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THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT, WAIVER AND FIRST AMENDMENT TO FEE LETTER
THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT, WAIVER AND FIRST AMENDMENT TO FEE LETTER (this “Amendment”), dated as of October 25, 2019 (the “Amendment Effective Date”), is made by and among Apollo Endosurgery, Inc., a Delaware corporation (“Parent”), Apollo Endosurgery US, Inc., a Delaware corporation (“Apollo Endo”), Apollo Endosurgery International LLC, a Delaware limited liability company (“Apollo International”), Lpath Therapeutics Inc., a Delaware corporation (“Lpath”; together with Parent, Apollo Endo and Apollo International, individually and collectively, jointly and severally, “Borrower”), Solar Capital Ltd., a Maryland corporation (“Solar”), in its capacity as collateral agent (in such capacity, together with its successors and assigns in such capacity, “Collateral Agent”) and the Lenders listed on Schedule 1.1 of the Loan and Security Agreement (as defined below) or otherwise a party hereto from time to time including Solar in its capacity as a Lender (each a “Lender” and collectively, the “Lenders”).
The Borrower, the Lenders and Collateral Agent are parties to a Loan and Security Agreement dated as of March 15, 2019 (as amended, by that certain First Amendment to Loan and Security Agreement, dated as of June 20, 2019, Second Amendment to Loan and Security Agreement, dated as of August 7, 2019, and as further amended restated, modified or supplemented from time to time, the “Loan and Security Agreement”).  The Borrower has requested that the Lenders agree to certain amendments to the Loan and Security Agreement.  The Lenders have agreed to such request, subject to the terms and conditions hereof.
Pursuant to the that certain Notice of Default dated as of September 26, 2019, the Borrower has failed to (i) comply with (i) Section 7.13(b) of the Loan and Security Agreement for the calendar month ending August 31, 2019 and (ii) Section 6.2(a)(xiii) of the Loan and Security Agreement for the failure to give timely notice of the Event of Default set forth in the preceding clause (i) (together, the “Specified Defaults”).  The Borrower has requested that Collateral Agent and the Lenders agree to waive the Specified Defaults and their rights and remedies against the Borrower with respect to the Specified Defaults.  Although Collateral Agent and the Lenders are under no obligation to do so, they have agreed to such requests, subject to the terms and conditions hereof.
Accordingly, the parties hereto agree as follows:
SECTION 1.Definitions; Interpretation.
(a)Terms Defined in Loan and Security Agreement.  All capitalized terms used in this Amendment (including in the recitals hereof) and not otherwise defined herein shall have the meanings assigned to them in the Loan and Security Agreement.
(b)Interpretation.  The rules of interpretation set forth in Section 1.1 of the Loan and Security Agreement shall be applicable to this Amendment and are incorporated herein by this reference.
SECTION 2.Waiver of Specified Defaults.
(a)Subject to the terms of this Amendment, Collateral Agent and the Lenders hereby waive the Specified Defaults.  Collateral Agent’s and the Lenders’ waiver of the Specified Defaults shall apply only to the foregoing periods specified in the definition of “Specified Defaults.”
(b)Collateral Agent’s and the Lenders’ agreement to waive the Specified Defaults (1) in no way shall be deemed an agreement by Collateral Agent or the Lenders to waive Borrower’s compliance with the above-described covenant(s) as of all other dates, (2) shall not limit or impair Collateral Agent’s or the Lenders’ right to demand strict performance of the covenant(s) as of all other dates and (3) shall not limit or impair Collateral Agent’s or the Lenders’ right to demand strict performance of all other covenants as of any date.
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(c)The waiver set forth in this Section 2 is effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (1) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (2) otherwise prejudice any right or remedy which Collateral Agent or the Lenders may now have or may have in the future under or in connection with any Loan Document.
SECTION 3.Amendments to the Loan and Security Agreement and Fee Letter.
(a)The Loan and Security Agreement shall be amended as follows effective as of the Amendment Effective Date: 
(i)New Definitions.  The following definitions are added to Section 1.4 in their proper alphabetical order: 
“Third Amendment” means that certain Third Amendment to Loan and Security Agreement and First Amendment to Fee Letter, dated as of the Third Amendment Effective Date, by and among Borrowers, Collateral Agent and the Lenders party thereto.
“Third Amendment Effective Date” means October 25, 2019.
(ii)The definition of “Qualified Cash Amount” is hereby amended by adding “as in effect on the First Amendment Effective Date” immediately after “Section 7.13(b)” therein.
(iii)Section 7.13(b) is hereby amended by amending and restating Section 7.13(b) in its entirety as follows: 
(b) Minimum Specified Product Revenue.  Permit Specified Product Revenue, measured on a trailing six-month basis on the last day of each month, to be lower than the following:
						
