EXHIBIT 10.1



 


EXHIBIT
10.1


 


LOAN
AND SECURITY AGREEMENT


 


THIS
LOAN AND SECURITY AGREEMENT (as the same may be amended, restated, modified, or supplemented from time to time, this “Agreement”)
dated as of May 11, 2015 (the “Effective Date”) among IMMY Funding LLC, a Delaware limited liability company,
as collateral agent (in such capacity, together with its successors and assigns in such capacity, “Collateral Agent”),
and the Lenders listed on Schedule 1.1 hereof or otherwise a party hereto from time to time including IMMY Funding LLC
in its capacity as a Lender (each a “Lender” and collectively, the “Lenders”), and Imprimis
Pharmaceuticals, Inc., a Delaware corporation (“Borrower”), provides the terms on which the Lenders
shall lend to Borrower and Borrower shall repay the Lenders. The parties agree as follows:


 


1.
DEFINITIONS AND OTHER TERMS


 


1.1
Terms. Capitalized terms used herein shall have the meanings set forth in Section 1.3 to the extent defined therein.
All other capitalized terms used but not defined herein shall have the meaning given to such terms in the Code. Any accounting
term used but not defined herein shall be construed in accordance with GAAP and all calculations shall be made in accordance with
GAAP. The term “financial statements” shall include the accompanying notes and schedules.


 


1.2
Section References. Any section, subsection, schedule or exhibit references are to this Agreement unless otherwise specified.


 


1.3
Definitions. The following terms are defined in the Sections or subsections referenced opposite such terms:


 


	“Agreement”	Preamble
	“Borrower”	Preamble
	“Claims”	Section 12.2
	“Collateral
    Agent”	Preamble
	“Collateral
    Agent Report”	Exhibit B, Section
    5
	“Communication”	Section 10
	“Default
    Rate”	Section 2.3(b)
	“Effective
    Date”	Preamble
	“Event
    of Default”	Section 8
	“Indemnified
    Person”	Section 12.2
	“Lender”
    and “Lenders”	Preamble
	“Lender
    Transfer”	Section 12.1
	“New
    Subsidiary”	Section 6.10
	“Non-Funding
    Lender”	Exhibit B, Section
    10(c)(ii)
	“Other
    Lender”	Exhibit B, Section
    10(c)(ii)
	“Perfection
    Certificate” and “Perfection Certificates”	Section 5.1
	“Term
    A Loan”	Section 2.2(a)(i)
	“Term
    B Loan”	Section 2.2(a)(ii)
	“Termination
    Date”	Exhibit B, Section
    8
	“Term
    Loan”	Section 2.2(a)(ii)
	“Transfer”	Section 7.1


 


In
addition to the terms defined elsewhere in this Agreement, the following terms have the following meanings:


 




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


 


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


 


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


 


“Amortization
Date” is the earlier of (i) (unless waived by the Required Lenders) an Event of Default occurring, or (ii) (A) the twentieth
(20th) Payment Date following the Effective Date if the Borrower fails to satisfy the Revenue Threshold as of December 31, 2016,
(B) the thirty-seventh (37th) Payment Date following the Effective Date as long as the Borrower continues to satisfy the Revenue
Threshold or (C) on the Payment Date immediately after the Borrower fails to satisfy the Revenue Threshold or the Collateral Agent
reasonably determines that Borrower has not reached or cannot reasonably achieve the Revenue Threshold, unless the Required Lenders
agree otherwise to postpone such Amortization Date to a later Payment Date.


 


“Anti-Terrorism
Laws” are any laws relating to terrorism or money laundering, including without limitation 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.


 


“Blocked
Person” is 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 any Lender is prohibited from dealing
or otherwise engaging in any transaction by any Anti-Terrorism Law, (d) a Person that commits, threatens or conspires to commit
or supports “terrorism” as defined in Executive Order No. 13224, or (e) a Person that is named a “specially
designated national” or “blocked person” on the most current list published by OFAC or other similar list.


 


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


 


“Business
Day” is any day that is not a Saturday, Sunday or a day on which Collateral Agent is closed.


 


“Cash
Equivalents” are (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any
agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper
maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings
Group or Moody’s Investors Service, Inc., and (c) certificates of deposit maturing no more than one (1) year after issue
provided that the account in which any such certificate of deposit is maintained is subject to a Control Agreement in favor of
Collateral Agent.


