Exhibit 10.1


 





 


CytoSorbents
Corporation, A DELAWARE CORPORATION


CytoSorbEnts
Medical, Inc., a delaware corporation


 


WESTERN
ALLIANCE BANK, an arizona corporation




AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


 




     


     


    

 


This Amended
and Restated Loan And Security Agreement (as the same may from time to time be amended, modified, supplemented or restated,
this “Agreement”) is entered into as of March 29, 2018, by and between Western
Alliance Bank, an Arizona corporation (“Bank”), and CytoSorbents
Corporation, a Delaware corporation and CytoSorbents Medical,
Inc., a Delaware corporation (individually and collectively, jointly and severally
“Borrower”) and amends and restates in its entirety that certain Loan and Security Agreement dated as of June 30, 2016
by and between Bank and Borrower (the “Old Agreement”).


 


Recitals


 


Borrower wishes to
obtain credit from time to time from Bank, and Bank desires to extend credit to Borrower. This Agreement sets forth the terms on
which Bank will advance credit to Borrower, and Borrower will repay the amounts owing to Bank.


 


Agreement


 


The parties agree as
follows:


 


1.                  
Definitions and Construction.


 


1.1               
Definitions. As used in this Agreement, the following terms shall have the following definitions:


 


“Accounts”
means all presently existing and hereafter arising accounts, contract rights, payment intangibles, and all other forms of obligations
owing to Borrower arising out of the sale or lease of goods (including, without limitation, the licensing of software and other
technology) or the rendering of services by Borrower, whether or not earned by performance, and any and all credit insurance, guaranties,
and other security therefor, as well as all merchandise returned to or reclaimed by Borrower and Borrower’s Books relating
to any of the foregoing.


 


“Affiliate”
means, with respect to any Person, any Person that owns or controls directly or indirectly such Person, any Person that controls
or is controlled by or is under common control with such Person, and each of such Person’s senior executive officers, directors,
and partners.


 


“Amortization
Date” means (i) November 1, 2019, if the Term B Loans are not made hereunder, and (ii) May 1, 2020, if Term B Loans are made
hereunder.


 


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


 


“Bank Expenses”
means all reasonable costs or expenses (including reasonable attorneys’ fees and expenses) incurred in connection with the
preparation, negotiation, administration, and enforcement of the Loan Documents; reasonable Collateral audit fees; and Bank’s
reasonable attorneys’ fees and expenses incurred in amending, enforcing or defending the Loan Documents (including fees and
expenses of appeal), incurred before, during and after an Insolvency Proceeding, whether or not suit is brought.


 


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


 






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“Borrower’s
Books” means all of Borrower’s books and records including: ledgers; records concerning Borrower’s assets or
liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment,
containing such information.


 


“Business Day”
means any day that is not a Saturday, Sunday, or other day on which banks in the State of California are authorized or required
to close.


 


“Change in Control”
means a transaction in which any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all classes of stock then outstanding of either
Borrower ordinarily entitled to vote in the election of directors, empowering such “person” or “group”
to elect a majority of the Board of Directors of Borrower, who did not have such power before such transaction.


 


“Closing Date”
means the date of this Agreement.


 


“Code”
means the California Uniform Commercial Code.


 


“Collateral”
means the property described on Exhibit A attached hereto.


 


“Collateral Account”
is any Deposit Account, Securities Account, or Commodity Account, or any other bank account maintained by Borrower or any Subsidiary
at any time.


 


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


 


“Contingent Obligation”
means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any
indebtedness, lease, dividend, letter of credit or other obligation of another; (ii) any obligations with respect to undrawn
letters of credit, corporate credit cards, or merchant services issued or provided for the account of that Person; and (iii) all
obligations arising under any agreement or arrangement designed to protect such Person against fluctuation in interest rates, currency
exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements
for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by Bank in good
faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee
or other support arrangement.


 


“Copyrights”
means any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship
and derivative work thereof.


 


“Credit Extension”
means any Term Loan or any other extension of credit by Bank for the benefit of Borrower hereunder.


 


“Daily Balance”
means the amount of the Obligations outstanding under the Loan Documents owed at the end of a given day.


 


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


 


“Designated Deposit
Account” means Borrower’s primary depository or operating account with Bank.


 


“Effective Interest
Rate” means, with respect to the Term Loan, the per annum rate of interest (based on a year of three hundred sixty (360)
days) equal to the sum of (a) Index Rate on the last Business Day of the month that immediately precedes the month in which the
interest will accrue, plus (b) Three and Sixty-Six Hundredths percent (3.66%). Notwithstanding the foregoing, the Effective Interest
Rate for the Term A Loan for the period from its Disbursement Date through and including March 31, 2018 shall be Eight and Forty
One Hundredths percent (8.41%).


 






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“Equipment”
means all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments
in which Borrower has any interest.


 


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


 


“Event of Default”
has the meaning assigned in Article 8.


 


“Final Payment”
means a payment (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest) due
on the earliest to occur of (a) the Maturity Date, or (b) the acceleration of any Term Loan, or (c) the prepayment of a Term Loan
pursuant to Section 2.2(c) or (d), equal to the original principal amount of such Term Loan multiplied by the Final Payment Percentage,
payable to Bank.


 


“Final Payment
Percentage” means two and one-half percent (2.50%).


 


“Foreign Subsidiary”
means a Subsidiary that is not an entity organized under the laws of the United States or any territory thereof.


 


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


 


“GAAP”
means generally accepted accounting principles in the United States as in effect from time to time.


 


“German Sub”
means CytoSorbents Europe GmbH, a wholly and directly owned subsidiary of Borrower that is organized under the laws of Germany.


 


“Guillermina
Vega Montiel Agreement” means that certain letter agreement, by and among CytoSorbents Corporation (as successor in interest
to RenalTech International, LLC) and Guillermina Vega Montiel, dated August 11, 2003, a copy of which has been provided to Bank
prior to the Closing Date (and without any amendments thereto).


 


“Indebtedness”
means (a) all indebtedness for borrowed money or the deferred purchase price of property or services, including without limitation
reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes,
bonds, debentures or similar instruments, (c) all capital lease obligations and (d) all Contingent Obligations.


 


“Index Rate”
means the Prime Rate published in the Money Rates section of the Western Edition of The Wall Street Journal.


 


“Insolvency Proceeding”
means any proceeding commenced by or against any person or entity under any provision of the United States Bankruptcy Code, as
amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal
moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.


 


“Intellectual
Property” means all of Borrower’s right, title, and interest in and to the following: Copyrights, Trademarks and Patents;
all trade secrets, all design rights, claims for damages by way of past, present and future infringement of any of the rights included
above, all licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all license fees and royalties arising
from such use to the extent permitted by such license or rights; all amendments, renewals and extensions of any of the Copyrights,
Trademarks or Patents; and all proceeds and products of the foregoing, including without limitation all payments under insurance
or any indemnity or warranty payable in respect of any of the foregoing.


 






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“Inventory”
means all inventory in which Borrower has or acquires any interest, including work in process and finished products intended for
sale or lease or to be furnished under a contract of service, of every kind and description now or at any time hereafter owned
by or in the custody or possession, actual or constructive, of Borrower, including such inventory as is temporarily out of its
custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds,
resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and Borrower’s
Books relating to any of the foregoing.


 


“Investment”
means any beneficial ownership of (including stock, partnership interest or other securities) any Person, or any loan, advance
or capital contribution to any Person.


 


“IRC” means
the Internal Revenue Code of 1986, as amended, and the regulations thereunder.


 


“Lien”
means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.


 


“Loan Documents”
means, collectively, this Agreement, any note or notes (including the Secured Promissory Notes) executed by Borrower, the Success
Fee Letter, the Post Closing Letter, any pledge agreement regarding Shares of the German Sub and any other agreement entered into
in connection with this Agreement, all as amended, restated, supplemented or otherwise modified from time to time.


 


“Material Adverse
Effect” means a material adverse effect on (i) the business operations or condition (financial or otherwise) of Borrower
and its Subsidiaries taken as a whole or (ii) the ability of Borrower to repay the Obligations or otherwise perform its obligations
under the Loan Documents or (iii) the value or priority of Bank’s security interests in the Collateral, but subject to Permitted
Liens.


 


“Maturity Date”
means April 1, 2022.


 


“Negotiable Collateral”
means all letters of credit of which Borrower is a beneficiary, notes, drafts, instruments, securities, documents of title, and
chattel paper, and Borrower’s Books relating to any of the foregoing.


 


“Obligations”
means all debt, principal, interest, the Prepayment Fee, the Final Payment, Bank Expenses and other amounts owed to Bank by Borrower
pursuant to this Agreement or any other agreement, whether absolute or contingent, due or to become due, now existing or hereafter
arising, including any interest that accrues after the commencement of an Insolvency Proceeding and including any debt, liability
or obligation owing from Borrower to others that Bank may have obtained by assignment or otherwise.


 


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


 


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


 


“Patents”
means all patents, patent applications and like protections including without limitation improvements, divisions, continuations,
renewals, reissues, extensions and continuations-in-part of the same.


 


“Payment Date”
means the first (1st) calendar day of each calendar month.


 


“Perfection Certificate”
has the meaning assigned in Section 3.1.


 






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“Periodic Payments”
means all installments or similar recurring payments that Borrower may now or hereafter become obligated to pay to Bank pursuant
to the terms and provisions of any instrument, or agreement now or hereafter in existence between Borrower and Bank.


 


“Permitted Indebtedness”
means:


 


(a)               
Indebtedness of Borrower in favor of Bank arising under this Agreement or any other Loan Document;


 


(b)               
Indebtedness existing on the Closing Date and disclosed in the Perfection Certificate on the Closing Date;


 


(c)                
Indebtedness secured by a Lien described in clause (c) of the defined term “Permitted Liens”, provided
(i) such Indebtedness does not exceed the lesser of the cost or fair market value of the equipment financed with such Indebtedness
and (ii) such Indebtedness does not exceed Five Hundred Thousand Dollars ($500,000) in the aggregate at any given time;


 


(d)               
Subordinated Debt;


 


(e)                
Unsecured Indebtedness to trade creditors incurred in the ordinary course of business;


 


(f)                 
Contingent Obligations (in the aggregate outstanding amount of up to Two Hundred Fifty Thousand Dollars ($250,000) at
any given time) arising in the ordinary course of business or consisting of guarantees of any items of Permitted Indebtedness;


 


(g)               
Indebtedness (in the aggregate outstanding amount of up to One Hundred Thousand Dollars ($100,000) at any given time)
incurred as a result of endorsing negotiable instruments received in the ordinary course of business;


 


(h)               
Indebtedness (in the aggregate outstanding amount of up to Three Hundred Thousand Dollars ($300,000) at any given time)
incurred to finance insurance premiums in the ordinary course of business;


 


(i)                 
Indebtedness constituting financing by the landlord or its Affiliates of leasehold improvements related to the Plant
Expansion and not exceeding Five Hundred Thousand Dollars ($500,000) in the aggregate at any given time; and


 


(j)                 
extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through
(i) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome
terms upon Borrower or its Subsidiary, as the case may be.


 


“Permitted Investment”
means:


 


(a)               
Investments existing on the Closing Date disclosed in the Perfection Certificate;


 


(b)               
(i) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency
or any State thereof maturing within one (1) year from the date of acquisition thereof, (ii) commercial paper maturing no
more than one (1) year from the date of creation thereof and currently having rating of at least A-2 or P-2 from either Standard &
Poor’s Corporation or Moody’s Investors Service, (iii) certificates of deposit maturing no more than one (1) year
from the date of investment therein issued by Bank and (iv) Bank’s money market accounts;


 






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(c)                
Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of Borrower;


 


(d)               
Investments consisting of deposit accounts in which Bank has a perfected security interest;


 


(e)                
Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in
the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities
of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s Board of Directors;
not to exceed in the aggregate for (i) and (ii), Two Hundred Fifty Thousand Dollars ($250,000) in any fiscal year;


 


(f)                 
(i) Net Investments (i.e. Investments net of any payments received by Borrower from the German Sub after the
making of such Investments) by Borrower in the German Sub not to exceed Seven Hundred Thousand Dollars ($700,000) in the aggregate
at any given time in any fiscal year and (ii) Net Investments (i.e. Investments net of any payments received by German Sub from
the Swiss Sub after the making of such Investments) by German Sub in the Swiss Sub not to exceed Two Hundred Thousand Dollars
($200,000) in the aggregate at any given time in any fiscal year;


 


(g)               
Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or
suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary
course of business;


 


(h)               
Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers
who are not Affiliates, in the ordinary course of business; provided that this paragraph (h) shall not apply to Investments of
Borrower in any Subsidiary; and


 


(i)                 
non-cash Investments in joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting
of the non-exclusive licensing of technology, the development of technology or the providing of technical support.