	Month-End	Specified Product Revenue
	June 2019	$22,000,000
	July 2019	$22,000,000
	August 2019	$21,750,000
	September 2019
	$22,250,000
	October 2019	$22,500,000
	November 2019	$22,500,000
	December 2019	$22,000,000
	January 2020 and each month through and including December 2021	80% of projected Specified Product Revenue in accordance with an annual plan submitted by Borrower to Lenders pursuant to Section 6.2(a)(iv), such plan to be approved by Borrower’s board of directors and by Agent and Lenders in writing


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	January 2022 and each month thereafter	75% of projected Specified Product Revenue in accordance with an annual plan submitted by Borrower to Lenders pursuant to Section 6.2(a)(iv), such plan to be approved by Borrower’s board of directors and by Agent and Lenders in writing




(b)Section 2 of the Fee Letter shall be amended and restated as follows effective as of the Amendment Effective Date:
2. Final Fee.  a final fee (the “Final Fee”) (A) due and payable on the earliest to occur of (i) the Maturity Date, (ii) the acceleration of any Term Loan (including, but not limited to, upon the occurrence of a bankruptcy or insolvency event (including the acceleration of claims by operation of law)), and (iii) the prepayment, refinancing, substitution or replacement of any Term Loan pursuant to Section 2.2(b), (c) or (d) of the Loan Agreement, (B) equal to 4.90% of the Term Loans funded.  The Final Fee shall be fully earned on the date so paid, non-refundable for any reason and payable to the Lenders in accordance with their respective Pro Rata Shares.  The Final Fee shall also be payable in the event the Obligations (and/or the Loan Agreement and/or this Fee Letter) are satisfied or released by foreclosure (whether by power of judicial proceeding), deed in lieu of foreclosure or by any other means.  EACH BORROWER AND GUARANTOR EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING FINAL FEE IN CONNECTION WITH ANY SUCH ACCELERATION.
(c)References Within Loan and Security Agreement.  Each reference in the Loan and Security Agreement to “this Agreement” and the words “hereof,” “herein,” “hereunder,” or words of like import, shall mean and be a reference to the Loan and Security Agreement as amended by this Amendment.
SECTION 4.Conditions of Effectiveness.  The effectiveness of this Amendment shall be subject to the satisfaction of each of the following conditions precedent:
(a)Fees and Expenses.  The Borrower shall have paid (i) an amendment fee of Thirty Five Thousand Dollars ($35,000), which shall be deemed fully earned and non-refundable upon payment, (ii) all invoiced costs and expenses then due in accordance with Section 6(e), and (iii) all other fees, costs and expenses, if any, due and payable as of the Amendment Effective Date under the Loan and Security Agreement. 
(b)This Amendment.  Collateral Agent shall have received this Amendment, executed by the Borrower.
(c)Representations and Warranties; No Default.  On the Amendment Effective Date, after giving effect to the amendment of the Loan and Security Agreement contemplated hereby:
(i)The representations and warranties contained in Section 5 shall be true and correct on and as of the Amendment Effective Date as though made on and as of such date; and
(ii)There exist no Events of Default or events that with the passage of time would result in an Event of Default.
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SECTION 5.Representations and Warranties.  To induce the Lenders to enter into this Amendment, the Borrower hereby confirms, as of the date hereof, (a) that the representations and warranties made by it in Section 5 of the Loan and Security Agreement and in the other Loan Documents are true and correct in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; (b) that there has not been and there does not exist a Material Adverse Change; and (c) that the information included in the Perfection Certificate delivered to Collateral Agent on the Effective Date remains true and correct.   For the purposes of this Section 5, (i) each reference in Section 5 of the Loan and Security Agreement to “this Agreement,” and the words “hereof,” “herein,” “hereunder,” or words of like import in such Section, shall mean and be a reference to the Loan and Security Agreement as amended by this Amendment, and (ii) any representations and warranties which relate solely to an earlier date shall not be deemed confirmed and restated as of the date hereof (provided that such representations and warranties shall be true, correct and complete in all material respects as of such earlier date).
SECTION 6.Miscellaneous.