 


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


 




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“Collateral”
is any and all properties, rights and assets of Borrower described on Exhibit A.


 


“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.


 


“Commitment
Percentage” is set forth in Schedule 1.1, as amended from time to time.


 


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


 


“Compliance
Certificate” is that certain certificate in substantially the form attached hereto as Exhibit D.


 


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


 


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


 


“Copyrights”
are any and all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship
and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret.


 


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


 


“DOJ”
means the U.S. Department of Justice or any successor thereto or any other comparable Governmental Authority.


 


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


 


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


 


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


 


“Excluded
Account” means (i) accounts of Borrower or any of its Subsidiaries used exclusively for payroll, payroll taxes and other
employee wage and benefit payments, as identified to Collateral Agent by Borrower as such in the Perfection Certificate or otherwise
by written notice from time to time, or (ii) accounts numbered ********2060 and *****2396 held at Bank of America, N.A. and JPMorgan
Chase Bank, N.A., respectively, so long as those accounts are closed within fifteen (15) Business Days of the Effective Date.


 




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“Exigent
Circumstance” means any event or circumstance that, in the reasonable judgment of Collateral Agent, imminently threatens
the ability of Collateral Agent to realize upon any material portion of the Collateral, such as, without limitation, fraudulent
removal, concealment, or abscondment thereof, destruction or material waste thereof, or failure of Borrower or any of its Subsidiaries
after reasonable demand to maintain or reinstate adequate casualty insurance coverage, or which, in the judgment of Collateral
Agent, could reasonably be expected to result in a material diminution in value of the Collateral.


 


“Facility
Fee” is a fee due on the Effective Date equal to 1.50% of the total Term Loan Commitment, payable to IMMY Funding LLC.


 


“FDA”
means the U.S. Food and Drug Administration or any successor thereto or any other comparable Governmental Authority.


 


“Final
Fee” is a payment (in addition to and not a substitution for the regular monthly payments of principal plus accrued
interest or any other fee payable hereunder) 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), in each case equal to five percent (5%)
multiplied by the principal amount of the Term Loan funded at such time, payable to Lenders in accordance with their respective
Pro Rata Shares.


 


“Foreign
Currency” means lawful money of a country other than the United States.


 


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


 


“Funding
Date” is any date on which a Term Loan is made to or on account of Borrower, which shall be a Business Day.


 


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


 


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


 


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


 


“Governmental
Authority” is any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body (including, without limitation, the FDA and any state board of pharmacy or state pharmacy licensing authority),
court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions
of or pertaining to government, any securities exchange and any self-regulatory organization.


 




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“Guarantor”
is any Person providing a Guaranty in favor of Collateral Agent for the benefit of the Lenders.


 


“Guaranty”
is any guarantee (including the Secured Guaranty) of all or any part of the Obligations, as the same may from time to time be
amended, restated, modified or otherwise supplemented.


 


“Indebtedness”
is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations
for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital
lease obligations, and (d) Contingent Obligations.


 


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


 


“Insolvent”
means not Solvent.


 


“Intellectual
Property” means all of Borrower’s or any of its Subsidiaries’ right, title and interest in and to the following:


 


(a) its Copyrights, Trademarks and Patents;


 


(b) any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how, operating manuals;


 


(c) any and all source code;


 


(d) any and all design rights which may be available to Borrower;


 


(e) any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above;


 


(f) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents; and


 


(g) all licenses, sublicenses or other contracts under which Borrower or any Subsidiary is granted rights by third parties in any Intellectual Property asset.


 



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


 


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


 


“IP
Security Agreement” is that certain Intellectual Property Security Agreement executed and delivered by Borrower to Collateral
Agent and dated as of the Effective Date, as may be amended, restated, or otherwise modified or supplemented from time to time.


 


“Key
Person” is Borrower’s Chief Executive Officer, who is Mark L. Baum as of the Effective Date.


 


“Knowledge”
means to the “best of” Borrower’s knowledge, or with a similar qualification, knowledge or awareness means the
actual knowledge, after reasonable investigation, of the Responsible Officers.


 




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“Lender”
is any one of the Lenders.


 


“Lenders”
are the Persons identified on Schedule 1.1 hereto and each permitted assignee that becomes a party to this Agreement pursuant
to Section 12.1.