 


“Permitted Liens”
means the following:


 


(a)               
Any Liens existing on the Closing Date and disclosed in the Perfection Certificate on the Closing Date or arising under
this Agreement or the other Loan Documents;


 


(b)               
Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested
in good faith by appropriate proceedings, provided the same have no priority over any of Bank’s security interests;


 


(c)                
Liens (i) upon or in any equipment which was not financed by Bank acquired or held by Borrower or any of its Subsidiaries
to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition of
such equipment or (ii) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely
to the property so acquired and improvements thereon, and the proceeds of such equipment;


 


(d)               
Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course
of business so long as such Liens attach only to Inventory, securing liabilities in the aggregate amount not to exceed Fifty Thousand
Dollars ($50,000.00), and which are not delinquent or remain payable without penalty or which are being contested in good faith
and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto;


 


(e)                
Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and
other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA);


 






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(f)                 
leases or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring to
another Person, in the ordinary course of such Person’s business), and leases, subleases, non-exclusive licenses or sublicenses
of personal property (other than Intellectual Property) granted in the ordinary course of Borrower’s business (or, if referring
to another Person, in the ordinary course of such Person’s business), if the leases, subleases, licenses and sublicenses
do not prohibit granting Bank a security interest therein;


 


(g)               
Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Sections 8.4
or 8.7;


 


(h)               
Liens in favor of other financial institutions arising in connection with Borrower’s deposit and/or securities
accounts held at such institutions, provided that Borrower is permitted under the terms of this Agreement to maintain such accounts
and Bank has a perfected security interest in the amounts held in such deposit and/or securities accounts;


 


(i)                 
Liens in favor of the landlord or its Affiliates to secure the Permitted Indebtedness described in clause (i) of the
definition of “Permitted Indebtedness”; provided, however, such Liens are restricted to the leasehold improvements
related to the Plant Expansion that are financed by such Permitted Indebtedness; and


 


(j)                 
Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the
type described in clauses (a) through (i) above, provided that any extension, renewal or replacement Lien shall be limited to the
property encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced does
not increase; and


 


(k)               
easements, rights of way, restrictions, minor defects or irregularities in title and other similar Liens affecting real
property not interfering in any material respect with the conduct of Borrower’s business in its ordinary course.


 


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


 


“Prepayment Fee”
means, with respect to any Term Loan subject to prepayment prior to the Maturity Date, whether by mandatory or voluntary prepayment,
acceleration or otherwise, an additional fee payable to Bank in amount equal to:


 


(i)                 
for a prepayment made on or after the Funding Date of such Term Loan through and including the first anniversary of
the Funding Date of such Term Loan, two percent (2.0%) of the principal amount of such Term Loan prepaid;


 


(ii)               
for a prepayment made after the date which is after the first anniversary of the Funding Date of such Term Loan through
and including the second anniversary of the Funding Date of such Term Loan, one and one-half percent (1.5%) of the principal amount
of the Term Loan prepaid; and


 


(iii)             
for a prepayment made after the second anniversary of the Funding Date of such Term Loan, one percent (1.0%) of the
principal amount of the Term Loan prepaid, provided that no Prepayment Fee shall be due for any payment made at the Maturity Date.


 


“Plant Expansion”
means the new plant expansion contemplated by Borrower during 2018.


 


“Purolite”
means collectively, Brotech Corporation and its affiliate, Purolite International, Inc.


 


“Purolite Settlement
Agreement” means that certain Settlement Agreement, by and among Purolite and Borrower, dated October 2006, in the form provided
to the Bank prior to the Closing Date and without any amendments thereto unless such amendments have been approved by Bank in writing
in advance.


 






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“Responsible
Officer” means each of the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and the Controller
of Borrower.


 


“Revenue Event”
means the achievement by Borrower, for its fiscal year 2018, of consolidated annual revenues (strictly from the sale of its products
and not related to grant funding activities) of at least Fourteen Million Six Hundred Thousand Dollars ($14,600,000), as reasonably
determined by the Bank based upon written evidence reasonably satisfactory to the Bank.


 


“Required Reserves
Test” means that on the date of its determination, Borrower shall have sufficient cash reserves (including the proceeds of
the Term B Loans) to meet all of its projected expenses in accordance with its then applicable annual operating budget and financial
projections delivered and accepted by Bank in accordance with Section 6.3 hereof (including, but not limited to, interest expenses
and any applicable principal repayment expenses) for the then immediately following 12 month period, as reasonably determined by
the Bank based on evidence reasonably acceptable to the Bank.


 


“Schedule”
means the schedule of exceptions attached hereto and approved by Bank, if any.


 


“Second Draw
Period” means the period commencing on the of the date of the occurrence of Revenue Event and ending on the earlier of (i) March
31, 2019 and (ii) the occurrence of an Event of Default; provided, however, that the Second Draw Period shall not commence
if on the date of the occurrence of the Revenue Event an Event of Default has occurred and is continuing; provided further that
no Term B Loans shall be made during the Second Draw Period unless on the Funding Date of the Term B Loans, the Required Reserves
Test is met and, on or before the Funding Date of the Term B Loans (but no earlier than ten (10) days prior to the Funding Date),
the Seventy Five Percent Test is met or on the Funding Date of the Term B Loans, the aggregate cash reserves of Borrower (held
in accounts maintained with the Bank after giving effect to the funding of the Term B Loans), as determined by the Bank based on
evidence reasonably acceptable to the Bank, would exceed One Hundred Twenty Five percent (125%) of the then outstanding aggregate
outstanding principal amount of the Term Loans (including the Term B Loans).


 


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


 


“Secured Promissory
Note Record” means a record maintained by the Bank with respect to the outstanding Obligations under the Loan Documents owed
by Borrower to the Bank and credits made thereto.


 


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


 


“Seventy Five
Percent Test” means that on the date of its determination, Borrower shall have achieved consolidated trailing six month revenue
(for the six full calendar months completed immediately preceding the date of determination and strictly from the sale of its products
and not related to grant funding activities) equal to at least seventy-five percent (75%) of the projected revenue for such period
in accordance with the then applicable financial projections delivered by Borrower and accepted by Bank in accordance with Section
6.3 hereof, as reasonably determined by the Bank based on evidence reasonably acceptable to the Bank.


 


“Shares”
means one hundred percent (100%) of the issued and outstanding capital stock, membership units or other securities owned or held
of record by Borrower or Borrower’s Subsidiary, in any Subsidiary; provided that, in the event Borrower, demonstrates to
the Bank’s reasonable satisfaction, that a pledge of more than sixty five percent (65%) of the Shares of such Subsidiary
which is a Foreign Subsidiary, creates a present and existing adverse tax consequence to Borrower under the U.S. Internal Revenue
Code, “Shares” shall mean sixty-five percent (65%) of the issued and outstanding capital stock, membership units or
other securities owned or held of record by Borrower or its Subsidiary in such Foreign Subsidiary. For the purposes of clarification,
“Shares” with respect to the German Subsidiary means sixty-five percent (65%) of the issued and outstanding capital
stock, membership units or other securities owned or held of record by Borrower of the German Sub.


 






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“Subordinated
Debt” means any debt incurred by Borrower that is subordinated to the debt owing by Borrower to Bank on terms reasonably
acceptable to Bank (and identified as being such by Borrower and Bank).


 


“Subsidiary”
means any corporation, company or partnership in which (i) any general partnership interest or (ii) more than 50% of
the stock or other units of ownership which by the terms thereof has the ordinary voting power to elect the Board of Directors,
managers or trustees of the entity, at the time as of which any determination is being made, is owned by Borrower, either directly
or through an Affiliate.


 


“Success Fee
Letter” means that certain success fee letter agreement, by and between the Bank and Borrower, dated as of the date hereof.


 


“Swiss Sub”
means CytoSorbents Switzerland GmbH, a wholly and directly owned subsidiary of the German Sub that is organized under the laws
of Switzerland.


 


“Term Loan”
has the meaning assigned in Section 2.2(a)(ii) hereof.


 


“Term A Loan”
has the meaning assigned in Section 2.2(a)(i) hereof.


 


“Term B Loan”
has the meaning assigned in Section 2.2(a)(ii) hereof.


 


“Trademarks”
means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and
like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.


 


1.2               
Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP and
all calculations made hereunder shall be made in accordance with GAAP. When used herein, the terms “financial statements”
shall include the notes and schedules thereto. Without limiting the foregoing, if leases are to be reclassified and accounted for
on a basis inconsistent with that reflected in the financial statements of Borrower for the fiscal year ended December 31, 2017
due to a change in GAAP that becomes effective after the Closing Date then, for the purposes of this Agreement, any Indebtedness
of Borrower resulting strictly due to such reclassification of such leases (and for no other reason) shall be deemed to be Permitted
Indebtedness hereunder.


 


2.                  
Loan and Terms Of Payment.


 


2.1               
Credit Extensions.


 


Borrower promises to
pay to the order of Bank, in lawful money of the United States of America, the aggregate unpaid principal amount of all Credit
Extensions made by Bank to Borrower hereunder. Borrower shall also pay interest on the unpaid principal amount of such Credit Extensions
at rates in accordance with the terms hereof.


 


2.2               
Term Loan.


 


(a)               
Availability.


 


(i)                 
Subject to the terms and conditions of this Agreement, on the Closing Date, Bank shall make a term loan to Borrower
in the amount of Ten Million Dollars ($10,000,000) (the “Term A Loan”). After repayment, the Term A Loan may not be
re-borrowed.


 


(ii)               
Subject to the terms and conditions of this Agreement, during the Second Draw Period, Bank shall make a term loan to
Borrower in the amount of Five Million Dollars ($5,000,000) (the “Term B Loans”, and together with the Term A Loan,
the “Term Loans” and each individually, a “Term Loan”). After repayment, the Term B Loan may not be re-borrowed.


 






    	 	9	 



     


    

 


(b)               
Repayment. Borrower shall make monthly payments of interest only commencing on the first (1st) Payment Date following
the Funding Date of each Term Loan, and continuing on the Payment Date of each successive month thereafter through and including
the Payment Date immediately preceding the Amortization Date of such Term Loan. Borrower agrees to pay, on the Funding Date of
each Term Loan, any initial partial monthly interest payment otherwise due for the period between the Funding Date of such Term
Loan and the first Payment Date thereof. Commencing on the Amortization Date for the Term Loans, and continuing on the Payment
Date of each month thereafter, Borrower shall make equal monthly payments of principal, together with applicable interest, in arrears,
as calculated by Bank (which calculations shall be deemed correct absent manifest error) based upon: (1) the amount of the Term
Loans, (2) the Effective Interest Rate, as determined in Section 2.3(a), and (3) a repayment schedule equal to (A) thirty (30)
months, if the Term B Loans are not drawn, and (B) twenty-four (24) months, if the Term B Loans are drawn. All unpaid principal
and accrued and unpaid interest is due and payable in full on the Maturity Date with respect to the Term Loans. For the avoidance
of doubt, if Borrower pays the Term Loan in full on the Maturity Date in accordance with this Agreement, no prepayment fee will
apply. The Term Loans may only be prepaid in accordance with Sections 2.2(c) and 2.2(d).


 


(c)                
Mandatory Prepayments. If the Term Loans are accelerated following the occurrence of an Event of Default, Borrower
shall immediately pay to Bank, an amount equal to the sum of: (i) all outstanding principal of the Term Loans plus accrued
and unpaid interest thereon through the prepayment date, (ii) the Final Payment, (iii) the Prepayment Fee, plus (iv)
all other Obligations that are due and payable, including Bank’s Expenses and interest at the Default Rate with respect to
any past due amounts. Notwithstanding (but without duplication with) the foregoing, on the Maturity Date, if the Final Payment
has not previously been paid in full in connection with the prepayment of the Term Loans in full, Borrower shall pay Bank the Final
Payment in respect of the Term Loan(s).


 


(d)               
Permitted Prepayment of Term Loans. Borrower shall have the option to prepay, all but not less than all, of Term
A Loan and/or Term B Loan advanced by Bank under this Agreement, provided Borrower (i) provides written notice to Bank of
its election to prepay such Term Loan at least ten (10) days prior to such prepayment, and (ii) pays to the Bank on the date
of such prepayment an amount equal to the sum of (A) all outstanding principal of such Term Loan being prepaid plus accrued
and unpaid interest thereon through the prepayment date, (B) the Final Payment, (C) the Prepayment Fee, plus (D) all other Obligations
that are due and payable, including Bank Expenses and interest at the Default Rate with respect to any past due amounts.


 


2.3               
Interest Rate, Payments, and Calculations.


 


(a)               
Interest Rate. Except as set forth in Section 2.3(b) below, the Term Loan shall bear interest, on the outstanding Daily
Balance thereof, at a floating per annum rate equal to the Effective Interest Rate.


 


(b)               
Late Fee; Default Rate. If any payment is not made within ten (10) days after the date such payment is due, Borrower
shall pay Bank a late fee equal to the lesser of (i) five percent (5%) of the amount of such unpaid amount or (ii) the
maximum amount permitted to be charged under applicable law, not in any case to be less than Twenty-Five Dollars ($25.00). All
Obligations shall bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate equal
to five (5) percentage points above the interest rate applicable immediately prior to the occurrence of the Event of Default.


