds the aggregate principal amount of Loans outstanding at such time.
Amounts of Loans repaid may not be reborrowed.

2.02 Borrowing Procedures. Subject to the terms and conditions of this Agreement
(including Section 6), each Borrowing (other than the First Borrowing and a
Borrowing of PIK Loans) shall be made on written notice in the form of Exhibit B
given by the applicable Borrower to the Lenders not later than 11:00 a.m.
(Central time) on the Borrowing Notice Date (a “Notice of Borrowing”).

2.03 Fees. The Borrowers shall pay to the Lenders such fees as described in the
Fee Letter.

2.04 Notes. If requested by any Lender, the Loans of such Lender shall be
evidenced by one or more promissory notes (each a “Note”). The Borrowers shall
prepare, execute and deliver to the Lenders such promissory note(s) payable to
the Lenders (or, if requested by the Lenders, to the Lenders and their
registered assigns) and in the form attached hereto as Exhibit C-1. Thereafter,
the Loans and interest thereon shall at all times (including after assignment
pursuant to Section 12.05) be represented by one or more promissory notes in
such form payable to the payee named therein (or, if such promissory note is a
registered note, to such payee and its registered assigns).

2.05 Use of Proceeds. The Borrowers shall use the proceeds of the Loans (i) in
the case of the Loans comprising the First Borrowing, to repay in full and
convert the Existing Term Loans into Loans hereunder and for general working
capital purposes, and (ii) in the case of any Loans comprising the subsequent
Borrowings, for general working capital purposes; provided that the Lenders
shall have no responsibility as to the use of any of proceeds of Loans in the
amount made by PIOP. No portion of any proceeds of Loans in the amount made by
PIOP (i) will be used to acquire realty or to discharge an obligation relating
to the prior acquisition of realty; (ii) will be used outside of the United
States (except to pay for services to be rendered outside the

 

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United States and to acquire from abroad material and equipment or property
rights for use or sale in the United States, unless prohibited by Part 107.720
of the United States Code of Federal Regulations); or (iii) will be used for any
purpose contrary to the public interest (including but not limited to activities
which are in violation of law) or inconsistent with free competitive enterprise,
in each case, within the meaning of Part 107.720 of Title 13 of the United
States Code of Federal Regulations. The Borrowers will use the proceeds of the
Loans in the amount made by PIOP for only those purposes specified in the SBA
Form 1031 provided to the Lenders.

2.06 Defaulting Lenders.

(a) Adjustments. Notwithstanding anything to the contrary contained in this
Agreement, if any Lender becomes a Defaulting Lender, then, until such time as
that Lender is no longer a Defaulting Lender, to the extent permitted by
applicable law:

(b) Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in Section 12.04.

(c) Reallocation of Payments. Any payment of principal, interest, fees or other
amounts received by the Lenders for the account of such Defaulting Lender
(whether voluntary or mandatory, at maturity, pursuant to Section 11 or
otherwise), shall be applied at such time or times as follows: first, as the
Borrowers may request (so long as no Default exists), to the funding of any Loan
in respect of which such Defaulting Lender has failed to fund its portion
thereof as required by this Agreement; second, if so determined by the Majority
Lenders and the Borrowers, to be held in a non-interest bearing deposit account
and released in order to satisfy obligations of such Defaulting Lender to fund
Loans under this Agreement; third, to the payment of any amounts owing to the
Lenders as a result of any judgment of a court of competent jurisdiction
obtained by any Lender against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Agreement; fourth, so
long as no Default exists, to the payment of any amounts owing to the Borrowers
as a result of any judgment of a court of competent jurisdiction obtained by the
Borrowers against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement; and fifth, to such Defaulting
Lender or as otherwise directed by a court of competent jurisdiction; provided
that if (A) such payment is a payment of the principal amount of any Loans in
respect of which such Defaulting Lender has not fully funded its appropriate
share and (B) such Loans were made at a time when the conditions set forth in
Section 6 were satisfied or waived, such payment shall be applied solely to pay
the Loans of all non-Defaulting Lenders on a pro rata basis prior to being
applied to the payment of any Loans of such Defaulting Lender. Any payments,
prepayments or other amounts paid or payable to a Defaulting Lender that are
applied (or held) to pay amounts owed by a Defaulting Lender pursuant to this
Section 2.06(c) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

(d) Defaulting Lender Cure. If the Borrowers and the Majority Lenders agree in
writing in their sole discretion that a Defaulting Lender should no longer be
deemed to be a Defaulting Lender, that Lender will, to the extent applicable,
purchase that portion of outstanding Loans of the other Lenders or take such
other actions as necessary to cause the Loans to be held on a pro rata basis by
the Lenders in accordance with their Proportionate Share, whereupon that

 

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Lender will cease to be a Defaulting Lender; provided that no adjustments will
be made retroactively with respect to fees accrued or payments made by or on
behalf of the Borrowers while that Lender was a Defaulting Lender; and provided,
further, that except to the extent otherwise expressly agreed by the affected
parties, no change hereunder from Defaulting Lender to Lender will constitute a
waiver or release of any claim of any party hereunder arising from that Lender’s
having been a Defaulting Lender.

2.07 Substitution of Lenders.

(a) Substitution Right. In the event that any Lender (an “Affected Lender”),
(i) becomes a Defaulting Lender or (ii) does not consent to any amendment,
waiver or consent to any Loan Document for which the consent of the Majority
Lenders is obtained but that requires the consent of other Lenders (a
“Non-Consenting Lender”), either the Borrowers may pay in full such Affected
Lender with respect to amounts due or such Affected Lender may be substituted by
any willing Lender or Affiliate of any Lender or Eligible Transferee (in each
case, a “Substitute Lender”); provided that any substitution of a Non-Consenting
Lender shall occur only with the consent of Majority Lenders.

(b) Procedure. To substitute such Affected Lender or pay in full the Obligations
owed to such Affected Lender, the Borrowers shall deliver a notice to such
Affected Lender. The effectiveness of such payment or substitution shall be
subject to the delivery by the Borrowers (or, as may be applicable in the case
of a substitution, by the Substitute Lender) of (i) payment for the account of
such Affected Lender, of, to the extent accrued through, and outstanding on, the
effective date for such payment or substitution, all Obligations owing to such
Affected Lender (which for the avoidance of doubt, shall not include any
Prepayment Premium) and (ii) in the case of a substitution, an Assignment and
Acceptance whereby the Substitute Lender shall, among other things, agree to be
bound by the terms of the Loan Documents.

(c) Effectiveness. Upon satisfaction of the conditions set forth in
Section 2.07(a) and Section 2.07(b) above, the Control Agent shall record such
substitution or payment in the Register, whereupon (i) in the case of any
payment in full of an Affected Lender, such Affected Lender’s Commitments shall
be terminated and (ii) in the case of any substitution of an Affected Lender,
(A) such Affected Lender shall sell and be relieved of, and the Substitute
Lender shall purchase and assume, all rights and claims of such Affected Lender
under the Loan Documents, except that (1) the Affected Lender shall retain such
rights expressly providing that they survive the repayment of the Obligations
and the termination of the Commitments and (2) a Non-Consenting Lender shall be
permitted to retain any Warrants issued to such Non-Consenting Lender, (B) such
Substitute Lender shall become a “Lender” hereunder and (C) such Affected Lender
shall execute and deliver an Assignment and Acceptance to evidence such
substitution; provided, however, that the failure of any Affected Lender to
execute any such Assignment and Acceptance shall not render such sale and
purchase (or the corresponding assignment) invalid.

 

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SECTION 3

PAYMENTS OF PRINCIPAL AND INTEREST

3.01 Repayment.

(a) Repayment. During the Interest-Only Period, no payments of principal of the
Loans shall be due. Each Borrower agrees to repay to the Lenders the outstanding
principal amount of the Loans, on each Payment Date occurring after the
Interest-Only Period, in equal installments. The amounts of such installments
shall be calculated by dividing (i) the sum of the aggregate principal amount of
the Loans outstanding on the first day following the end of the Interest-Only
Period, by (b) the number of Payment Dates remaining prior to the Maturity Date.

(b) Application. Any optional or mandatory prepayment of the Loans shall be
applied to the installments thereof under Section 3.01(a) in the inverse order
of maturity. To the extent not previously paid, the principal amount of the
Loans, together with all other outstanding Obligations (other than the Warrant
Obligations), shall be due and payable on the Maturity Date.

3.02 Interest.

(a) Interest Generally. Subject to Section 3.02(d), each Borrower agrees to pay
to the Lenders interest on the unpaid principal amount of the Loans and the
amount of all other outstanding Obligations, in the case of the Loans, for the
period from the applicable Borrowing Date, and in the case of any other
Obligation, from the date such other Obligation is due and payable, in each
case, until paid in full, at a rate per annum equal to 12.50%.

(b) Default Interest. Notwithstanding the foregoing, upon the occurrence and
during the continuance of any Event of Default, the interest payable pursuant to
Section 3.02(a) shall increase automatically by 4.00% per annum (such aggregate
increased rate, the “Post-Default Rate”). Notwithstanding any other provision
herein (including Section 3.02(d)), if interest is required to be paid at the
Post-Default Rate, it shall be paid entirely in cash. If any Obligation is not
paid when due under the applicable Loan Document, the amount thereof shall
accrue interest at a rate equal to 4.00% per annum (without duplication of
interest payable at the Post-Default Rate).

(c) Interest Payment Dates. Accrued interest on the Loans shall be payable in
arrears on the last day of each Interest Period in cash, and upon the payment or
prepayment thereof (on the principal amount so paid or prepaid); provided that
interest payable at the Post-Default Rate shall be payable from time to time on
demand.

(d) Paid In-Kind Interest. Notwithstanding Section 3.01(a), at any time during
the PIK Period, the Borrowers may elect to pay the interest on the outstanding
principal amount of the Loans payable pursuant to Section 3.01 as follows:
(i) only 9.00% of the 12.50% per annum interest in cash and (ii) 3.50% of the
12.50% per annum interest as compounded interest, added to the aggregate
principal amount of the Loans (the amount of any such compounded interest being
a “PIK Loan”). Each PIK Loan shall be evidenced by a Note in the form of Exhibit
C-2. The principal amount of each PIK Loan shall accrue interest in accordance
with the provisions of this Agreement applicable to the Loans.

3.03 Prepayments.

(a) Optional Prepayments. The Borrowers shall have the right optionally to
prepay the outstanding principal amount of the Loans in whole or in part on any
Payment Date (a

 

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“Redemption Date”) for an aggregate amount equal to the aggregate principal
amount of the Loans being prepaid plus the Prepayment Premium plus any accrued
but unpaid interest and any fees which are due and owing (such aggregate amount,
the “Redemption Price”). The applicable “Prepayment Premium” shall be an amount
calculated pursuant to Section 3.03(a)(i).

(i) If the Redemption Date occurs:

(A) on or prior to the fourth Payment Date, the Prepayment Premium shall be an
amount equal to 4.00% of the aggregate outstanding principal amount of the Loans
being prepaid on such Redemption Date;

(B) after the fourth Payment Date, and on or prior to the eighth Payment Date,
the Prepayment Premium shall be an amount equal to 3.00% of the aggregate
outstanding principal amount of the Loans being prepaid on such Redemption Date;

(C) after the eighth Payment Date, and on or prior to the twelfth Payment Date,
the Prepayment Premium shall be an amount equal to 2.00% of the aggregate
outstanding principal amount of the Loans being prepaid on such Redemption Date;

(D) after the twelfth Payment Date, and on or prior to the sixteenth Payment
Date, the Prepayment Premium shall be an amount equal to 1.00% of the aggregate
outstanding principal amount of the Loans being prepaid on such Redemption Date;
and

(E) after the sixteenth Payment Date, the Prepayment Premium shall be an amount
equal to 0.00% of the aggregate outstanding principal amount of the Loans being
prepaid on such Redemption Date.

(ii) To determine the aggregate outstanding principal amount of the Loans, and
how many Payment Dates have occurred, as of any Redemption Date for purposes of
Section 3.03(a)(i):

(A) if, as of such Redemption Date, the Borrowers shall have made only one
Borrowing, the number of Payment Dates shall be deemed to be the number of
Payment Dates that shall have occurred following the date of the initial
Borrowing; and

(B) if, as of such Redemption Date, the Borrowers shall have made more than one
Borrowing, then the Redemption Price shall equal the sum of multiple Redemption
Prices calculated with respect to the Loans of each Borrowing, each of which
Redemption Prices shall be calculated based on solely the aggregate outstanding
principal amount of the Loans borrowed in such Borrowing (and PIK Loans
subsequently borrowed in respect of interest payments thereon), as though the
applicable number of Payment Dates equals the number of Payment Dates that shall
have occurred following the applicable Borrowing Date. In the case of any
partial prepayment, the amount of such prepayment shall be allocated to Loans
made in the various Borrowings (and PIK Loans in respect thereof) in the order
in which such Borrowings were made.

 

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(iii) No partial prepayment shall be made under this Section 3.03(a) in
connection with any event described in Section 3.03(b).

(iv) On or prior to the Redemption Date, the Lenders may notify Borrowers of a
reduction in the amounts due under Section 3.03(a)(i) with respect to any
portion of the Loans held by any entity licensed by the SBA as an SBIC.

(v) Notwithstanding the foregoing, the Borrowers shall not be required to pay
any Prepayment Premium in connection with the conversion of the Existing Term
Loans with the proceeds of the Loans on the date hereof. For the avoidance of
doubt, the Lenders that were “Lenders” in the Existing Term Loan Agreement
hereby waive their rights to receive any “Prepayment Premium” (as defined in the
Existing Term Loan Agreement) in connection with such conversion.

(b) Mandatory Prepayments.

(i) Asset Sales. In the event of any contemplated Asset Sale not permitted under
Section 9.09, the Borrowers shall provide 30 days’ prior written notice of such
Asset Sale to the Lenders and, if within such notice period Majority Lenders
advise the Borrowers that a prepayment is required pursuant to this
Section 3.03(b)(i), the Borrowers shall: (x) if the assets sold represent
substantially all of the assets or revenues of the applicable Borrower, or
represent any specific line of business which either on its own or together with
other lines of business sold over the term of this Agreement account for revenue
generated by such lines of business exceeding 30% of the revenue of the
applicable Borrower in the immediately preceding year, prepay the aggregate
outstanding principal amount of the Loans in an amount equal to the Redemption
Price applicable on the date of such Asset Sale in accordance with
Section 3.03(a), and (y) in the case of all other Asset Sales not described in
the foregoing clause (x), prepay the Loans in an amount equal to the entire
amount of the Asset Sale Net Proceeds of such Asset Sale, plus any accrued but
unpaid interest and any fees which are due and owing, in the following order:

(A) first, in reduction of the Borrowers’ obligation to pay any unpaid interest
and any fees which are due and owing;

(B) second, in reduction of the Borrowers’ obligation to pay any Claims or
Losses referred to in Section 12.03;

(C) third, in reduction of the Borrowers’ obligation to pay any amounts due and
owing on account of the unpaid principal amount of the Loans;

(D) fourth, in reduction of any other Obligation; and

(E) fifth, to the Borrowers or such other Persons as may lawfully be entitled to
or directed by the Borrowers to receive the remainder.

(ii) Change of Control. In the event of a Change of Control, the Borrowers shall
immediately provide notice of such Change of Control to the Lenders and, if
within 10 days

 

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of receipt of such notice Majority Lenders notify the Borrowers in writing that
a prepayment is required pursuant to this Section 3.03(b)(ii), the Borrowers
shall prepay the aggregate outstanding principal amount of the Loans in an
amount equal to the Redemption Price applicable on the date of such Change of
Control in accordance with Section 3.03(a).

SECTION 4

PAYMENTS, ETC.

4.01 Payments.

(a) Payments Generally. Each payment of principal, interest and other amounts to
be made by the Obligors under this Agreement or any other Loan Document shall be
made in Dollars, in immediately available funds, without deduction, set off or
counterclaim, to an account to be designated by the Majority Lenders by notice
to the Borrowers, not later than 4:00 p.m. (Central time) on the date on which
such payment shall become due (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding Business Day).

(b) Application of Payments. Each Obligor shall, at the time of making each
payment under this Agreement or any other Loan Document, specify to the Lenders
the amounts payable by such Obligor hereunder to which such payment is to be
applied (and in the event that Obligors fail to so specify, or if an Event of
Default has occurred and is continuing, the Lenders may apply such payment in
the manner they determine to be appropriate).

(c) Non-Business Days. If the due date of any payment under this Agreement
(other than of principal of or interest on the Loans) would otherwise fall on a
day that is not a Business Day, such date shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension.

4.02 Computations. All computations of interest and fees hereunder shall be
computed on the basis of a year of 360 days and actual days elapsed occurring in
the period for which payable.

4.03 Notices. Each notice of optional prepayment shall be effective only if
received by the Lenders not later than 4:00 p.m. (Central time) on the date one
Business Day prior to the date of prepayment. Each notice of optional prepayment
shall specify the amount to be prepaid and the date of prepayment. Notices to
the Lenders may be made to the Control Agent and the Control Agent agrees to
deliver such notices to the other Lenders.

4.04 Set-Off.

(a) Set-Off Generally. Upon the occurrence and during the continuance of any
Event of Default, the Lenders and each of their Affiliates are hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by the Lenders or such Affiliate to or for the credit or the account of the
Borrowers against any and all of the Obligations, whether or not the Lenders
shall have made any demand and although such obligations may be unmatured. The
Lenders agree promptly to

 

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notify the Borrowers after any such set-off and application, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Lenders and their Affiliates under this
Section 4.04 are in addition to other rights and remedies (including other
rights of set-off) that the Lenders and their Affiliates may have.

(b) Exercise of Rights Not Required. Nothing contained herein shall require the
Lenders to exercise any such right or shall affect the right of the Lenders to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness or obligation of any Borrower.

SECTION 5

YIELD PROTECTION, ETC.

5.01 Additional Costs.

(a) Change in Requirements of Law Generally. If, on or after the date hereof,
the adoption of any Requirement of Law, or any change in any Requirement of Law,
or any change in the interpretation or administration thereof by any court or
other Governmental Authority charged with the interpretation or administration
thereof, or compliance by any of the Lenders (or its lending office) with any
request or directive (whether or not having the force of law) of any such
Governmental Authority, shall impose, modify or deem applicable any reserve
(including any such requirement imposed by the Board of Governors of the Federal
Reserve System), special deposit, contribution, insurance assessment or similar
requirement, in each case that becomes effective after the date hereof, against
assets of, deposits with or for the account of, or credit extended by, a Lender
(or its lending office) or shall impose on a Lender (or its lending office) any
other condition affecting the Loans or the Commitment, and the result of any of
the foregoing is to increase the cost to such Lender of making or maintaining
the Loans, or to reduce the amount of any sum received or receivable by such
Lender under this Agreement or any other Loan Document, by an amount deemed by
such Lender to be material (other than (i) Indemnified Taxes and (ii) Taxes
described in clause (c) or (d) of the definition of “Excluded Taxes”), then the
Borrowers shall pay to such Lender on demand such additional amount or amounts
as will compensate such Lender for such increased cost or reduction. Borrowers
shall not be required to compensate a Lender for any increased cost incurred
more than 90 days prior to the date such Lender notifies Borrower of the change
giving rise to such increased cost.

(b) Change in Capital Requirements. If a Lender shall have determined that, on
or after the date hereof, the adoption of any Requirement of Law regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
Governmental Authority, in each case that becomes effective after the date
hereof, has or would have the effect of reducing the rate of return on capital
of a Lender (or its parent) as a consequence of a Lender’s obligations hereunder
or the Loans to a level below that which a Lender (or its parent) could have
achieved but for such adoption, change, request or directive by an amount
reasonably deemed by it to be material, then the Borrowers shall pay to such
Lender on demand such additional amount or amounts as will compensate such
Lender (or its parent) for such reduction. Borrowers shall not be required to
compensate a Lender for any reduction in the rate of return on capital suffered
more than 90 days prior to the date such Lender notifies Borrower of the change
giving rise to such reduction.