 


“Lenders’
Expenses” are all audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses,
as well as appraisal fees, fees incurred on account of lien searches, inspection fees, and filing fees) for preparing, amending,
negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection
with appeals or Insolvency Proceedings) or otherwise incurred by Collateral Agent and/or the Lenders in connection with the Loan
Documents.


 


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


 


“Loan
Documents” are, collectively, this Agreement, the Pledge Agreement, the IP Security Agreement, the Secured Guaranty,
the Warrants, the Perfection Certificates, each Control Agreement, each Compliance Certificate, each Loan Payment Request Form,
any subordination agreements, any note, or notes or guaranties executed by Borrower or any other Person, and any other present
or future agreement entered into by Borrower, any Guarantor or any other Person for the benefit of the Lenders and Collateral
Agent in connection with this Agreement; all as amended, restated, or otherwise modified or supplemented from time to time.


 


“Loan
Payment Request Form” is that certain form attached hereto as Exhibit C.


 


“Material
Adverse Change” is (a) a material adverse change in the business, operations or condition (financial or otherwise) of
Borrower or any Subsidiary, when taken as a whole; (b) a material impairment of the prospect of repayment of any portion of the
Obligations or (c) a material adverse effect on the Collateral that is not the result of the Collateral Agent’s or the Lenders’
action or inaction in connection with filings made or not made with respect to the Collateral. For the avoidance of doubt, the
following events, solely in and of themselves, shall not constitute a Material Adverse Change or a Material Adverse Effect: (a)
a “going concern” or like qualification or “emphasis of matter” paragraph in an auditor’s opinion;
(b) Borrower or any of its Subsidiaries conducts a mandatory or voluntary recall which could reasonably be expected to result
in liability and expense to Borrower or any of its Subsidiaries of $1,000,000 or less; (c) Borrower or any of its Subsidiaries
enters into a settlement agreement with the FDA, DOJ, or other Governmental Authority that results in aggregate liability as to
any single or related series of transactions, incidents or conditions, of $1,000,000 or less; or (d) an action by a Governmental
Authority of a type and magnitude substantially similar to those disclosed in the Perfection Certificate provided to the Collateral
Agent prior to the date hereof, which could not reasonably be expected to cause Borrower to discontinue its operations or otherwise
result in or cause a Material Adverse Change.


 


“Material
Agreement” is any license, agreement or other contractual arrangement with a Person or Governmental Authority whereby
Borrower or any of its Subsidiaries is reasonably likely to be required to transfer, either in-kind or in cash, prior to the Maturity
Date, assets or property valued (book or market) at more than $500,000 in the aggregate or any license, agreement or other contractual
arrangement conveying rights in or to any Intellectual Property necessary to make, use or sell any Inventory, products or services
of Borrower or any Subsidiary.


 


“Maturity
Date” is, for each Term Loan, the earlier of (i) May 11, 2021 and (ii) twenty-four (24) months following the Amortization
Date only if the Revenue Threshold is not met.


 


“Milestone
Date” is the date that Borrower has achieved trailing twelve (12) month revenue under GAAP of at least Fifteen Million
Dollars ($15,000,000.00) during any consecutive twelve (12) month period through and until May 11, 2016, measured on an unaudited
basis for any month for which audited financial statements are not available, in each case subject to verification and supporting
evidence reasonably requested by Collateral Agent.


 


“Obligations”
are all of Borrower’s obligations to pay when due any debts, principal, interest, Lenders’ Expenses, the Final Fee,
and other amounts Borrower owes the Lenders now or later, in connection with, related to, following, or arising from, out of or
under, this Agreement or, the other Loan Documents (other than the Warrants), and including interest accruing after Insolvency
Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of Borrower assigned to the Lenders and/or Collateral
Agent, and the performance of Borrower’s duties under the Loan Documents.


 




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


 


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


 


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


 


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


 


“Payment
Date” is the first (1st) calendar day of each calendar month, commencing on June 1, 2015.