 


(c)                
Payments. Interest hereunder shall be due and payable on the first calendar day of each month during the term hereof.
Bank shall, at its option, charge such interest, all Bank Expenses, and all Periodic Payments against any of Borrower’s deposit
accounts (including but not limited to the Designated Deposit Account), in which case those amounts shall thereafter accrue interest
at the rate then applicable hereunder. Any interest not paid when due shall be compounded by becoming a part of the Obligations,
and such interest shall thereafter accrue interest at the rate then applicable hereunder. All payments shall be free and clear
of any taxes, withholdings, duties, impositions or other charges, to the end that Bank will receive the entire amount of any Obligations
payable hereunder, regardless of source of payment.


 


(d)               
Computation. In the event the Index Rate is changed from time to time hereafter, the applicable rate of interest hereunder
shall be increased or decreased, as set forth in the definition of “Effective Interest Rate.” All interest chargeable
under the Loan Documents shall be computed on the basis of a three hundred sixty (360) day year for the actual number of days elapsed.


 






    	 	10	 



     


    

 


2.4               
Crediting Payments. Prior to the occurrence of an Event of Default, Bank shall credit a wire transfer of funds, check
or other item of payment to such deposit account or Obligation as Borrower specifies. After the occurrence of an Event of Default,
unless such Event of Default is either waived by the Bank in its sole discretion or cured to the Bank’s satisfaction and
Bank upon such Event of Default having been cured decides in its sole discretion not to further exercises its remedies hereunder
in connection therewith, the receipt by Bank of any wire transfer of funds, check, or other item of payment shall be immediately
applied to conditionally reduce Obligations, but shall not be considered a payment on account unless such payment is of immediately
available federal funds or unless and until such check or other item of payment is honored when presented for payment. Notwithstanding
anything to the contrary contained herein, any wire transfer or payment received by Bank after 1:00 p.m. Pacific time shall be
deemed to have been received by Bank as of the opening of business on the immediately following Business Day. Whenever any payment
to Bank under the Loan Documents would otherwise be due (except by reason of acceleration) on a date that is not a Business Day,
such payment shall instead be due on the next Business Day, and additional fees or interest, as the case may be, shall accrue and
be payable for the period of such extension.


 


2.5               
Fees. Borrower shall pay to Bank the following:


 


(a)               
Diligence Deposit. The Bank acknowledges prior receipt of diligence deposit from Borrower in the amount of Fifteen Thousand
Dollars ($15,000) on or about March 2, 2018 and agrees that such deposit will be applied in the following order: towards payment
of the Bank Expenses payable on the Closing Date in accordance with Section 2.5(g) and, to the extent that any diligence deposit
is remaining thereafter, towards payment of the closing fee in accordance with Section 2.5(c).


 


(b)               
Old Agreement Final Payment. A Final Payment (as defined in the Old Agreement) equal to $85,937.50 due under the Old
Agreement on the Closing Date (it being agreed and understood that Bank is waiving the remaining portion of the Final Payment due
under the Old Agreement and the Prepayment Fee (as described in the Old Agreement) due under the Old Agreement). For the avoidance
of doubt, the parties agree that the payment due under this Section 2.5(a) is in addition to, and not in substitution of, the Final
Payment set forth in Section 2.5(c) below and the Prepayment Fee set forth in Section 2.5(d) below;


 


(c)                
Closing Fee. A fully earned and non-refundable closing fee equal to Twenty Five Thousand Dollars ($25,000) due on the
Closing Date;


 


(d)               
Final Payment. The Final Payment, when due hereunder;


 


(e)                
Prepayment Fee. The Prepayment Fee, when due hereunder;


 


(f)                 
Success Fee. The Success Fee (as defined in the Success Fee Letter), when due thereunder; and


 


(g)               
Bank Expenses. On the Closing Date, all Bank Expenses incurred through such date and, after the Closing Date, all Bank
Expenses as and when they are incurred by Bank.


 


2.6               
Term. This Agreement shall become effective on the date hereof and, subject to Section 13.7, shall continue in
full force and effect for so long as any Obligations under the Loan Documents (other than inchoate indemnity obligations and any
other obligations which, by their terms, are to survive the termination of this Agreement) remain outstanding or Bank has any obligation
to make Credit Extensions under this Agreement. Notwithstanding the foregoing, Bank shall have the right to terminate its obligation
to make Credit Extensions under this Agreement immediately and without notice upon the occurrence and during the continuance of
an Event of Default. Notwithstanding termination, Bank’s Lien on the Collateral shall remain in effect for so long as any
Obligations under the Loan Documents (other than inchoate indemnity obligations and any other obligations which, by their terms,
are to survive the termination of this Agreement) are outstanding. Furthermore, termination hereof shall not in any way affect
the respective rights and obligations of Borrower and Bank under the Success Fee Letter.


 






    	 	11	 



     


    

 


2.7               
Secured Promissory Notes. The Term Loans shall be evidenced by a Secured Promissory Note or Notes in the form attached
as Exhibit D hereto (each a “Secured Promissory Note”), and shall be repayable as set forth in this
Agreement. Borrower irrevocably authorizes the Bank to make or cause to be made, on or about the Funding Date of any Term Loan
or at the time of receipt of any payment of principal on such Secured Promissory Note, an appropriate notation on such Secured
Promissory Note Record reflecting the making of such Term Loan or (as the case may be) the receipt of such payment. The outstanding
amount of each Term Loan set forth on such Secured Promissory Note Record shall be prima facie evidence of the principal amount
thereof owing and unpaid to the Bank, but the failure to record, or any error in so recording, any such amount on such Secured
Promissory Note Record shall not limit or otherwise affect the obligations of Borrower under any Secured Promissory Note or any
other Loan Document to make payments of principal of or interest on any Secured Promissory Note when due. Upon receipt of an affidavit
of an officer of the Bank as to the loss, theft, destruction, or mutilation of any of its Secured Promissory Note, Borrower
shall issue, in lieu thereof, a replacement Secured Promissory Note in the same principal amount thereof and of like tenor.


 


3.                  
Conditions of Loans.


 


3.1               
Conditions Precedent to Initial Credit Extension. The obligation of Bank to make the initial Credit Extension is subject
to the condition precedent that Bank shall have received, in form and substance reasonably satisfactory to Bank, the following:


 


(a)               
this Agreement;


 


(b)               
a certificate of the Secretary of Borrower with respect to incumbency and resolutions authorizing the execution and
delivery of this Agreement;


 


(c)                
UCC National Form Financing Statement;


 


(d)               
a duly executed Success Fee Letter;


 


(e)                
duly executed original Secured Promissory Notes in favor of the Bank;


 


(f)                 
agreement to provide insurance;


 


(g)               
payment of the fees and Bank Expenses then due specified in Section 2.5 hereof;


 


(h)               
current financial statements of Borrower;


 


(i)                 
[reserved];


 


(j)                 
completed perfection certificate of Borrower (the “Perfection Certificate”);


 


(k)               
a landlord’s consent for each of Borrower’s leased locations;


 


(l)                 
a bailee waiver for each location where Borrower maintains Collateral having a book value in excess of Two Hundred Fifty
Thousand Dollars ($250,000);


 


(m)             
a Disbursement Letter in the form of Exhibit B-1 attached hereto;


 


(n)               
a Loan Payment/Advance Request Form in the form of Exhibit B-2 attached hereto;


 






    	 	12	 



     


    

 


(o)               
the certificate(s) for the Shares of CytoSorbents Medical, Inc., together with Assignment(s) Separate from certificate(s),
duly executed in blank;


 


(p)               
a pledge agreement and other related documents regarding the pledge to the Bank of a perfected security interest in
the Shares of the German Sub (it being agreed and understood that the pledge agreement in effect on the Closing Date shall suffice
for the purposes of the initial Credit Extension but that such pledge agreement will be revised and/or amended and restated to
provide for otherwise substantially the same provisions as the pledge agreement currently in effect but to secure the entire aggregate
amount of all of the Term Loans); and


 


(q)               
such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.


 


3.2               
Conditions Precedent to all Credit Extensions. The obligation of Bank to make each Credit Extension, including the initial
Credit Extension, is further subject to the representations and warranties contained in Section 5 shall be true and correct
in all material respects on and as of the effective date of each Credit Extension as though made at and as of each such date (except
for representations and warranties that relate to a specific date, which shall be true and correct in all material respects as
of such date), and no Event of Default shall have occurred and be continuing, or would exist after giving effect to such Credit
Extension. The making of each Credit Extension shall be deemed to be a representation and warranty by Borrower on the date of such
Credit Extension as to the accuracy of the facts referred to in this Section 3.2. Furthermore, the making of each Credit Extension
shall be subject to the (i) delivery by Borrower to the Bank, to the extent not delivered at the Closing, of duly executed original
Secured Promissory Notes, in number, form and content acceptable to the Bank, with respect to such Credit Extension made by the
Bank after the Closing Date and (ii) in the event of Credit Extension of Term B Loans, the Required Reserves Test must be met on
the Funding Date of the Term B Loans and the Seventy Five Percent Test must be met on or before the Funding Date of the Term B
Loans but no earlier than ten (10) days prior to the Funding Date of the Term B Loans or on the Funding Date of the Term B Loans,
the aggregate cash reserves of Borrower (held in accounts maintained with the Bank after giving effect to the funding of the Term
B Loans), as determined by the Bank based on evidence reasonably acceptable to the Bank, would exceed One Hundred Twenty Five percent
(125%) of the then outstanding aggregate outstanding principal amount of the Term Loans (including the Term B Loans). Furthermore,
prior to the Funding Date of the Term B Loans, the Bank shall have received an amendment to (or an amendment and restatement) of
the pledge agreement in effect on the Closing Date, and other related documents regarding the pledge to the Bank of a perfected
security interest in the Shares of the German Sub, after giving effect to which amendment (or amendment and restatement) the pledge
agreement shall provide for otherwise substantially the same provisions as currently in effect but shall secure the entire aggregate
amount of all of the Term Loans.


 


3.3               
Procedures for Borrowing. Whenever Borrower desires a Term Loan, Borrower will notify Bank no later than 3:00 p.m.
Pacific time, three (3) Business Days prior to the date the Term Loan is to be made. Each such notification shall be made (i) by
telephone or in-person followed by written confirmation from Borrower within twenty four (24) hours, (ii) by electronic mail
or facsimile transmission, or (iii) by delivering to Bank a Loan Payment/Advance Request Form in substantially the form of Exhibit B-2
hereto. Bank shall be entitled to rely on any notice given by a person who Bank reasonably believes to be a Responsible Officer
or a designee thereof, and Borrower shall indemnify and hold Bank harmless for any damages or loss suffered by Bank as a result
of such reliance. Bank will credit the amount of Term Loan made under this Section 3.3 to Borrower’s deposit account.


 


4.                  
Creation of Security Interest.


 


4.1               
Grant of Security Interest. Borrower grants and pledges to Bank a continuing security interest in all presently existing
and hereafter acquired or arising Collateral in order to secure prompt repayment of any and all Obligations and in order to secure
prompt performance by Borrower of each of its covenants and duties under the Loan Documents. Except as set forth in the Perfection
Certificate, such security interest constitutes a valid, first priority security interest in the presently existing Collateral,
other than Permitted Liens, and will constitute a valid, first priority security interest in Collateral, other than Permitted Liens,
acquired after the date hereof.


 






    	 	13	 



     


    

 


4.2               
Delivery of Additional Documentation Required. Borrower shall from time to time execute and deliver to Bank, at the
request of Bank, all Negotiable Collateral, all financing statements and other documents that Bank may reasonably request, in form
satisfactory to Bank, to perfect and continue the perfection of Bank’s security interests in the Collateral and in order
to fully consummate all of the transactions contemplated under the Loan Documents. Borrower from time to time may deposit with
Bank specific time deposit accounts to secure specific Obligations. Borrower authorizes Bank to hold such balances in pledge and
to decline to honor any drafts thereon or any request by Borrower or any other Person to pay or otherwise transfer any part of
such balances for so long as the Obligations are outstanding.


 


4.3               
Right to Inspect. Bank (through any of its officers, employees, or agents) shall have the right, upon reasonable prior
notice, from time to time during Borrower’s usual business hours but no more than twice a year (unless an Event of Default
has occurred and is continuing), to inspect Borrower’s Books and to make copies thereof and to check, test, and appraise
the Collateral in order to verify Borrower’s financial condition or the amount, condition of, or any other matter relating
to, the Collateral.