 

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(c) Notification by Lender. The Lenders will promptly notify the Borrowers of
any event of which they have knowledge, occurring after the date hereof, which
will entitle a Lender to compensation pursuant to this Section 5.01. Before
giving any such notice pursuant to this Section 5.01(c) such Lender shall
designate a different lending office if such designation (x) will, in the
reasonable judgment of such Lender, avoid the need for, or reduce the amount of,
such compensation and (y) will not, in the reasonable judgment of such Lender,
be materially disadvantageous to such Lender. A certificate of the Lender
claiming compensation under this Section 5.01, setting forth the additional
amount or amounts to be paid to it hereunder, shall be conclusive and binding on
the Borrowers in the absence of manifest error.

(d) Notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and (y) 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 constitute a
change in Requirements of Law for all purposes of this Section 5, regardless of
the date enacted, adopted or issued.

5.02 Reserved.

5.03 Illegality. Notwithstanding any other provision of this Agreement, in the
event that on or after the date hereof the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof by any
competent Governmental Authority shall make it unlawful for a Lender or its
lending office to make or maintain the Loans (and, in the opinion of such
Lender, the designation of a different lending office would either not avoid
such unlawfulness or would be disadvantageous to such Lender), then such Lender
shall promptly notify the Borrowers thereof following which (a) the Lender’s
Commitment shall be suspended until such time as such Lender may again make and
maintain the Loans hereunder and (b) if such Requirement of Law shall so
mandate, the Loans shall be prepaid by the Borrowers on or before such date as
shall be mandated by such Requirement of Law in an amount equal to the
Redemption Price applicable on the date of such prepayment in accordance with
Section 3.03(a).

5.04 Reserved.

5.05 Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
Obligation shall be made without deduction or withholding for any Taxes, except
as required by applicable law. If any applicable law (as determined in the good
faith discretion of an applicable withholding agent) requires the deduction or
withholding of any Tax from any such payment by a withholding agent, then the
applicable withholding agent shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law and, if such
Tax is an Indemnified Tax, then the sum payable by the Obligor shall be
increased as necessary so that

 

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after such deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 5) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

(b) Payment of Other Taxes by the Borrowers. The Borrowers shall timely pay to
the relevant Governmental Authority in accordance with applicable law, or at the
option of each Lender, timely reimburse it for, Other Taxes.

(c) Evidence of Payments. As soon as practicable after any payment of Taxes by
the Borrowers to a Governmental Authority pursuant to this Section 5, the
Borrowers shall deliver to each Lender the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment.

(d) Indemnification. The Borrowers shall reimburse and indemnify each Recipient,
within 10 days after demand therefor, for the full amount of any Indemnified
Taxes (including Indemnified Taxes imposed or asserted on or attributable to
amounts payable under this Section 5) payable or paid by such Recipient or
required to be withheld or deducted from a payment to such Recipient and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to the Borrowers by a Lender shall be conclusive absent
manifest error.

(e) Status of Lenders.

(i) Any Lender that is entitled to an exemption from, or reduction of
withholding Tax with respect to payments made under any Loan Document shall
timely deliver to the Borrowers such properly completed and executed
documentation reasonably requested by the Borrowers as will permit such payments
to be made without withholding or at a reduced rate of withholding. In addition,
any Lender shall deliver such other documentation prescribed by applicable law
as reasonably requested by the Borrowers as will enable the Borrowers to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements. Notwithstanding anything to the contrary in
the preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in
Section 5.05(e)(ii)(A), (B) or (D)) shall not be required if in the Lender’s
reasonable judgment such completion, execution or submission would subject such
Lender to any material unreimbursed cost or expense or would materially
prejudice the legal or commercial position of such Lender.

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

(A) any Lender that is a U.S. Person shall deliver to the Borrowers on or prior
to the date on which such Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the reasonable request of the Borrowers), executed
originals of IRS Form W-9 (or successor form) certifying that such Lender is
exempt from U.S. Federal backup withholding tax;

 

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

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

(2) executed originals of IRS Form W-8ECI (or successor form);

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit D to the effect that such Foreign Lender is
not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of the applicable Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) executed originals of IRS Form W-8BEN; or

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

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

(D) any Foreign Lender shall deliver to the Borrowers any forms and information
necessary to establish that the Foreign Lender is not subject to withholding tax
under FATCA.

 

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Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the applicable Borrowers in writing of
its legal inability to do so.

(f) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 5 (including by the
payment of additional amounts pursuant to this Section 5), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section 5 with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this Section 5.05(f), in no event will the indemnified party be required to
pay any amount to an indemnifying party pursuant to this Section 5.05(f) the
payment of which would place the indemnified party in a less favorable net
after-Tax position than the indemnified party would have been in if the
indemnification payments or additional amounts giving rise to such refund had
never been paid. This Section 5.05(f) shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

(g) Mitigation Obligations. If the Borrowers are required to pay any Indemnified
Taxes or additional amounts to any Lender or to any Governmental Authority for
the account of any Lender pursuant to Section 5.01 or this Section 5.05, then
such Lender shall (at the request of the Borrowers) use commercially reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign and delegate its rights and obligations hereunder to
another of its offices, branches or Affiliates if, in the sole reasonable
judgment of such Lender, such designation or assignment and delegation would
(i) eliminate or reduce amounts payable pursuant to Section 5.01 or this
Section 5.05, as the case may be, in the future, (ii) not subject such Lender to
any unreimbursed cost or expense and (iii) not otherwise be disadvantageous to
such Lender. The Borrowers hereby agree to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment and
delegation.

SECTION 6

CONDITIONS PRECEDENT

6.01 Conditions to Second Borrowing. The obligation of each Lender to make a
Loan as part of the Second Borrowing hereunder shall not become effective until
the following conditions precedent shall have been satisfied or waived in
writing by the Majority Lenders:

(a) Amount of Second Borrowing. The amount of such Borrowing shall equal
$10,000,000.

 

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(b) No Other Secured Debt. On the date hereof, no Obligor shall have any secured
Indebtedness outstanding or available to be drawn, other than under this
Agreement and under any Permitted Indebtedness.

(c) Terms of Material Agreements, Etc. Lenders shall be satisfied reasonably
with the terms and conditions of all of the Obligors’ Material Agreements set
forth on Schedule 7.14 hereto.

(d) No Law Restraining Transactions. No applicable law or regulation shall
restrain, prevent or, in the reasonable judgment of the Lenders, impose
materially adverse conditions upon the Transactions.

(e) Payment of Fees. The Obligors shall have paid or caused to be paid the
financing fee required pursuant to Section 2.03 and all other costs and expenses
of the Lenders required pursuant to Section 12.03 which have been invoiced to
the Borrowers on or prior to the Closing Date in connection with the
preparation, execution and delivery of this Agreement and the other Loan
Documents and the consummation of the transactions contemplated hereby and
thereby.

(f) Updated Lien Searches. Lenders shall be satisfied with updated Lien searches
prior to the date hereof showing that no Liens exist on the Collateral other
than Permitted Liens.

(g) Documentary Deliveries. The Lenders shall have received the following
documents, each of which shall be in form and substance satisfactory to the
Lenders:

(i) Agreement. This Agreement duly executed and delivered by the Borrowers and
each of the other parties hereto.

(ii) Security Documents.

(A) The Security Agreement, duly executed and delivered by each of the Obligors
with annexes updated as of the date hereof, shall remain in full force and
effect;

(B) Each of the Short-Form IP Security Agreements, duly executed and delivered
by the applicable Obligor, shall remain in full force and effect;

(C) Evidence of filing of UCC-1 financing statements against each Obligor in its
jurisdiction of formation or incorporation, as the case may be;

(D) Evidence of filing of each of the Short-Form IP Security Agreements in the
United States Patent and Trademark Office; and

(E) Without limitation, all other documents and instruments reasonably required
to perfect the Lenders’ Lien on, and security interest in, the Collateral
required to be delivered on or prior to the date hereof (including delivery of
any capital stock certificates and undated stock powers executed in blank) shall
have been duly executed and delivered and remain in full force and effect, and
shall create in favor of the Lenders, a perfected Lien on, and security interest
in, the Collateral, subject only to Permitted Liens.

 

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(iii) Subordination Agreement. The CMI Subordination Agreement shall remain in
full force and effect.

(iv) Warrants. The Warrants, duly executed and delivered by Borrowers and issued
in connection with the Existing Term Loan Agreement, shall remain in full force
and effect and have been transferred in accordance with the terms thereof to the
Lenders on the date hereof in accordance with their Proportionate Share for such
number of shares of common stock of Holdings set forth on Schedule 1.

(v) Notes. Any Notes requested in accordance with Section 2.04.

(vi) Approvals. Certified copies of all material licenses, consents,
authorizations and approvals of, and notices to and filings and registrations
with, any Governmental Authority (including all foreign exchange approvals), and
of all third-party consents and approvals, necessary in connection with the
making and performance by the Obligors of the Loan Documents and the
Transactions.

(vii) Corporate Documents. Certified copies (as of a recent date) of the
constitutive documents of each Obligor (if publicly available in such Obligor’s
jurisdiction of formation) and of resolutions of the Board of Directors (or
shareholders, if applicable) of each Obligor authorizing the making and
performance by it of the Loan Documents to which it is a party.

(viii) Incumbency Certificate. A certificate of each Obligor as to the
authority, incumbency and specimen signatures of the persons who have executed
the Loan Documents and any other documents in connection herewith on behalf of
the Obligors.

(ix) Officer’s Certificate. A certificate, dated the Closing Date and signed by
the President, a Vice President or a financial officer of each Borrower,
confirming compliance with the conditions set forth in Section 6.03.

(x) Opinions of Counsel. A favorable opinion, dated the Closing Date, of counsel
to each Obligor in form acceptable to the Lenders and their counsel.

(xi) Insurance. Certificates of insurance evidencing the existence of all
insurance required to be maintained by the Borrowers pursuant to Section 8.05
and the designation of the Lenders as the loss payees or additional named
insured, as the case may be, thereunder.

6.02 Conditions to Third Borrowing. The obligation of each Lender to make a Loan
as part of a subsequent Borrowing hereunder is subject to the following
conditions precedent:

(a) Revenue Milestone Achievement. Borrowers and their Subsidiaries shall either
have achieved annualized Revenue with respect to sales of the Product, for a
consecutive twelve (12) month period prior to December 31, 2015 (“Third
Borrowing Minimum Revenue”), equal to or exceeding (A) $35,000,000, or (B)
$40,000,000.

 

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(b) Amount of Third Borrowing. The amount of such Borrowing may either be (A) up
to $10,000,000, provided that Borrowers have achieved a Third Borrowing Minimum
Revenue of at least $35,000,000, or (B) up to $15,000,000, provided that
Borrowers have achieved a Third Borrowing Minimum Revenue of at least
$40,000,000. Subject to the foregoing sentence, the amount of such Borrowing is
at Borrowers’ option.

(c) Three Borrowings. After giving effect to such Borrowing, no more than three
Borrowings shall have been made; provided that, for purposes of this
Section 6.02(c), “Borrowing” shall not be deemed to include any borrowing of PIK
Loans.

(d) Notice of Milestone Achievement and Borrowing. The Borrowers shall have
delivered to the Lenders a notice certifying achievement of the Third Borrowing
Minimum Revenue no later than January 31, 2016, and the Lenders shall have been
reasonably satisfied with the results of its audit of the Borrowers’ Revenue by
examining the Borrowers’ books and records within 30 days following the delivery
of such notice. The Notice of Borrowing for the Third Borrowing shall be
delivered to the Lenders no later than February 29, 2016.

6.03 Conditions to Each Borrowing. The obligation of each Lender to make a Loan
as part of any Borrowing hereunder (including the First Borrowing) is also
subject to satisfaction of the following further conditions precedent on the
applicable Borrowing Date:

(a) Commitment Period. Such Borrowing Date shall occur during the Commitment
Period.

(b) No Default; Representations and Warranties. Both immediately prior to the
making of such Loan and after giving effect thereto and to the intended use
thereof:

(i) no Default shall have occurred and be continuing; and

(ii) the representations and warranties made by the Borrowers in Section 7 shall
be true in all material respects on and as of the Borrowing Date and immediately
after giving effect to the application of the proceeds of the Borrowing with the
same force and effect as if made on and as of such date, except that the
representation regarding representations and warranties that refer to a specific
earlier date shall be that they were true on such earlier date.

(c) Financing Fee. Except in the case of any PIK Loan, each Lender shall have
received its portion of the fees payable pursuant to Section 2.03.

(d) Notice of Borrowing. Except in the case of any PIK Loan, Capital Royalty
Partners II L.P. shall have received a Notice of Borrowing as and when required
pursuant to Section 2.02.

Each Borrowing shall constitute a certification by the Borrowers to the effect
that the conditions set forth in this Section 6.03 have been fulfilled as of the
applicable Borrowing Date.

 

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SECTION 7

REPRESENTATIONS AND WARRANTIES

The Borrowers represent and warrant to the Lenders that:

7.01 Power and Authority. Each Borrower and its Subsidiaries (a) is a duly
organized and validly existing under the laws of its jurisdiction of
organization, (b) has all requisite corporate or other power, and has all
material governmental licenses, authorizations, consents and approvals necessary
to own its assets and carry on its business as now being or as proposed to be
conducted except to the extent that failure to have the same could not
reasonably be expected to have a Material Adverse Effect, (c) is qualified to do
business and is in good standing in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where failure so
to qualify could (either individually or in the aggregate) have a Material
Adverse Effect, (d) has full power and authority to make and perform each of the
Loan Documents to which it is a party and, in the case of the Borrowers, to
borrow the Loans hereunder and (e) is in material compliance with all applicable
laws and regulations to which it is subject and all Material Agreements to which
it is a party.

7.02 Authorization; Enforceability. The Transactions are within each Obligor’s
corporate powers and have been duly authorized by all necessary corporate and,
if required, by all necessary shareholder action. This Agreement has been duly
executed and delivered by each Obligor and constitutes, and each of the other
Loan Documents to which it is a party when executed and delivered by such
Obligor will constitute, a legal, valid and binding obligation of such Obligor,
enforceable against each Obligor in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or similar laws of general applicability affecting the enforcement of
creditors’ rights and (b) the application of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

7.03 Governmental and Other Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority or any third party, except for (i) such as
have been obtained or made and are in full force and effect (ii) filings and
recordings in respect of the Liens created pursuant to the Security Documents
(iii) those that are permitted to be made after the Closing Date, (b) will not
violate any applicable law or regulation or the charter, by laws or other
organizational documents of each Borrower and its Subsidiaries or any order of
any Governmental Authority, other than any such violations that, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon each Borrower and its Subsidiaries or
assets, or give rise to a right thereunder to require any payment to be made by
any such Person, and (d) will not result in the creation or imposition of any
Lien on any asset of each Borrower and its Subsidiaries, other than Permitted
Liens.

7.04 Financial Statements; Material Adverse Change.

(a) Financial Statements. The Borrowers have heretofore furnished to the Lenders
certain financial statements as provided for in Section 8.01. Such financial
statements present

 

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fairly, in all material respects, the financial position and results of
operations and cash flows of each Borrower and its Subsidiaries as of such dates
and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the statements
previously-delivered statements of the type described in Section 8.01(b).
Neither any Borrower nor any of its Subsidiaries has any material contingent
liabilities or unusual forward or long-term commitments not disclosed in the
audited financial statements.

(b) No Material Adverse Change. Since June 30, 2014, there has been no Material
Adverse Change.

7.05 Properties.

(a) Property Generally. Each Obligor has good and marketable fee simple title
to, or valid leasehold interests in, all its real and personal property
(excluding any Intellectual Property) material to its business, subject only to
Permitted Liens and except for minor defects in title that do not interfere with
its ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.

(b) Intellectual Property. The Obligors represent and warrant to the Lenders as
of the date hereof as follows, and the Obligors acknowledge that the Lenders are
relying on such representations and warranties in entering into this Agreement:

(i) Schedule 7.05(b) contains:

(A) a complete and accurate list of all applied for or registered Patents,
including the jurisdiction and patent number;

(B) a complete and accurate list of all applied for or registered Trademarks,
including the jurisdiction, trademark application or registration number and the
application or registration date; and

(C) a complete and accurate list of all applied for or registered Copyrights;

(ii) Each Obligor is the absolute beneficial owner of all right, title and
interest in and to Material Intellectual Property listed on Schedule 7.05(c) as
owned by such Obligor with good and marketable title, free and clear of any
Liens of any kind whatsoever other than Permitted Liens. Without limiting the
foregoing, and except as set forth in Schedule 7.05(b):

(A) other than with respect to the Material Agreements, or as permitted by
Section 9.09 below, the Obligors have not transferred ownership of Material
Intellectual Property listed on Schedule 7.05(c) as owned by such Obligors, in
whole or in part, to any other Person who is not an Obligor;

(B) other than (i) the Material Agreements, (ii) customary restrictions in
in-bound licenses of Intellectual Property and non-disclosure agreements, or
(iii) as would have been or is permitted by Section 9.09 below, there are no
judgments, covenants not to sue, permits, grants, licenses, Liens (other than
Permitted Liens), or other agreements or

 

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arrangements relating to Borrowers’ Material Intellectual Property, including
any development, submission, services, research, license or support agreements,
which bind, obligate or otherwise restrict the Obligors in any manner that would
reasonably be expected to have a Material Adverse Effect; provided that this
representation and warranty in this subsection (B) is only as to the Knowledge
of the Borrowers with respect to any Material Intellectual Property licensed to
any of the Obligors;

(C) the use of any of the Obligor Intellectual Property in the business of the
Borrower as currently conducted or as currently contemplated to be conducted, to
the best of Borrowers’ Knowledge, does not breach, violate, infringe or
interfere with or constitute a misappropriation of any valid rights arising
under any Intellectual Property of any other Person;

(D) there are no pending or, to Borrowers’ Knowledge, threatened in writing
Claims against the Obligors asserted by any other Person relating to the Obligor
Intellectual Property owned by or exclusively licensed to Obligors, including
any Claims of adverse ownership, invalidity, infringement, misappropriation,
violation or other opposition to or conflict with such Intellectual Property,
except as could not reasonably be expected to have a Material Adverse Effect;
the Obligors have not received any written notice from any Person that the
Borrower’s business, the use of the Obligor Intellectual Property in the
business of the Borrowers as currently conducted, or the manufacture, use or
sale of any product or the performance of any service by the Borrowers infringes
upon, violates or constitutes a misappropriation of, or may infringe upon,
violate or constitute a misappropriation of, or otherwise interfere with, any
other Intellectual Property of any other Person;

(E) the Obligors have no Knowledge that the Obligor Intellectual Property owned
by or exclusively licensed to Obligors is being infringed, violated,
misappropriated or otherwise used by any other Person without the express
authorization of the Obligors. Without limiting the foregoing, the Obligors have
not put any other Person on notice of actual or potential infringement,
violation or misappropriation of any of the Material Intellectual Property owned
by or exclusively licensed to Obligors; the Obligors have not initiated the
enforcement of any Claim with respect to any of the Obligor Intellectual
Property owned by or exclusively licensed to Obligors;

(F) all relevant current and former employees and contractors of each Borrower
have executed written confidentiality and invention assignment Contracts with
such Borrower that irrevocably assign to such Borrower or its designee all of
their rights to any Inventions relating to Borrowers’ business that are
conceived or reduced to practice by such employees within the scope of their
employment or by such contractors within the scope of their contractual
relationship with the respective Borrower, to the extent permitted by applicable
law; except, in the case of former employees and former contractors, as does not
have a Material Adverse Effect;

(G) to the Knowledge of the Obligors, the Obligor Intellectual Property is all
the Intellectual Property necessary for the operation of the Borrowers’ business
as it is currently conducted or as currently contemplated to be conducted,
except for such Intellectual Property the absence of which could not reasonably
be expected to have a Material Adverse Effect;

 

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(H) the Obligors have taken reasonable precautions to protect the secrecy,
confidentiality and value of its Material Intellectual Property consisting of
trade secrets and confidential information, except as could not reasonably be
expected to have a Material Adverse Effect.