 


“Permitted
Indebtedness” is:


 


(a)
Borrower’s Indebtedness to the Lenders and Collateral Agent under this Agreement and the other Loan Documents;


 


(b)
Indebtedness existing on the Effective Date and disclosed on the Perfection Certificate(s);


 


(c)
Subordinated Debt;


 


(d)
unsecured Indebtedness to trade creditors and in connection with credit cards incurred in the ordinary course of business;


 


(e)
Indebtedness consisting of capitalized lease obligations and purchase money Indebtedness, in each case incurred by Borrower or
any of its Subsidiaries to finance the acquisition, repair, improvement or construction of fixed or capital assets of such person,
provided that (i) the aggregate outstanding principal amount of all such Indebtedness does not exceed (A) Two Million Dollars
($2,000,000.00) for construction and improvement efforts of pharmacy and outsourcing facilities in New Jersey and California,
and (B) Two Hundred Fifty Thousand Dollars ($250,000.00) for other capitalized lease obligations and purchase money Indebtedness
at any time, and (ii) the principal amount of such Indebtedness does not exceed the lower of the cost or fair market value of
the property so acquired or built or of such repairs or improvements financed with such Indebtedness (each measured at the time
of such acquisition, repair, improvement or construction is made);


 


(f)
Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of Borrower’s business;


 


(g)
provided that the full amount of the Term Loans have been drawn hereunder, Indebtedness related to secured accounts receivable
and inventory financing (A) secured solely by accounts receivable and cash proceeds thereof, (B) in an aggregate outstanding principal
amount that does not exceed $2,500,000, (C) is subject to an intercreditor agreement in form and substance satisfactory to Collateral
Agent and (D) the borrowings thereunder are subject to a maximum borrowing base for accounts receivable of 80% and a maximum borrowing
base for inventory of 40%;


 




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(h)
Indebtedness related to letters of credit related to trade payables and creditors and real estate leases incurred in the Borrower’s
ordinary course of business, in an aggregate outstanding principal amount that does not exceed $500,000;


 


(i)
Indebtedness consisting of deferred compensation owing under the Stock Purchase Agreement, dated as of November 26, 2014 (without
any amendment or modification effective after the date hereof without Collateral Agent’s consent), among Borrower, South
Coast Specialty Compounding, Inc. (d/b/a Park Compounding) and the seller parties thereto;


 


(j)
Indebtedness consisting of the bona fide financing of insurance premiums or self-insurance obligations (which must be commercially
reasonable and consistent with insurance practices generally) that does not exceed $250,000;


 


(k)
Indebtedness (i) among Borrower and Guarantors, (ii) of any Subsidiary that is not a Guarantor to Borrower or any Guarantor that
is a Permitted Investment, and (iii) of any Subsidiary that is not a Guarantor to another Subsidiary that is not a Guarantor,
provided that, in each case, if any such Indebtedness exceeds Two Hundred and Fifty Thousand ($250,000) for each transaction or
Seven Hundred and Fifty Thousand ($750,000) in the aggregate, it is, at Collateral Agent’s discretion, subordinated to the
Obligations hereunder in form and substance acceptable to Collateral Agent and any notes or other instruments evidencing such
Indebtedness are pledged to Collateral Agent;


 


(l)
Deposits or advances received from customers in the ordinary course of business;


 


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


 


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


 


“Permitted
Investments” are:


 


(a)
Investments disclosed on the Perfection Certificate(s) and existing on the Effective Date;


 


(b)
(i) Investments consisting of cash and Cash Equivalents, and (ii) any Investments permitted by Borrower’s investment policy,
as amended from time to time, provided that such investment policy (and any such amendment thereto) has been approved in writing
by Collateral Agent;


 


(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 Collateral Agent has a perfected security interest;


 


(e)
Investments in connection with Transfers permitted by Section 7.1;


 


(f)
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; and
(iii) other loans or arrangements in the ordinary course of the Borrower’s business that does not to exceed in the aggregate
for (i), (ii) and (iii), (A) One Hundred Fifty Thousand Dollars ($150,000.00) in fiscal year 2015, (B) Two Hundred Fifty Thousand
Dollars ($250,000.00) in fiscal year 2016; and (C) Three Hundred Fifty Thousand Dollars ($350,000.00) in each fiscal year thereafter.


 




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(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;


 


(i)
Investments in Subsidiaries, not to exceed Five Hundred Thousand Dollars ($500,000) per fiscal year;


 


(j)
Investments in joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the licensing
of technology, the development of technology or the providing of technical support, in each case as permitted hereunder (i.e.
under a Permitted License), not to exceed Five Hundred Thousand Dollars ($500,000) per fiscal year; and


 


(k)
Excluded Accounts.