 


4.4               
Pledge of Collateral. Borrower hereby pledges, assigns and grants to the Bank a security interest in all the Shares,
together with all proceeds and substitutions thereof, all cash, stock and other moneys and property paid thereon, all rights to
subscribe for securities declared or granted in connection therewith, and all other cash and noncash proceeds of the foregoing,
as security for the performance of the Obligations. On the Closing Date, or, to the extent not certificated as of the Closing Date,
within fifteen (15) days of the certification of any Shares, the certificate or certificates for the Shares will be delivered to
the Bank, accompanied by an instrument of assignment duly executed in blank by Borrower. To the extent required by the terms and
conditions governing the Shares, Borrower shall cause the books of each entity whose Shares are part of the Collateral and any
transfer agent to reflect the pledge of the Shares. Upon the occurrence and during the continuance of an Event of Default hereunder
and continuing only until all of the Obligations outstanding under the Loan Documents have been fully repaid, the Bank may effect
the transfer of any securities included in the Collateral (including but not limited to the Shares) into the name of the Bank and
cause new (as applicable) certificates representing such securities to be issued in the name of Bank or its transferee. Borrower
will execute and deliver such documents, and take or cause to be taken such actions, as the Bank may reasonably request to perfect
or continue the perfection of the Bank’s security interest in the Shares. Unless an Event of Default shall have occurred
and be continuing, Borrower shall be entitled to exercise any voting rights with respect to the Shares and to give consents, waivers
and ratifications in respect thereof, provided that no vote shall be cast or consent, waiver or ratification given or action taken
which would be inconsistent with any of the terms of this Agreement or which would constitute or create any violation of any of
such terms. All such rights to vote and give consents, waivers and ratifications shall terminate upon the occurrence and continuance
of an Event of Default.


 


5.                  
Representations and Warranties.


 


Borrower represents
and warrants as follows:


 


5.1               
Due Organization and Qualification. Borrower and each Subsidiary is a corporation duly existing under the laws of its
jurisdiction of incorporation and qualified and licensed to do business in any state in which the conduct of its business or its
ownership of property requires that it be so qualified.


 


5.2               
Due Authorization; No Conflict. The execution, delivery, and performance of the Loan Documents are within Borrower’s
powers, have been duly authorized, and are not in conflict with nor constitute a breach of any provision contained in Borrower’s
Articles of Incorporation or Bylaws, nor will they constitute an event of default under any material agreement to which Borrower
is a party or by which Borrower is bound. Borrower is not in default under any material agreement to which it is a party or by
which it is bound.


 


5.3               
No Prior Encumbrances. Borrower has good and marketable title to its material property, free and clear of Liens, except
for Permitted Liens.


 


5.4               
Merchantable Inventory. All Inventory is in all material respects of good and marketable quality, free from all material
defects, except for Inventory for which adequate reserves have been made.


 






    	 	14	 



     


    

 


5.5               
Intellectual Property. Borrower is the sole owner of the Intellectual Property, except for non-exclusive licenses granted
by Borrower to its customers in the ordinary course of business. Except for the Purolite Settlement Agreement, each of the Patents
is valid and enforceable, and no part of the Intellectual Property has been judged invalid or unenforceable, in whole or in part,
and no claim has been made that any part of the material Intellectual Property violates the rights of any third party. Except as
set forth in the Perfection Certificate, Borrower is not a party to, or bound by, any agreement that restricts the grant by Borrower
of a security interest in Borrower’s rights under such agreement.


 


5.6               
Name; Location of Chief Executive Office. Except as disclosed in the Perfection Certificate or as disclosed by Borrower
under Section 7.2, Borrower has not done business under any name other than that specified on the signature page hereof. The chief
executive office of Borrower is located at the address indicated in Section 10 hereof or such other address as provided by
Borrower under Section 7.2. All Borrower’s Inventory and Equipment is located only at the location set forth in Section 10
hereof or such other address as provided by Borrower under Section 7.2.


 


5.7               
Litigation. Except as set forth in the Perfection Certificate, there are no actions or proceedings pending by or against
Borrower or any Subsidiary before any court or administrative agency in which an adverse decision could reasonably be expected
to have a Material Adverse Effect.


 


5.8               
No Material Adverse Change in Financial Statements. All consolidated and consolidating financial statements related
to Borrower and any Subsidiary that Bank has received from Borrower fairly present in all material respects Borrower’s financial
condition as of the date thereof and Borrower’s consolidated and consolidating results of operations for the period then
ended. There has not been a material adverse change in the consolidated or the consolidating financial condition of Borrower since
the date of the most recent of such financial statements submitted to Bank.


 


5.9               
Solvency, Payment of Debts. Borrower is solvent and able to pay its debts (including trade debts) as they mature.


 


5.10            
Regulatory Compliance. Borrower and each Subsidiary have met the minimum funding requirements of ERISA with respect
to any employee benefit plans subject to ERISA, and no event has occurred resulting from Borrower’s failure to comply with
ERISA that could reasonably be expected to result in Borrower’s incurring any material liability. Borrower is not an “investment
company” or a company “controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940. Borrower is not engaged principally, or as one of the important activities, in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T and U of the Board of Governors
of the Federal Reserve System). Borrower has complied with all the provisions of the Federal Fair Labor Standards Act. Borrower
has not violated any statutes, laws, ordinances or rules applicable to it, violation of which could reasonably be expected to have
a Material Adverse Effect.


 


None of Borrower, any
of its Subsidiaries, or any of Borrower’s or its Subsidiaries’ Affiliates or any of their respective agents acting
or benefiting in any capacity in connection with the transactions contemplated by this Agreement is (i) in violation of any Anti-Terrorism
Law, (ii) engaging in or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding
or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person. None of Borrower,
any of its Subsidiaries, or to the knowledge of Borrower and any of their Affiliates or agents, acting or benefiting in any capacity
in connection with the transactions contemplated by this Agreement, (x) conducts any business or engages in making or receiving
any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages
in any transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar
executive order or other Anti-Terrorism Law.


 


5.11            
Environmental Condition. Except as disclosed in the Perfection Certificate, none of Borrower’s or any Subsidiary’s
properties or assets have ever been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous
owners or operators, in the disposal of, or to produce, store, handle, treat, release, or transport, any hazardous waste or hazardous
substance other than in accordance with applicable law; to the best of Borrower’s knowledge, none of Borrower’s properties
or assets have ever been designated or identified in any manner pursuant to any environmental protection statute as a hazardous
waste or hazardous substance disposal site, or a candidate for closure pursuant to any environmental protection statute; no lien
arising under any environmental protection statute has attached to any revenues or to any real or personal property owned by Borrower
or any Subsidiary; and neither Borrower nor any Subsidiary has received a summons, citation, notice, or directive from the Environmental
Protection Agency or any other federal, state or other governmental agency concerning any action or omission by Borrower or any
Subsidiary resulting in the releasing, or otherwise disposing of hazardous waste or hazardous substances into the environment.


 






    	 	15	 



     


    

 


5.12            
Taxes. Borrower and each Subsidiary have filed or caused to be filed all material tax returns required to be filed,
and have paid, or have made adequate provision for the payment of, all taxes reflected therein, except to the extent such taxes
are being contested in accordance with the following sentence (for the purposes hereof, any and all taxes in the aggregate amount
of One Hundred Thousand Dollars ($100,000) or more shall be deemed to be material, individually and collectively). Borrower and
each of its Subsidiaries, may defer payment of any contested taxes, provided that Borrower or such Subsidiary, (a) in good
faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies
Bank in writing of the commencement of, and any material development in, the proceedings, and (c) posts bonds or takes any
other steps required to prevent the applicable ggovernmental aauthority levying such contested taxes from obtaining a Lien upon
any of the Collateral that is other than a Permitted Lien.


 


5.13            
Subsidiaries. Borrower does not own any stock, partnership interest or other equity securities of any Person, except
for Permitted Investments and the Shares of its Subsidiaries identified on the Perfection Certificate on the Closing Date.


 


5.14            
Government Consents. Borrower and each Subsidiary have obtained all material consents, approvals and authorizations
of, made all declarations or filings with, and given all notices to, all governmental authorities that are necessary for the continued
operation of Borrower’s business as currently conducted.


 


5.15            
Accounts. Other than as set forth on the Perfection Certificate, none of Borrower’s nor any Subsidiary’s
Collateral Accounts (other than the German Sub’s and Swiss Sub’s Collateral Accounts maintained outside the United
States and otherwise disclosed to Borrower) is maintained or invested with a Person other than Bank.


 


5.16            
Use of Proceeds. Borrower shall use the proceeds of the Term Loan solely as working capital and to fund its general
business requirements in accordance with the provisions of this Agreement, and not for personal, family, household or agricultural
purposes.


 


5.17            
Full Disclosure. No representation, warranty or other statement made by Borrower in any certificate or written statement
furnished to Bank contains any untrue statement of a material fact or omits to state a material fact necessary in order to make
the statements contained in such certificates or statements not misleading in light of the circumstances under which they were
made, it being recognized by Bank that the projections and forecasts have been provided by Borrower in good faith and based upon
reasonable assumptions and are not to be viewed as representations, warranties, statements or facts, and that actual results during
the period or periods covered by any such projections and forecasts may differ from the projected or forecasted results; provided,
however, nothing herein is meant to affect, nor shall it affect, any of Borrower’s obligations and covenants hereunder, including
without limitation the financial covenant set forth in Section 6.13, or any other provisions of this Agreement that may be contingent
upon the achievement of certain financial results by Borrower.


 


5.18            
Shares. Borrower has full power and authority to create a first lien on the Shares and no disability or contractual
obligation exists that would prohibit Borrower from pledging the Shares pursuant to this Agreement. To Borrower’s knowledge,
there are no subscriptions, warrants, rights of first refusal or other restrictions on transfer relative to, or options exercisable
with respect to the Shares. The Shares have been and will be duly authorized and validly issued, and are fully paid and non-assessable.
To Borrower’s knowledge, the Shares are not the subject of any present or threatened suit, action, arbitration, administrative
or other proceeding, and Borrower knows of no reasonable grounds for the institution of any such proceedings.


 






    	 	16	 



     


    

 


6.                  
Affirmative Covenants.


 


Borrower shall do all
of the following:


 


6.1               
Good Standing. Borrower shall maintain its and each of its Subsidiaries’ corporate existence and good standing
in its jurisdiction of incorporation and maintain qualification in each jurisdiction in which it is required under applicable law,
in each case where the loss of which could reasonably be expected to have a Material Adverse Effect. Borrower shall maintain, and
shall cause each of its Subsidiaries to maintain, in force all licenses, approvals and agreements, in each case where the loss
of which could reasonably be expected to have a Material Adverse Effect.


 


6.2               
Government Compliance. Borrower shall meet, and shall cause each Subsidiary to meet, the minimum funding requirements
of ERISA with respect to any employee benefit plans subject to ERISA. Borrower shall comply, and shall cause each Subsidiary to
comply, with all statutes, laws, ordinances and government rules and regulations to which it is subject, noncompliance with which
could reasonably be expected to have a Material Adverse Effect.


 


6.3               
Financial Statements, Reports, Certificates. Borrower shall deliver the following to Bank: (a) as soon as available,
but in any event within thirty (30) days after the end of each calendar month, a company prepared consolidated balance sheet, income
statement and, for each calendar month that is the last month of a fiscal quarter, cash flow statement, covering Borrower’s
consolidated operations during such period (except that the cash flow statement shall cover the entire applicable fiscal quarter),
prepared in accordance with GAAP, consistently applied, in a form acceptable to Bank and certified by a Responsible Officer; (b) as
soon as available, but in any event within ninety (90) days after the end of Borrower’s fiscal year, audited consolidated
financial statements of Borrower prepared in accordance with GAAP, consistently applied, together with an unqualified opinion on
such financial statements of an independent certified public accounting firm reasonably acceptable to Bank; (c) copies of all statements,
reports and notices sent or made available generally by Borrower to its security holders or to any holders of Subordinated Debt
and, if applicable, within five (5) days of such filings, all reports on Forms 10-K and 10-Q filed with the Securities and
Exchange Commission; (d) promptly upon receipt of notice thereof, a report of any legal actions pending or threatened in writing
against Borrower or any Subsidiary that could reasonably be expected to result in damages or costs to Borrower or any Subsidiary
of One Hundred Thousand Dollars ($100,000) or more; (e) as soon as available, but in any event no later than the earlier to
occur of thirty (30) days following the beginning of each fiscal year or the date of approval by Borrower’s board of directors,
an annual operating budget and financial projections (including income statements, balance sheets and cash flow statements) for
such fiscal year, presented in a quarterly format (provided, however, the projected revenues must be set forth for each month of
such fiscal year), approved by Borrower’s board of directors, and in form and substance reasonably acceptable to Bank; and
(f) such budgets, sales projections, operating plans or other financial information as Bank may reasonably request from time
to time.


 


Borrower shall deliver
to Bank with the monthly financial statements a Compliance Certificate signed by a Responsible Officer in substantially the form
of Exhibit C hereto.


 


Bank shall have a right
from time to time hereafter to audit Borrower’s Accounts and appraise Collateral at Borrower’s expense, provided that
such audits will be conducted no more often than every six (6) months unless an Event of Default has occurred and is continuing.


 


6.4               
Inventory; Returns. Borrower shall keep all Inventory in good and marketable condition, free from all material defects,
except for Inventory for which adequate reserves have been made. Returns and allowances, if any, as between Borrower and its account
debtors shall be on the same basis and in accordance with the usual customary practices of Borrower, as they exist at the time
of the execution and delivery of this Agreement. Borrower shall promptly notify Bank of all returns and recoveries and of all disputes
and claims, where the return, recovery, dispute or claim involves more than Two Hundred Fifty Thousand Dollars ($250,000).


