Exhibit 10.4

 

SUBORDINATION AGREEMENT

 

THIS SUBORDINATION AGREEMENT (this “Agreement”) is entered into as of
February 21, 2019, by and among CAP 1 LLC, a Delaware limited liability company
(“Cap 1”), for itself and on behalf of each of the Purchasers and other Holders
under (and each term as defined in) the Subordinated NPA (as hereinafter
defined) (in such capacity. “Subordinated Agent”; Subordinated Agent, Purchasers
and such other Holders, collectively, “Subordinated Creditors”), OCULAR
THERAPEUTIX, INC., a Delaware corporation (“Borrower”), and MIDCAP FINANCIAL
TRUST, a Delaware statutory trust, as agent (in such capacity, “Senior Agent”),
for the holders from time to time of the “Senior Debt” (as hereinafter defined)
(the “Lenders,”; Senior Agent and Lenders, collectively, the “Senior Lenders”).

 

R E C I T A L S

 

A.            Borrower and Senior Lenders have entered into a Third Amended and
Restated Credit and Security Agreement dated as of December 21, 2018 (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the “Senior Credit Agreement”) pursuant to which, among other things,
Senior Lenders have agreed, subject to the terms and conditions set forth in the
Senior Credit Agreement, to make certain loans and financial accommodations to
Borrower and the other Credit Parties. All of Borrower’s obligations to Senior
Lenders under the Senior Credit Agreement and the other Senior Debt Documents
(as hereinafter defined) are secured by liens on and security interests in
substantially all of the now existing and hereafter acquired personal property
of Borrower (all collateral, real and personal, now or hereafter encumbered by
the lien of any Senior Debt Document is herein referred to collectively as the
“Collateral”).  Borrower and any other Credit Party (as defined in the Senior
Credit Agreement) may each be referred to herein as a “Credit Party” and
collectively as “Credit Parties”).  All other capitalized terms used by not
defined herein shall have the meanings set forth in the Senior Credit Agreement.

 

B.            Subordinated Creditors have purchased certain convertible
promissory notes under and in accordance with that certain Note Purchase
Agreement dated February 21, 2019, by and among Borrower and the Purchasers (as
defined therein) (as amended in accordance with this Agreement, the
“Subordinated NPA”), pursuant to which Subordinated Creditors have extended or
will extend to Borrower loans and other financial accommodations or Borrower may
otherwise become obligated to Subordinated Creditors for the payment of money.

 

C.            As an inducement to and as one of the conditions precedent to the
agreement of Senior Lenders to allow Borrower to consummate the transactions
contemplated by the Subordinated NPA, Senior Lenders have required the execution
and delivery of this Agreement by Subordinated Agent (on behalf of itself and
the other Subordinated Creditors) and Borrower in order to set forth the
relative rights and priorities of Senior Lenders and Subordinated Creditors
under the Senior Debt Documents and the Subordinated Debt Documents (as
hereinafter defined).

 

NOW, THEREFORE, in order to induce Senior Lenders to allow Borrower to
consummate the transactions contemplated by the Subordinated NPA, and for other
good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto hereby covenant and agree as follows:

 

1.             Definitions. The following terms shall have the following
meanings in this Agreement:

 

“Bankruptcy Code” shall mean Chapter 11 of Title 11 of the United States Code,
as amended from time to time and any successor statute and all rules and
regulations promulgated thereunder.

 

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“Conversion Shares” shall mean any equity securities of Borrower issuable
pursuant to the Subordinated NPA in connection with any Subordinated Debt
Conversion; provided, however, that such Conversion Shares may not entitle any
holder thereof to (a) require Borrower to redeem or repurchase such Conversion
Shares, (b) demand or receive mandatory dividends in cash of other assets (other
than additional equity securities of Borrower satisfying the conditions set
forth in clauses (a), (b) and (c) of this definition), or (c) demand or receive
any other payment in respect of such equity securities (other than customary
liquidation preference rights associated with the Conversion Shares that are not
exercisable by the holders thereof until the Senior Debt has been Paid in Full).

 

“Distribution” shall mean, with respect to any indebtedness, (a) any payment or
distribution by any Person of cash, securities or other property, by set-off or
otherwise, on account of such indebtedness or obligation, (b) any redemption,
purchase or other acquisition of such indebtedness or obligation by any Person
or (c) the granting of any lien or security interest to or for the benefit of
the holders of such indebtedness or obligation in or upon any property of any
Person.  Without limiting the foregoing, any cash payment of principal, interest
or “make-whole consideration” made in connection with any (i) redemption of the
Subordinated Debt by Borrower, (ii) conversion (whether upon a Corporate
Transaction (as defined in the Subordinated Notes) or otherwise), whether
elected by a holder of the Subordinated Debt or by Borrower (including, without
limitation, as a Cash Settlement or Combination Settlement (each as defined in
any Subordinated Note)), or (iii) exercise of any repurchase right under any
Subordinated Note, shall each constitute a “Distribution”.