 


“Permitted
Licenses” are (A) licenses of over-the-counter software that is commercially available to the public, (B) non-exclusive
licenses for the use of the Intellectual Property of Borrower or any of its Subsidiaries entered into in the ordinary course of
business, provided, that, with respect to each such license described in clause (B), the license constitutes an arms-length
transaction, the terms of which, on their face, do not provide for a sale or assignment of any Intellectual Property and do not
restrict the ability of Borrower or any of its Subsidiaries, as applicable, to pledge, grant a security interest in or lien on,
or assign or otherwise Transfer any Intellectual Property, or (C) exclusive or non-exclusive licenses relating to Investments
described under clause (k) of the definition of “Permitted Investments”; provided, that, with respect to each
such exclusive license described in this clause (C), the license (i) constitutes an arms-length transaction, the terms of which,
on their face, do not provide for a sale or assignment of any Intellectual Property and do not restrict the ability of Borrower
or any of its Subsidiaries, as applicable, to pledge, grant a security interest in or lien on, or assign or otherwise Transfer
any Intellectual Property, (ii) is limited in territory with respect to a specific geographic country or region (i.e. Japan, Germany,
northern China) outside of the United States (i.e., not exclusive in the United States), and (iii) Borrower has obtained the consent
and acknowledgement of the counterparty to such license for the collateral assignment of such license to the Collateral Agent
for the benefit of the Lenders.


 


“Permitted
Liens” are:


 


(a)
Liens existing on the Effective Date and disclosed on the Perfection Certificates or arising under this Agreement and the other
Loan Documents;


 


(b)
Liens for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or (ii) being contested
in good faith and for which Borrower maintains adequate reserves on its Books, provided that no notice of any such Lien has been
filed or recorded under the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder;


 


(c)
liens securing Indebtedness permitted under clause (e) of the definition of “Permitted Indebtedness,” provided that
(i) such liens exist prior to the acquisition of, or attach substantially simultaneous with, or within twenty (20) days after
the, acquisition, lease, repair, improvement or construction of, such property financed or leased by such Indebtedness and (ii)
such liens do not extend to any property of Borrower other than the property (and proceeds thereof) acquired, leased or built,
or the improvements or repairs, financed by such Indebtedness;


 




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(d)
Liens securing Indebtedness permitted under clause (g) of the definition of “Permitted Indebtedness;


 


(e)
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 One Hundred Thousand
Dollars ($100,000.00), 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;


 


(f)
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);


 


(g)
Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (d), but
any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal
amount of the indebtedness may not increase;


 


(h)
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 Collateral Agent or any Lender a security interest therein;


 


(i)
banker’s liens, rights of setoff and Liens in favor of financial institutions incurred in the ordinary course of business
arising in connection with Borrower’s deposit accounts or securities accounts held at such institutions solely to secure
payment of fees and similar costs and expenses and provided such accounts are maintained in compliance with Section 6.6 hereof;


 


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


 


(k)
Permitted Licenses;


 


(l)
deposits to secure indebtedness permitted under clause (h) of the definition of “Permitted Indebtedness”;


 


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


 


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


 


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


 




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“PIK
Option Period” means the period from the Effective Date until the earlier of (i) May 11, 2017 and (ii) the Amortization
Date.


 


“Pledge
Agreement” is that certain Pledge Agreement executed and delivered by Borrower to Collateral Agent and dated as of the
Effective Date, as may be amended, restated, or otherwise modified or supplemented from time to time.


 


“Property”
means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.


 


“Pro
Rata Share” is, as of any date of determination, with respect to each Lender, a percentage (expressed as a decimal,
rounded to the ninth decimal place) determined by dividing the outstanding principal amount of Term Loans held by such Lender
by the aggregate outstanding principal amount of all Term Loans.


 


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


 


“Registration”
means any registration, authorization, approval, license, permit, clearance, certificate, and exemption issued or allowed by the
FDA or state pharmacy licensing authorities (including, without limitation, new drug applications, abbreviated new drug applications,
biologics license applications, investigational new drug applications, over-the-counter drug monograph, device pre-market approval
applications, device pre-market notifications, investigational device exemptions, product recertifications, manufacturing approvals,
registrations and authorizations, CE Marks, pricing and reimbursement approvals, labeling approvals or their foreign equivalent,
controlled substance registrations, and wholesale distributor permits).