(I) each Obligor has delivered to the Lenders accurate and complete copies of
all Material Agreements relating to the Obligor Intellectual Property;

(J) there are no pending or, to the Knowledge of any of the Obligors, threatened
in writing Claims against the Obligors asserted by any other Person relating to
the Material Agreements, including any Claims of breach or default under such
Material Agreements, except as could not reasonably be expected to have a
Material Adverse Effect;

(iii) With respect to the Material Intellectual Property owned by or for which
prosecution is controlled by Obligors consisting of issued Patents, except as
set forth in Schedule 7.05(b), and without limiting the representations and
warranties in Section 7.05(b)(ii):

(A) each of the issued claims in such Patents, to Borrowers’ Knowledge, is valid
and enforceable;

(B) the inventors claimed in such Patents have executed written Contracts with
the applicable Borrower or its predecessor-in-interest that properly and
irrevocably assigns to such Borrower or predecessor-in-interest all of their
rights to any of the Inventions claimed in such Patents to the extent permitted
by applicable law;

(C) none of the Patents, or the Inventions claimed in them, have been dedicated
to the public except as a result of intentional decisions made by the applicable
Obligor;

(D) to Borrowers’ Knowledge, all prior art material to such Patents was
adequately disclosed to or considered by the respective patent offices during
prosecution of such Patents to the extent required by applicable law or
regulation;

(E) subsequent to the issuance of such Patents, neither the Borrowers nor any
Subsidiary Guarantors or their predecessors in interest, have filed any
disclaimer or filed any other voluntary reduction in the scope of the Inventions
claimed in such Patents;

(F) no allowed subject matter of such Patents, to Borrowers’ Knowledge,
currently is subject to any competing conception claims of allowable or allowed
subject matter of any patent applications or patents of any third party and
currently is not the subject of any pending interference, re-examination or
opposition proceedings;

(G) no such Patents, to Borrowers’ Knowledge, have ever been finally adjudicated
to be invalid or unenforceable for any reason in any administrative,
arbitration, judicial or other proceeding, and, with the exception of publicly
available documents in the applicable Patent Office recorded with respect to any
Patents, the Obligors have not received any written notice asserting that such
Patents are invalid or unenforceable; if any of such Patents is terminally
disclaimed to another patent or patent application, all patents and patent
applications subject to such terminal disclaimer are included in the Collateral;

 

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(H) the Obligors have not received a written opinion of counsel that concludes
that a challenge to the validity or enforceability of any of such Patents is
more likely than not to succeed;

(I) the Obligors have no Knowledge that they or any prior owner of such Patents
or their respective agents or representatives have engaged in any conduct, or
omitted to perform any necessary act, the result of which would invalidate or
render unpatentable or unenforceable any such Patents; and

(J) all maintenance fees, annuities, and the like due or payable on the Patents
have been timely paid or the failure to so pay was the result of an intentional
decision by the applicable Obligor or would not reasonably be expected to result
in a Material Adverse Change.

(iv) none of the foregoing representations and statements of fact contains any
untrue statement of material fact or omits to state any material fact necessary
to make any such statement or representation not misleading to a prospective
Lender with respect to the Material Intellectual Property; provided that this
representation and warranty in this subsection (iv) is only as to the Knowledge
of the Borrowers with respect to any Material Intellectual Property licensed to
any of the Obligors.

(c) Material Intellectual Property. Schedule 7.05(c) contains an accurate list
of the Obligor Intellectual Property that the Borrowers have determined the loss
of which, individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect with an indication as to whether the applicable
Obligor owns or has an exclusive or non-exclusive license to such Obligor
Intellectual Property.

7.06 No Actions or Proceedings.

(a) Litigation. There is no litigation, investigation or proceeding pending or,
to the best of the Borrowers’ Knowledge, threatened with respect to each
Borrower and its Subsidiaries by or before any Governmental Authority or
arbitrator (i) that either individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect, except as specified in Schedule 7.06
or (ii) that involves this Agreement or the Transactions.

(b) Environmental Matters. The operations and Property of each Borrower and its
Subsidiaries comply with all applicable Environmental Laws, except to the extent
the failure to so comply (either individually or in the aggregate) could not
reasonably be expected to have a Material Adverse Effect.

(c) Labor Matters. The Borrowers have not engaged in unfair labor practices and
there are no material labor actions or disputes involving the employees of the
Borrowers that could reasonably be expected to have a Material Adverse Effect.

 

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7.07 Compliance with Laws and Agreements. Each of the Obligors is in compliance
with all laws, regulations and orders of any Governmental Authority applicable
to it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.

7.08 Taxes. Except as set forth on Schedule 7.08, each of the Obligors has
timely filed or caused to be filed all tax returns and reports required to have
been filed and has paid or caused to be paid all taxes required to have been
paid by it, except taxes that are being contested in good faith by appropriate
proceedings and for which such Obligor has set aside on its books adequate
reserves with respect thereto in accordance with GAAP.

7.09 Full Disclosure. The Borrowers have disclosed to the Lenders all Material
Agreements to which any Obligor is subject, and all other matters to their
Knowledge, that, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect. None of the reports, financial
statements, certificates or other information furnished by or on behalf of the
Obligors to the Lenders in connection with the negotiation of this Agreement and
the other Loan Documents or delivered hereunder or thereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of material fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Borrowers represent only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

7.10 Regulation.

(a) Investment Company Act. Neither any Borrower nor any of its Subsidiaries is
an “investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940.

(b) Margin Stock. Neither any Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or ultimate, of buying or
carrying Margin Stock, and no part of the proceeds of the Loans will be used to
buy or carry any Margin Stock in violation of Regulation T, U or X.

7.11 Solvency. Each Borrower is and, immediately after giving effect to the
Borrowing and the use of proceeds thereof will be, Solvent.

7.12 Subsidiaries. Schedule 7.12 is a complete and correct list of all
Subsidiaries of the Borrowers as of the date hereof, each such Subsidiary is
duly organized and validly existing under the jurisdiction of its organization
shown in said Schedule 7.12, and the percentage ownership by each Borrower of
each such Subsidiary is as shown in said Schedule 7.12.

7.13 Indebtedness and Liens. Schedule 7.13(b)-1 is a complete and correct list
of all Indebtedness of each Obligor outstanding as of the date hereof. Schedule
7.13(b)-2 is a complete and correct list of all Liens granted by the Borrowers
and other Obligors with respect to their respective Property and outstanding as
of the date hereof.

 

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7.14 Material Agreements. Schedule 7.14 is a complete and correct list of
(i) each Material Agreement existing on the date hereof and (ii) each agreement
creating or evidencing any Material Indebtedness. No Obligor is in material
default under any such Material Agreement or agreement creating or evidencing
any Material Indebtedness. Except as otherwise disclosed on Schedule 7.14, all
material customer contracts of the Obligors are in full force and effect in the
aggregate without material modification from the form in which the same were
disclosed to the Lenders.

7.15 Restrictive Agreements. None of the Obligors of any Borrower or the
Borrowers are subject to any indenture, agreement, instrument or other
arrangement of the type described in Section 9.11, except for any indenture,
agreement, instrument or other arrangement described on Schedule 7.15 or
otherwise permitted under Section 9.11 (each, a “Permitted Restrictive
Agreement”).

7.16 Real Property.

(a) Generally. Neither any Borrower nor any of its Subsidiaries owns or leases
(as tenant thereof) any real property, except as described on Schedule 7.16.

(b) Santa Rosa Lease.

(i) Borrowers have made available a true, accurate and complete copy of the
Santa Rosa Lease to Lenders by filing such a copy of the Santa Rosa Lease with
the SEC or otherwise.

(ii) The Santa Rosa Lease is in full force and effect and no default has
occurred under the Santa Rosa Lease and, to the Knowledge of Borrowers, there is
no existing condition which, but for the passage of time or the giving of
notice, could reasonably be expected to result in a default under the terms of
the Santa Rosa Lease.

(iii) TriVascular is the tenant under the Santa Rosa Lease and has not
transferred, sold, assigned, conveyed, disposed of, mortgaged, pledged,
hypothecated, or encumbered any of its interest in, the Santa Rosa Lease.

7.17 Pension Matters. Schedule 7.17 sets forth, as of the date hereof, a
complete and correct list of, and that separately identifies, (a) all Title IV
Plans and (b) all Multiemployer Plans. Each Benefit Plan, and each trust
thereunder, intended to qualify for tax exempt status under Section 401 or 501
of the Code so qualifies. Except for those that could not, in the aggregate,
have a Material Adverse Effect, (x) each Benefit Plan is in compliance with
applicable provisions of ERISA, the Code and other Requirements of Law,
(y) there are no existing or pending (or to the Knowledge of any Obligor or
Subsidiary thereof, threatened) claims (other than routine claims for benefits
in the normal course), sanctions, actions, lawsuits or other proceedings or
investigation involving any Benefit Plan to which any Obligor or Subsidiary
thereof to their Knowledge incurs or could reasonably be expected to incur
obligation or any liability and (z) no ERISA Event is reasonably expected to
occur. Each Borrower and each of its ERISA Affiliates has met all applicable
requirements under the ERISA Funding Rules with respect to each Title IV Plan,
and no waiver of the minimum funding standards under the ERISA Funding Rules has

 

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been applied for or obtained. As of the most recent valuation date for any Title
IV Plan, the funding target attainment percentage (as defined in
Section 430(d)(2) of the Code) is at least 60%, and neither any Borrower nor any
of its ERISA Affiliates knows of any facts or circumstances that could
reasonably be expected to cause the funding target attainment percentage to fall
below 60% as of the most recent. On the date hereof, no ERISA Event has occurred
in connection with which obligations and liabilities (contingent or otherwise)
remain outstanding. No ERISA Affiliate would have any Withdrawal Liability as a
result of a complete withdrawal from any Multiemployer Plan on the date this
representation is made.

7.18 Collateral; Security Interest. Subject to Permitted Liens, each Security
Document is effective to create in favor of the Lenders a legal, valid and
enforceable security interest in the Collateral subject thereto, which security
interests shall be first-priority, subject to Permitted Liens.

7.19 Regulatory Approvals. Each Borrower and its Subsidiaries hold, and will
continue to hold, either directly or through licensees and agents, all
Regulatory Approvals, licenses, permits and similar governmental authorizations
of a Governmental Authority necessary or required for each Borrower and its
Subsidiaries to conduct their operations and business in the manner currently
conducted, except as could not reasonably be expected to have a Material Adverse
Effect.

7.20 Small Business Concern. Each Borrower’s primary business activity does not
involve, directly or indirectly, providing funds to others (other than among
Borrowers or to its Subsidiaries), the purchase or discounting of debt
obligations, factoring or long term leasing of equipment with no provision for
maintenance or repair, and each Borrowers is not classified under Major Group 65
(Real Estate) or Industry No. 1531 (Operative Builders) of the SIC Manual. Each
Borrower acknowledges that it has been advised that PIOP is a Small Business
Investment Company and licensee under the SBIC Act. The information regarding
each Borrower and its affiliates set forth in the SBA Form 480, Form 652, and
Form 1031 is accurate and complete. The Borrowers acknowledge that the Lenders
are relying on the representations and warranties made by the Borrowers to the
SBA in the SBA Form 480 provided to the Lenders.

7.21 Update of Schedules. Schedules 7.05(b) (in respect of the lists of Patents,
Copyrights and Trademarks under Section 7.05(b)(i) only), 7.05(c), 7.06, and
7.16, may be updated by Borrowers prior to each Borrowing Date to insure the
continued accuracy of such Schedule as of such Borrowing Date, by Borrowers
providing to the Lenders, in writing (including via electronic means), a revised
version of such Schedule in accordance with the provisions of Section 12.02.
Each such updated Schedule shall be effective immediately upon the receipt
thereof by the Lenders.

SECTION 8

AFFIRMATIVE COVENANTS

Each Borrower covenants and agrees with the Lenders that, until the Commitments
have expired or been terminated and all Obligations (other than the Warrant
Obligations) have been paid in full indefeasibly in cash:

 

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8.01 Financial Statements and Other Information. The Borrowers will furnish to
the Lenders:

(a) as soon as available and in any event within 5 days following the date
Holdings files Form 10-Q with the SEC, the consolidated and consolidating
balance sheets of the Obligors as of the end of such quarter, and the related
consolidated and consolidating statements of income, consolidated statement of
shareholders’ equity and consolidated statement of cash flows of each Borrower
and its Subsidiaries for such quarter and the portion of the fiscal year through
the end of such quarter, prepared in accordance with GAAP consistently applied,
all in reasonable detail and setting forth in comparative form the figures for
the corresponding period in the preceding fiscal year, subject to changes
resulting from normal, year-end audit adjustments and except for the absence of
notes;

(b) as soon as available and in any event within 5 days following the date
Holdings files Form 10-K with the SEC, the consolidated balance sheets of each
Borrower and its Subsidiaries as of the end of such fiscal year, and the related
consolidated statements of income, consolidated statement of shareholders’
equity and consolidated statement of cash flows of each Borrower and its
Subsidiaries for such fiscal year, prepared in accordance with GAAP consistently
applied, all in reasonable detail and setting forth in comparative form the
figures for the previous fiscal year, accompanied by a report and opinion
thereon of PricewaterhouseCoopers LLP or another firm of independent certified
public accountants of recognized national standing acceptable to the Lenders,
which report and opinion shall be prepared in accordance with generally accepted
auditing standards and shall not be subject to any qualification or exception as
to the scope of such audit (except with respect to a going concern
qualification, if applicable);

(c) together with the financial statements required pursuant to Sections 8.01(a)
and (b), a compliance certificate of a Responsible Officer as of the end of the
applicable accounting period (which delivery may, unless a Lender requests
executed originals, be by electronic communication including fax or email and
shall be deemed to be an original authentic counterpart thereof for all
purposes) in the form of Exhibit E (a “Compliance Certificate”) including
details of any issues that are material that are raised by auditors;

(d) promptly upon receipt thereof, copies of all letters of representation
signed by an Obligor to its auditors and copies of all auditor reports delivered
for each fiscal quarter;

(e) as soon as available, a consolidated financial forecast for each Borrower
and its Subsidiaries for the following five fiscal years, including forecasted
consolidated balance sheets, consolidated statements of income, shareholders’
equity and cash flows of each Borrower and its Subsidiaries;

(f) promptly, and in any event within five Business Days after receipt thereof
by an Obligor thereof, copies of each notice or other correspondence received
from any securities regulator or exchange to the authority of which any Borrower
may become subject from time to time concerning any investigation or possible
investigation or other inquiry by such agency regarding financial or other
operational results of such Obligor;

 

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(g) the information regarding insurance maintained by each Borrower and its
Subsidiaries as required under Section 8.05; and

(h) within 5 days of filing, provide access (via posting and/or links on
Holdings’ website) to all reports on Form 10-K and Form 10-Q filed with the SEC,
any Governmental Authority succeeding to any or all of the functions of the SEC
or with any national securities exchange; and within 5 days of filing, provide
notice and access (via posting and/or links on Holdings’ website) to all reports
on Form 8-K filed with the SEC, and copies of (or access to, via posting and/or
links on Holdings’ website) all other reports, proxy statements and other
materials filed by Holdings with the SEC, any Governmental Authority succeeding
to any of the functions of the SEC or with any national securities exchange.

Documents required to be delivered pursuant to Section 8.01(a) or (b) or
referred to in Section 8.02(h) (to the extent any such documents are included in
materials otherwise filed with the SEC) may be delivered electronically and if
so delivered, shall be deemed to have been delivered on the date (i) on which
Holdings posts such documents, or provides a link thereto on Holdings’ website;
(ii) on which such documents are posted on Holdings’ behalf on an Internet or
intranet website, if any, to which each Lender has access (whether a commercial,
third party website or whether sponsored by the Lenders); or (iii) on which
Holdings provides notice of filing of such documents with the SEC by electronic
mail message to the Lenders in accordance with Section 12.02.

8.02 Notices of Material Events. The Borrowers will furnish to the Lenders
written notice of the following promptly after a Responsible Officer first
learns of the existence of:

(a) the occurrence of any Default;

(b) notice of the occurrence of any event with respect to its property or assets
resulting in a Loss aggregating $750,000 (or the Equivalent Amount in other
currencies) or more;

(c) to the best of the Borrowers’ Knowledge, (A) any proposed acquisition of
stock, assets or property by any Obligor that would reasonably be expected to
result in material environmental liability under Environmental Laws, and (B)(1)
spillage, leakage, discharge, disposal, leaching, migration or release of any
Hazardous Material required to be reported to any Governmental Authority under
applicable Environmental Laws, and (2) all actions, suits, claims, notices of
violation, hearings, investigations or proceedings pending, or threatened
against or affecting any Borrower or any of its Subsidiaries or with respect to
the ownership, use, maintenance and operation of their respective businesses,
operations or properties, relating to Environmental Laws or Hazardous Material,
in each case, which would reasonably be expected to result in a Material Adverse
Effect;

(d) the assertion of any environmental matter by any Person against, or with
respect to the activities of, any Borrower or any of its Subsidiaries and any
alleged violation of or non-compliance with any Environmental Laws or any
permits, licenses or authorizations which could reasonably be expected to
involve damages in excess of $550,000 other than any environmental matter or
alleged violation that, if adversely determined, could not (either individually
or in the aggregate) have a Material Adverse Effect;

 

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(e) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting any Borrower or
any of its Subsidiaries that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;

(f) (i) on or prior to any filing by any ERISA Affiliate of any notice of intent
to terminate any Title IV Plan, a copy of such notice and (ii) promptly, and in
any event within ten days, after any Responsible Officer of any ERISA Affiliate
knows or has reason to know that a request for a minimum funding waiver under
Section 412 of the Code has been filed with respect to any Title IV Plan or
Multiemployer Plan, a notice (which may be made by telephone if promptly
confirmed in writing) describing such waiver request and any action that any
ERISA Affiliate proposes to take with respect thereto, together with a copy of
any notice filed with the PBGC or the IRS pertaining thereto;

(g) (i) the termination of any Material Agreement; (ii) the receipt by any
Borrower or any of its Subsidiaries of any material notice under any Material
Agreement; (iii) the entering into of any new Material Agreement by an Obligor;
or (iv) any material amendment to a Material Agreement;

(h) the reports and notices as required by the Security Documents;

(i) within 30 days of the date thereof, or, if earlier, on the date of delivery
of any financial statements pursuant to Section 8.01, notice of any material
change in accounting policies or financial reporting practices by the Obligors
(which requirement will be deemed satisfied by the description thereof in a Form
10-K, Form 10-Q or Form 8-K filed with the SEC);

(j) promptly after the occurrence thereof, notice of any labor controversy
resulting in or threatening to result in any strike, work stoppage, boycott,
shutdown or other material labor disruption against or involving an Obligor,
which could reasonably be expected to result in a Material Adverse Effect;

(k) a licensing agreement or arrangement entered into by any Borrower or any
Subsidiary in connection with any infringement or alleged infringement of the
Intellectual Property of another Person;

(l) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect;

(m) concurrently with the delivery of financial statements under
Section 8.01(b), notice of the creation or other acquisition of any Intellectual
Property by Borrowers or any Subsidiary after the date hereof and during such
prior fiscal year which is registered or becomes registered or the subject of an
application for registration with the U.S. Copyright Office or the U.S. Patent
and Trademark Office, as applicable, or with any other equivalent foreign
Governmental Authority;

 

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(n) any change to the Borrowers’ and each Subsidiary Guarantor’s ownership of
Deposit Accounts, Securities Accounts and Commodity Accounts, by delivering to
Lenders an updated Annex 7 to the Security Agreement setting forth a complete
and correct list of all such accounts as of the date of such change; or

(o) such other information respecting the operations, properties, business or
condition (financial or otherwise) of the Obligors (including with respect to
the Collateral) as the Majority Lenders may from time to time reasonably
request.