 

“Enforcement Action” shall mean (a) to take from or for the account of any
Credit Party or any guarantor of the Subordinated Debt, by set-off or in any
other manner, the whole or any part of any moneys which may now or hereafter be
owing by any Credit Party or any such guarantor with respect to the Subordinated
Debt, (b) to sue for payment of, or to initiate or participate with others in
any suit, action or proceeding against any Credit Party or any such guarantor to
(i) enforce payment of or to collect the whole or any part of the Subordinated
Debt or (ii) commence judicial enforcement of any of the rights and remedies
under the Subordinated Debt Documents or applicable law with respect to the
Subordinated Debt, including, without limitation, any judicial proceedings to
obtain possession of any premises leased under the Subordinated Debt Documents,
(c) to demand payment of or accelerate the Subordinated Debt, (d) to exercise
any put option or to cause any Credit Party or any such guarantor to honor any
redemption or mandatory prepayment obligation under any Subordinated Debt
Document, (e) to notify account debtors or directly collect accounts receivable
or other payment rights of any Credit Party or any such guarantor, (f) to
exercise any self-help remedies available to any Subordinated Creditor in its
capacity as a landlord under a lease which constitutes a portion of the
Subordinated Debt Documents, (g) to commence, or join with any creditors other
than Senior Agent in commencing any case or proceeding referred to a Proceeding,
or (h) take any action under the provisions of any state or federal law,
including, without limitation, the Uniform Commercial Code, the Bankruptcy Code
or under any contract or agreement, to enforce, foreclose upon, take possession
of or sell any property or assets of any Credit Party or any such guarantor
including the Collateral.

 

“Paid in Full” or “Payment in Full” shall mean, with respect to the Senior Debt,
the date that is ninety-one (91) days after the full and indefeasible payment in
cash and satisfaction in full of all of the obligations under the Senior Debt
Documents, and the termination of all obligations of Senior Agent and the other
Senior Lenders under the Senior Debt Documents (including, without limitation,
any commitment to lend), and the termination of the Senior Debt Documents.

 

“Person” shall mean any natural person, corporation, general or limited
partnership, limited liability company, firm, trust, association, government,
governmental agency or other entity, whether acting in an individual, fiduciary
or other capacity.

 

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“Proceeding” shall mean any voluntary or involuntary insolvency, bankruptcy,
receivership, custodianship, liquidation, dissolution, reorganization,
assignment for the benefit of creditors, appointment of a custodian, receiver,
trustee or other officer with similar powers or any other proceeding for the
liquidation, dissolution or other winding up of a Person.

 

“Senior Debt” shall mean all obligations, liabilities and indebtedness of every
nature of any Credit Party from time to time owed to Senior Lenders under the
Senior Debt Documents or otherwise, whether now existing or hereafter created,
including, without limitation, the principal amount of all debts, claims,
reimbursement obligations and indebtedness, accrued and unpaid interest and all
fees, costs, indemnities and expenses, whether primary, secondary, direct,
contingent, fixed or otherwise, heretofore, now and from time to time hereafter
owing, due or payable, whether before or after the filing of a Proceeding under
the Bankruptcy Code together with (a) any amendments, modifications, renewals or
extensions thereof and (b) any interest accruing thereon after the commencement
of a Proceeding, without regard to whether or not such interest is an allowed
claim.

 

“Senior Debt Documents” shall mean the Senior Credit Agreement, each promissory
note or other instruments evidencing the Senior Debt or the obligation to pay
the Senior Debt, any guaranty with respect to the Senior Debt, any security
agreement or other collateral document securing the Senior Debt (including, but
not limited to, the Senior Credit Agreement and each of the “Financing
Documents” as defined in the Senior Credit Agreement) and all other documents,
agreements and instruments now existing or hereafter entered into evidencing or
pertaining to all or any portion of the Senior Debt, together with any
amendments, modifications, renewals or extensions thereof.

 

“Subordinated Debt” shall mean all obligations, liabilities and indebtedness of
every nature of any Credit Party from time to time owed to Subordinated
Creditors, whether now existing or hereafter created, including, without
limitation, the principal amount of all debts and indebtedness, accrued and
unpaid interest and all fees, costs and expenses, whether primary, secondary,
direct, contingent, fixed or otherwise, heretofore, now and from time to time
hereafter owing, due or payable, whether before or after the filing of a
Proceeding under the Bankruptcy Code together with any amendments,
modifications, renewals or extensions thereof.