 


“Regulatory
Action” means an administrative, regulatory, or judicial enforcement action, proceeding, investigation or inspection,
FDA Form 483 notice of inspectional observation, warning letter, untitled letter, other notice of violation letter, recall, seizure,
Section 305 notice or other similar written communication, injunction or consent decree, issued by the FDA or a federal or state
court.


 


“Related
Persons” means, with respect to any Person, each Affiliate of such Person and each director, officer, employee, agent,
trustee, representative, attorney, accountant and each insurance, environmental, legal, financial and other advisor and other
consultants and agents of or to such Person or any of its Affiliates.


 


“Required
Lenders” means (i) for so long as all of the Persons that are Lenders on the Effective Date (each an “Original
Lender”) have not assigned or transferred any of their interests in their Term Loan, Lenders holding one hundred percent
(100%) of the aggregate outstanding principal balance of the Term Loan, or (ii) at any time from and after any Original Lender
has assigned or transferred any interest in its Term Loan, Lenders holding at least fifty-one percent (51%) of the aggregate outstanding
principal balance of the Term Loan.


 


“Requirement
of Law” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common),
treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or any of its property is subject.


 


“Responsible
Officer” is any of the President, Chief Executive Officer, or Chief Financial Officer of Borrower acting alone.


 


“Revenue
Threshold” means the Borrower continuing to satisfy or meet the following: (a) the trailing twelve (12) calendar months
of Borrower’s revenue under GAAP on or after December 31, 2016, is equal to or greater than Twenty-Five Million Dollars
($25,000,000) or (b) Borrower has a balance of cash equal to or greater than the then-outstanding Obligations in Collateral Accounts
subject to Control Agreements.


 


“Second
Draw Period” is the period commencing on the Milestone Date and ending on May 11, 2016.


 




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“Secured
Guaranty” is that certain Secured Guaranty executed and delivered by each Subsidiary of Borrower to Collateral Agent
and dated as of the Effective Date, as may be amended, restated, or otherwise modified or supplemented from time to time.


 


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


 


“Solvent”
is, with respect to any Person: the fair salable value of such Person’s consolidated assets (including goodwill minus disposition
costs) exceeds the fair value of such Person’s liabilities; such Person is not left with unreasonably small capital after
the transactions in this Agreement; and such Person is able to pay its debts (including trade debts) as they mature in the ordinary
course (without taking into account any forbearance and extensions related thereto).


 


“Subordinated
Debt” is indebtedness incurred by Borrower or any of its Subsidiaries subordinated to all Indebtedness of Borrower and/or
its Subsidiaries to the Lenders (pursuant to a subordination, intercreditor, or other similar agreement in form and substance
reasonably satisfactory to Collateral Agent and the Lenders entered into between Collateral Agent, Borrower, and/or any of its
Subsidiaries, and the other creditor), on terms acceptable to Collateral Agent and the Lenders.


 


“Subsidiary”
is, with respect to any Person, any Person of which more than fifty percent (50%) of the voting stock or other equity interests
(in the case of Persons other than corporations) is owned or controlled, directly or indirectly, by such Person or through one
or more intermediaries. Unless otherwise specified, references herein to a Subsidiary means a Subsidiary of Borrower.


 


“Term
Loan Commitment” is, for any Lender, the obligation of such Lender to make a Term Loan, up to the principal amount shown
on Schedule 1.1. “Term Loan Commitments” means the aggregate amount of such commitments of all
Lenders.


 


“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 and each of its Subsidiaries connected with and symbolized
by such trademarks.


 


“Warrant”
means any of that certain Warrant to Purchase Stock dated as of the Effective Date issued by Borrower in favor of each Lender
or such Lender’s Affiliates or any other warrant entered into in connection with the Term Loan, all as may be amended, restated,
or otherwise modified or supplemented from time to time.


 


2.
LOANS AND TERMS OF PAYMENT


 


2.1
Promise to Pay. Borrower hereby unconditionally promises to pay each Lender, the outstanding principal amount of all Term
Loans advanced to Borrower by such Lender and accrued and unpaid interest thereon and any other amounts due hereunder as and when
due in accordance with this Agreement.