 


6.5               
Taxes. Borrower shall make, and shall cause each Subsidiary to make, due and timely payment or deposit of all material
federal, state, and local taxes, assessments, or contributions required of it by law, and will execute and deliver to Bank, on
demand, appropriate certificates attesting to the payment or deposit thereof; and Borrower will make, and will cause each Subsidiary
to make, timely payment or deposit of all material tax payments and withholding taxes required of it by applicable laws, including,
but not limited to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and
will, upon request, furnish Bank with proof satisfactory to Bank indicating that Borrower or a Subsidiary has made such payments
or deposits; provided that Borrower or a Subsidiary need not make any payment if the amount or validity of such payment is contested
in good faith by appropriate proceedings and is reserved against (to the extent required by GAAP) by Borrower.


 






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6.6               
Insurance.


 


(a)               
Borrower, at its expense, shall keep the Collateral insured against loss or damage by fire, theft, explosion, sprinklers,
and all other hazards and risks, and in such amounts, as ordinarily insured against by other owners in similar businesses conducted
in the locations where Borrower’s business is conducted on the date hereof. Borrower shall also maintain insurance relating
to Borrower’s business, ownership and use of the Collateral in amounts and of a type that are customary to businesses similar
to Borrower’s.


 


(b)               
All such policies of insurance shall be in such form, with such companies, and in such amounts as are reasonably satisfactory
to Bank. All such policies of property insurance shall contain a lender’s loss payable endorsement, in a form satisfactory
to Bank, showing Bank as an additional loss payee thereof, and all liability insurance policies shall show the Bank as an additional
insured and all such insurance policies shall specify that the insurer must give at least twenty (20) days’ notice to Bank
before canceling its policy for any reason. Upon Bank’s request, Borrower shall deliver to Bank certified copies of such
policies of insurance and evidence of the payments of all premiums therefor. All proceeds payable under any such policy shall,
at the option of Bank, be payable to Bank to be applied on account of the Obligations to amounts due; provided that, notwithstanding
the foregoing, so long as no Event of Default has occurred and is continuing, Borrower shall be permitted to reinvest up to $500,000
of such proceeds in any fiscal year into its business within 180 days of receipt thereof.


 


6.7               
Accounts. Borrower shall (i) maintain and shall cause each of its Subsidiaries to maintain its primary depository, operating,
and investment accounts with Bank (including, without limitation, all depository, operating, and investment accounts maintained
in the United States) and (ii) endeavor to utilize and shall cause each of its Subsidiaries to endeavor to utilize Bank’s
International Banking Division for any international banking services required by Borrower, including, but not limited to, foreign
currency wires, hedges and swaps. Notwithstanding the foregoing, Borrower may continue to maintain its account with Chase Bank
in an amount not to exceed Fifty Thousand Dollars ($50,000) at any time. Notwithstanding anything herein to the contrary (including
any provision of Section 7.7), for so long as the Collateral Accounts are maintained at Chase Bank (as described in this Section
6.7) are maintained in accordance with the provisions of this Section 6.7, no control agreements shall be required by the Bank
with respect thereto.


 


6.8               
Intellectual Property Rights. Borrower and each of its Subsidiaries shall: (a) use commercially reasonable efforts
to protect, defend and maintain the validity and enforceability of its Intellectual Property that is material to Borrower’s
business; (b) promptly advise Bank in writing of infringement by a third party of its Intellectual Property; (c) on a quarterly
basis, advise Bank of any material changes to the composition of Intellectual Property; and (d) not allow any Intellectual
Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Bank’s prior
written consent.


 


6.9               
Landlord Waivers; Bailee Waivers. In the event that Borrower or any of its Subsidiaries, after the Closing Date, intends
to add any new offices or business locations, including warehouses, or otherwise store any portion of the Collateral with, or deliver
any portion of the Collateral to, a bailee, in each case pursuant to Section 7.2, then Borrower or such Subsidiary will first
notify Bank and, in the event that the Collateral at any new location is valued in excess of Two Hundred Fifty Thousand Dollars
($250,000) in the aggregate or includes any of the books and records of Borrower or any of its Subsidiaries, Borrower shall obtain
from such bailee or landlord, as applicable, a bailee waiver or landlord waiver, as applicable, in form and substance reasonably
satisfactory to Bank within thirty (30) days from the addition of any new offices or business locations, or any such storage with
or delivery to any such bailee, as the case may be; provided, however, no waiver shall be required with respect to a new office,
business location or bailee of a Foreign Subsidiary that is neither a party hereto nor a guarantor of the Obligations.


 






    	 	18	 



     


    

 


6.10            
Creation/Acquisition of Subsidiaries. In the event Borrower, or any of its Subsidiaries creates or acquires any Subsidiary,
Borrower shall provide prior written notice to Bank of the creation or acquisition of such new Subsidiary and take all such action
as may be reasonably required by Bank to cause each such Subsidiary to become a co-Borrower hereunder or to guarantee the Obligations
of Borrower under the Loan Documents and, in each case, grant a continuing pledge and security interest in and to the assets of
such Subsidiary (as described on Exhibit A hereto); and Borrower (or its Subsidiary, as applicable) shall grant and
pledge to Bank a perfected security interest in the all of the Shares of each newly created Subsidiary; provided, however, no Foreign
Subsidiary will be required to become a co-Borrower hereunder or to guarantee the Obligations of Borrower under the Loan Documents
to the extent Borrower demonstrates to the Bank’s reasonable satisfaction that such action creates a present and existing
adverse tax consequence to Borrower under the U.S. Internal Revenue Code. For the purposes of clarification, the German Sub will
not be required become a co-Borrower hereunder or to guarantee the Obligations of Borrower under the Loan Documents.


 


6.11            
Litigation Cooperation. Commencing on the Closing Date and continuing through the termination of this Agreement, make
available to Bank, without expense to Bank, Borrower and each of Borrower’s officers, employees and agents and Borrower’s
Books, to the extent that Bank may reasonably deem them necessary to prosecute or defend any third-party suit or proceeding instituted
by or against Bank with respect to any Collateral or relating to Borrower.


 


6.12            
Further Assurances. At any time and from time to time Borrower shall execute and deliver such further instruments and
take such further action as may reasonably be requested by Bank to effect the purposes of this Agreement.


 


6.13            
Financial Covenant. 


 


(a)               
Following the funding of the Term B Loans hereunder, the Borrower must satisfy the Seventy Five Percent Test each month,
as determined by the Bank on the date of the receipt of the monthly financial statements by the Bank in accordance with Section
6.3 hereof.


 


(b)               
If, after the Funding Date of the Term B Loans, the aggregate cash reserves of Borrower (held in accounts maintained
with the Bank) for any given month, as determined by the Bank based on evidence reasonably acceptable to the Bank, exceed One Hundred
Twenty Five percent (125%) of the then outstanding aggregate outstanding principal amount of the Term Loans, Borrower shall not
be required to comply with the provisions of Section 6.13(a) for such month.


 


6.14            
Shelf Registration Statement/Equity Sales Agreement. Shelf Registration Statement/Equity Sales Agreement.  Borrower
shall file replacement registration statement for its registration statement on Form S-3, as filed with the SEC on July 23, 2015,
(Registration No. 333-205806), in a timely manner such that within 30 days of expiration or earlier termination of Registration
No. 333-205806, the replacement registration statement shall be effective under which the Borrower may issue, at its election,
in one or more offerings, any combination of common stock, preferred stock, senior or subordinated debt securities, warrants, or
units, with a total dollar amount of at least Fifty Million Dollars ($50,000,000.00).   Within thirty days of the expiration
or earlier termination of the Borrower’s Controlled Equity Offering Sales Agreement with Cantor Fitzgerald and Co., as agent
(“Cantor”), Borrower shall enter into a substantially similar agreement with Cantor or another third party pursuant
to which the Borrower may offer to sell, from time to time through such third party, shares of the Borrower’s common stock,
having an aggregate value of at least Ten Million Dollars ($10,000,000.00) as part of the offering described above.


 


7.                  
Negative Covenants.


 


Borrower will not do
any of the following:


 


7.1               
Dispositions. Convey, sell, lease, transfer or otherwise dispose of (collectively, a “Transfer”), or permit
any of its Subsidiaries to Transfer, all or any part of its business or property, other than: (i) Transfers of Inventory in
the ordinary course of business; (ii) Transfers of non-exclusive licenses and similar arrangements for the use of the property
of Borrower or its Subsidiaries in the ordinary course of business; (iii) intercompany Transfers between or among Borrower and
co-Borrower or guarantor of Obligations, in each case located in, formed or incorporated under the laws of, and primarily conducting
its business in the United States; (iv) Transfers of worn-out or obsolete Equipment and (v) making of royalty payments in
accordance with the terms of the Purolite Settlement Agreement and the Guillermina Vega Montiel Agreement.


 






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7.2               
Change in Business; Change in Control or Executive Office. Engage in any business, or permit any of its Subsidiaries
to engage in any business, other than the businesses currently engaged in by Borrower and any business substantially similar or
related thereto (or incidental thereto); or cease to conduct business in the manner conducted by Borrower as of the Closing Date;
or suffer or permit a Change in Control; or without thirty (30) days prior written notification to Bank, relocate its chief executive
office or state of incorporation or change its legal name; or without Bank’s prior written consent, change the date on which
its fiscal year ends. Furthermore, Borrower shall not, without at least thirty (30) days’ prior written notice to Bank add
any new offices or business locations, including warehouses (unless such new offices or business locations contain less than Two
Hundred Fifty Thousand Dollars ($250,000) in assets or property of Borrower or any of its Subsidiaries).


 


7.3               
Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into
any other business organization, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital
stock or property of another Person.


 


7.4               
Indebtedness. Create, incur, assume or be or remain liable with respect to any Indebtedness, or permit any Subsidiary
so to do, other than Permitted Indebtedness.


 


7.5               
Encumbrances. Create, incur, assume or suffer to exist any Lien with respect to any of its property (including without
limitation, its Intellectual Property) or assign or otherwise convey any right to receive income, including the sale of any Accounts,
or permit any of its Subsidiaries to do so, in each case, except for Permitted Liens, or agree with any Person other than Bank
not to grant a security interest in, or otherwise encumber, any of its property (including without limitation, its Intellectual
Property), or permit any Subsidiary to do so.


 


7.6               
Distributions. Pay any dividends or make any other distribution or payment on account of or in redemption, retirement
or purchase of any capital stock, or permit any of its Subsidiaries to do so, except that Borrower may repurchase the stock of
former employees pursuant to stock repurchase agreements as long as an Event of Default does not exist prior to such repurchase
or would not exist after giving effect to such repurchase.


 


7.7               
Investments. Directly or indirectly acquire or own, or make any Investment in or to any Person, or permit any of its
Subsidiaries so to do, other than Permitted Investments; or, maintain any Collateral Accounts with a Person other than Bank or
permit any of its Subsidiaries to do so (other than the Collateral Accounts maintained by the German Sub and the Swiss Sub outside
the United States and otherwise disclosed to the Bank) unless such Person has entered into an account control agreement with Bank
in form and substance satisfactory to Bank; or suffer or permit any Subsidiary to be a party to, or be bound by, an agreement that
restricts such Subsidiary from paying dividends or otherwise distributing property to Borrower.


 


7.8               
Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any
Affiliate of Borrower, except for (i) transactions that are in the ordinary course of Borrower’s business, upon fair and
reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated
Person, (ii) Permitted Investments and Permitted Indebtedness to be made in or to Affiliates and (iii) sales of inventory from
Borrower to German Sub pursuant to standard transfer pricing arrangements and in the ordinary course of business.


 


7.9               
Subordinated Debt. Make any payment in respect of any Subordinated Debt, or permit any of its Subsidiaries to make any
such payment, except in compliance with the terms of such Subordinated Debt, or amend any provision contained in any documentation
relating to the Subordinated Debt without Bank’s prior written consent.


 






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7.10            
Inventory and Equipment. Store any Inventory or Equipment having a book value in excess of Two Hundred Fifty Thousand
Dollars ($250,000) with a bailee, warehouseman, or other third party unless the third party has been notified of Bank’s security
interest and Bank (a) has received an acknowledgment from the third party that it is holding or will hold the Inventory or Equipment
for Bank’s benefit or (b) is in pledge possession of the warehouse receipt, where negotiable, covering such Inventory or
Equipment. Store or maintain any Equipment or Inventory at a location other than the location set forth in Section 10 of this Agreement
or as disclosed under Section 7.2 hereof; provided, however, Borrower must at all times be in compliance with Section 6.9 hereof.