(a)Loan Documents Otherwise Not Affected; Reaffirmation.  Except as expressly amended pursuant hereto or referenced herein, the Loan and Security Agreement and the other Loan Documents shall remain unchanged and in full force and effect and are hereby ratified and confirmed in all respects.  The Lenders’ and Collateral Agent’s execution and delivery of, or acceptance of, this Amendment shall not be deemed to create a course of dealing or otherwise create any express or implied duty by any of them to provide any other or further amendments, consents or waivers in the future.  The Borrower hereby reaffirms the grant of security under Section 4.1 of the Loan and Security Agreement and hereby reaffirms that such grant of security in the Collateral secures all Obligations under the Loan and Security Agreement, including without limitation any Term Loans funded on or after the Amendment Effective Date, as of the date hereof.
(b)Conditions.  For purposes of determining compliance with the conditions specified in Section 4, each Lender that has signed this Amendment shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless Collateral Agent shall have received notice from such Lender prior to the Amendment Effective Date specifying its objection thereto.
(c)Release.  In consideration of the agreements of Collateral Agent and each Lender contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, on behalf of itself and its successors, assigns, and other legal representatives, hereby fully, absolutely, unconditionally and irrevocably releases, remises and forever discharges Collateral Agent and each Lender, and its successors and assigns, and its present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, Lenders and all such other persons being hereinafter referred to collectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which Borrower, or any of its successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to the day and date of this Amendment, including, without limitation, for or on account of, or in relation to, or in any way in connection with the Loan Agreement, or any of the other Loan Documents or transactions thereunder or related thereto.  Borrower understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.  Borrower agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above.
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(d)No Reliance.  The Borrower hereby acknowledges and confirms to Collateral Agent and the Lenders that the Borrower is executing this Amendment on the basis of its own investigation and for its own reasons without reliance upon any agreement, representation, understanding or communication by or on behalf of any other Person.
(e)Costs and Expenses.  The Borrower agrees to pay to Collateral Agent within ten (10) days of its receipt of an invoice (or on the Amendment Effective Date to the extent invoiced on or prior to the Amendment Effective Date), the reasonable out-of-pocket costs and expenses of Collateral Agent and the Lenders party hereto, and the reasonable fees and disbursements of counsel to Collateral Agent and the Lenders party hereto  (including allocated costs of internal counsel), in connection with the negotiation, preparation, execution and delivery of this Amendment and any other documents to be delivered in connection herewith on the Amendment Effective Date or after such date.
(f)Binding Effect.  This Amendment binds and is for the benefit of the successors and permitted assigns of each party.  
(g)Governing Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES that would result in the application of any laws other than the laws OF the State of New York), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL.
(h)Complete Agreement; Amendments; Exit Fee Agreement.  This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements with respect to such subject matter.  All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.  For the avoidance of doubt and notwithstanding anything to the contrary in this Amendment, Borrower (a) reaffirms its obligations under the Exit Fee Agreement, including without limitation its obligation to pay the Exit Fee (as defined in the Exit Fee Agreement) if and when due thereunder, and (b) agrees that the defined term “Loan Agreement” as defined in the Exit Fee Agreement shall on and after the Amendment Effective Date mean the Loan and Security Agreement as amended by this Amendment and as may be amended, restated or modified from time to time on or after the Amendment Effective Date. 
(i)Severability of Provisions.  Each provision of this Amendment is severable from every other provision in determining the enforceability of any provision.
(j)Counterparts.  This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Amendment.  Delivery of an executed counterpart of a signature page of this Amendment by facsimile, portable document format (.pdf) or other electronic transmission will be as effective as delivery of a manually executed counterpart hereof.
(k)Loan Documents. This Amendment and the documents related thereto shall constitute Loan Documents.
[Balance of Page Intentionally Left Blank; Signature Pages Follow] 




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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of the date first above written.
									