Each notice delivered under this Section 8.02 shall be accompanied by a
statement of a financial officer or other executive officer of each Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.

8.03 Existence; Conduct of Business. Each Borrower will, and will cause each of
its Subsidiaries to, do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its legal existence and the rights,
licenses, permits, privileges and franchises material to the conduct of its
business; provided that the foregoing shall not prohibit any merger,
amalgamation, consolidation, liquidation or dissolution permitted under
Section 9.03. Without obtaining the prior written approval of PIOP, each
Borrower will not change within one (1) year after the date hereof, such
Borrower’s business activity to a business activity to which a licensee under
the SBIC Act is prohibited from providing funds by the SBIC Act, as more
specifically set forth under Part 107.720 of Title 13 of the United States Code
of Federal Regulations. If any Borrower’s business activity changes to such a
prohibited business activity or the proceeds are used for ineligible business
activities, such Borrower will use all commercially reasonable efforts and
cooperate in good faith to assist PIOP to sell or transfer its Proportionate
Share of the Loans in a commercially reasonable manner; provided that in no way
shall this be considered PIOP’s sole remedy if any Borrower’s business activity
changes to such a prohibited business activity. Based on the Lenders’ due
diligence on the Borrowers as of the date hereof, Borrower’s current business
activity of designing, developing or manufacturing medical devices is not a
business activity to which a licensee under the SBIC Act is prohibited from
providing funds by the SBIC Act.

8.04 Payment of Obligations. Each Borrower will, and will cause each of its
Subsidiaries to, pay and discharge its obligations, including (i) all taxes,
fees, assessments and governmental charges or levies imposed upon it or upon its
properties or assets prior to the date on which penalties attach thereto, and
all lawful claims for labor, materials and supplies which, if unpaid, might
become a Lien upon any properties or assets of such Borrowers or any Subsidiary,
except to the extent such taxes, fees, assessments or governmental charges or
levies, or such claims are being contested in good faith by appropriate
proceedings and are adequately reserved against in accordance with GAAP;
(ii) all lawful claims which, if unpaid, would by law become a Lien upon its
property not constituting a Permitted Lien; and (iii) all Indebtedness other
than Permitted Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.

8.05 Insurance. Each Borrower will, and will cause each of its Subsidiaries to
maintain, with financially sound and reputable insurance companies, insurance in
such amounts and against

 

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such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations. Upon the request
of the Majority Lenders, each Borrower shall furnish the Lenders from time to
time with full information as to the insurance carried by it and, if so
requested, copies of all such insurance policies. Each Borrower also shall
furnish to the Lenders from time to time upon the request of the Majority
Lenders a certificate from the Borrowers’ insurance broker or other insurance
specialist stating that all premiums then due on the policies relating to
insurance on the Collateral have been paid, that such policies are in full force
and effect and that such insurance coverage and such policies comply with all
the requirements of this Section 8.05. The Borrowers shall use commercially
reasonable efforts to ensure, or cause others to ensure, that all insurance
policies required under this Section 8.05 shall provide that they shall not be
terminated or cancelled nor shall any such policy be materially changed in a
manner adverse to the Borrowers without at least 30 days’ prior written notice
to the Borrowers and the Lenders. Receipt of notice of termination or
cancellation of any such insurance policies or reduction of coverages or amounts
thereunder shall entitle the Lenders to renew any such policies, cause the
coverages and amounts thereof to be maintained at levels required pursuant to
the first sentence of this Section 8.05 or otherwise to obtain similar insurance
in place of such policies, in each case at the expense of the Borrowers.

8.06 Books and Records; Inspection Rights. Each Borrower will, and will cause
each of its Subsidiaries to, keep proper books of record and account in which
full, true and correct entries are made of all dealings and transactions in
relation to its business and activities. Each Borrower will, and will cause each
of its Subsidiaries to, permit any representatives designated by the Lender,
upon reasonable prior notice, to visit and inspect its real properties, to
examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants,
all at such reasonable times (but not more often than once a year unless an
Event of Default has occurred and is continuing).

8.07 Compliance with Laws and Other Obligations. Each Borrower will, and will
cause each of its Subsidiaries to, (i) comply in all material respects with all
laws, rules, regulations and orders of any Governmental Authority applicable to
it or its property (including Environmental Laws) and (ii) comply in all
material respects with all terms of Indebtedness and all other Material
Agreements, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

8.08 Maintenance of Properties, Etc.

(a) Each Borrower shall, and shall cause each of its Subsidiaries to, maintain
and preserve all of its real and tangible personal properties necessary or
useful in the proper conduct of its business in good working order and condition
in accordance with the general practice of other Persons of similar character
and size, ordinary wear and tear and damage from casualty or condemnation
excepted.

(b) Without limiting the generality of clause (a) above, Borrowers shall comply
with each of the following covenants with respect to the Santa Rosa Lease:

(i) TriVascular shall diligently perform and timely observe all of the terms,
covenants and conditions of the Santa Rosa Lease on the part of TriVascular to
be performed and

 

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observed prior to the expiration of any applicable grace period therein provided
and do everything necessary to preserve and to keep unimpaired and in full force
and effect the Santa Rosa Lease; provided, however, that the parties acknowledge
that the Santa Rosa Lease shall expire on February 28, 2018.

(ii) Borrowers shall promptly notify Lenders of the giving of any written notice
by Santa Rosa Landlord to TriVascular of any default by TriVascular thereunder,
and promptly deliver to Lenders a true copy of each such notice. If TriVascular
shall be in default under the Santa Rosa Lease, Lenders shall have the right
(but not the obligation) to cause the default or defaults under the Santa Rosa
Lease to be remedied and otherwise exercise any and all rights of TriVascular
under the Santa Rosa Lease, as may be necessary to prevent or cure any default
and Lenders shall have the right to enter all or any portion of the Property, at
such times and in such manner as Lenders reasonably deem necessary, to prevent
or to cure any such default. Without limiting the foregoing, upon any such
default, TriVascular shall promptly execute, acknowledge and deliver to Lenders
such instruments as may reasonably be required of TriVascular to permit Lenders
to cure any default under the Santa Rosa Lease or permit Lenders to take such
other action required to enable Lenders to cure or remedy the matter in default
and preserve the security interest of Lenders under the Loan Documents with
respect to the Santa Rosa Facility.

(iii) TriVascular shall use commercially reasonable efforts to enforce, in a
commercially reasonable manner, each covenant or obligation of the Santa Rosa
Landlord in the Santa Rosa Lease in accordance with its terms. Subject to the
terms and requirements of the Santa Rosa Lease, within ten (10) days after
receipt of written request by Lenders, Borrowers shall use reasonable efforts to
obtain from the Santa Rosa Landlord under the Santa Rosa Lease and furnish to
Lenders an estoppel certificate from the Santa Rosa Landlord stating the date
through which rent has been paid and whether or not, to the Santa Rosa
Landlord’s knowledge, there are any defaults thereunder and specifying the
nature of such claimed defaults, if any, and such other matters as Lenders may
reasonably request or in the form required pursuant to the terms of the Santa
Rosa Lease. Borrowers shall furnish to Lenders all information that Lenders may
reasonably request from time to time in the possession of Borrowers (or
reasonably available to Borrowers) concerning the Santa Rosa Lease and
TriVascular’s compliance with the Santa Rosa Lease.

(iv) Borrowers, promptly upon learning that Santa Rosa Landlord has failed to
perform the material terms and provisions under the Santa Rosa Lease and
immediately upon learning of a rejection or disaffirmance or purported rejection
or disaffirmance of the Santa Rosa Lease pursuant to any state or federal
bankruptcy law, shall notify Lenders thereof. Borrowers shall promptly notify
Lenders of any request that any party to the Santa Rosa Lease makes for
arbitration or other dispute resolution procedure pursuant to the Santa Rosa
Lease and of the institution of any such arbitration or dispute resolution.
TriVascular hereby authorizes Lenders to attend any such arbitration or dispute,
and upon the occurrence and during the continuance of an Event of Default
participate in any such arbitration or dispute resolution but such participation
shall not be to the exclusion of Borrowers; provided, however, that, in any
case, TriVascular shall consult with Lenders with respect to the matters related
thereto. Borrowers shall promptly deliver to Lenders a copy of the determination
of each such arbitration or dispute resolution mechanism.

 

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(v) If Lenders or their designee shall acquire or obtain a new Santa Rosa Lease
following a termination of the Santa Rosa Lease, then Borrowers shall have no
right, title or interest whatsoever in or to such new Santa Rosa Lease, or any
proceeds or income arising from the estate arising under any such new Santa Rosa
Lease, including from any sale or other disposition thereof. Lenders or their
designee shall hold such new Santa Rosa Lease free and clear of any right or
claim of Borrowers.

(vi) Borrowers shall promptly, after obtaining knowledge of such filing notify
Lenders orally of any filing by or against Santa Rosa Landlord under the Santa
Rosa Lease of a petition under the Bankruptcy Code or other applicable law.
Borrowers shall thereafter promptly give written notice of such filing to
Lenders, setting forth any information available to Borrowers as to the date of
such filing, the court in which such petition was filed, and the relief sought
in such filing. Borrowers shall promptly deliver to Lenders any and all notices,
summonses, pleadings, applications and other documents received by Borrowers in
connection with any such petition and any proceedings relating to such petition.

8.09 Licenses. Each Borrower shall, and shall cause each of its Subsidiaries to,
obtain and maintain all licenses, authorizations, consents, filings, exemptions,
registrations and other Governmental Approvals necessary in connection with the
execution, delivery and performance of the Loan Documents, the consummation of
the Transactions or the operation and conduct of its business and ownership of
its properties, except where failure to do so could not reasonably be expected
to have a Material Adverse Effect.

8.10 Action under Environmental Laws. Each Borrower shall, and shall cause each
of its Subsidiaries to, upon becoming aware of the presence of any Hazardous
Materials or the existence of any environmental liability under applicable
Environmental Laws with respect to their respective businesses, operations or
properties, take all actions, at their cost and expense, as shall be necessary
or advisable to investigate and clean up the condition of their respective
businesses, operations or properties, including all required removal,
containment and remedial actions, and restore their respective businesses,
operations or properties to a condition in compliance with applicable
Environmental Laws, except where failure to do so could not reasonably be
expected to have a Material Adverse Effect.

8.11 Use of Proceeds. The proceeds of the Loans will be used only as provided in
Section 2.05. No part of the proceeds of the Loans will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board of Governors of the Federal Reserve System, including
Regulations T, U and X.

8.12 Certain Obligations Respecting Subsidiaries; Further Assurances.

(a) Subsidiary Guarantors. Each Borrower will take such action, and will cause
each of its Subsidiaries to take such action, from time to time as shall be
necessary to ensure that all Subsidiaries that are Domestic Subsidiaries of such
Borrower are “Subsidiary Guarantors” hereunder. Without limiting the generality
of the foregoing, in the event that any Borrower or any of its Subsidiaries
shall form or acquire any new Subsidiary that is a Domestic Subsidiary, each
Borrower and Subsidiary Guarantor will and shall cause each of its Subsidiaries
to:

 

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(i) cause such new Subsidiary to become a “Subsidiary Guarantor” hereunder, and
a “Grantor” under the Security Agreement, pursuant to a Guarantee Assumption
Agreement;

(ii) take such action or cause such Subsidiary to take such action (including
delivering such shares of stock together with undated transfer powers executed
in blank) as shall be necessary to create and perfect valid and enforceable
first priority (subject to Permitted Liens permitted under Section 9.02(c))
Liens on substantially all of the personal property of such new Subsidiary as
collateral security for the obligations of such new Subsidiary hereunder;

(iii) cause the parent of such Subsidiary to execute and deliver a pledge
agreement in favor of the Lenders in respect of all outstanding issued shares of
such Subsidiary; and

(iv) deliver such proof of corporate action, incumbency of officers, opinions of
counsel and other documents as is consistent with those delivered by each
Obligor pursuant to Section 6.01 or as the Majority Lenders shall have
requested.

(b) Foreign Subsidiaries. Foreign Subsidiaries of any Borrower shall not be
required to become Subsidiary Guarantors hereunder, except that the Borrowers
and Subsidiary Guarantors shall take such action to cause the parent of such
Foreign Subsidiary to execute and deliver a pledge agreement in favor of the
Lenders in respect of (i) 65% of the issued and outstanding shares of voting
stock of such Foreign Subsidiary and (ii) to the extent such pledge could not
reasonably be expected to cause a material adverse tax consequence to Borrowers,
100% of all other issued and outstanding shares of capital stock of whatever
class of such Foreign Subsidiary are beneficially owned by such parent.

(c) Further Assurances. Each Borrower will, and will cause each of its
Subsidiaries to, take such action from time to time as shall reasonably be
requested by the Majority Lenders to effectuate the purposes and objectives of
this Agreement.

Without limiting the generality of the foregoing, the Borrowers will, and will
cause each Person that is required to be a Subsidiary Guarantor to, take such
action from time to time (including executing and delivering such assignments,
security agreements, control agreements and other instruments) as shall be
reasonably requested by the Majority Lenders to create, in favor of the Lenders,
perfected security interests and Liens in substantially all of the personal
property of such Obligor (subject to Permitted Liens) as collateral security for
the Obligations; provided that any such security interest or Lien shall be
subject to the relevant requirements of the Security Documents.

8.13 Termination of Non-Permitted Liens. In the event that any Borrower or any
of its Subsidiaries shall become aware or be notified by the Lenders of the
existence of any outstanding Lien against any Property of any Borrower or any of
its Subsidiaries, which Lien is not a Permitted Lien, the Borrowers shall use
their best efforts to promptly terminate or cause the termination of such Lien.

 

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8.14 Intellectual Property.

(a) Notwithstanding any provision in this Agreement or any other Loan Documents
to the contrary, the Lenders are not assuming any liability or obligation of the
Borrowers, the Subsidiary Guarantors or their Subsidiaries of whatever nature,
whether presently in existence or arising or asserted hereafter, except to the
extent required under applicable law in connection with any Intellectual
Property license agreement of the Borrowers, the Subsidiary Guarantors or their
Subsidiaries in the event that the Lenders foreclose on such Collateral. All
such liabilities and obligations shall be retained by and remain obligations and
liabilities of the Obligors, the Subsidiary Guarantors and/or their Subsidiaries
as the case may be, except to the extent required under applicable law in
connection with any Intellectual Property license agreement of the Borrowers,
the Subsidiary Guarantors or their Subsidiaries in the event that the Lenders
foreclose on such Collateral. Without limiting the foregoing, the Lenders are
not assuming and shall not be responsible for any liabilities or Claims of the
Borrowers, the Subsidiary Guarantors or their Subsidiaries, whether present or
future, absolute or contingent and whether or not relating to the Obligors, the
Obligor Intellectual Property, and/or the Material Agreements, and the Borrowers
shall indemnify and save harmless the Lenders from and against all such
liabilities, Claims and Liens, except to the extent required under applicable
law in connection with any Intellectual Property license agreement of the
Borrowers, the Subsidiary Guarantors or their Subsidiaries in the event that the
Lenders foreclose on such Collateral. Without limiting the foregoing, this
Agreement shall not constitute an agreement to assign any Contracts of, or
Obligor Intellectual Property to, the Lenders, except to the extent required
under applicable law in connection with any Intellectual Property license
agreement of the Borrowers, the Subsidiary Guarantors or their Subsidiaries in
the event that the Lenders foreclose on such Collateral.

(b) In the event that the Obligors acquire Obligor Intellectual Property during
the term of this Agreement, then the provisions of this Agreement shall
automatically apply thereto and any such Obligor Intellectual Property shall
automatically constitute part of the Collateral hereunder, without further
action by any party, in each case from and after the date of such acquisition
(except that any representations or warranties of any Obligor shall apply to any
such Obligor Intellectual Property only from and after the date, if any,
subsequent to such acquisition that such representations and warranties are
brought down or made anew as provided herein).

8.15 Post-Closing Items.

(a)Leasehold Deed of Trust and Landlord Consent. Borrowers shall use
commercially reasonable efforts to (i) execute and deliver an amendment to the
Leasehold Deed of Trust for recording with the County of Sonoma, California, and
(ii) obtain the consent of the Santa Rosa Landlord for such amendment, in each
case, as promptly as possible following the date hereof.

 

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SECTION 9

NEGATIVE COVENANTS

Each Borrower covenants and agrees with the Lenders that, until the Commitments
have expired or been terminated and all Obligations (other than the Warrant
Obligations) have been paid in full indefeasibly in cash:

9.01 Indebtedness. Each Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Indebtedness,
whether directly or indirectly, except:

(a) the Obligations;

(b) Indebtedness existing on the date hereof and set forth on Schedule 7.13(b)-1
and Permitted Refinancings thereof; provided that, in each case, such
Indebtedness is subordinated to the Obligations on terms satisfactory to the
Majority Lenders;

(c) Permitted Priority Debt;

(d) [Reserved];

(e) accounts payable to trade creditors for goods and services and current
operating liabilities (not the result of the borrowing of money) incurred in the
ordinary course of such Borrower’s or such Subsidiary’s business in accordance
with customary terms and paid within such Borrower or such Subsidiary’s ordinary
business practices, unless contested in good faith by appropriate proceedings
and reserved for in accordance with GAAP;

(f) Indebtedness consisting of guarantees resulting from endorsement of
negotiable instruments for collection by such Borrower or any Subsidiary in the
ordinary course of business;

(g) Indebtedness (i) of such Borrower to any Subsidiary Guarantor, (ii) of any
Subsidiary Guarantor to such Borrower or any other Subsidiary Guarantor, and
(iii) of any Foreign Subsidiary to any other Foreign Subsidiary;

(h) Guarantees by such Borrower of Indebtedness of any Subsidiary Guarantor and
by any Subsidiary of Indebtedness of such Borrower or any other Subsidiary
Guarantor and by any Foreign Subsidiary of Indebtedness of such Borrower or any
other Subsidiary; provided that the aggregate outstanding principal amount of
such Indebtedness, when added to the aggregate principal amount of the
outstanding Indebtedness permitted in reliance on Section 9.01(i), does not
exceed $1,000,000 (or the Equivalent Amount in other currencies) at any time;

(i) normal course of business equipment financing; provided that (i) if secured,
the collateral therefor consists solely of the assets being financed, the
products and proceeds thereof and books and records related thereto, and
(ii) the aggregate outstanding principal amount of such Indebtedness, when added
to the aggregate principal amount of the outstanding Indebtedness permitted in
reliance on Section 9.01(h), does not exceed $1,000,000 (or the Equivalent
Amount in other currencies) at any time;

 

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(j) Permitted Convertible Subordinated Debt not to exceed $150,000,000 in
aggregate principal amount;

(k) Indebtedness incurred in a transaction specifically permitted under Section
9.10(d);

(l) Indebtedness approved in advance in writing by the Majority Lenders;

(m) Guarantees of automobile leases entered into by Foreign Subsidiaries;

(n) Customary indemnification arrangements with suppliers arising in the
ordinary course of business and customary indemnification arrangements with
respect to directors and officers, contractors and professionals rendering
services to Borrowers and its Subsidiaries;

(o) Indebtedness of any Person acquired in a Permitted Acquisition (so long as
such Indebtedness (A) existed prior to the acquisition of such Person by
Borrowers or any Subsidiary, (B) is not created in connection with such
acquisition and (C) is solely the obligation of such Person and not of Borrowers
or any other Subsidiary), provided that the aggregate outstanding principal
amount of such Indebtedness, when added to the aggregate outstanding principal
amount of the Indebtedness permitted in reliance on Section 9.01(p), does not
exceed $1,000,000 (or the Equivalent Amount in other currencies) in the
aggregate;

(p) Indebtedness consisting of contingent liabilities in respect of
indemnification obligations or adjustment of purchase price in connection with
the consummation of Permitted Acquisitions, provided that the aggregate
outstanding principal amount of such Indebtedness, when added to the aggregate
outstanding principal amount of the Indebtedness permitted in reliance on
Section 9.01(o), does not exceed $1,000,000 (or the Equivalent Amount in other
currencies) in the aggregate;

(q) Indebtedness to CMI under the CMI Loan Agreement existing on the date
hereof; and

(r) Other Indebtedness not to exceed $1,000,000 in the aggregate, provided that
such Indebtedness is unsecured and subordinated to the Obligations in terms of
rights to payment and to exercise remedies.