 


7.11            
Compliance. Become an “investment company” or be controlled by an “investment company,” within
the meaning of the Investment Company Act of 1940, or become principally engaged in, or undertake as one of its important activities,
the business of extending credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Credit Extension
for such purpose. Fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction,
as defined in ERISA, to occur, fail to comply with the Federal Fair Labor Standards Act or violate any law or regulation, which
violation could reasonably be expected to have a Material Adverse Effect, or permit any of its Subsidiaries to do any of the foregoing.


 


7.12            
Compliance with Anti-Terrorism Laws. Bank hereby notifies Borrower and each of its Subsidiaries that pursuant to the
requirements of Anti-Terrorism Laws, and Bank’s policies and practices, Bank is required to obtain, verify and record certain
information and documentation that identifies Borrower and each of its Subsidiaries and their principals, which information includes
the name and address of Borrower and each of its Subsidiaries and their principals and such other information that will allow Bank
to identify such party in accordance with Anti-Terrorism Laws. Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower
or any of its Subsidiaries permit any Affiliate to, directly or indirectly, knowingly enter into any documents, instruments, agreements
or contracts with any Person listed on the OFAC Lists. Borrower and each of its Subsidiaries shall immediately notify Bank if Borrower
or such Subsidiary has knowledge that Borrower, or any Subsidiary or Affiliate of Borrower, is listed on the OFAC Lists or (a) is
convicted on, (b) pleads nolo contendere to, (c) is indicted on, or (d) is arraigned and held over on charges
involving money laundering or predicate crimes to money laundering. Neither Borrower nor any of its Subsidiaries shall, nor shall
Borrower or any of its Subsidiaries, permit any Affiliate to, directly or indirectly, (i) conduct any business or engage in
any transaction or dealing with any Blocked Person, including, without limitation, the making or receiving of any contribution
of funds, goods or services to or for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to Executive Order No. 13224 or any similar executive order
or other Anti-Terrorism Law, or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224 or other
Anti-Terrorism Law.


 


7.13            
Cash and Cash Equivalent Assets of German Sub and Swiss Sub. 


 


(a)               
The total cash and cash equivalent assets of the German Sub may not exceed Five Hundred Thousand Dollars ($500,000)
at any given time and any cash and cash equivalent assets in excess of such amount must be caused to be distributed to the Borrower.


 


(b)               
The total assets of the Swiss Sub may not exceed Two Hundred Thousand Dollars ($200,000) in value at any given time
and any assets in excess of such amount must be caused to be distributed to the German Sub within 90 days, where such assets shall
be subject to the provisions of Section 7.13(a).


 


8.                  
Events of Default.


 


Any one or more of
the following events shall constitute an “Event of Default” by Borrower under this Agreement:


 


8.1               
Payment Default. If Borrower fails to pay, when due, any of the Obligations.


 


8.2               
Covenant Default.


 






    	 	21	 



     


    

 


(a)               
If Borrower fails to perform any obligation under Sections 6.3 (Financial Statements, Reports, Certificates),
6.5 (Taxes), 6.6 (Insurance), 6.7 (Accounts), 6.10 (Creation/Acquisition of Subsidiaries), 6.11 (Litigation
Cooperation) or 6.13 (Financial Covenant), or violates any of the covenants contained in Article 7 of this Agreement;
or


 


(b)               
If Borrower fails or neglects to perform or observe any other material term, provision, condition, covenant contained
in this Agreement, in any of the Loan Documents, or in any other present or future agreement between Borrower and Bank and as to
any default under such other term, provision, condition or covenant that can be cured, has failed to cure such default within fifteen
(15) days after Borrower receives notice thereof or any officer of Borrower becomes aware thereof; provided, however, that if the
default cannot by its nature be cured within the fifteen (15) day period or cannot after diligent attempts by Borrower be cured
within such fifteen (15) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have
an additional reasonable period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within
such reasonable time period the failure to have cured such default shall not be deemed an Event of Default but no Credit Extensions
will be made.


 


8.3               
Material Adverse Effect. If there occurs a Material Adverse Effect or there occurs any circumstance or circumstances
that could reasonably be expected to have a Material Adverse Effect.


 


8.4               
Attachment. If any portion of Borrower’s assets is attached, seized, subjected to a writ or distress warrant,
or is levied upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such attachment,
seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within fifteen (15) days, or if Borrower
is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business
affairs, or if a judgment or other claim becomes a lien or encumbrance upon any material portion of Borrower’s assets, or
if a notice of lien, levy, or assessment is filed of record with respect to any of Borrower’s assets by the United States
Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency,
and the same is not paid within fifteen (15) days after Borrower receives notice thereof, provided that none of the foregoing shall
constitute an Event of Default where such action or event is stayed or an adequate bond has been posted pending a good faith contest
by Borrower (provided that no Credit Extensions will be required to be made during such cure period).


 


8.5               
Insolvency. If Borrower becomes insolvent, or if an Insolvency Proceeding is commenced by Borrower, or if an Insolvency
Proceeding is commenced against Borrower and is not dismissed or stayed within thirty (30) days (provided that no Credit Extensions
will be made prior to the dismissal of such Insolvency Proceeding).


 


8.6               
Other Agreements. If there is a default or other failure to perform in any agreement to which Borrower is a party or
by which it is bound resulting in a right by a third party or parties, whether or not exercised, to accelerate the maturity of
any Indebtedness in an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000) or which could reasonably be expected
to have a Material Adverse Effect.


 


8.7               
Judgments. If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at
least Two Hundred Fifty Thousand Dollars ($250,000) shall be rendered against Borrower and shall remain unsatisfied and unstayed
for a period of fifteen (15) days (provided that no Credit Extensions will be made prior to the satisfaction or stay of such judgment).


 


8.8               
Misrepresentations. If any material misrepresentation or material misstatement exists now or hereafter in any warranty
or representation set forth herein or in any certificate delivered to Bank by any Responsible Officer pursuant to this Agreement
or to induce Bank to enter into this Agreement or any other Loan Document.


 


8.9               
Subordinated Debt. A default or breach occurs under any agreement between Borrower or any of its Subsidiaries and any
creditor of Borrower or any of its Subsidiaries that signed a subordination, intercreditor, or other similar agreement with Bank,
or any creditor that has signed such an agreement with Bank breaches any terms of such agreement.


 






    	 	22	 



     


    

 


8.10            
Governmental Approvals. 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 shall have
been revoked, rescinded, suspended, modified in an adverse manner, or not renewed in the ordinary course for a full term and such
revocation, rescission, suspension, modification or non-renewal has resulted in or could reasonably be expected to result in a
Material Adverse Effect.


 


9.                  
Bank’s Rights and Remedies.


 


9.1               
Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Bank may, at its election,
without notice of its election and without demand (except as required by law), do any one or more of the following, all of which
are authorized by Borrower:


 


(a)               
Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately
due and payable (provided that upon the occurrence of an Event of Default described in Section 8.5, all Obligations shall
become immediately due and payable without any action by Bank);


 


(b)               
Cease advancing money or extending credit to or for the benefit of Borrower under this Agreement or under any other
agreement between Borrower and Bank;


 


(c)                
Settle or adjust disputes and claims directly with account debtors for amounts, upon terms and in whatever order that
Bank reasonably considers advisable;


 


(d)               
Make such payments and do such acts as Bank considers necessary or reasonable to protect its security interest in the
Collateral. Borrower agrees to assemble the Collateral if Bank so requires, and to make the Collateral available to Bank as Bank
may designate. Borrower authorizes Bank to enter the premises where the Collateral is located, to take and maintain possession
of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Bank’s
determination appears to be prior or superior to its security interest and to pay all expenses incurred in connection therewith.
With respect to any of Borrower’s owned premises, Borrower hereby grants Bank a license to enter into possession of such
premises and to occupy the same, without charge, in order to exercise any of Bank’s rights or remedies provided herein, at
law, in equity, or otherwise;


 


(e)                
Set off and apply to the Obligations when due (after taking into account the occurrence of such Event of Default) any
and all (i) balances and deposits of Borrower held by Bank, or (ii) indebtedness at any time owing to or for the credit
or the account of Borrower held by Bank;


 


(f)                 
Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner
provided for herein) the Collateral. Bank is hereby granted a license or other right, solely pursuant to the provisions of this
Section 9.1, to use, without charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets,
trade names, trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to the Collateral,
in completing production of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of
its rights under this Section 9.1, Borrower’s rights under all licenses and all franchise agreements shall inure to
Bank’s benefit;


 


(g)               
Dispose of the Collateral by way of one or more contracts or transactions, for cash or on terms, in such manner and
at such places (including Borrower’s premises) as Bank determines is commercially reasonable, and apply any proceeds to the
Obligations in whatever manner or order Bank deems appropriate;


 


(h)               
Bank may credit bid and purchase at any public sale; and


 


(i)                 
Any deficiency that exists after disposition of the Collateral as provided above will be paid immediately by Borrower.


 






    	 	23	 



     


    

 


9.2               
Power of Attorney. Effective only upon the occurrence and during the continuance of an Event of Default, Borrower hereby
irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as Borrower’s true and lawful attorney
to: (a) send requests for verification of Accounts or notify account debtors of Bank’s security interest in the Accounts;
(b) endorse Borrower’s name on any checks or other forms of payment or security that may come into Bank’s possession;
(c) sign Borrower’s name on any invoice or bill of lading relating to any Account, drafts against account debtors, schedules
and assignments of Accounts, verifications of Accounts, and notices to account debtors; (d) dispose of any Collateral; (e) make,
settle, and adjust all claims under and decisions with respect to Borrower’s policies of insurance; (f) settle and adjust
disputes and claims respecting the accounts directly with account debtors, for amounts and upon terms which Bank determines to
be reasonable; and (g) to file, in its sole discretion, one or more financing or continuation statements and amendments thereto,
relative to any of the Collateral. The appointment of Bank as Borrower’s attorney in fact, and each and every one of Bank’s
rights and powers, being coupled with an interest, is irrevocable until all of the Obligations outstanding under the Loan Documents
have been fully repaid and performed and Bank’s obligation to provide Credit Extensions hereunder is terminated.


 


9.3               
Accounts Collection. At any time after the occurrence of an Event of Default unless cured to the satisfaction of (or
waived by) Bank, Bank may notify any Person owing funds to Borrower of Bank’s security interest in such funds and verify
the amount of such Account. Borrower shall collect all amounts owing to Borrower for Bank, receive in trust all payments as Bank’s
trustee, and immediately deliver such payments to Bank in their original form as received from the account debtor, with proper
endorsements for deposit.


 


9.4               
Bank Expenses. If Borrower fails to pay any amounts or furnish any required proof of payment due to third persons or
entities, as required under the terms of this Agreement, then Bank may do any or all of the following after reasonable notice to
Borrower: (a) make payment of the same or any part thereof; (b) set up such reserves under a loan facility in Section
2.1 as Bank deems necessary to protect Bank from the exposure created by such failure; or (c) obtain and maintain insurance
policies of the type discussed in Section 6.6 of this Agreement, and take any action with respect to such policies as Bank
deems prudent. Any amounts so paid or deposited by Bank shall constitute Bank Expenses, shall be immediately due and payable, and
shall bear interest at the then applicable rate hereinabove provided, and shall be secured by the Collateral. Any payments made
by Bank shall not constitute an agreement by Bank to make similar payments in the future or a waiver by Bank of any Event of Default
under this Agreement.


 


9.5               
Bank’s Liability for Collateral. So long as Bank complies with reasonable banking practices, Bank shall not in
any way or manner be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage thereto
occurring or arising in any manner or fashion from any cause; (c) any diminution in the value thereof; or (d) any act
or default of any carrier, warehouseman, bailee, forwarding agency, or other person whomsoever. All risk of loss, damage or destruction
of the Collateral shall be borne by Borrower.


 


9.6               
Remedies Cumulative. Bank’s rights and remedies under this Agreement, the Loan Documents, and all other agreements
shall be cumulative. Bank shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law,
or in equity. No exercise by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any Event of Default
on Borrower’s part shall be deemed a continuing waiver. No delay by Bank shall constitute a waiver, election, or acquiescence
by it. No waiver by Bank shall be effective unless made in a written document signed on behalf of Bank and then shall be effective
only in the specific instance and for the specific purpose for which it was given.


 


9.7               
Demand; Protest. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment
and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts,
documents, instruments, chattel paper, and guarantees at any time held by Bank on which Borrower may in any way be liable.


 


10.               
Notices.


 


All notices, consents,
requests, approvals, demands, or other communication by any party to this Agreement or any other Loan Document must be in writing
and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business
Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid;
(b) upon transmission, when sent by electronic mail or facsimile transmission; (c) one (1) Business Day after deposit with a reputable
overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed
to the party to be notified and sent to the address, facsimile number, or email address indicated below. Bank or Borrower may change
its mailing or electronic mail address or facsimile number by giving the other party written notice thereof in accordance with
the terms of this Section 10.


 






    	 	24	 



     


    

 








	 	If to Borrower:	CYTOSORBENTS CORPORATION


7 Deer Park Drive


Suite K


Monmouth Junction, NJ 08852


Attn: Kathleen P. Bloch, Chief Financial Officer


FAX: (732) 329-8650

EMAIL: kbloch@cytosorbents.com


	 	 	 
	 	If to Bank:	Bridge Bank, a division of Western
Alliance Bank


12220 El Camino Real, Suite 100


San Diego, CA 92130


Attn: Bill Wickline


EMAIL: bill.wickline@bridgebank.com





 


The parties hereto
may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the
other.