 

“Subordinated Debt Conversion” shall mean any conversion of the Subordinated
Debt, or any portion thereof, into Conversion Shares pursuant to the terms and
conditions of the Subordinated NPA, but only so long as no cash is paid by
Borrower in connection with the consummation of such conversion.

 

“Subordinated Debt Documents” shall mean the Subordinated NPA, the Subordinated
Notes, and any other agreement, promissory note, lease or other instrument
evidencing the Subordinated Debt or the obligation to pay the Subordinated Debt,
any agreements or documents related to or governing the rights of the holders of
the Conversion Shares issued in connection with any Subordinated Debt
Conversion, any guaranty with respect to the Subordinated Debt, any security
agreement or other collateral document securing the Subordinated Debt and all
other documents, agreements and instruments now existing or hereafter entered
into evidencing or pertaining to all or any portion of the Subordinated Debt.

 

“Subordinated Notes” shall mean each of those Senior Subordinated Convertible
Notes dated as of March 1, 2019, issued by Borrower in favor of a Subordinated
Creditor, or otherwise issued under or in connection with the Subordinated NPA,
in each case as amended, restated, supplemented or otherwise modified from time
to time prior to the date hereof and after the date hereof in accordance with
the terms of this Agreement.

 

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2.             Subordination.

 

2.1          Subordination of Subordinated Debt to Senior Debt.  Each Credit
Party covenants and agrees, and each Subordinated Creditor likewise covenants
and agrees, notwithstanding anything to the contrary contained in any of the
Subordinated Debt Documents, that the payment of any and all of the Subordinated
Debt shall be subordinate and subject in right and time of payment, to the
extent and in the manner hereinafter set forth, to the Payment in Full of all
Senior Debt. Each holder of Senior Debt, whether now outstanding or hereafter
created, incurred, assumed or guaranteed, shall be deemed to have acquired the
Senior Debt in reliance upon the provisions contained in this Agreement.  Except
as otherwise agreed in writing by the Senior Agent in its sole discretion, all
Senior Debt shall first be Paid in Full before any Distribution shall be made to
any Subordinated Creditor on account of any Subordinated Debt; provided,
however, that (i) Borrower may issue to Subordinated Creditors, and Subordinated
Creditors may accept, Conversion Shares in connection with a Subordinated Debt
Conversion, (ii) Borrower may pay and Subordinated Creditors may receive cash in
lieu of fractional shares in connection with a Subordinated Debt Conversion, and
(iii) Borrower may pay, and Subordinated Creditors and Subordinated Agent may
accept, reasonable attorneys’ fees and expenses incurred by Subordinated
Creditors or Subordinated Agent from time to time required under the terms of
the Subordinated Debt Documents.

 

2.2          Subordinated Debt Standstill Provisions.  Until the Senior Debt is
Paid in Full, no Subordinated Creditor shall, without the prior written consent
of Senior Agent, take any Enforcement Action with respect to the Subordinated
Debt.

 

2.3          Incorrect Payments. If any Distribution on account of the
Subordinated Debt not permitted to be made by any Credit Party or accepted by
any Subordinated Creditor under this Agreement is so made by a Credit Party and
received by any Subordinated Creditor, such Distribution shall not be commingled
with any of the assets of any Subordinated Creditor, shall be held in trust by
such Subordinated Creditor for the benefit of Senior Agent and shall be promptly
paid over to Senior Agent for the benefit of Senior Lenders, in the form
received (except for endorsement or assignment by such Subordinated Creditor
when required by Senior Agent) for application (in accordance with the Senior
Debt Documents) to the payment of the Senior Debt then remaining unpaid, until
all of the Senior Debt is Paid in Full.

 

2.4          Confirmation of No Liens; Subordination of Liens and Security
Interests; Agreement Not to Contest; Agreement to Release Liens.

 

(a)           Borrower acknowledges and agrees, and each Subordinated Creditor
likewise acknowledges and agrees, that the Subordinated Debt is not secured by
any lien on or security interest in any asset (including personal property and
real property) of Borrower or any other Credit Party and shall not be secured by
any lien on or security interest in any asset (including personal property and
real property) of Borrower or any other Credit Party, whether now owned or
hereafter acquired, until the Senior Debt is Paid in Full.   No references
herein to, or subordinations of, liens or security interest of Subordinated
Agent or any other Subordinated Creditor in the Collateral shall imply or infer
any limitation on the foregoing or any consent by Senior Agent to such a lien or
security interest.