9.02 Liens. Each Borrower will not, and will not permit any of its Subsidiaries
to, create, incur, assume or permit to exist any Lien on any property or asset
now owned by it, or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except (collectively,
“Permitted Liens”):

(a) Liens securing the Obligations;

(b) any Lien on any property or asset of any Borrower or any of its Subsidiaries
existing on the date hereof and set forth in Schedule 7.13(b)-2; provided that
(i) the scope of the collateral to which such Lien applies shall not be expanded
and (ii) any such Lien shall secure only those obligations which it secures on
the date hereof and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;

 

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(c) Liens described in the definition of “Permitted Priority Debt”;

(d) Liens securing Indebtedness permitted under Section 9.01(i); provided that
such Liens are restricted solely to the collateral described in Section 9.01(i);

(e) Liens imposed by law which were incurred in the ordinary course of business,
including (but not limited to) carriers’, warehousemen’s and mechanics’ liens
and other similar liens arising in the ordinary course of business and which
(x) do not in the aggregate materially detract from the value of the Property
subject thereto or materially impair the use thereof in the operations of the
business of such Person or (y) are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture or
sale of the Property subject to such liens and for which adequate reserves have
been made if required in accordance with GAAP;

(f) pledges or deposits made in the ordinary course of business in connection
with workers’ compensation, unemployment insurance or other similar social
security legislation;

(g) Liens securing taxes, assessments and other governmental charges, the
payment of which is not yet due or is being contested in good faith by
appropriate proceedings promptly initiated and diligently conducted and for
which such reserve or other appropriate provisions, if any, as shall be required
by GAAP shall have been made;

(h) servitudes, easements, rights of way, restrictions and other similar
encumbrances on real Property imposed by applicable Laws and encumbrances
consisting of zoning or building restrictions, easements, licenses, restrictions
on the use of property or minor imperfections in title thereto which, in the
aggregate, are not material, and which do not in any case materially detract
from the value of the property subject thereto or interfere with the ordinary
conduct of the business of any of the Subsidiaries;

(i) with respect to any real Property, (A) such defects or encroachments as
might be revealed by an up-to-date survey of such real Property; (B) the
reservations, limitations, provisos and conditions expressed in the original
grant, deed or patent of such property by the original owner of such real
Property pursuant to applicable Laws; and (C) rights of expropriation, access or
user or any similar right conferred or reserved by or in applicable Laws, which,
in the aggregate for (A), (B) and (C), are not material, and which do not in any
case materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of any of the Subsidiaries;

(j) Liens securing Permitted Convertible Subordinated Debt;

(k) Bankers’ liens, rights of setoff and similar Liens incurred on deposits made
in the ordinary course of business;

(l) Liens arising from judgments, decrees or attachments in circumstances not
constituting an Event of Default;

 

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(m) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payments of customs duties in connection with the importation of
goods;

(n) Liens on insurance proceeds in favor of insurance companies granted solely
as security for financed premiums; and

(o) Liens in favor of CMI to secure the obligations under the CMI Loan
Agreement;

provided that no Lien otherwise permitted under any of the foregoing Sections
9.02(b), (c), (d), (e), (f), (h), (i), (j) and (o) shall apply to any Material
Intellectual Property.

9.03 Fundamental Changes and Acquisitions. Each Borrower will not, and will not
permit any of its Subsidiaries to, (i) enter into any transaction of merger,
amalgamation or consolidation (ii) liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution) (iii) make any Acquisition or otherwise
acquire any business or substantially all the property from, or capital stock
of, or be a party to any acquisition of, any Person. Notwithstanding the
foregoing provisions of this Section 9.03:

(a) each Borrower and its Subsidiaries may make Investments permitted under
Section 9.05;

(b) (i) any Subsidiary Guarantor may be merged, amalgamated or consolidated with
or into any Borrower or any other Subsidiary Guarantor and (ii) any Foreign
Subsidiary may be merged, amalgamated or consolidated with or into any Borrower
or any other Subsidiary;

(c) (i) any Subsidiary Guarantor may sell, lease, transfer or otherwise dispose
of any or all of its property (upon voluntary liquidation or otherwise) to any
Borrower or another Subsidiary Guarantor; and (ii) any Foreign Subsidiary may
sell, lease, transfer or otherwise dispose of any or all of its property (upon
voluntary liquidation or otherwise) to any Borrower or another Subsidiary; and

(d) the capital stock of (i) any Subsidiary Guarantor may be sold, transferred
or otherwise disposed of to any Borrower or another Subsidiary Guarantor and
(ii) the capital stock of any Foreign Subsidiary may be sold, transferred or
otherwise disposed of to any Borrower or another Subsidiary; and

(e) each Borrower and its Subsidiaries may make Permitted Acquisitions, not to
exceed $25,000,000 in the aggregate.

9.04 Lines of Business. Each Borrower will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than the
business engaged in on the date hereof by Borrower or any Subsidiary or a
business reasonably related thereto.

9.05 Investments. Each Borrower will not, and will not permit any of its
Subsidiaries to, make, directly or indirectly, or permit to remain outstanding
any Investments except:

(a) Investments outstanding on the date hereof and identified in Schedule 9.05;

 

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(b) operating deposit accounts with banks;

(c) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sales of goods or services in the ordinary course of
business;

(d) Permitted Cash Equivalent Investments;

(e) Investments by such Borrower and the Subsidiary Guarantors in such
Borrower’s wholly-owned Subsidiary Guarantors (for greater certainty, each
Borrower shall not be permitted to have any direct or indirect Subsidiaries that
are not wholly-owned Subsidiaries);

(f) Hedging Agreements entered into in the ordinary course of such Borrower’s
financial planning solely to hedge currency risks (and not for speculative
purposes) and in an aggregate notional amount for all such Hedging Agreements
not in excess of $250,000 (or the Equivalent Amount in other currencies);

(g) Investments consisting of security deposits with utilities and other like
Persons made in the ordinary course of business;

(h) Investments consisting of (A) employee loans, travel advances and guarantees
in accordance with such Borrower’s usual and customary practices with respect
thereto (if permitted by applicable law) which in the aggregate shall not exceed
$500,000 outstanding at any time (or the Equivalent Amount in other currencies)
and (B) non-cash loans to employees, officers or directors relating to the
purchase of equity securities of Holdings pursuant to employee stock purchase
plans or arrangements approved by Holdings’ board of directors which in the
aggregate shall not exceed $3,000,000 outstanding at any time (or the Equivalent
Amount in other currencies);

(i) Investments received in connection with any Insolvency Proceedings in
respect of any customers, suppliers or clients and in settlement of delinquent
obligations of, and other disputes with, customers, suppliers or clients;

(j) Investments consisting of notes receivable or prepaid royalties and other
credit obligations to customers and suppliers, in the ordinary course of
business;

(k) Investments permitted pursuant to Section 9.03;

(l) Investments by such Borrower and the Subsidiary Guarantors in all Foreign
Subsidiaries not to exceed $1,500,000 in the aggregate at any time outstanding;

(m) Indebtedness permitted by Section 9.01; and

(n) Other Investments in an aggregate amount not to exceed $2,000,000.

9.06 Restricted Payments. Each Borrower will not, and will not permit any of its
Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except:

 

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(a) such Borrower may declare and pay dividends with respect to its capital
stock payable solely in additional shares of its common stock;

(b) such Borrower may purchase, redeem, retire, or otherwise acquire shares of
its capital stock or other equity interests with the proceeds received from a
substantially concurrent issue of new shares of its capital stock or other
equity interests;

(c) for the payment of dividends by any Subsidiary of an Obligor to any Obligor;
and

(d) repurchases of capital stock by Holdings pursuant to the terms of employee
stock purchase plans, employee restricted stock agreements or similar
arrangements which in the aggregate shall not exceed $2,500,000.

9.07 Payments of Indebtedness. Each Borrower will not, and will not permit any
of its Subsidiaries to, make any payments in respect of any Indebtedness other
than (i) the Obligations and (ii) subject to any applicable terms of
subordination, other Permitted Indebtedness.

9.08 Change in Fiscal Year. Each Borrower will not, and will not permit any of
its Subsidiaries to, change the last day of its fiscal year from that in effect
on the date hereof, except to change the fiscal year of a Subsidiary acquired in
connection with an Acquisition to conform its fiscal year to the Borrowers’.

9.09 Sales of Assets, Etc. Unless such Borrower simultaneously makes the
prepayment required under Section 3.03(b)(i), each Borrower will not, and will
not permit any of its Subsidiaries to, sell, lease, exclusively license (in
terms of geography or field of use), transfer, or otherwise dispose of any of
its Property (including accounts receivable and capital stock of Subsidiaries)
to any Person in one transaction or series of transactions (any thereof, an
“Asset Sale”), except for any of the following:

(a) transfers of cash in the ordinary course of its business for equivalent
value;

(b) sales of inventory in the ordinary course of its business on ordinary
business terms;

(c) research, development, manufacturing, assembly, sterilization, quality
assurance, advertising, marketing, promotion, sales agent, or confidentiality
arrangements where such arrangements provide for the licenses or disclosure of
Patents, Trademarks, Copyrights or other Intellectual Property rights in the
ordinary course of business and consistent with general market practices,
provided that such arrangements do not grant any Person (other than any Obligor)
the right to manufacture and sell any material products of any Borrower on such
Person’s own behalf;

(d) transfers of Property by (i) any Obligor to any other Obligor and (ii) by
any Foreign Subsidiary to any Obligor;

(e) sales or transfers of Property (other than cash or inventory) by any Obligor
to any Foreign Subsidiary; provided that the terms thereof are no less favorable
(including the amount of cash received by such Obligor) to such Obligor than
those that would be obtained in a

 

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comparable arm’s-length transaction with a Person not an Affiliate of any
Obligor; provided further that if such sale is not on arm’s length terms, such
sale of Property to a Foreign Subsidiary shall be permitted, but only if such
Foreign Subsidiary shall transfer cash to such Obligor in the amount equal to
the fair market value of the sold or transferred Property within 15 days of such
sale or transfer;

(f) dispositions of any Property that is obsolete or worn out or no longer used
or useful in the Business;

(g) up to $2 million of any other Asset Sales during the term of this Agreement;
and

(h) those transactions permitted by Sections 9.03 or 9.04.

Lenders acknowledge and agree that clause (f) above includes the right for any
Borrower to make decisions in the ordinary course of business regarding the
registration of any of its Intellectual Property, including without limitation,
any decisions regarding application, prosecution, abandonment, or cancellation
of any such Intellectual Property, without the consent of any Lender.

9.10 Transactions with Affiliates. Each Borrower will not, and will not permit
any of its Subsidiaries to, sell, lease, license or otherwise transfer any
assets to, or purchase, lease, license or otherwise acquire any assets from, or
otherwise engage in any other transactions with, any of its Affiliates, except
for any of the following:

(a) transactions between or among Obligors;

(b) any Indebtedness permitted by Section 9.01;

(c) any Investment permitted by Section 9.05;

(d) any Restricted Payment permitted by Section 9.06;

(e) any Asset Sale permitted by Section 9.09;

(f) customary compensation and indemnification of, and other employment
arrangements with, directors, officers and employees of such Borrower or any
Subsidiary in the ordinary course of business,

(g) any Borrower may issue debt or Equity Interests to Affiliates in exchange
for cash, provided that the terms thereof are no less favorable (including the
amount of cash received by such Borrower) to such Borrower than those that would
be obtained in a comparable arm’s-length transaction with a Person not an
Affiliate of any Borrower; and

(h) the transactions set forth on Schedule 9.10.

9.11 Restrictive Agreements. Except for Permitted Restrictive Agreements, each
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any

 

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condition upon (a) the ability of such Borrower or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets, or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any shares of its capital stock or to make or repay loans or advances to such
Borrower or any other Subsidiary or to Guarantee Indebtedness of such Borrower
or any other Subsidiary; provided that:

(i) the foregoing shall not apply to (x) restrictions and conditions imposed by
law or by this Agreement and (y) customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be sold
and such sale is permitted hereunder; and

(ii) the foregoing clause (a) shall not apply to (x) restrictions or conditions
imposed by any agreement relating to secured Permitted Indebtedness if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (y) customary provisions in leases, in-bound licenses of
Intellectual Property and other contracts restricting the assignment thereof;

(iii) the foregoing shall not apply to any stockholder agreement, charter, by
laws or other organizational documents of any Borrower or any Subsidiary as in
effect on the date hereof and as amended as permitted hereunder; and

(iv) the foregoing shall not apply to Permitted Liens.

9.12 Amendments to Material Agreements. Each Borrower will not, and will not
permit any of its Subsidiary Guarantors to, enter into any amendment to or
modification of any Material Agreement or terminate any Material Agreement
(unless replaced with another agreement that, viewed as a whole, is on better
terms for such Borrower or such Subsidiary Guarantor) without in each case the
prior written consent of the Lender (which consent shall not be unreasonably
withheld or delayed).

9.13 Preservation of Santa Rosa Lease; Operating Leases.

(a) Notwithstanding any provision of this Agreement to the contrary, Borrowers
shall not:

(i) Surrender, terminate, forfeit, or suffer or permit the surrender,
termination or forfeiture of, or change, modify or amend, the Santa Rosa Lease,
nor transfer, sell, assign, convey, dispose of, mortgage, pledge, hypothecate,
assign or encumber any of its interest in, the Santa Rosa Lease;

(ii) Consent to, cause, agree to, or permit to occur any subordination, or
consent to the subordination of, the Santa Rosa Lease to any mortgage, deed of
trust or other lien encumbering (or that may in the future encumber) the
interest of Santa Rosa Landlord in the Santa Rosa Facility;

 

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(iii) Waive, excuse, condone or in any way release or discharge Santa Rosa
Landlord of or from its material obligations, covenants and/or conditions under
the Santa Rosa Lease; or

(iv) Elect to treat the Santa Rosa Lease as terminated or rejected under
subsection 365 of the Bankruptcy Code or other applicable Law. Any such election
made without Majority Lenders’ prior written consent shall be void. If, pursuant
to subsection 365 of the Bankruptcy Code or other applicable law, Borrowers
seeks to offset, against the rent reserved in the Santa Rosa Lease, the amount
of any damages caused by the nonperformance by Santa Rosa Landlord of any of its
obligations thereunder after the rejection by Santa Rosa Landlord of the Santa
Rosa Lease under the Bankruptcy Code or other applicable Law, then Borrowers
shall not effect any offset of any amounts objected to by Lenders.

(b) Each Borrower will not, and will not permit any of its Subsidiaries to, make
any expenditures in respect of operating leases, except for:

(i) real estate operating leases;

(ii) operating leases between such Borrower and any of its wholly-owned
Subsidiaries or between any of such Borrower’s wholly-owned Subsidiaries; and

(c) operating leases that would not cause each Borrower and its Subsidiaries, on
a consolidated basis, to make payments exceeding $2,000,000 (or the Equivalent
Amount in other currencies) in any fiscal year.

9.14 Sales and Leasebacks. Except as disclosed on Schedule 9.14, each Borrower
will not, and will not permit any of its Subsidiaries to, become liable,
directly or indirectly, with respect to any lease, whether an operating lease or
a Capital Lease Obligation, of any property (whether real, tangible personal, or
mixed), whether now owned or hereafter acquired, (i) which such Borrower or such
Subsidiary has sold or transferred or is to sell or transfer to any other Person
and (ii) which such Borrower or such Subsidiary intends to use for substantially
the same purposes as property which has been or is to be sold or transferred.

9.15 Hazardous Material. Each Borrower will not, and will not permit any of its
Subsidiaries to, use, generate, manufacture, install, treat, release, store or
dispose of any Hazardous Material, except in compliance with all applicable
Environmental Laws or where the failure to comply could not reasonably be
expected to result in a Material Adverse Change.

9.16 Accounting Changes. Each Borrower will not, and will not permit any of its
Subsidiaries to, make any significant change in accounting treatment or
reporting practices, except as required or permitted by GAAP.

9.17 Compliance with ERISA. No ERISA Affiliate shall cause or suffer to exist
(a) any event that could result in the imposition of a Lien with respect to any
Title IV Plan or Multiemployer Plan or (b) any other ERISA Event that would, in
the aggregate, have a Material Adverse Effect.

 

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9.18 Foreign Subsidiaries Excess Cash. The Borrowers shall not allow all its
Foreign Subsidiaries to hold cash in excess of $2,000,000 in the aggregate,
unless such cash is transferred by the applicable Foreign Subsidiary as
dividends to any Obligor within 30 days of receipt of such cash.

SECTION 10

FINANCIAL COVENANTS

10.01 Minimum Revenue.

(a) Borrowers and their Subsidiaries shall have Revenue:

(i) during the twelve month period beginning on January 1, 2015, of at least
$30,000,000;

(ii) during the twelve month period beginning on January 1, 2016, of at least
$45,000,000;

(iii) during the twelve month period beginning on January 1, 2017, of at least
$60,000,000;

(iv) during the twelve month period beginning on January 1, 2018, of at least
$75,000,000; and

(v) during each twelve month period beginning on January 1, 2019 and each twelve
month period beginning on each January 1 thereafter, of at least $90,000,000.

10.02 Cure Right.

(a) Notwithstanding anything to the contrary contained in Section 11, in the
event that the Borrowers fail to comply with the covenants contained in
Section 10.01(a) or Section 10.03 (such covenants for such applicable periods
being the “Specified Financial Covenants”), Borrowers shall have the right at
any time in the twelve (12) months prior to, or within 90 (ninety) days of, the
end of the respective calendar year:

(i) to issue additional shares of Equity Interests in exchange for cash (the
“Equity Cure Right”), or

(ii) to borrow Permitted Convertible Subordinated Debt (the “Subordinated Debt
Cure Right” and, collectively with the Equity Cure Right, the “Cure Right”),

and upon the receipt by Borrowers of the Cure Amount pursuant to the exercise of
such Cure Right, such Cure Amount shall be deemed to constitute Revenue of
Borrowers for purposes of the Specified Financial Covenants and the Specified
Financial Covenants shall be recalculated. If, after giving effect to the
foregoing recalculation, Borrowers shall then be in compliance with the
requirements of the Specified Financial Covenants, Borrowers shall be deemed to
have satisfied the requirements of the Specified Financial Covenants as of the
relevant date of determination with the same effect as though there had been no
failure to comply therewith at such date, and the applicable breach of the
Specified Financial Covenants that had occurred shall be deemed cured for this
purposes of this Agreement.

 

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(b) Notwithstanding anything herein to the contrary, (i) the Cure Right may be
exercised no more than twice, (ii) the amount of the payment received by
Borrowers from investors investing in Borrowers pursuant to Section 10.02(a)
(the “Cure Amount”) shall be equal to twice the shortfall amount required to
cause the Borrowers to be in compliance with the Specified Financial Covenants,
(iii) Borrowers shall deliver a compliance certificate, evidencing compliance
with the Specified Financial Covenants after giving effect to receipt of the
Cure Amount, and (iv) upon receipt by Borrower of the Cure Amount, Borrower
shall immediately prepay the Loans (including any PIK Loans), without any
Prepayment Premium or other penalty, in an amount equal to the Cure Amount,
credited in the order set forth on Section 3.03(b)(i)(A)-(E).

10.03 Minimum Cash

Borrowers and Subsidiaries shall at the end of each Business Day maintain
Liquidity in an amount which shall exceed the greater of (and not the sum of)
(i) $2,000,000 or (ii) to the extent Borrowers have incurred Permitted Priority
Debt, the minimum cash balance, if any, required of Borrowers by Borrowers’
Permitted Priority Debt creditors. Borrowers shall provide the Lenders not more
often than once a quarter a compliance certificate relating to the foregoing in
such form satisfactory to the Majority Lenders.