 


11.               
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.


 


This Agreement shall
be governed by, and construed in accordance with, the internal laws of the State of California, without regard to principles of
conflicts of law. Each of Borrower and Bank hereby submits to the exclusive jurisdiction of the state and Federal courts located
in the County of Santa Clara, State of California. BORROWER AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY
RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY
REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.


 


12.               
JUDICIAL REFERENCE PROVISION.


 


12.1            
In the event the Jury Trial Waiver set forth above is not enforceable, the parties elect to proceed under this Judicial
Reference Provision.


 


12.2            
With the exception of the items specified in Section 12.3, below, any controversy, dispute or claim (each, a “Claim”)
between the parties arising out of or relating to this Agreement or any other document, instrument or agreement between the undersigned
parties (collectively in this Section, the “Loan Documents”), will be resolved by a reference proceeding
in California in accordance with the provisions of Sections 638 et seq. of the California Code of Civil Procedure (“CCP”),
or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether the
Claim is subject to the reference proceeding. Except as otherwise provided in the Loan Documents, venue for the reference proceeding
will be in the state or federal court in the county or district where the real property involved in the action, if any, is located
or in the state or federal court in the county or district where venue is otherwise appropriate under applicable law (the “Court”).


 






    	 	25	 



     


    

 


12.3            
The matters that shall not be subject to a reference are the following: (i) nonjudicial foreclosure of any security
interests in real or personal property, (ii) exercise of self-help remedies (including, without limitation, set-off), (iii) appointment
of a receiver and (iv) temporary, provisional or ancillary remedies (including, without limitation, writs of attachment, writs
of possession, temporary restraining orders or preliminary injunctions). This reference provision does not limit the right of any
party to exercise or oppose any of the rights and remedies described in clauses (i) and (ii) or to seek or oppose from a court
of competent jurisdiction any of the items described in clauses (iii) and (iv). The exercise of, or opposition to, any of those
items does not waive the right of any party to a reference pursuant to this reference provision as provided herein.


 


12.4            
The referee shall be a retired judge or justice selected by mutual written agreement of the parties. If the parties
do not agree within ten (10) days of a written request to do so by any party, then, upon request of any party, the referee shall
be selected by the Presiding Judge of the Court (or his or her representative). A request for appointment of a referee may be heard
on an ex parte or expedited basis, and the parties agree that irreparable harm would result if ex parte relief is not granted.
Pursuant to CCP § 170.6, each party shall have one peremptory challenge to the referee selected by the Presiding Judge of
the Court (or his or her representative).


 


12.5            
The parties agree that time is of the essence in conducting the reference proceedings. Accordingly, the referee shall
be requested, subject to change in the time periods specified herein for good cause shown, to (i) set the matter for a status and
trial-setting conference within fifteen (15) days after the date of selection of the referee, (ii) if practicable, try all issues
of law or fact within one hundred twenty (120) days after the date of the conference and (iii) report a statement of decision within
twenty (20) days after the matter has been submitted for decision.


 


12.6            
The referee will have power to expand or limit the amount and duration of discovery. The referee may set or extend discovery
deadlines or cutoffs for good cause, including a party’s failure to provide requested discovery for any reason whatsoever.
Unless otherwise ordered based upon good cause shown, no party shall be entitled to “priority” in conducting discovery,
depositions may be taken by either party upon seven (7) days written notice, and all other discovery shall be responded to within
fifteen (15) days after service. All disputes relating to discovery which cannot be resolved by the parties shall be submitted
to the referee whose decision shall be final and binding.


 


12.7            
Except as expressly set forth herein, the referee shall determine the manner in which the reference proceeding is conducted
including the time and place of hearings, the order of presentation of evidence, and all other questions that arise with respect
to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be
conducted without a court reporter, except that when any party so requests, a court reporter will be used at any hearing conducted
before the referee, and the referee will be provided a courtesy copy of the transcript. The party making such a request shall have
the obligation to arrange for and pay the court reporter. Subject to the referee’s power to award costs to the prevailing
party, the parties will equally share the cost of the referee and the court reporter at trial.


 


12.8            
The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of
the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to
the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, enter equitable orders that
will be binding on the parties and rule on any motion which would be authorized in a court proceeding, including without limitation
motions for summary judgment or summary adjudication. The referee shall issue a decision at the close of the reference proceeding
which disposes of all claims of the parties that are the subject of the reference. Pursuant to CCP § 644, such decision shall
be entered by the Court as a judgment or an order in the same manner as if the action had been tried by the Court and any such
decision will be final, binding and conclusive. The parties reserve the right to appeal from the final judgment or order or from
any appealable decision or order entered by the referee. The parties reserve the right to findings of fact, conclusions of laws,
a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is
also to be a reference proceeding under this provision.


 


12.9            
If the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted),
any dispute between the parties that would otherwise be determined by reference procedure will be resolved and determined by arbitration.
The arbitration will be conducted by a retired judge or justice, in accordance with the California Arbitration Act §1280 through
§1294.2 of the CCP as amended from time to time. The limitations with respect to discovery set forth above shall apply to
any such arbitration proceeding.


 






    	 	26	 



     


    

 


12.10        
THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION
WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS,
HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE
PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS.


 


13.               
General Provisions.


 


13.1            
Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted
assigns of each of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by Borrower
without Bank’s prior written consent, which consent may be granted or withheld in Bank’s sole discretion. Bank shall
have the right without the consent of or notice to Borrower to sell, transfer, negotiate, or grant participation in all or any
part of, or any interest in, Bank’s obligations, rights and benefits hereunder; provided, however, so long as no Event of
Default has occurred and is continuing, Bank may not transfer its obligations, rights or benefits hereunder (other than in connection
with (x) assignments by Bank due to a forced divestiture at the request of any regulatory agency; or (y) upon the occurrence of
a default, event of default or similar occurrence with respect to a Bank’s own financing or securitization transactions),
without Borrower’s consent, to any Person which is an Affiliate or Subsidiary of Borrower, a direct competitor of Borrower
or a vulture hedge fund, each as determined by the Bank in its reasonable discretion.


 


13.2            
Indemnification. Borrower shall defend, indemnify and hold harmless Bank and its officers, employees, and agents against:
(a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions
contemplated by this Agreement; and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by Bank as a result
of or in any way arising out of, following, or consequential to transactions between Bank and Borrower whether under this Agreement,
or otherwise (including without limitation reasonable attorneys’ fees and expenses), except for losses caused by Bank’s
gross negligence or willful misconduct.


 


13.3            
Time of Essence. Time is of the essence for the performance of all obligations set forth in this Agreement.


 


13.4            
Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement
for the purpose of determining the legal enforceability of any specific provision.


 


13.5            
Amendments in Writing, Integration. Neither this Agreement nor the Loan Documents can be amended or terminated orally.
All prior agreements, understandings, representations, warranties, and negotiations between the parties hereto with respect to
the subject matter of this Agreement and the Loan Documents, if any, are merged into this Agreement and the Loan Documents.


 


13.6            
Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute
but one and the same Agreement.


 


13.7            
Survival. All covenants, representations and warranties made in this Agreement shall continue in full force and effect so
long as any Obligations under the Loan Documents remain outstanding or Bank has any obligation to make Credit Extensions to Borrower.
The obligations of Borrower to indemnify Bank with respect to the expenses, damages, losses, costs and liabilities described in
Section 13.2 shall survive until all applicable statute of limitations periods with respect to actions that may be brought
against Bank have run. Furthermore, as set forth above, termination hereof shall not in any way affect the respective rights and
obligations of Borrower and Bank under the Success Fee Letter.


 






    	 	27	 



     


    

 


13.8            
Confidentiality. In handling any confidential information Bank and all employees and agents of Bank, including but not
limited to accountants, shall exercise the same degree of care that it exercises with respect to its own proprietary information
of the same types to maintain the confidentiality of any non-public information thereby received or received pursuant to this Agreement
except that disclosure of such information may be made (i) to the subsidiaries or affiliates of Bank in connection with their
present or prospective business relations with Borrower, (ii) to prospective transferees or purchasers of any interest in
the Loans, (iii) as required by law, regulations, rule or order, subpoena, judicial order or similar order, (iv) as may
be required in connection with the examination, audit or similar investigation of Bank and (v) as Bank may determine in connection
with the enforcement of any remedies hereunder. Confidential information hereunder shall not include information that either: (a) is
in the public domain or in the knowledge or possession of Bank when disclosed to Bank, or becomes part of the public domain after
disclosure to Bank through no fault of Bank; or (b) is disclosed to Bank by a third party, provided Bank does not have actual
knowledge that such third party is prohibited from disclosing such information.


 


13.9            
Patriot Act Notice.  Bank notifies Borrower that, pursuant to the requirements of the USA Patriot Act, Title III
of Pub. L. 107-56 (signed into law on October 26, 2001) (the “ Patriot Act “), it is required to obtain, verify and
record information that identifies Borrower, which information includes names and addresses and other information that will allow
Bank to identify the Borrower in accordance with the Patriot Act.


 


13.10        
Short Selling Transactions. Until the later of (i) repayment of all Term Loans hereunder by Borrower and (ii) termination
of the Success Fee Letter, the Bank shall not itself engage in, or direct any third party to engage in on the Bank’s behalf,
any transaction whereby the Bank may benefit from a decline in the Borrower’s stock price.


 


13.11        
Borrower Liability. Either Borrower may, acting singly, request Credit Extensions hereunder. Each Borrower hereby appoints
the other as agent for the other for all purposes hereunder, including with respect to requesting Credit Extensions hereunder.
Each Borrower hereunder shall be jointly and severally obligated to repay all Credit Extensions made hereunder, regardless of which
Borrower actually receives said Credit Extension, as if each Borrower hereunder directly received all Credit Extensions. Each Borrower
waives (a) any suretyship defenses available to it under the Code or any other applicable law, including, without limitation,
the benefit of California Civil Code Section 2815 permitting revocation as to future transactions and the benefit of California
Civil Code Sections 1432, 2809, 2810, 2819, 2839, 2845, 2847, 2848, 2849, 2850, and 2899 and 3433, and (b) any right to require
Bank to: (i) proceed against any Borrower or any other person; (ii) proceed against or exhaust any security; or (iii) pursue
any other remedy. Bank may exercise or not exercise any right or remedy it has against any Borrower or any security it holds (including
the right to foreclose by judicial or non-judicial sale) without affecting any Borrower’s liability. Notwithstanding any
other provision of this Agreement or other related document, each Borrower irrevocably waives all rights that it may have at law
or in equity (including, without limitation, any law subrogating Borrower to the rights of Bank under this Agreement) to seek contribution,
indemnification or any other form of reimbursement from any other Borrower, or any other Person now or hereafter primarily or secondarily
liable for any of the Obligations, for any payment made by Borrower with respect to the Obligations in connection with this Agreement
or otherwise and all rights that it might have to benefit from, or to participate in, any security for the Obligations as a result
of any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise. Any agreement providing
for indemnification, reimbursement or any other arrangement prohibited under this Section shall be null and void. If any payment
is made to a Borrower in contravention of this Section, such Borrower shall hold such payment in trust for Bank and such payment
shall be promptly delivered to Bank for application to the Obligations, whether matured or unmatured.


 


13.12        
Effect of Amendment and Restatement. Except as otherwise set forth herein, this Agreement is intended to and does completely
amend and restate, without novation, the Old Agreement. All security interests granted under the Old Agreement are hereby confirmed
and ratified and shall continue to secure all Obligations under this Agreement. Notwithstanding anything herein to the contrary,
the Success Fee Letter (as defined in the Old Agreement) issued pursuant to the Old Agreement shall continue to be in full force
and effect notwithstanding the amendment and restated hereby of the Old Agreement and shall represent separate Obligations of Borrower
from the Obligations represented by the Success Fee Letter issued hereunder.


 


14.               
NOTICE OF FINAL AGREEMENT.


 


BY
SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN
THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT MAY NOT BE CONTRADICTED
BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.


 


[Balance of Page Intentionally
Left Blank]


 




    	 	28	 



     


    

 


IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed as of the date first above written.