 

(b)           Until the Senior Debt has been Paid in Full, all liens and
security interests of Subordinated Creditors in the Collateral, if any, shall be
and hereby are subordinated for all purposes and in all respects to the liens
and security interests of Senior Agent in the Collateral, regardless of the
time, manner or order of perfection of any such liens and security interests and
regardless of any failure, whether intervening or continuing, of Senior Agent’s
liens to be perfected liens; provided, however, that Subordinated Creditors and
Borrower acknowledges and agrees that the existence of any such lien or security
interest of any Subordinated Creditor would constitute an automatic and
immediate Event of Default under the Senior Credit Agreement and a breach of
this Agreement.  As such, in the event that any

 

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lien or security interest arises in favor of any Subordinated Creditor,
immediately upon Senior Agent’s request, such Subordinated Creditor shall (or
shall cause its agent to) promptly execute and deliver to Senior Agent such
termination statements and releases as Senior Agent shall reasonably request to
effect the release of the liens and security interests of such Subordinated
Creditor in such Collateral or other property.

 

(c)           Each Subordinated Creditor agrees that it will not at any time
contest the validity, perfection, priority or enforceability of the Senior Debt,
the Senior Debt Documents, or the liens and security interests of Senior Agent
in the Collateral securing the Senior Debt.

 

(d)           By the execution of this Agreement, Subordinated Agent, on behalf
of itself and the other Subordinated Creditors, hereby authorizes Senior Agent
to terminate any financing statements filed by against Borrower naming
Subordinated Agent or any other Subordinated Creditor as secured party.

 

(e)           In furtherance of the foregoing, each Subordinated Creditor hereby
irrevocably appoints Senior Agent its attorney-in-fact, with full authority in
the place and stead of such Subordinated Creditor and in the name of such
Subordinated Creditor or otherwise, to execute and deliver any document or
instrument which such Subordinated Creditor may be required to deliver pursuant
to this Section 2.4.

 

2.5          Application of Proceeds from Sale or other Disposition of the
Collateral.  In the event of any sale, transfer or other disposition (including
a casualty loss or taking through eminent domain) of the Collateral, the
proceeds resulting therefrom (including insurance proceeds) shall be applied in
accordance with the terms of the Senior Debt Documents or as otherwise consented
to by Senior Agent until such time as the Senior Debt is Paid in Full.

 

2.6          Sale, Transfer or other Disposition of Subordinated Debt.   No
Subordinated Creditor shall sell, assign, pledge, dispose of or otherwise
transfer all or any portion of the Subordinated Debt or any Subordinated Debt
Document without the prior written consent of Senior Agent, which consent may be
withheld by Senior Agent in its sole and absolute discretion, except (a) a
disposal of the Subordinated Debt in connection with the Subordinated Debt
Conversion or (b) the sale or assignment of a Subordinated Note by a
Subordinated Creditor to another Person (each, an “Assignee”), so long as in
connection therewith, Senior Agent receives from Subordinated Agent written
notice of such sale or assignment at least three (3) Business Days prior to the
effective date of such sale or assignment and the Assignee acknowledges in
writing that such Subordinated Note and the Subordinated Debt evidenced thereby
is subject to the terms of this Agreement and that Subordinated Agent is
authorized to act on Assignee’s behalf in connection with this Agreement.

 

2.7          Legends. Until the termination of this Agreement in accordance with
Section 10 hereof, Subordinated Creditors will cause to be clearly,
conspicuously and prominently inserted on the face of each Subordinated Debt
Document a legend in form acceptable to Senior Agent stating that the
Subordinated Debt Document is subject to the terms of this Agreement.

 

2.8          Liquidation, Dissolution, Bankruptcy. In the event of any
Proceeding involving Borrower:

 

(a)           This Agreement shall remain in full force and effect, and any
Distribution, whether in cash, securities or other property which would
otherwise, but for the terms hereof, be payable or deliverable in respect of the
Subordinated Debt shall be paid or delivered directly to Senior Agent (to be
held and/or applied by Senior Agent in accordance with the terms of the Senior
Debt Documents) until all Senior Debt is Paid in Full.  Each Subordinated
Creditor irrevocably authorizes, empowers and directs any debtor, debtor in
possession, receiver, trustee, liquidator, custodian, conservator or other
Person having authority, to pay or otherwise deliver all such Distributions to
Senior Agent. Each Subordinated Creditor

 

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also irrevocably authorizes and empowers Senior Agent, in the name of such
Subordinated Creditor, to demand, sue for, collect and receive any and all such
Distributions.