	BORROWER:	

	


	

	

	


	APOLLO ENDOSURGERY, INC.	

	APOLLO ENDOSURGERY INTERNATIONAL, LLC

	

	

	


	

	

	


	By: /s/Stefanie Cavanaugh
	

	By: /s/Stefanie Cavanaugh

	Name:  Stefanie Cavanaugh
	

	Name:  Stefanie Cavanaugh

	Title: Chief Financial Officer
	

	Title: Chief Financial Officer

	

	

	


	

	

	


	APOLLO ENDOSURGERY US, INC.	

	LPATH THERAPEUTICS INC.
	

	

	


	

	

	


	By: /s/Stefanie Cavanaugh
	

	By: /s/Stefanie Cavanaugh

	Name:  Stefanie Cavanaugh
	

	Name:  Stefanie Cavanaugh

	Title: Chief Financial Officer
	

	Title: Chief Financial Officer

	

	

	








[Signature Page to Third Amendment to Loan and Security Agreement, Waiver and First Amendment to Fee Letter (Apollo Endo/Solar)]






						
	GUARANTOR:	


	

	


	APOLLO ENDOSURGERY UK LTD	


	

	


	

	


	By: /s/Stefanie Cavanaugh
	


	Name:  Stefanie Cavanaugh
	


	Title: Director	


	

	


	

	


	

	








[Signature Page to Third Amendment to Loan and Security Agreement, Waiver and First Amendment to Fee Letter (Apollo Endo/Solar)]






						
	GUARANTOR:	


	

	


	APOLLO ENDOSURGERY COSTA RICA S.R.L.	


	

	


	

	


	By: /s/Todd Newton
	


	Name:  Todd Newton
	


	Title: Manager
	


	

	


	

	


	

	


	

	








STATE OF        Texas     )
              ) ss.
COUNTY OF      Travis    )




On October 25, 2019, before me, the undersigned Notary Public, personally appeared Todd Newton (name of signer), personally known to me or proved to me on the basis of satisfactory evidence of identification, which were 10953171(license), to be the person(s) whose name is signed on the preceding or attached document, and acknowledge to me that he/she/they signed it voluntarily and for its stated purpose.


WITNESS my hand and official seal.
SEAL
/s/ Margaret Rose Keller
________________________________
Notary Public in and for said State




[Signature Page to Third Amendment to Loan and Security Agreement, Waiver and First Amendment to Fee Letter (Apollo Endo/Solar)]






									
	COLLATERAL AGENT:	

	


	

	

	


	SOLAR CAPITAL LTD.		
	

	

	


	

	

	


	By: /s/Anthony J. Storino
	

	


	Name: Anthony J. Storino
	

	


	Title: Authorized Signatory
	

	


	

	

	







[Signature Page to Third Amendment to Loan and Security Agreement, Waiver and First Amendment to Fee Letter (Apollo Endo/Solar)]






LENDER:
									
	

	

	


	LENDER:	

	


	

	

	


	SOLAR CAPITAL LTD.		
	

		
	By: /s/Anthony J. Storino
		
	Name: Anthony J. Storino
		
	Title: Authorized Signatory
		
	

		
	SCP PRIVATE CREDIT INCOME FUND SPV LLC		
	

	

	


	By: /s/Anthony J. Storino
	

	


	Name: Anthony J. Storino
	

	


	Title: Authorized Signatory
	

	


	

	

	


	SCP PRIVATE CREDIT INCOME BDC SPV LLC		
	

	

	


	By: /s/Anthony J. Storino
	

	


	Name: Anthony J. Storino
	

	


	Title: Authorized Signatory
	

	


	

	

	


	SCP PRIVATE CORPORATE LENDING FUND SPV LLC		
	

	

	


	By: /s/Anthony J. Storino
	

	


	Name: Anthony J. Storino
	

	


	Title: Authorized Signatory
	

	


	

	

	


	SCP CAYMAN DEBT MASTER FUND SPV LLC		
	

	

	


	By: /s/Anthony J. Storino
	

	


	Name: Anthony J. Storino
	

	


	Title: Authorized Signatory
	

	










[Signature Page to Third Amendment to Loan and Security Agreement, Waiver and First Amendment to Fee Letter (Apollo Endo/Solar)]