SECTION 11

EVENTS OF DEFAULT

11.01 Events of Default. Each of the following events shall constitute an “Event
of Default”:

(a) any Borrower shall fail to pay any principal of any Loan when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof or otherwise;

(b) any Obligor shall fail to pay any Obligation (other than an amount referred
to in Section 11.01(a)) when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of three (3) Business Days;

(c) any representation or warranty made or deemed made by or on behalf of any
Borrower or any of its Subsidiaries in or in connection with this Agreement or
any other Loan Document or any amendment or modification hereof or thereof, or
in any report, certificate, financial statement or other document furnished
pursuant to or in connection with this Agreement or any other Loan Document or
any amendment or modification hereof or thereof, shall: (i) prove to have been
incorrect when made or deemed made to the extent that such representation or
warranty contains any materiality or Material Adverse Effect qualifier; or
(ii) prove to have been incorrect in any material respect when made or deemed
made to the extent that such representation or warranty does not otherwise
contain any materiality or Material Adverse Effect qualifier;

 

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(d) any Obligor shall fail to observe or perform any covenant, condition or
agreement contained in Section 8.02, 8.03 (with respect to the Borrowers’
existence), 8.11, 8.12, 8.14, 9 or 10, and with respect to Section 8.12 only,
such failure shall continue unremedied for a period of 10 or more days after
such new Subsidiary is formed or acquired;

(e) any Obligor shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those specified in
Section 11.01(a), (b) or (d)) or any other Loan Document and such failure shall
continue unremedied for a period of 30 or more days after written notice thereof
from the Lenders is received by a Responsible Officer of Borrower;

(f) any Obligor shall fail to make any payment (whether of principal or interest
and regardless of amount) in respect of any Material Indebtedness, when and as
the same shall become due and payable after giving effect to any applicable
grace or cure period as originally provided by the terms of such Indebtedness;

(g) (i) any material breach of, or “event of default” or similar event under,
the documentation governing any Material Indebtedness shall occur, or (ii) any
event or condition occurs (A) that results in any Material Indebtedness becoming
due prior to its scheduled maturity or (B) that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of such Material Indebtedness or any trustee or agent on its or their behalf to
cause such Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this Section 11.01(g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Material Indebtedness.

(h) any Obligor:

(i) becomes insolvent, or generally does not or becomes unable to pay its debts
or meet its liabilities as the same become due, or admits in writing its
inability to pay its debts generally, or declares any general moratorium on its
indebtedness, or proposes a compromise or arrangement or deed of company
arrangement between it and any class of its creditors;

(ii) commits an act of bankruptcy or makes an assignment of its property for the
general benefit of its creditors or makes a proposal (or files a notice of its
intention to do so);

(iii) institutes any proceeding seeking to adjudicate it an insolvent, or
seeking liquidation, dissolution, winding-up, reorganization, compromise,
arrangement, adjustment, protection, moratorium, relief, stay of proceedings of
creditors generally (or any class of creditors), or composition of it or its
debts or any other relief, under any federal, provincial or foreign Law now or
hereafter in effect relating to bankruptcy, winding-up, insolvency,
reorganization, receivership, plans of arrangement or relief or protection of
debtors or at common law or in equity, or files an answer admitting the material
allegations of a petition filed against it in any such proceeding;

(iv) applies for the appointment of, or the taking of possession by, a receiver,
interim receiver, receiver/manager, sequestrator, conservator, custodian,
administrator, trustee, liquidator, voluntary administrator, receiver and
manager or other similar official for it or any substantial part of its
property; or

 

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(v) takes any action, corporate or otherwise, to approve, effect, consent to or
authorize any of the actions described in this Section 11.01(h) or in
Section 11.01(i), or otherwise acts in furtherance thereof or fails to act in a
timely and appropriate manner in defense thereof;

(i) any petition is filed, application made or other proceeding instituted
against or in respect of any Obligor:

(i) seeking to adjudicate it an insolvent;

(ii) seeking a receiving order against it;

(iii) seeking liquidation, dissolution, winding-up, reorganization, compromise,
arrangement, adjustment, protection, moratorium, relief, stay of proceedings of
creditors generally (or any class of creditors), deed of company arrangement or
composition of it or its debts or any other relief under any federal, provincial
or foreign law now or hereafter in effect relating to bankruptcy, winding-up,
insolvency, reorganization, receivership, plans of arrangement or relief or
protection of debtors or at common law or in equity; or

(iv) seeking the entry of an order for relief or the appointment of, or the
taking of possession by, a receiver, interim receiver, receiver/manager,
sequestrator, conservator, custodian, administrator, trustee, liquidator,
voluntary administrator, receiver and manager or other similar official for it
or any substantial part of its property, and such petition, application or
proceeding continues undismissed, or unstayed and in effect, for a period of
thirty (30) days after the institution thereof; provided that if an order,
decree or judgment is granted or entered (whether or not entered or subject to
appeal) against such Obligor thereunder in the interim, such grace period will
cease to apply; provided further that if such Obligor files an answer admitting
the material allegations of a petition filed against it in any such proceeding,
such grace period will cease to apply;

(j) any other event occurs which, under the laws of any applicable jurisdiction,
has an effect equivalent to any of the events referred to in either of
Section 11.01(h) or (i);

(k) one or more judgments for the payment of money in an aggregate amount in
excess of $1,500,000 (or the Equivalent Amount in other currencies) shall be
rendered against any Obligor or any combination thereof and the same shall
remain undischarged for a period of 45 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of any Obligor to enforce
any such judgment;

(l) a Material Adverse Change shall have occurred;

(m) (i) the Liens created by the Security Documents shall at any time not
constitute a valid and perfected Lien on the collateral intended to be covered
thereby (to the extent perfection

 

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by filing, registration, recordation or possession is required herein or
therein) in favor of the Lenders, free and clear of all other Liens (other than
Permitted Liens), (ii) except for expiration in accordance with its terms, any
of the Security Documents or any Guarantee of any of the Obligations (including
that contained in Section 13) shall for whatever reason be terminated or cease
to be in full force and effect, (ii) the enforceability of any of the Security
Documents or any Guarantee of any of the Obligations (including that contained
in Section 13) shall be contested by any Obligor;

(n) any injunction, whether temporary or permanent, shall be rendered against
any Obligor that prevents the Obligors from selling or manufacturing the Product
or its commercially available successors, or any of their other material and
commercially available products in the United States or Europe for more than 45
consecutive calendar days.

11.02 Remedies. Upon the occurrence of any Event of Default, then, and in every
such event (other than an Event of Default described in Section 11.01(h), (i) or
(j)), and at any time thereafter during the continuance of such event, Majority
Lenders may, by notice to the Borrowers, take either or both of the following
actions, at the same or different times: (i) terminate the Commitments, and
thereupon the Commitments shall terminate immediately, and (ii) declare the
Loans then outstanding to be due and payable in whole (or in part, in which case
any principal not so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and all fees and
other Obligations, shall become due and payable immediately (in the case of the
Loans, at the Redemption Price therefor), without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by each Obligor; and
in case of any an Event of Default described in Section 11.01(h), (i) or (j),
the Commitment shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
Obligations, shall automatically become due and payable immediately (in the case
of the Loans, at the Redemption Price therefor), without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Obligor.

SECTION 12

MISCELLANEOUS

12.01 No Waiver. No failure on the part of the Lenders to exercise and no delay
in exercising, and no course of dealing with respect to, any right, power or
privilege under any Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or privilege under any Loan
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.

12.02 Notices. All notices, requests, instructions, directions and other
communications provided for herein (including any modifications of, or waivers,
requests or consents under, this Agreement) shall be given or made in writing
(including by telecopy) delivered, if to any Borrower, another Obligor or the
Lenders, to its address specified on the signature pages hereto or its Guarantee
Assumption Agreement, as the case may be, or at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given upon receipt of a

 

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legible copy thereof, in each case given or addressed as aforesaid. All such
communications provided for herein by telecopy shall be confirmed in writing
promptly after the delivery of such communication (it being understood that
non-receipt of written confirmation of such communication shall not invalidate
such communication). Notices, documents, certificates and other deliverables to
the Lenders by any Obligor may be made solely to the Control Agent and the
Control Agent shall promptly deliver such notices, documents, certificates and
other deliverables to the other Lenders hereunder.

12.03 Expenses, Indemnification, Etc.

(a) Expenses. Each Borrower agrees to pay or reimburse (i) the Lenders for all
of their reasonable out of pocket costs and expenses (including the reasonable
out-of-pocket fees and expenses of Morrison & Foerster LLP, special counsel to
the Lenders, and any sales, goods and services or other similar taxes applicable
thereto, and printing, reproduction, document delivery, communication and travel
costs) in connection with (x) the negotiation, preparation, execution and
delivery of this Agreement and the other Loan Documents and the making of the
Loans (exclusive of post-closing costs), (y) post-closing costs and (z) the
negotiation or preparation of any modification, supplement or waiver of any of
the terms of this Agreement or any of the other Loan Documents (whether or not
consummated) and (ii) the Lenders for all of their out of pocket costs and
expenses (including the fees and expenses of legal counsel) in connection with
any enforcement or collection proceedings resulting from the occurrence of an
Event of Default; provided, however, that the Borrowers shall not be required to
pay or reimburse any amounts (1) pursuant to Section 12.03(a)(i)(x) in excess of
the Expense Cap, and (2) in excess of $10,000 in the aggregate per foreign
country for any additional foreign Intellectual Property filings or any
amendments to any existing foreign Intellectual Property filings (including,
without limitation, any amendments required in connection with
Section 12.05(c)); provided further that, so long as the Second Borrowing is
consummated on the Closing Date, then such fees shall be credited from the fees
paid by the Borrowers pursuant to Section 2.03.

(b) Indemnification. Each Borrower hereby indemnifies the Lenders, their
Affiliates, and their respective directors, officers, employees, attorneys,
agents, advisors and controlling parties (each, an “Indemnified Party”) from and
against, and agrees to hold them harmless against, any and all Claims or Losses
of any kind (including reasonable fees and disbursements of counsel), joint or
several, that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or relating to any
investigation, litigation or proceeding or the preparation of any defense with
respect thereto arising out of or in connection with or relating to this
Agreement or any of the other Loan Documents or the transactions contemplated
hereby or thereby or any use made or proposed to be made with the proceeds of
the Loans, whether or not such investigation, litigation or proceeding is
brought by any Borrower, any of its shareholders or creditors, an Indemnified
Party or any other Person, or an Indemnified Party is otherwise a party thereto,
and whether or not any of the conditions precedent set forth in Section 6 are
satisfied or the other transactions contemplated by this Agreement are
consummated, except to the extent such Claim or Loss is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party’s gross negligence or willful misconduct. No Obligor
shall assert

 

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any claim against any Indemnified Party, on any theory of liability, for
consequential, indirect, special or punitive damages arising out of or otherwise
relating to this Agreement or any of the other Loan Documents or any of the
transactions contemplated hereby or thereby or the actual or proposed use of the
proceeds of the Loans. Borrower, its Subsidiaries and Affiliates and their
respective directors, officers, employees, attorneys, agents, advisors and
controlling parties are each sometimes referred to in this Agreement as a
“Borrower Party.” No Lender shall assert any claim against any Borrower Party,
on any theory of liability, for consequential, indirect, special or punitive
damages arising out of or otherwise relating to this Agreement or any of the
other Loan Documents or any of the transactions contemplated hereby or thereby
or the actual or proposed use of the proceeds of the Loans.

12.04 Amendments, Etc. Except as otherwise expressly provided in this Agreement,
any provision of this Agreement may be modified or supplemented only by an
instrument in writing signed by the Borrowers and the Lenders. Any consent,
approval, (including without limitation any approval of or authorization for any
amendment to any of the Loan Documents), instruction or other expression of the
Lenders under any of the Loan Documents may be obtained by an instrument in
writing signed in one or more counterparts by Majority Lenders; provided
however, that the consent of all of the Lenders shall be required to:

(i) amend, modify, discharge, terminate or waive any of the terms of this
Agreement if such amendment, modification, discharge, termination or waiver
would increase the amount of the Loans, reduce the fees payable hereunder,
reduce interest rates or other amounts payable with respect to the Loans, extend
any date fixed for payment of principal, interest or other amounts payable
relating to the Loans or extend the repayment dates of the Loans;

(ii) amend the provisions of Section 6;

(iii) amend, modify, discharge, terminate or waive any Security Document if the
effect is to release a material part of the Collateral subject thereto otherwise
than pursuant to the terms hereof or thereof; or

(iv) amend this Section 12.04.

Notwithstanding anything to the contrary herein, a Defaulting Lender shall not
have any right to approve or disapprove any amendment, waiver or consent
hereunder (and any amendment, waiver or consent which by its terms requires the
consent of all Lenders or each affected Lender may be effected with the consent
of the applicable Lenders other than Defaulting Lenders), except that (x) the
Commitment of any Defaulting Lender may not be increased or extended without the
consent of such Lender and (y) any waiver, amendment or modification requiring
the consent of all Lenders or each affected Lender that by its terms affects any
Defaulting Lender more adversely than other affected Lenders shall require the
consent of such Defaulting Lender.

12.05 Successors and Assigns.

(a) General. The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby,

 

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except that each Borrower may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of the Lenders. Any
of the Lenders may assign or otherwise transfer any of their rights or
obligations hereunder to an assignee in accordance with the provisions of
Section 12.05(b), (ii) by way of participation in accordance with the provisions
of Section 12.05(e) or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of Section 12.05(g). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in Section 12.05(e) and,
to the extent expressly contemplated hereby, the Indemnified Parties) any legal
or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any of the Lenders may at any time assign to one or
more Eligible Transferees all or a portion of their rights and obligations under
this Agreement (including all or a portion of the Commitment and the Loans at
the time owing to it); provided, however, that no such assignment shall be made
to any Borrower, an Affiliate of any Borrower, or any employees or directors of
any Borrower at any time. So long as no Event of Default has occurred and is
continuing, any assignment to Eligible Transferees that would result in the
Lenders that are Affiliates of Capital Royalty, L.P., in the aggregate, holding
less than 50% of the right to vote the aggregate Commitments and Loans would
require the consent of the Borrowers; provided that the Lenders may at any time
assign the right to vote their Commitments and Loans to Eligible Transferees in
connection with a securitization transaction or other leveraged arrangement that
such Lenders may enter into with respect to their loan portfolios without
Borrower consent. Notwithstanding the foregoing, each Lender may assign its
rights and obligations under this Agreement at any time to an Affiliate of the
Lender without Borrower consent. Subject to the recording thereof by the Lenders
pursuant to Section 12.05(c), from and after the effective date specified in
each Assignment and Acceptance, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of the Lenders under this Agreement,
and correspondingly the assigning Lender shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of a Lender’s rights and obligations under this Agreement, such Lender shall
cease to be a party hereto) but shall continue to be entitled to the benefits of
Section 5 and Section 12.03. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 12.05(b)
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section
12.05(e).

(c) Amendments to Loan Documents. Each of the Lenders and the Obligors agrees to
enter into such amendments to the Loan Documents, and such additional Security
Documents and other instruments and agreements, in each case in form and
substance reasonably acceptable to the Lenders and the Obligors, as shall
reasonably be necessary to implement and give effect to any assignment made
under this Section 12.05.

(d) Register. The Lenders, acting solely for this purpose as an agent of each
Borrower, shall maintain at one of its offices, which shall be the office of the
Control Agent, a register for the recordation of the name and address of any
assignee of the Lenders and the

 

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Commitment and outstanding principal amount of the Loans owing thereto (the
“Register”). The entries in the Register shall be conclusive, absent manifest
error, and each Borrower may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as the “Lender” hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by each Borrower, at any reasonable time and from time
to time upon reasonable prior notice.

(e) Participations. Any of the Lenders may at any time, without the consent of,
or notice to, any Borrower, sell participations to any Person (other than a
natural person or any Borrower or any of the Borrowers’ Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
the Commitment and/or the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrowers shall continue to deal solely and
directly with the Lenders in connection therewith.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver that would (i) increase or extend the
term of such Lender’s Commitment, (ii) extend the date fixed for the payment of
principal of or interest on the Loans or any portion of any fee hereunder
payable to the Participant, (iii) reduce the amount of any such payment of
principal, or (iv) reduce the rate at which interest is payable thereon to a
level below the rate at which the Participant is entitled to receive such
interest. Subject to Section 12.05(f), each Borrower agrees that each
Participant shall be entitled to the benefits of Section 5 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to
Section 12.05(b). To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 4.04(a) as though it were the Lender.

(f) Limitations on Rights of Participants. A Participant shall not be entitled
to receive any greater payment under Section 5.01 or 5.05 than a Lender would
have been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrowers’ prior written consent.

(g) Certain Pledges. The Lenders may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement and any other
Loan Document to secure obligations of the Lenders, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release the Lenders from any of their
obligations hereunder or substitute any such pledgee or assignee for the Lenders
as a party hereto.

12.06 Survival. The obligations of each Borrower under Sections 5.01, 5.03,
5.05, 12.03, 12.05, 12.09, 12.10, 12.11, 12.12, 12.13, 12.14 and Section 13
(solely to the extent guaranteeing any of the obligations under the foregoing
Sections) shall survive the repayment of the Loans and the termination of the
Commitment and, in the case of the Lenders’ assignment of any interest in the
Commitment or the Loans hereunder, shall survive, in the case of any event or

 

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circumstance that occurred prior to the effective date of such assignment, the
making of such assignment, notwithstanding that the Lenders may cease to be
“Lenders” hereunder. In addition, each representation and warranty made, or
deemed to be made by a notice of the Loans, herein or pursuant hereto shall
survive the making of such representation and warranty.

12.07 Captions. The table of contents and captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.

12.08 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.

12.09 Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and construed in accordance with, the
law of the State of New York, without regard to principles of conflicts of laws
that would result in the application of the laws of any other jurisdiction;
provided that Section 5-1401 of the New York General Obligations Law shall
apply.

12.10 Jurisdiction, Service of Process and Venue.

(a) Submission to Jurisdiction. Each Obligor agrees that any suit, action or
proceeding with respect to this Agreement or any other Loan Document to which it
is a party or any judgment entered by any court in respect thereof may be
brought initially in the federal or state courts in Houston, Texas or in the
courts of its own corporate domicile and irrevocably submits to the
non-exclusive jurisdiction of each such court for the purpose of any such suit,
action, proceeding or judgment. This Section 12.10(a) is for the benefit of the
Lenders only and, as a result, no Lender shall be prevented from taking
proceedings in any other courts with jurisdiction. To the extent allowed by
applicable Laws, the Lenders may take concurrent proceedings in any number of
jurisdictions.

(b) Alternative Process. Nothing herein shall in any way be deemed to limit the
ability of the Lenders to serve any such process or summonses in any other
manner permitted by applicable law.

(c) Waiver of Venue, Etc. Each Obligor irrevocably waives to the fullest extent
permitted by law any objection that it may now or hereafter have to the laying
of the venue of any suit, action or proceeding arising out of or relating to
this Agreement or any other Loan Document and hereby further irrevocably waives
to the fullest extent permitted by law any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
A final judgment (in respect of which time for all appeals has elapsed) in any
such suit, action or proceeding shall be conclusive and may be enforced in any
court to the jurisdiction of which such Obligor is or may be subject, by suit
upon judgment.

12.11 Waiver of Jury Trial. EACH OBLIGOR AND EACH LENDER HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY SUIT, ACTION OR

 

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PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

12.12 Waiver of Immunity. To the extent that any Obligor may be or become
entitled to claim for itself or its Property or revenues any immunity on the
ground of sovereignty or the like from suit, court jurisdiction, attachment
prior to judgment, attachment in aid of execution of a judgment or execution of
a judgment, and to the extent that in any such jurisdiction there may be
attributed such an immunity (whether or not claimed), such Obligor hereby
irrevocably agrees not to claim and hereby irrevocably waives such immunity with
respect to its obligations under this Agreement and the other Loan Documents.