 

(b)           Each Subordinated Creditor agrees that Senior Agent may consent to
the use of cash collateral or provide financing to Borrower on such terms and
conditions and in such amounts as Senior Agent, in its sole discretion, may
decide and, in connection therewith, any Credit Party may grant to Senior Agent
liens and security interests upon all of the property of such Credit Party,
which liens and security interests (i) shall secure payment of all Senior Debt
(whether such Senior Debt arose prior to the commencement of any Proceeding or
at any time thereafter) and all other financing provided by Senior Agent during
the Proceeding and (ii) shall be superior in priority to the liens and security
interests, if any, in favor of Subordinated Creditors on the property of such
Credit Party.  Each Subordinated Creditor agrees that it will not object to or
oppose a sale or other disposition of any property securing all of any part of
the Senior Debt free and clear of security interests, liens or other claims of
such Subordinated Creditor under Section 363 of the Bankruptcy Code or any other
provision of the Bankruptcy Code if Senior Agent has consented to such sale or
disposition.  Each Subordinated Creditor agrees not to assert any right it may
have to “adequate protection” of such Subordinated Creditor’s interest in any
Collateral in any Proceeding and agrees that it will not seek to have the
automatic stay lifted with respect to any Collateral without the prior written
consent of Senior Agent. Each Subordinated Creditor waives any claim it may now
or hereafter have arising out of Senior Agent’s election, in any Proceeding
instituted under the Bankruptcy Code, of the application of
Section 1111(b)(2) of the Bankruptcy Code, and/or any borrowing or grant of a
security interest under Section 364 of the Bankruptcy Code by Borrower, as
debtor in possession. Each Subordinated Creditor further agrees that it will not
seek to participate or participate on any creditor’s committee without Senior
Agent’s prior written consent.

 

(c)           Each Subordinated Creditor agrees to execute, verify, deliver and
file any proofs of claim in respect of the Subordinated Debt requested by Senior
Agent in connection with any such Proceeding and hereby irrevocably authorizes,
empowers and appoints Senior Agent its agent and attorney-in-fact to
(i) execute, verify, deliver and file such proofs of claim upon the failure of
such Subordinated Creditor promptly to do so prior to 30 days before the
expiration of the time to file any such proof of claim and (ii) vote such claim
in any such Proceeding, including, but not limited to, to accept or reject any
plan of reorganization or arrangement on behalf of such Subordinated Creditor,
all in such manner as Senior Agent deems appropriate; provided Senior Agent
shall have no obligation to execute, verify, deliver, file and/or vote any such
proof of claim. In the event that Senior Agent votes any claim in accordance
with the authority granted hereby, no Subordinated Creditor shall be entitled to
change or withdraw such vote.  Each Subordinated Creditor hereby assigns to
Senior Agent or its nominee (and will, upon request of Senior Agent, reconfirm
in writing the assignment to Senior Agent or its nominee of) all rights of such
Subordinated Creditor under such claims.

 

(d)           The Senior Debt shall continue to be treated as Senior Debt and
the provisions of this Agreement shall continue to govern the relative rights
and priorities of Senior Lenders and Subordinated Creditors even if all or part
of the Senior Debt or the security interests securing the Senior Debt are
subordinated, set aside, avoided, invalidated or disallowed in connection with
any such Proceeding, and this Agreement shall be reinstated if at any time any
payment of any of the Senior Debt is rescinded or must otherwise be returned by
any holder of Senior Debt or any representative of such holder.

 

3.             Modifications.

 

3.1          Modifications to Senior Debt Documents. Senior Agent may at any
time and from time to time without the consent of or notice to any Subordinated
Creditor, without incurring liability to any Subordinated Creditor and without
impairing or releasing the obligations of any Subordinated Creditor under this
Agreement, change the manner or place of payment or extend the time of payment
of or renew

 

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or alter any of the terms of the Senior Debt, or amend in any manner any
agreement, note, guaranty or other instrument evidencing or securing or
otherwise relating to the Senior Debt.

 

3.2          Modifications to Subordinated Debt Documents. Until the Senior Debt
has been Paid in Full, and notwithstanding anything to the contrary contained in
the Subordinated Debt Documents, no Subordinated Creditor shall, without the
prior written consent of Senior Agent, agree to any amendment, modification or
supplement to any Subordinated Debt Document which modifies the principal amount
or maturity date of any Subordinated Debt or which is adverse in any manner to
the interests of Senior Agent or any other Senior Lender.  At any time and from
time to time, without notice to any Subordinated Creditor, Senior Agent may take
such actions in accordance with the terms of the Senior Credit Agreement with
respect to the Senior Debt as Senior Agent, in its sole discretion, may deem
appropriate, including, without limitation, terminating advances to Borrower,
increasing the principal amount, extending the time of payment, increasing
applicable interest rates, renewing, compromising or otherwise amending the
terms of any documents affecting the Senior Debt and any Collateral securing the
Senior Debt, and enforcing or failing to enforce any rights against any Credit
Party or any other person.  No such action or inaction shall impair or otherwise
affect Senior Agent’s rights hereunder.  All rights and interests of Senior
Agent under this Agreement, and all agreements and obligations of Subordinated
Creditors and Borrower hereunder, shall remain in full force and effect
irrespective of: (1) any lack of validity or enforceability of any Senior Debt
Documents; (2) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Senior Debt, or any amendment or waiver or
other modification, whether by course of conduct or otherwise, of the terms of
the Senior Credit Agreement or any other Senior Debt Document; (3) any exchange,
release or non-perfection of any security interest in any Collateral, or any
release, amendment, waiver or other modification, whether in writing or by
course of conduct or otherwise, of all or any of the Senior Debt or any
guarantee thereof; or (4) any other circumstances which otherwise might
constitute a defense available to, or a discharge of, any Credit Party in
respect of the Senior Debt, or of any Subordinated Creditor or any Credit Party
in respect of this Agreement.