 





	 	CytoSorbents Corporation, a Delaware corporation
	 	 	 
	 	By:	/s/ Kathleen P. Bloch
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	CytoSorbents Medical,
        Inc., a Delaware corporation
	 	 	 
	 	By:	/s/ Kathleen P. Bloch
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	Western Alliance Bank,
        an Arizona corporation
	 	 	 
	 	By:	/s/ Lindsay Fouty
	 	 	 
	 	Title:	Vice President, Portfolio Management



 




     

     


    

 


EXHIBIT A


 


		DEBTOR:	CYTOSORBENTS CORPORATION, a Delaware corporation



 


CYTOSORBENTS MEDICAL,
INC., a Delaware corporation


 


		SECURED	PARTY:WESTERN ALLIANCE BANK, an Arizona corporation



 


COLLATERAL
DESCRIPTION ATTACHMENT

TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


 


All personal property
of Borrower (herein referred to as “Borrower” or “Debtor”) whether presently existing or hereafter created
or acquired, and wherever located, including, but not limited to:


 


(a)        all
accounts (including health-care-insurance receivables), chattel paper (including tangible and electronic chattel paper), deposit
accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto), general intangibles
(including payment intangibles and software), goods (including fixtures), instruments (including promissory notes), inventory (including
all goods held for sale or lease or to be furnished under a contract of service, and including returns and repossessions), investment
property (including securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books and
records with respect to any of the foregoing, and the computers and equipment containing said books and records;


 


(b)        any
and all cash proceeds and/or noncash proceeds of any of the foregoing, including, without limitation, insurance proceeds, and all
supporting obligations and the security therefor or for any right to payment. All terms above have the meanings given to them in
the California Uniform Commercial Code, as amended or supplemented from time to time.


 


Notwithstanding the
foregoing, the Collateral does not include (i) any Intellectual Property; provided, however, the Collateral shall include all Accounts
and all proceeds of Intellectual Property. If a judicial authority (including a U.S. Bankruptcy Court) would hold that a security
interest in the underlying Intellectual Property is necessary to have a security interest in such Accounts and such property that
are proceeds of Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include
the Intellectual Property to the extent necessary to permit perfection of Bank’s security interest in such Accounts and such
other property of Borrower that are proceeds of the Intellectual Property; and (ii) more than 65% of the total combined voting
power of all classes of stock entitled to vote the shares of capital stock (the “Shares”) of any Foreign Subsidiary,
if Borrower demonstrates to Bank’s reasonable satisfaction that a pledge of more than sixty five percent (65%) of the Shares
of such Subsidiary creates a present and existing adverse tax consequence to Borrower under the U.S. Internal Revenue Code; and
(iii) any license or contract, in each case if the granting of a Lien in such license or contract is prohibited by or would constitute
a default under the agreement governing such license or contract (but (A) only to the extent such prohibition is enforceable under
applicable law and (B) other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-408
or 9-409 (or any other Section) of Division 9 of the Code); provided that upon the termination, lapsing or expiration of any such
prohibition, such license or contract, as applicable, shall automatically be subject to the security interest granted in favor
of Bank hereunder and become part of the “Collateral.”


 


Pursuant to the terms
of a certain negative pledge arrangement with the Bank, Borrower has agreed not to encumber any of its Intellectual Property.


 




     

     


    

 


Exhibit
B-1


 


DISBURSEMENT
LETTER



__, 201[_]


 


The undersigned,
being the duly elected and acting                                    of CYTOSORBENTS CORPORATION, a Delaware corporation as a Borrower (as
defined in the Loan Agreement), on behalf of itself and all Borrowers, does hereby certify to WESTERN ALLIANCE BANK,
an Arizona corporation (“Bank”), in connection with that certain Amended and Restated Loan and Security
Agreement dated as of March __, 2018, by and among Borrower and Bank (the “Loan Agreement”; with other
capitalized terms used herein having the meanings ascribed thereto in the Loan Agreement) that:


 


1.       The
representations and warranties made by Borrower in Section 5 of the Loan Agreement and in the other Loan Documents are true
and correct in all material respects as of the date hereof.


 


2.       No
event or condition has occurred that would constitute an Event of Default under the Loan Agreement or any other Loan Document.


 


3.       Borrower
is in compliance with the covenants and requirements contained in Sections 5, 6 and 7 of the Loan Agreement.


 


4.       All
conditions referred to in Section 3 of the Loan Agreement to the making of the Loan to be made on or about the date hereof
have been satisfied or waived by Bank.


 


5.       No
Material Adverse Effect has occurred.


 


6.       The
undersigned is a Responsible Officer.


  


[Balance of Page
Intentionally Left Blank]


 




     

     


    

 


7.       The
proceeds of the Term Loan shall be disbursed as follows:


 


	Disbursement from Bank:	 
	Loan Amount	$[___]
	Plus:	 
	--Deposit Received	$[___]
	 	 
	Less:	 
	--Loan Fee	($[_______])
	--Interim Interest	($_________)
	--Bank’s Legal Fees	($_________)*
	 	 
	TOTAL TERM LOAN NET PROCEEDS	$_______________ 


 


8.       The
aggregate net proceeds of the Term Loans shall be transferred to the Designated Deposit Account as follows:


 


	Account Name:	CYTOSORBENTS CORPORATION.
	 	 
	Bank Name:	[                             ]
	 	 
	Bank Address:	[                             ]
	 	 
	Account Number:	____________________________________
	 	 
	ABA Number:	[                             ]





 


[Balance
of Page Intentionally Left Blank]


 


* Legal fees and costs are
through the Closing Date. Post-closing legal fees and costs, payable after the Closing Date, to be invoiced and paid post-closing.


 




     

     


    

 


Dated as of the date
first set forth above.


 


	BORROWER:	 
	 	 	 
	CYTOSORBENTS CORPORATION,


a Delaware corporation


	 
	 	 	 
	By	 	 
	Name:	 	 
	Title:	
         
	 
	 	 	 
	CYTOSORBENTS
MEDICAL, INC., a Delaware corporation 


	 
	 	 
	By:	 	 
	 	 	 
	Title:	 	 
	 	 	 
	BANK:	 	 
	 	 	 
	WESTERN ALLIANCE BANK,


an Arizona corporation


	 
	 	 	 
	By	 	 
	Name:	 	 
	Title:	 	 



 





[Signature Page to Disbursement Letter]


 






     

     


    

 


EXHIBIT B-2


 


Loan Payment/Advance
Request Form


 


To be submitted no later than 3:00 PM
to be considered for same day processing)


 


	To:	Western Alliance Bank, an Arizona corporation


 


	Fax:	[(408) 282-1681]


 


	Date:	 


 


	From:	 


Borrower's Name


 


	 	 


Authorized Signature


 


	 	 


Authorized Signer's Name (please print)


 


	 	 


Phone Number


 


	To Account #	 


 


Borrower hereby requests funding in the
amount of $ _______ in accordance with the Term Loan as defined in the Amended and Restated Loan and Security Agreement dated _______________,
2018.


 


Borrower hereby authorizes the Bank to
rely on facsimile stamp signatures and treat them as authorized by Borrower for the purpose of requesting the above advance.


 


All representations and warranties of Borrower
stated in the Amended and Restated Loan and Security Agreement are true, correct and complete in all material respects as of the
date of this request; provided that those representations and warranties expressly referring to another date shall be true,
correct and complete in all material respects as of such date.


 


Capitalized terms used
herein and not otherwise defined have the meanings set forth in the Amended and Restated Loan and Security Agreement.


 




     

     


    

 


Exhibit
C


 


Compliance
Certificate


 


		TO:	WESTERN ALLIANCE BANK, an Arizona corporation



 


		FROM:	 	 



 


The undersigned authorized
officer of CYTOSORBENTS CORPORATION hereby certifies, on behalf of itself and CYTOSORBENTS MEDICAL INC., that in accordance with
the terms and conditions of the Amended and Restated Loan and Security Agreement between Borrower and Bank (the “Agreement”),
(i) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below
and (ii) all representations and warranties of Borrower stated in the Agreement are true and correct in all material respects as
of the date hereof (except for representations and warranties that relate to a specific date, which shall be true and correct in
all material respects as of such date). Attached herewith are the required documents supporting the above certification. The Officer
further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently
applied from one period to the next except as explained in an accompanying letter or footnotes.


 


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


 


	Reporting Covenant	Required	Complies
	 	 	 	 
	Annual financial statements (CPA Audited)	FYE within 90 days	Yes	No
	 	 	 	 
	Monthly financial statements and Compliance Certificate	Prior to each Credit Extension, and monthly within 30 days	Yes	No
	 	 	 	 
	10K and 10Q	Within 5 days of filing	Yes	No
	 	 	 	 
	Annual operating budget, sales projections and operating plans approved by board of directors	Annually no later than 30 days after the beginning of each fiscal year	Yes	No
	 	 	 	 
	Intellectual Property Report	Quarterly no later than 30 days after the end of each fiscal quarter	Yes	No
	 	 	 	 
	 	 	 	 
	Deposit balances with Bank	$ ___________________	 	 
	Deposit balance outside Bank	$ ___________________	 	 
	 	 	 	 
	Comments Regarding Exceptions: See Attached.	BANK USE ONLY
	 	 
	 	Received by: _________________________
	Sincerely,	AUTHORIZED SIGNER
	 	 
	 	Date:  _________________________
	 	 
	___________________________________________	Verified:  _________________________
	SIGNATURE	AUTHORIZED SIGNER
	 	 
	___________________________________________	Date:  _________________________
	TITLE	 
	 	Compliance Status	Yes          No
	___________________________________________	 
	DATE	 


 




     

     


    

 


EXHIBIT D


 


SECURED PROMISSORY NOTE

(Term [A][B] Loan)


 


		$[_____]	Dated: [_____]



 


FOR VALUE RECEIVED, the undersigned, CYTOSORBENTS
CORPORATION, a Delaware corporation with offices located at 7 Deer Park Drive, Suite K, Monmouth Junction, NJ 08852 and CYTOSORBENTS
MEDICAL, INC., a Delaware corporation with offices located at 7 Deer Park Drive, Suite K, Monmouth Junction, NJ 08852 (individually
and collectively, jointly and severally “Borrower”) HEREBY PROMISES TO PAY to the order of WESTERN ALLIANCE
BANK (“Bank”) the principal amount of FIVE MILLION DOLLARS ($5,000,000.00) or such lesser amount as shall equal
the outstanding principal balance of the Term [A][B] Loan made to Borrower by the Bank, plus interest on the aggregate unpaid
principal amount of such Term Loan, at the rates and in accordance with the terms of the Amended and Restated Loan and Security
Agreement dated March 29, 2018 by and between Borrower and the Bank (as amended, restated, supplemented or otherwise modified from
time to time, the “Loan Agreement”). If not sooner paid, the entire principal amount and all accrued and unpaid
interest hereunder shall be due and payable on the Maturity Date as set forth in the Loan Agreement. Any capitalized term not otherwise
defined herein shall have the meaning attributed to such term in the Loan Agreement.


 


Principal, interest
and all other amounts due with respect to the Term [A][B] Loan, are payable in lawful money of the United States of America to
the Bank as set forth in the Loan Agreement and this Secured Promissory Note (this “Note”). The principal amount
of this Note and the interest rate applicable thereto, and all payments made with respect thereto, shall be recorded by the Bank
and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note.


 


The Loan Agreement,
among other things, (a) provides for the making of a secured Term [A][B] Loan by the Bank to Borrower, and (b) contains
provisions for acceleration of the maturity hereof upon the happening of certain stated events.


 


This Note may not be
prepaid except as set forth in Section 2.2 (c) and Section 2.2(d) of the Loan Agreement.


 


This Note and the obligation
of Borrower to repay the unpaid principal amount of the Term [A][B] Loan, interest on the Term [A][B] Loan and all other amounts
due to the Bank under the Loan Agreement is secured under the Loan Agreement.


 


Presentment for payment,
demand, notice of protest and all other demands and notices of any kind in connection with the execution, delivery, performance
and enforcement of this Note are hereby waived.


 


Borrower shall pay
all reasonable fees and expenses, including, without limitation, reasonable attorneys’ fees and costs, incurred by the Bank
in the enforcement or attempt to enforce any of Borrower’s obligations hereunder not performed when due.


 


This Note shall be
governed by, and construed and interpreted in accordance with, the internal laws of the State of California.


 


The ownership of an
interest in this Note shall be registered on a record of ownership maintained by the Bank or its agent. Notwithstanding anything
else in this Note to the contrary, the right to the principal of, and stated interest on, this Note may be transferred only if
the transfer is registered on such record of ownership and the transferee is identified as the owner of an interest in the obligation.
Borrower shall be entitled to treat the registered holder of this Note (as recorded on such record of ownership) as the owner in
fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in this Note on the
part of any other person or entity.


 


[Balance of Page Intentionally
Left Blank]


 




     

     


    

 


IN WITNESS WHEREOF, Borrower has caused
this Note to be duly executed by one of its officers thereunto duly authorized on the date hereof.


 


	 	BORROWER:
	 	 	 
	 	CYTOSORBENTS CORPORATION
	 	 	 
	 	By	
	 	Name:	
	 	Title:	


 


 


	 	BORROWER:
	 	 
	 	CYTOSORBENTS MEDICAL, INC.
	 	 	 
	 	By	 
	 	Name:	
	 	Title:	


 


Term [A][B] Loan Note


 




     

     


    

 


LOAN INTEREST RATE AND PAYMENTS OF
PRINCIPAL


 


	
        Date
	


        Principal

        Amount


	
        Interest
        Rate
	


        Scheduled

        Payment Amount


	
        Notation
        By