12.13 Entire Agreement. This Agreement and the other Loan Documents constitute
the entire agreement among the parties with respect to the subject matter hereof
and thereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. EACH OBLIGOR
ACKNOWLEDGES, REPRESENTS AND WARRANTS THAT IN DECIDING TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS OR IN TAKING OR NOT TAKING ANY ACTION
HEREUNDER OR THEREUNDER, IT HAS NOT RELIED, AND WILL NOT RELY, ON ANY STATEMENT,
REPRESENTATION, WARRANTY, COVENANT, AGREEMENT OR UNDERSTANDING, WHETHER WRITTEN
OR ORAL, OF OR WITH THE LENDERS OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.

12.14 Severability. If any provision hereof is found by a court to be invalid or
unenforceable, to the fullest extent permitted by applicable law the parties
agree that such invalidity or unenforceability shall not impair the validity or
enforceability of any other provision hereof.

12.15 No Fiduciary Relationship. Each Borrower acknowledges that the Lenders
have no fiduciary relationship with, or fiduciary duty to, any Borrower arising
out of or in connection with this Agreement or the other Loan Documents, and the
relationship between the Lenders and the Borrowers are solely that of creditor
and debtor. This Agreement and the other Loan Documents do not create a joint
venture among the parties.

12.16 Confidentiality. The Lenders agree to maintain the confidentiality of the
Confidential Information (as defined in the Non-Disclosure Agreement (defined
below)) in accordance with the terms of that certain non-disclosure agreement
dated June 22, 2012 among TriVascular and Capital Royalty, L.P (the
“Non-Disclosure Agreement”).

Any new Lender that becomes party to this Agreement hereby agrees to be bound by
the terms of the Non-Disclosure Agreement. The parties to this Agreement shall
prepare a mutually agreeable press release announcing the completion of this
transaction on the date hereof.

12.17 USA PATRIOT Act. The Lenders hereby notify the Borrowers that pursuant to
the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Act”), they are required to obtain, verify and
record information that identifies each Borrower, which information includes the
name and address of each Borrower and other information that will allow such
Lender to identify each Borrower in accordance with the Act.

 

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12.18 Maximum Rate of Interest. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (in each case, the “Maximum Rate”). If the Lenders
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans, and not to the payment
of interest, or, if the excessive interest exceeds such unpaid principal, the
amount exceeding the unpaid balance shall be refunded to the applicable Obligor.
In determining whether the interest contracted for, charged, or received by the
Lenders exceeds the Maximum Rate, the Lenders may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, (c) amortize, prorate, allocate, and spread in equal or
unequal parts the total amount of interest throughout the contemplated term of
the Indebtedness and other obligations of any Obligor hereunder, or (d) allocate
interest between portions of such Indebtedness and other obligations under the
Loan Documents to the end that no such portion shall bear interest at a rate
greater than that permitted by applicable Law.

12.19 Co-Borrower Provisions.

(a) Borrower Agent. Each Borrower appoints TriVascular its agent for purposes of
the giving and receiving of any notice, and the agreement to any consent or
waiver under this Agreement (TriVascular, in such capacity, the “Borrower
Agent”). Any notice required by this Agreement to be delivered to any Borrower
shall be deemed to have been delivered to such Borrower upon delivery of such
notice to the Borrower Agent, and receipt of any notice by the Borrower Agent
shall constitute receipt of such notice by each Borrower. Any notice or consent
to be delivered hereunder by any Borrower shall be deemed to have been delivered
by such Borrower upon delivery thereof by the Borrower Agent.

(b) Joint and Several Nature of Obligations. All Loans made to the Borrowers
shall be deemed to have been made to all Borrowers and each Borrower hereby
agrees that it shall jointly and severally, and unconditionally, be obligated to
pay all of the Obligations, including, without limitation, the Obligations
incurred for the benefit of each of the other Borrowers.

(c) Co-Borrower Waivers.

(i) General Waivers. Each Borrower hereby expressly waives (A) diligence,
presentment, demand for payment, protest, benefit of any statute of limitations
affecting any Borrower’s liability under the Loan Documents; (B) discharge due
to any disability of any Borrower; (C) any defenses of any Borrower to
obligations under the Loan Documents not arising under the express terms of the
Loan Documents or from a material breach thereof by any Lender which under
applicable law has the effect of discharging any Borrower from the Obligations
as to which this Agreement is sought to be enforced; (D) the benefit of any act
or omission by any Lender which directly or indirectly results in or aids the
discharge of any Borrower from any of the Obligations by operation of law or
otherwise; (E) all notices

 

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whatsoever, including, without limitation, notice of acceptance of the incurring
of the Obligations; (F) any right it may have to require any Lender to disclose
to it any information that any Lender may now or hereafter acquire concerning
the financial condition or any circumstances that bear on the risk of nonpayment
by any other Borrower, including without limitation the release of such other
Borrower from its Obligations hereunder; and (G) any requirement that any Lender
exhaust any right, power or remedy or proceed against the other Borrower or any
other security for, or any guarantor of, or any other party liable for, any of
the Obligations, or any portion thereof. Each Borrower specifically agrees that
it shall not be necessary or required, and Borrowers shall not be entitled to
require, that any Lender (1) file suit or proceed to assert or obtain a claim
for personal judgment against any other Borrower for all or any part of the
Obligations; (2) make any effort at collection or enforcement of all or any part
of the Obligations from any Borrower; (3) foreclose against or seek to realize
upon the Collateral or any other security now or hereafter existing for all or
any part of the Obligations; (4) file suit or proceed to obtain or assert a
claim for personal judgment against any Borrower or any guarantor or other party
liable for all or any part of the Obligations; (5) exercise or assert any other
right or remedy to which any Lender is or may be entitled in connection with the
Obligations or any security or guaranty relating thereto to assert; or (6) file
any claim against assets of one Borrower before or as a condition of enforcing
the liability of any other Borrower under any Loan Document.

(ii) Real Property Security Waivers.

(A) Each Borrower acknowledges that all or any portion of the Obligations may
now or hereafter be secured by a Lien or Liens upon real property evidenced by
certain documents including, without limitation, deeds of trust and assignments
of rents. Lenders may, pursuant to the terms of said real property security
documents and applicable law, foreclose under all or any portion of one or more
of said Liens by means of judicial or nonjudicial sale or sales. Each Borrower
agrees that Lenders may exercise whatever rights and remedies they may have with
respect to said real property security, all without affecting the liability of
any Borrower hereunder, except to the extent Lenders realize payment by such
action or proceeding. Except as provided under applicable law, no election to
proceed in one form of action or against any party, or on any obligation shall
constitute a waiver of Lenders’ rights to proceed in any other form of action or
against any Borrower or any other Person, or diminish the liability of any
Borrower, or affect the right of Lenders to proceed against any Borrower for any
deficiency, except to the extent Lenders realize payment by such action,
notwithstanding the effect of such action upon any Borrower’s rights of
subrogation, reimbursement or indemnity, if any, against Borrower or any other
Person.

(B) To the extent permitted under applicable law, each Borrower hereby waives
any rights and defenses that are or may become available to such Borrower by
reason of Sections 2787 to 2855, inclusive, of the California Civil Code.

(C) To the extent permitted under applicable law, each Borrower hereby waives
all rights and defenses that such Borrower may have because the Obligations are
or may be secured by real property. This means, among other things:

 

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(1) Lenders may collect from any Borrower without first foreclosing on any real
or personal property collateral pledged by any other Borrower;

(2) If Lenders foreclose on any real property collateral pledged by any
Borrower:

i. The amount of the Loan may be reduced only by the price for which that
collateral is sold at the foreclosure sale, even if the collateral is worth more
than the sale price; and

ii. Lenders may collect from each Borrower even if Lender, by foreclosing on the
real property collateral, has destroyed any right Borrower may have to collect
from any other Borrower.

To the extent permitted under applicable law, this is an unconditional and
irrevocable waiver of any rights and defenses each Borrower may have because the
Obligations hereunder are or may be secured by real property. These rights and
defenses include, but are not limited to, any rights or defenses based upon
Section 580a, 580b, 580d or 726 of the California Code of Civil Procedure.

(D) To the extent permitted under applicable law, each Borrower waives all
rights and defenses arising out of an election of remedies by Lenders, even
though that election of remedies, such as a nonjudicial foreclosure with respect
to security for a guaranteed obligation, has destroyed such Borrower’s rights of
subrogation and reimbursement against the principal by the operation of
Section 580d of the California Code of Civil Procedure or otherwise.

(iii) Waiver of Marshaling. WITHOUT LIMITING THE FOREGOING IN ANY WAY, EACH
BORROWER HEREBY IRREVOCABLY WAIVES AND RELEASES TO THE EXTENT PERMITTED BY LAW
ANY AND ALL RIGHTS IT MAY HAVE AT ANY TIME (WHETHER ARISING DIRECTLY OR
INDIRECTLY, BY OPERATION OF LAW, CONTRACT OR OTHERWISE) TO REQUIRE THE
MARSHALING OF ANY ASSETS OF ANY BORROWER, WHICH RIGHT OF MARSHALING MIGHT
OTHERWISE ARISE FROM ANY SUCH PAYMENTS MADE OR OBLIGATIONS PERFORMED.

SECTION 13

GUARANTEE

13.01 The Guarantee. The Subsidiary Guarantors hereby jointly and severally
guarantee to the Lenders and their successors and assigns the prompt payment in
full when due (whether at stated maturity, by acceleration or otherwise) of the
principal of and interest on the Loans and all fees and other amounts from time
to time owing to the Lenders by any Borrower under this Agreement or under any
other Loan Document and by any other Obligor under any of the Loan Documents, in
each case strictly in accordance with the terms thereof (such obligations being
herein collectively called the “Guaranteed Obligations”). The Subsidiary
Guarantors hereby further jointly and severally agree that if any Borrower shall
fail to pay in full when due (whether at stated maturity, by acceleration or
otherwise) any of the Guaranteed Obligations, the

 

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Subsidiary Guarantors will promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Guaranteed Obligations, the same will be promptly paid in full
when due (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.

13.02 Obligations Unconditional. The obligations of the Subsidiary Guarantors
under Section 13.01 are absolute and unconditional, joint and several,
irrespective of the value, genuineness, validity, regularity or enforceability
of the obligations of any Borrower under this Agreement or any other agreement
or instrument referred to herein, or any substitution, release or exchange of
any other guarantee of or security for any of the Guaranteed Obligations, and,
to the fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 13.02 that the obligations of the Subsidiary Guarantors hereunder shall
be absolute and unconditional, joint and several, under any and all
circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not alter or
impair the liability of the Subsidiary Guarantors hereunder, which shall remain
absolute and unconditional as described above:

(a) at any time or from time to time, without notice to the Subsidiary
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;

(b) any of the acts mentioned in any of the provisions of this Agreement or any
other agreement or instrument referred to herein shall be done or omitted;

(c) the maturity of any of the Guaranteed Obligations shall be accelerated, or
any of the Guaranteed Obligations shall be modified, supplemented or amended in
any respect, or any right under this Agreement or any other agreement or
instrument referred to herein shall be waived or any other guarantee of any of
the Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or

(d) any lien or security interest granted to, or in favor of, the Lenders as
security for any of the Guaranteed Obligations shall fail to be perfected.

The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that the
Lenders exhaust any right, power or remedy or proceed against any Borrower under
this Agreement or any other agreement or instrument referred to herein, or
against any other Person under any other guarantee of, or security for, any of
the Guaranteed Obligations.

13.03 Reinstatement. The obligations of the Subsidiary Guarantors under this
Section 13 shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any Borrower in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise, and the Subsidiary Guarantors jointly and
severally agree that they will indemnify the Lenders on demand for all
reasonable costs and expenses (including fees of counsel) incurred by the
Lenders in connection with such rescission

 

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or restoration, including any such costs and expenses incurred in defending
against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.

13.04 Subrogation. The Subsidiary Guarantors hereby jointly and severally agree
that until the payment and satisfaction in full of all Guaranteed Obligations
(other than the Warrant Obligations) and the expiration and termination of the
Commitment of the Lenders under this Agreement they shall not exercise any right
or remedy arising by reason of any performance by them of their guarantee in
Section 13.01, whether by subrogation or otherwise, against any Borrower or any
other guarantor of any of the Guaranteed Obligations or any security for any of
the Guaranteed Obligations.

13.05 Remedies. The Subsidiary Guarantors jointly and severally agree that, as
between the Subsidiary Guarantors and the Lenders, the obligations of each
Borrower under this Agreement and under the other Loan Documents may be declared
to be forthwith due and payable as provided in Section 11 (and shall be deemed
to have become automatically due and payable in the circumstances provided in
Section 11) for purposes of Section 13.01 notwithstanding any stay, injunction
or other prohibition preventing such declaration (or such obligations from
becoming automatically due and payable) as against any Borrower and that, in the
event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and payable
by any Borrower) shall forthwith become due and payable by the Subsidiary
Guarantors for purposes of Section 13.01.

13.06 Instrument for the Payment of Money. Each Subsidiary Guarantor hereby
acknowledges that the guarantee in this Section 13 constitutes an instrument for
the payment of money, and consents and agrees that the Lender, at its sole
option, in the event of a dispute by such Subsidiary Guarantor in the payment of
any moneys due hereunder, shall have the right to proceed by motion for summary
judgment in lieu of complaint pursuant to N.Y. Civ. Prac. L&R § 3213.

13.07 Continuing Guarantee. The guarantee in this Section 13 is a continuing
guarantee, and shall apply to all Guaranteed Obligations whenever arising.

13.08 Rights of Contribution. The Subsidiary Guarantors hereby agree, as between
themselves, that if any Subsidiary Guarantor shall become an Excess Funding
Guarantor (as defined below) by reason of the payment by such Subsidiary
Guarantor of any Guaranteed Obligations, each other Subsidiary Guarantor shall,
on demand of such Excess Funding Guarantor (but subject to the next sentence),
pay to such Excess Funding Guarantor an amount equal to such Subsidiary
Guarantor’s Pro Rata Share (as defined below and determined, for this purpose,
without reference to the properties, debts and liabilities of such Excess
Funding Guarantor) of the Excess Payment (as defined below) in respect of such
Guaranteed Obligations. The payment obligation of a Subsidiary Guarantor to any
Excess Funding Guarantor under this Section 13.08 shall be subordinate and
subject in right of payment to the prior payment in full of the obligations of
such Subsidiary Guarantor under the other provisions of this Section 13 and such
Excess Funding Guarantor shall not exercise any right or remedy with respect to
such excess until payment and satisfaction in full of all of such obligations.

 

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For purposes of this Section 13.08, (i) “Excess Funding Guarantor” means, in
respect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid an
amount in excess of its Pro Rata Share of such Guaranteed Obligations,
(ii) “Excess Payment” means, in respect of any Guaranteed Obligations, the
amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of
such Guaranteed Obligations and (iii) “Pro Rata Share” means, for any Subsidiary
Guarantor, the ratio (expressed as a percentage) of (x) the amount by which the
aggregate present fair saleable value of all properties of such Subsidiary
Guarantor (excluding any shares of stock of any other Subsidiary Guarantor)
exceeds the amount of all the debts and liabilities of such Subsidiary Guarantor
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of such Subsidiary Guarantor hereunder and any
obligations of any other Subsidiary Guarantor that have been Guaranteed by such
Subsidiary Guarantor) to (y) the amount by which the aggregate fair saleable
value of all properties of all of the Subsidiary Guarantors exceeds the amount
of all the debts and liabilities (including contingent, subordinated, unmatured
and unliquidated liabilities, but excluding the obligations of the Borrowers and
the Subsidiary Guarantors hereunder and under the other Loan Documents) of all
of the Subsidiary Guarantors, determined (A) with respect to any Subsidiary
Guarantor that is a party hereto on the date hereof, as of the date hereof, and
(B) with respect to any other Subsidiary Guarantor, as of the date such
Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.

13.09 General Limitation on Guarantee Obligations. In any action or proceeding
involving any provincial, territorial or state corporate law, or any state or
federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Subsidiary Guarantor under
Section 13.01 would otherwise, taking into account the provisions of
Section 13.08, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under Section 13.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Subsidiary Guarantor, the Lenders or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.

13.10 Additional Waivers.

(a) To the extent permitted under applicable law, each Subsidiary Guarantor
hereby waives any rights and defenses that are or may become available to
Subsidiary Guarantor by reason of Sections 2787 to 2855, inclusive, of the
California Civil Code.

(b) To the extent permitted under applicable law, each Subsidiary Guarantor
hereby waives all rights and defenses that Subsidiary Guarantor may have because
the Obligations are or may be secured by real property. This means, among other
things:

(i) Lenders may collect from any Subsidiary Guarantor without first foreclosing
on any real or personal property collateral pledged by any Borrower;

(ii) If Lenders foreclose on any real property collateral pledged by any
Borrower:

 

79

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

(A) The amount of the Loan may be reduced only by the price for which that
collateral is sold at the foreclosure sale, even if the collateral is worth more
than the sale price; and

(B) Lenders may collect from each Subsidiary Guarantor even if Lenders, by
foreclosing on the real property collateral, has destroyed any right such
Subsidiary Guarantor may have to collect from any Borrower.

To the extent permitted under applicable law, this is an unconditional and
irrevocable waiver of any rights and defenses each Subsidiary Guarantor may have
because the Obligations are or may be secured by real property. These rights and
defenses include, but are not limited to, any rights or defenses based upon
Section 580a, 580b, 580d or 726 of the California Code of Civil Procedure.

(c) To the extent permitted under applicable law, each Subsidiary Guarantor
waives all rights and defenses arising out of an election of remedies by
Lenders, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a guaranteed obligation, has destroyed
such Subsidiary Guarantor’s rights of subrogation and reimbursement against the
principal by the operation of Section 580d of the California Code of Civil
Procedure or otherwise.

(d) To the extent permitted under applicable law, each Subsidiary Guarantor
hereby waives any right or defense it may have at law or equity, including
California Code of Civil Procedure Section 580a, to a fair market value hearing
or action to determine a deficiency judgment after a foreclosure.

[Signature Pages Follow]

 

80

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.

 

BORROWERS: TRIVASCULAR TECHNOLOGIES, INC. (FORMERLY TV2 HOLDING COMPANY) By  

/s/ Mike Kramer

  Name: Mike Kramer   Title: Chief Financial Officer Address for Notices: 3910
Brickway Blvd, Santa Rosa, CA 95403

Attn:   Mike Kramer, Chief Financial Officer Tel.:   707.543.8709 Fax:  
707.541.3909 Email:   mkramer@trivascular.com TRIVASCULAR, INC.

By  

/s/ Mike Kramer

  Name: Mike Kramer   Title: Chief Financial Officer Address for Notices: 3910
Brickway Blvd, Santa Rosa, CA 95403

Attn:   Mike Kramer, Chief Financial Officer Tel.:   707.543.8709 Fax:  
707.541.3909 Email:   mkramer@trivascular.com

[Signature Page to Amended and Restated Term Loan Agreement]

 

S-1

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

SUBSIDIARY GUARANTORS: TRIVASCULAR SALES LLC By  

/s/ Mike Kramer

  Name: Mike Kramer   Title: Chief Financial Officer

Address for Notices: 3910 Brickway Blvd, Santa Rosa, CA 95403 Attn:   Mike
Kramer, Chief Financial Officer Tel.:   707.543.8709 Fax:   707.541.3909 Email:
  mkramer@trivascular.com

[Signature Page to Amended and Restated Term Loan Agreement]

 

S-2

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

LENDERS: CAPITAL ROYALTY PARTNERS II L.P., in its capacity as a Lender and as
Control Agent  

By CAPITAL ROYALTY PARTNERS II GP

L.P., its General Partner

   

By CAPITAL ROYALTY PARTNERS II

GP LLC, its General Partner

    By  

/s/ Charles Tate

      Name: Charles Tate       Title: Sole Member
PARALLEL INVESTMENT OPPORTUNITIES PARTNERS II L.P.  