 

4.             Waiver of Certain Rights by Subordinated Creditors.

 

4.1          Marshaling. Each Subordinated Creditor hereby waives any rights it
may have under applicable law to assert the doctrine of marshaling or to
otherwise require Senior Agent to marshal any property of any Credit Party or
any guarantor of the Senior Debt for the benefit of such Subordinated Creditor.
Each Subordinated Creditor waives the benefits, if any, of any statutory or
common law rule that may permit a subordinating creditor to assert any defenses
of a surety or guarantor.  Each Subordinated Creditor agrees that it shall not
assert any such defenses or rights.

 

4.2          Rights Relating to Senior Agent’s Actions with respect to the
Collateral. Each Subordinated Creditor hereby waives, to the extent permitted by
applicable law, any rights which it may have to enjoin or otherwise obtain a
judicial or administrative order preventing Senior Agent from taking, or
refraining from taking, any action with respect to all or any part of the
Collateral. Without limitation of the foregoing, such Subordinated Creditor
hereby agrees (a) that it has no right to direct or object to the manner in
which Senior Agent applies the proceeds of the Collateral resulting from the
exercise by Senior Agent of rights and remedies under the Senior Debt Documents
to the Senior Debt and (b) that Senior Agent has not assumed any obligation to
act as the agent for any Subordinated Creditor with respect to the Collateral.

 

4.3          Rights Relating to Disclosures. Each Subordinated Creditor hereby
agrees that Senior Agent has not assumed any obligation or duty to disclose
information regarding any Credit Party or the Senior Debt to Subordinated
Creditors and Senior Agent shall have no special or fiduciary relationship to
Subordinated Creditors.  Each Subordinated Creditor hereby fully waives and
releases Senior Agent from any affirmative disclosures which may be required of
Senior Agent under applicable law.

 

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5.             Construction. The terms of this Agreement were negotiated among
business persons sophisticated in the area of business finance, and accordingly,
in construing the terms of this Agreement, no rule or law which would require
that this instrument be construed against the party who drafted this instrument
shall be given any force or effect.

 

6.             Modification of this Agreement. Any modification or waiver of any
provision of this Agreement, or any consent to any departure by any party from
the terms hereof, shall not be effective in any event unless the same is in
writing and signed by Senior Agent and Subordinated Agent, and then such
modification, waiver or consent shall be effective only in the specific instance
and for the specific purpose given. Any notice to or demand on any party hereto
in any event not specifically required hereunder shall not entitle the party
receiving such notice or demand to any other or further notice or demand in the
same, similar or other circumstances unless specifically required hereunder.

 

7.             Further Assurances.  Each party to this Agreement promptly will
execute and deliver such further instruments and agreements and do such further
acts and things as may be reasonably requested in writing by any other party
hereto that may be necessary or desirable in order to effect fully the purposes
of this Agreement.

 

8.             Notices.  Any notice or other communication required or permitted
under this Agreement shall be in writing and personally delivered, mailed by
registered or certified mail (return receipt requested and postage prepaid),
sent by facsimile (with a confirming copy sent by regular mail), or sent by
prepaid overnight courier service, and addressed to the relevant party at its
address set forth below, or at such other address as such party may, by written
notice, designate as its address for purposes of notice under this Agreement:

 

(a)                                 If to Senior Agent, at:

 

MidCap Financial Trust

c/o MidCap Financial Services, LLC, as servicer

7255 Woodmont Ave, Suite 200

Bethesda, MD 20814

Attn: Portfolio Management

Facsimile:  301-941-1450

Email:  notices@midcapfinancial.com

 

With a copy to:

 

MidCap Financial Trust

c/o MidCap Financial Services, LLC, as servicer

7255 Woodmont Ave, Suite 200

Bethesda, MD 20814

Attn: Legal

Facsimile:  301-941-1450

Email:  legalnotices@midcapfinancial.com

 

(b)           If to Borrower or any other Credit Party, at:

 

Ocular Therapeutix, Inc.