By PARALLEL INVESTMENT

OPPORTUNITIES PARTNERS II GP L.P., its

General Partner

   

By PARALLEL INVESTMENT

OPPORTUNITIES PARTNERS II GP LLC,

its General Partner

    By  

/s/ Charles Tate

     

Name: Charles Tate

     

Title: Sole Member

CAPITAL ROYALTY PARTNERS II–

PARALLEL FUND “A” L.P.

By CAPITAL ROYALTY PARTNERS II–

PARALLEL FUND “A” GP L.P., its General

Partner

   

By CAPITAL ROYALTY PARTNERS II–PARALLEL FUND “A” GP LLC, its

General Partner

    By  

/s/ Charles Tate

     

Name: Charles Tate

     

Title: Sole Member

[Signature Page to Amended and Restated Term Loan Agreement]

 

S-3

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

CAPITAL ROYALTY PARTNERS II

(CAYMAN) L.P.

 

By CAPITAL ROYALTY PARTNERS II

(CAYMAN) GP L.P., its General Partner

   

By CAPITAL ROYALTY PARTNERS II

(CAYMAN) GP LLC, its General Partner

    By  

/s/ Charles Tate

     

Name: Charles Tate

     

Title: Sole Member

      WITNESS:  

/s/ Tamela Ehlinger

      Name:  

Tamela Ehlinger

 

CAPITAL ROYALTY PARTNERS II –

PARALLEL FUND “B” (CAYMAN) L.P.

 

By CAPITAL ROYALTY PARTNERS II

(CAYMAN) GP L.P., its General Partner

    By CAPITAL ROYALTY PARTNERS II (CAYMAN) GP LLC, its General Partner     By  

/s/ Charles Tate

     

Name: Charles Tate

     

Title: Sole Member

      WITNESS:  

/s/ Andrei Dorenbaum

      Name:  

Andrei Dorenbaum

 

Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:  
General Counsel Tel.:   713.209.7350 Fax:   713.209.7351 Email:  
adorenbaum@crglp.com

[Signature Page to Amended and Restated Term Loan Agreement]

 

S-4

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

Exhibit A

to Amended and Restated Term Loan Agreement

FORM OF GUARANTEE ASSUMPTION AGREEMENT

GUARANTEE ASSUMPTION AGREEMENT dated as of [DATE] by [NAME OF ADDITIONAL
SUBSIDIARY GUARANTOR], a             [corporation][limited liability company]
(the “Additional Subsidiary Guarantor”), in favor of the lenders from time to
time party thereto (the “Lenders”) under that certain Amended and Restated Term
Loan Agreement, dated as of November 4, 2014 (as amended, restated, supplemented
or otherwise modified, renewed, refinanced or replaced, the “Loan Agreement”),
among TriVascular Technologies, Inc. (formerly TV2 Holding Company), a Delaware
corporation (“Holdings”), TriVascular, Inc., a California corporation
(“TriVascular” and, together with Holdings, the “Borrowers”), Capital Royalty
Partners II L.P. and the other lenders party thereto and the Subsidiary
Guarantors party thereto.

Pursuant to Section 8.12(a) of the Loan Agreement, the Additional Subsidiary
Guarantor hereby agrees to become a “Subsidiary Guarantor” for all purposes of
the Loan Agreement, and a “Grantor” for all purposes of the Security Agreement.
Without limiting the foregoing, the Additional Subsidiary Guarantor hereby,
jointly and severally with the other Subsidiary Guarantors, guarantees to the
Lenders and their successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of all Guaranteed
Obligations (as defined in Section 13.01 of the Loan Agreement) in the same
manner and to the same extent as is provided in Section 13 of the Loan
Agreement. In addition, as of the date hereof, the Additional Subsidiary
Guarantor hereby makes the representations and warranties set forth in Sections
7.01, 7.02, 7.03, 7.05(a), 7.06, 7.07, 7.08 and 7.18 of the Loan Agreement, and
in Section 2 of the Security Agreement, with respect to itself and its
obligations under this Agreement and the other Loan Documents, as if each
reference in such Sections to the Loan Documents included reference to this
Agreement, such representations and warranties to be made as of the date hereof.

The Additional Subsidiary Guarantor hereby instructs its counsel to deliver the
opinions referred to in Section 8.12(a) of the Loan Agreement to the Lenders.

IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has caused this
Guarantee Assumption Agreement to be duly executed and delivered as of the day
and year first above written.

 

[ADDITIONAL SUBSIDIARY GUARANTOR]

By

 

 

 

Name:

 

Title:

 

Exhibit A-1

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

Exhibit B

to Amended and Restated Term Loan Agreement

FORM OF NOTICE OF BORROWING

Date : [            ]

 

To: Capital Royalty Partners II L.P. and the other Lenders

  1000 Main Street, Suite 2500

  Houston, TX 77002

  Attn: General Counsel

 

  Re: Borrowing under Amended and Restated Term Loan Agreement

Ladies and Gentlemen:

The undersigned, TriVascular Technologies, Inc. (formerly TV2 Holding Company),
a Delaware corporation (“Holdings”), TriVascular, Inc., a California corporation
(“TriVascular” and, together with Holdings, the “Borrowers”), refers to the
Amended and Restated Term Loan Agreement, dated as of November 4, 2014 (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the “Loan Agreement”), among the Borrowers, Capital Royalty Partners II
L.P. and other parties from time to time party thereto as lenders (“Lenders”),
and the subsidiary guarantors from time to time party thereto. The terms defined
in the Loan Agreement are herein used as therein defined.

Borrowers hereby give you notice irrevocably, pursuant to Section 2.02 of the
Loan Agreement, of the borrowing of the Loan specified herein:

1. The proposed Borrowing Date is [            ].

2. The amount of the proposed Borrowing is $[            ].

3. The payment instructions with respect to the funds to be made available to
the Borrowers are as follows:

 

Bank name:

  [            ]

Bank Address:

  [            ]

Routing Number:

  [            ]

Account Number:

  [            ]

Swift Code:

  [            ]

The Borrowers hereby certify that the following statements are true on the date
hereof, and will be true on the date of the proposed borrowing of the Loan,
before and after giving effect thereto and to the application of the proceeds
therefrom:

a) the representations and warranties made by the Borrowers in Section 7 of the
Loan Agreement shall be true in all material respects on and as of the Borrowing
Date and

 

Exhibit B-1

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

immediately after giving effect to the application of the proceeds of the
Borrowing with the same force and effect as if made on and as of such date
except that the representation regarding representations and warranties that
refer to a specific earlier date shall be that they were true on such earlier
date;

b) on and as of the Borrowing Date, there shall have occurred no Material
Adverse Change since [            ]; and

c) no Default exists or would result from such proposed borrowing.

IN WITNESS WHEREOF, the Borrowers have caused this Notice of Borrowing to be
duly executed and delivered as of the day and year first above written.

BORROWERS:

TRIVASCULAR TECHNOLOGIES, INC. (FORMERLY TV2 HOLDING COMPANY)

 

By

 

 

 

Name:

 

Title:

 

TRIVASCULAR, INC. By  

 

  Name:   Title:

 

Exhibit B-2

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

Exhibit C-1

to Amended and Restated Term Loan Agreement

FORM OF TERM LOAN NOTE

 

U.S. $[            ]          [DATE]

FOR VALUE RECEIVED, each of the undersigned, TriVascular Technologies, Inc.
(formerly TV2 Holding Company), a Delaware corporation (“Holdings”),
TriVascular, Inc., a California corporation (“TriVascular” and, together with
Holdings, the “Borrowers”), hereby promises to pay to [Capital Royalty Partners
II L.P.]1 or its assigns (the “Lender”) at the Lender’s principal office in 1000
Main Street, Suite 2500, Houston, TX 77002, in immediately available funds, the
aggregate principal sum set forth above, or, if less, the aggregate unpaid
principal amount of all Loans made by the Lender pursuant to Section 2.01 of the
Amended and Restated Term Loan Agreement, dated as of November 4, 2014 (as
amended, restated, supplemented or otherwise modified, renewed, refinanced or
replaced, the “Loan Agreement”), among the Borrowers, the Lender, the other
lenders party thereto and the Subsidiary Guarantors party thereto, on the date
or dates specified in the Loan Agreement, together with interest on the
principal amount of such Loans from time to time outstanding thereunder at the
rates, and payable in the manner and on the dates, specified in the Loan
Agreement.

This Note is a Note issued pursuant to the terms of Section 2.04 of the Loan
Agreement, and this Note and the holder hereof are entitled to all the benefits
and security provided for thereby or referred to therein, to which Loan
Agreement reference is hereby made for a statement thereof. All defined terms
used in this Note, except terms otherwise defined herein, shall have the same
meaning as in the Loan Agreement.

THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD RESULT IN THE
APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION; PROVIDED THAT SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY.

The Borrowers hereby waive demand, presentment, protest or notice of any kind
hereunder, other than notices provided for in the Loan Documents. The
non-exercise by the holder hereof of any of its rights hereunder in any
particular instance shall not constitute a waiver thereof in such particular or
any subsequent instance.

THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE LOAN
AGREEMENT.

 

 

1  Insert applicable Lender name.

 

Exhibit B-1

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

TRIVASCULAR TECHNOLOGIES, INC. (FORMERLY TV2 HOLDING COMPANY) By  

 

  Name:   Title: TRIVASCULAR, INC. By  

 

  Name:   Title:

 

Exhibit B-2

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

Exhibit C-2

to Amended and Restated Term Loan Agreement

FORM OF PIK LOAN NOTE

 

U.S. $[            ]          [DATE]

FOR VALUE RECEIVED, each of the undersigned, TriVascular Technologies, Inc.
(formerly TV2 Holding Company), a Delaware corporation (“Holdings”),
TriVascular, Inc., a California corporation (“TriVascular” and, together with
Holdings, the “Borrowers”), hereby promises to pay to [Capital Royalty Partners
II L.P.]2 or its assigns (the “Lender”) at the Lender’s principal office in 1000
Main Street, Suite 2500, Houston, TX 77002, in immediately available funds, the
aggregate principal sum set forth above, or, if less, the aggregate unpaid
principal amount of all PIK Loans made by the Lender pursuant to Section 3.02(d)
of the Amended and Restated Term Loan Agreement, dated as of November 4, 2014
(as amended, restated, supplemented or otherwise modified, renewed, refinanced
or replaced, the “Loan Agreement”), among the Borrowers, the Lender, the other
lenders party thereto and the Subsidiary Guarantors party thereto, on the date
or dates specified in the Loan Agreement, together with interest on the
principal amount of such PIK Loans from time to time outstanding thereunder at
the rates, and payable in the manner and on the dates, specified in the Loan
Agreement.

This Note is a Note issued pursuant to the terms of Section 3.02(d) of the Loan
Agreement, and this Note and the holder hereof are entitled to all the benefits
and security provided for thereby or referred to therein, to which Loan
Agreement reference is hereby made for a statement thereof. All defined terms
used in this Note, except terms otherwise defined herein, shall have the same
meaning as in the Loan Agreement.

The Lender may supplement this Note by attaching to this Note a schedule (the
“Note Schedule”) to evidence additional PIK Loans made by the Lender to
Borrowers following the date first above written. The Lender may endorse thereon
the date such additional PIK Loan is made and the principal amount of such
additional PIK Loan when made. Such Note Schedule shall form part of this Note
and all references to this Note shall mean this Note, as supplemented by such
Note Schedule.

THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD RESULT IN THE
APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION; PROVIDED THAT SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY.

FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL

 

 

2 

Insert applicable Lender name.

 

Exhibit C-2-1

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

REVENUE CODE OF 1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, THIS
NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; PLEASE CONTACT [NAME OF CFO
OR TAX DIRECTOR OF ISSUER], [TITLE], [ADDRESS], TELEPHONE: [TEL #] TO OBTAIN
INFORMATION REGARDING THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT AND
THE YIELD TO MATURITY.

The Borrowers hereby waive demand, presentment, protest or notice of any kind
hereunder, other than notices provided for in the Loan Documents. The
non-exercise by the holder hereof of any of its rights hereunder in any
particular instance shall not constitute a waiver thereof in such particular or
any subsequent instance.

THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE LOAN
AGREEMENT.

 

TRIVASCULAR TECHNOLOGIES, INC. (FORMERLY TV2 HOLDING COMPANY) By  

 

  Name:   Title: TRIVASCULAR, INC. By  

 

  Name:   Title:

 

Exhibit C-2-2

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

PIK NOTE SCHEDULE

This Note Schedule supplements that certain Note issued by Borrowers to [Capital
Royalty Partners II L.P]3 or its assigns on [DATE].

 

Date of additional PIK Loan

  

Amount of additional PIK

Loan made

  

Notation made by4

                                                                                
                                      

 

 

3  Insert applicable Lender name.

4  Insert name of party making notation (e.g. Borrower or Lender).

 

Exhibit C-2-3

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

Exhibit D

to Amended and Restated Term Loan Agreement

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

Reference is made to the Amended and Restated Term Loan Agreement, dated as of
November 4, 2014 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”), among TriVascular
Technologies, Inc. (formerly TV2 Holding Company), a Delaware corporation
(“Holdings”), TriVascular, Inc., a California corporation (“TriVascular” and,
together with Holdings, the “Borrowers”), Capital Royalty Partners II L.P. and
other parties from time to time party thereto as lenders (“Lenders”), and the
subsidiary guarantors from time to time party thereto. [            ] (the
“Foreign Lender”) is providing this certificate pursuant to
Section 5.05(e)(ii)(B) of the Loan Agreement. The Foreign Lender hereby
represents and warrants that:

1. The Foreign Lender is the sole record owner of the Loans as well as any
obligations evidenced by any Note(s) in respect of which it is providing this
certificate;

2. The Foreign Lender’s direct or indirect partners/members are the sole
beneficial owners of the Loans as well as any obligations evidenced by any
Note(s) in respect of which it is providing this certificate;

3. Neither the Foreign Lender nor its direct or indirect partners/members is a
“bank” for purposes of Section 881(c)(3)(A) of the Internal Revenue Code of
1986, as amended (the “Code”). In this regard, the Foreign Lender further
represents and warrants that:

(a) neither the Foreign Lender nor its direct or indirect partners/members is
subject to regulatory or other legal requirements as a bank in any jurisdiction;
and

(b) neither the Foreign Lender nor its direct or indirect partners/members has
been treated as a bank for purposes of any tax, securities law or other filing
or submission made to any Governmental Authority, any application made to a
rating agency or qualification for any exemption from tax, securities law or
other legal requirements;

3. Neither the Foreign Lender nor its direct or indirect partners/members is a
10-percent shareholder of any Borrower within the meaning of
Section 881(c)(3)(B) of the Code; and

4. Neither the Foreign Lender nor its direct or indirect partners/members is a
controlled foreign corporation receiving interest from a related person within
the meaning of Section 881(c)(3)(C) of the Code.

[Signature follows]

 

Exhibit D-1

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

IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly
executed and delivered as of the date indicated below.

[NAME OF NON-U.S. LENDER]

 

By  

 

  Name:   Title:

Date:  

 

 

Exhibit D-2

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

Exhibit E

to Amended and Restated Term Loan Agreement

FORM OF COMPLIANCE CERTIFICATE

[DATE]

This certificate is delivered pursuant to Section 8.01(c) of, and in connection
with the consummation of the transactions contemplated in, the Amended and
Restated Term Loan Agreement, dated as of November 4, 2014 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”), among TriVascular Technologies, Inc. (formerly TV2 Holding
Company), a Delaware corporation (“Holdings”), TriVascular, Inc., a California
corporation (“TriVascular” and, together with Holdings, the “Borrowers”),
Capital Royalty Partners II L.P. and other parties from time to time party
thereto as lenders (“Lenders”), and the subsidiary guarantors from time to time
party thereto. Capitalized terms used herein and not otherwise defined herein
are used herein as defined in the Loan Agreement.

The undersigned, a duly authorized Responsible Officer of each Borrower having
the name and title set forth below under his signature, hereby certifies, on
behalf of the Borrowers for the benefit of the Lenders and pursuant to
Section 8.01(c) of the Loan Agreement that such Responsible Officer of the
Borrowers is familiar with the Loan Agreement and that, in accordance with each
of the following sections of the Loan Agreement, each of the following is true
on the date hereof, both before and after giving effect to any Loan to be made
on or before the date hereof:

In accordance with Section 8.01[(a)/(b)] of the Loan Agreement, attached hereto
as Annex A are the financial statements for the [fiscal quarter/fiscal year]
ended [            ] required to be delivered pursuant to Section 8.01[(a)/(b)]
of the Loan Agreement. Such financial statements fairly present in all material
respects the consolidated financial position, results of operations and cash
flow of Borrowers and their Subsidiaries as at the dates indicated therein and
for the periods indicated therein in accordance with GAAP [(subject to the
absence of footnote disclosure and normal year-end audit adjustments)]5 [without
qualification as to the scope of the audit (except with respect to a going
concern qualification, if applicable).]6

Attached hereto as Annex B are the calculations used to determine compliance
with each financial covenant contained in Section 10 of the Loan Agreement.

No Default is continuing as of the date hereof[, except as provided for on Annex
C attached hereto, with respect to each of which Borrower proposes to take the
actions set forth on Annex C].

 

 

5  Insert language in brackets only for quarterly certifications.

6  Insert language in brackets only for annual certifications.

 

Exhibit E-1

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

IN WITNESS WHEREOF, the undersigned has executed this certificate on the date
first written above.

 

TRIVASCULAR TECHNOLOGIES, INC. (FORMERLY TV2 HOLDING COMPANY) By  

 

  Name:   Title: TRIVASCULAR, INC. By  

 

  Name:   Title:

 

Exhibit E-2

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

Annex A to Compliance Certificate

FINANCIAL STATEMENTS

[see attached]

 

Exhibit E-3

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

Annex B to Compliance Certificate

CALCULATIONS OF FINANCIAL COVENANT COMPLIANCE

 

I.

   Section 10.01(a): Minimum Revenue   

    A.

   Revenue received during the twelve month period beginning on January 1, 2015:
   $    Test Period: January 1, 2015 to December 31, 2015       Is line I.B
equal to or greater than $30,000,000?    Yes: In compliance; No:
Not in compliance

    B.

   Revenue received during the twelve month period beginning on January 1, 2016:
   $    Test Period: January 1, 2016 to December 31, 2016       Is line I.C
equal to or greater than $45,000,000?    Yes: In compliance; No:
Not in compliance

    C.

   Revenue received during the twelve month period beginning on January 1, 2017:
   $    Test Period: January 1, 2017 to December 31, 2017       Is line I.D
equal to or greater than $60,000,000?    Yes: In compliance; No:
Not in compliance

    D.

   Revenue received during the twelve month period beginning on January 1, 2018:
   $    Test Period: January 1, 2018 to December 31, 2018       Is line I.D
equal to or greater than $75,000,000?    Yes: In compliance; No:
Not in compliance

    E.

   Revenue received during the twelve month period beginning on January 1, 201
   $    Test Period: January 1, 201     to December 31, 201           Is line
I.E equal to or greater than $90,000,000?    Yes: In compliance; No:
Not in compliance

II

   Section 10.03: Minimum Cash   

    A.

   Amount of unencumbered cash and Permitted Cash Equivalent Investments (which
for greater certainty shall not include any undrawn credit lines), in each case,
to the extent held in an account over which the Lenders have a first priority
perfected security interest:    $

    B.

   The greater of:    $   

(1)    $2,000,000 or

     

(2)    to the extent Borrowers have incurred Permitted Priority Debt, the
minimum cash balance required of Borrowers by Borrowers’ Permitted Priority Debt
creditors

      Is Line IIA equal to or greater than Line IIB?:    Yes: In compliance;
No: Not in compliance

 

Exhibit E-4