15 Crosby Drive

Bedford, MA 01730

 

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Attention: Chief Financial Officer

Fax:  781-357-4001

E-Mail: dnotman@ocutx.com

 

with a copy to:

 

Wilmer Cutler Pickering Hale and Dorr LLP

7 World Trade Center

250 Greenwich Street

New York, NY 10007

Attention:  Brian A. Johnson, Esq.

Fax: 212-230-8888

Email:  brian.johnson@wilmerhale.com

 

(c)           If to Subordinated Agent at:

 

CAP 1 LLC

c/o Summer Road LLC

655 Madison Avenue, 19th Floor

New York, New York 10065

Attention: Richard A. Silberberg, Chief Operating Officer

Email: RS@srllc.com

 

With a copy to:

 

Norton Rose Fulbright US LLP

1301 Avenue of the Americas

New York, New York 10019-6022

Attention: Frank S. Vellucci, Esq.

Email: Frank.vellucci@nortonrosefulbright.com

 

If mailed, notice shall be deemed to be given five (5) days after being sent,
and if sent by personal delivery, facsimile or prepaid courier, notice shall be
deemed to be given when delivered.

 

9.             Successors and Assigns; Authority.

 

(a)           This Agreement shall inure to the benefit of, and shall be binding
upon, the respective successors and assigns of Senior Agent, Subordinated Agent
and the Credit Parties; provided, however, that neither Subordinated Agent nor
any Credit Party may assign this Agreement in whole or in part without the prior
written consent of Senior Agent. Senior Agent may, from time to time, without
notice to any Subordinated Creditor, assign or transfer any or all of the Senior
Debt or any interest therein to any Person and, notwithstanding any such
assignment or transfer, or any subsequent assignment or transfer, the Senior
Debt shall, subject to the terms hereof, be and remain Senior Debt for purposes
of this Agreement, and every permitted assignee or transferee of any of the
Senior Debt or of any interest therein shall, to the extent of the interest of
such permitted assignee or transferee in the Senior Debt, be entitled to rely
upon and be the third party beneficiary of the subordination provided under this
Agreement and shall be entitled to enforce the terms and provisions hereof to
the same extent as if such assignee or transferee were initially a party hereto.
This Agreement is not for the benefit of Borrower or other Credit Party or any
guarantor of the Senior Debt.  Subordinated Agent further agrees that if
Borrower is in the process of refinancing any portion of the Senior Debt with a
new lender, and if Senior Agent makes a request of Subordinated Agent,

 

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Subordinated Agent agree to enter into a new subordination agreement with the
new lender on substantially the same terms and conditions of this Agreement on
behalf of itself and the other Subordinated Creditors.

 

(b)           Senior Agent represents and warrants to the other parties hereto
that it has been authorized to enter into this Agreement by and on behalf of
Senior Lenders.  Subordinated Agent represents and warrants to the other parties
hereto that it has been authorized to enter into this Agreement and that this
Agreement by and on behalf of Subordinated Creditors and is binding on all
current and future Purchasers and Holders (each as defined in the Subordinated
NPA).

 

10.          Continuation of Subordination; Termination of Agreement. This
Agreement shall remain in full force and effect until the Payment in Full of the
Senior Debt and the termination of all lending commitments under the Senior Debt
Documents after which this Agreement shall terminate without further action on
the part of the parties hereto. This Agreement will continue to be effective or
will be reinstated, as the case may be, if at any time payment of all or any
part of the Senior Debt Documents or the obligations thereunder is rescinded or
must otherwise be returned by Senior Agent and/or its principals upon
insolvency, bankruptcy, or reorganization of Borrower or otherwise, all as
though such payment had not been made.

 

11.          No Waiver or Novation.  No waiver shall be deemed to have been made
by any party to this Agreement of any of its rights under this Agreement unless
the same shall be in writing and duly signed by its duly authorized officers,
and each waiver, if any, shall be a waiver only with respect to the specific
instance involved and shall in no way impair the rights of any party to this
Agreement in any other respect at any time.  No executory agreement shall be
effective to change, modify or to discharge, in whole or in part, this
Agreement, unless such executory agreement is in writing and duly signed by the
duly authorized officers of each party to this Agreement.

 

12.          Expenses.  Borrower agrees to pay or reimburse Senior Agent, upon
demand, for all its costs and expenses in connection with the enforcement or
preservation of any rights under this Agreement, including, without limitation,
fees and disbursements of counsel to Senior Agent.  Borrower agrees to pay,
indemnify, and hold Senior Agent and its principals harmless from and against
any and all other liabilities, obligations, losses, damages, penalties, actions
(whether sounding in contract, tort or on any other ground), judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of, or
in any other way arising out of or relating to this Agreement or any action
taken or omitted to be taken by any Senior Lender with respect to any of the
foregoing, except that Borrower shall have no obligation hereunder with respect
to any liability resulting from the gross negligence or willful misconduct of
Senior Agent or any indemnitee, as determined by a final non-appealable judgment
of a court of competent jurisdiction.  The indemnity provided herein shall in be
in addition to, and not in lieu of, any other indemnity provided by Borrower or
any other Credit Party under any Financing Document.

 

13.          CONSENT TO JURISDICTION. EACH OF SUBORDINATED CREDITORS AND
BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE STATE OF MARYLAND AND IRREVOCABLY AGREES THAT, SUBJECT TO
SENIOR AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING
TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EACH OF SUBORDINATED
CREDITORS AND BORROWER EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS.  EACH OF
SUBORDINATED CREDITORS AND BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND
ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON IT BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO

 

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SUBORDINATED AGENT AND BORROWER AT THEIR RESPECTIVE ADDRESSES SET FORTH IN THIS
AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS
BEEN POSTED.

 

14.          WAIVER OF JURY TRIAL.  SUBORDINATED CREDITORS, BORROWER AND SENIOR
AGENT HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE SUBORDINATED
DEBT DOCUMENTS OR ANY OF THE SENIOR DEBT DOCUMENTS. EACH OF SUBORDINATED
CREDITORS, BORROWER AND SENIOR AGENT ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THE SENIOR DEBT DOCUMENTS AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH
OF SUBORDINATED CREDITORS, BORROWER AND SENIOR AGENT WARRANTS AND REPRESENTS
THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL
COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

 

15.          Miscellaneous.

 

15.1.       Conflict.  In the event of any conflict between any term, covenant
or condition of this Agreement and any term, covenant or condition of any of the
Subordinated Debt Documents, the provisions of this Agreement shall control and
govern.

 

15.2.       Headings.  The paragraph headings used in this Agreement are for
convenience only and shall not affect the interpretation of any of the
provisions hereof.

 

15.3.       Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument, but in making proof
hereof, it shall only be necessary to produce one such counterpart containing
signatures pages signed by each party.

 

15.4.       Severability.  In the event that any provision of this Agreement is
deemed to be invalid, illegal or unenforceable by reason of the operation of any
law or by reason of the interpretation placed thereon by any court or
governmental authority, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby, and the affected provision shall be modified to the minimum
extent permitted by law so as most fully to achieve the intention of this
Agreement.

 

15.5.       Governing Law.  This Agreement shall be governed by and shall be
construed and enforced in accordance with the internal laws of the State of New
York, without regard to conflicts of law principles.

 

15.6.       Relative Rights.  This Agreement shall define the relative rights of
Senior Lenders and Subordinated Creditors. Nothing in this Agreement shall
(a) impair, as between Credit Parties and Senior Lenders, the obligation of
Credit Parties with respect to the payment of the Senior Debt and the
Subordinated Debt in accordance with their respective terms or (b) affect the
relative rights of Senior Lenders or Subordinated Creditors with respect to any
other creditors of Borrower.

 

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15.7.       Entire Agreement.  This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.

 

[Remainder of page intentionally left blank; signature page follows]

 

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IN WITNESS WHEREOF, intending to be legally bound, and intending that this
Agreement constitute an instrument executed and delivered under seal, the
parties have caused this Agreement to be executed under seal as of the date
first written above.

 

 

CAP 1 LLC, as Subordinated Agent and a Purchaser

 

 

 

 

 

By:

/s/ David Sackler

 (SEAL)

 

Name:

David Sackler

 

 

Title:

President

 

 

OCULAR THERAPEUTIX, INC.

SUBORDINATION AGREEMENT

 

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OCULAR THERAPEUTIX, INC.

 

 

 

 

 

By:

/s/ Donald Notman

(SEAL)

 

Name:

Donald Notman

 

Title:

Chief Financial Officer, Treasurer and Secretary

 

OCULAR THERAPEUTIX, INC.

SUBORDINATION AGREEMENT

 

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MIDCAP FINANCIAL TRUST, as Senior Agent and a Senior Lender

 

 

 

By:

Apollo Capital Management, L.P.,

 

 

its investment manager

 

 

 

 

 

By:

Apollo Capital Management GP, LLC,

 

 

its general partner

 

 

 

 

 

By:

/s/ Maurice Amsellem

(SEAL)

 

 

Name:

Maurice Amsellem

 

 

Title:

Authorized Signatory

 

OCULAR THERAPEUTIX, INC.

SUBORDINATION AGREEMENT

 

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