 


2.2
Term Loans.


 


(a)
Availability. (i) Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly,
to make term loans to Borrower on the Effective Date in an aggregate principal amount of Ten Million Dollars ($10,000,000.00)
according to each Lender’s Term A Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are hereinafter
referred to singly as a “Term A Loan”, and collectively as the “Term A Loans”). After repayment,
no Term A Loan may be re-borrowed.


 


(ii)
Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, during the Second Draw Period,
upon the request of Borrower, to make term loans to Borrower in an aggregate principal amount up to Five Million Dollars ($5,000,000)
according to each Lender’s Term B Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are hereinafter
referred to singly as a “Term B Loan”, and collectively as the “Term B Loans”; each Term
A Loan or Term B Loan is hereinafter referred to singly as a “Term Loan” and the Term A Loans and the
Term B Loans are hereinafter referred to collectively as the “Term Loans”). Each Term B Loan shall be
in minimum increments of $2,500,000.00. After repayment, no Term B Loan may be re-borrowed.


 




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(b)
Repayment. Borrower shall make monthly payments of interest only commencing on the second (2nd) 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. 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 after such Funding Date. Commencing on the Amortization Date, and continuing on the Payment Date of each month thereafter,
Borrower shall make consecutive equal monthly payments of principal and interest, in arrears, to each Lender, as calculated by
Collateral Agent (which calculations shall be deemed correct absent manifest error) based upon: (1) the amount of such Lender’s
Term Loan, (2) the effective rate of interest, as determined in Section 2.3(a), and (3) a repayment schedule equal to twenty-four
(24) months after the Amortization Date. All unpaid principal and accrued and unpaid interest with respect to each Term Loan is
due and payable in full on the Maturity Date. The Term Loans may only be prepaid in accordance with Sections 2.2(c) and 2.2(d).


 


(c)
Mandatory Prepayments. If an event described in Section 7.2(c)(ii) occurs or the Term Loans are accelerated following the
occurrence of an Event of Default, Borrower shall immediately pay to Lenders, payable to each Lender in accordance with its respective
Pro Rata Share, an amount equal to the sum of: (i) all outstanding principal of the Term Loans plus accrued and unpaid interest
thereon through the prepayment date, (ii) the Final Fee, plus (iii) all other Obligations that are due and payable, including,
without limitation, Lenders’ 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 Fee had not previously been paid in full in connection
with the prepayment of the Term Loans in full, Borrower shall pay to each Lender in accordance with its respective Pro Rata Share,
the Final Fee in respect of the Term Loans.


 


(d)
Permitted Prepayment of Term Loans. Borrower shall have the option to prepay all, but not less than all, of the Term Loans
advanced by the Lenders under this Agreement, provided Borrower (i) provides written notice to Collateral Agent of its election
to prepay the Term Loans at least five (5) Business Days prior to such prepayment, and (ii) pays to the Lenders on the date of
such prepayment, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of (A) all
outstanding principal of the Term Loans plus accrued and unpaid interest thereon through the prepayment date, (B) the Final Fee,
plus (C) all other Obligations that are due and payable, including, without limitation, Lenders’ Expenses and interest at
the Default Rate with respect to any past due amounts.


 


2.3
Payment of Interest on the Term Loans.


 


(a)
Interest Rate. Subject to Section 2.3(b), the principal amount outstanding under the Term Loans shall accrue interest at
a fixed per annum rate equal to 12.50%, which interest shall be payable monthly in arrears in accordance with Sections 2.2(b)
and 2.3(e); provided that during the PIK Option Period, at the election of Borrower (which shall be considered given on the Effective
Date) with no less than five (5) Business Day written notice to Collateral Agent prior to the applicable Payment Date, 2.00% of
such 12.50% may be payable in-kind by adding an amount equal to such 2.00% of the outstanding principal amount to the then outstanding
principal balance on a monthly basis so as to increase the outstanding principal balance of such Term Loan on each Payment Date
and which amount shall be payable when the principal amount of the Term Loans are payable in accordance with Sections 2.2(b) and
2.3(e) and on which principal amount interest shall be owed pursuant to Section 2.3(a).


 


Interest
shall accrue on each Term Loan commencing on, and including, the Funding Date of such Term Loan, and shall accrue on the principal
amount outstanding under such Term Loan until but excluding the day on which such Term Loan is paid in full.


 


(b)
Default Rate. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall accrue
interest at a fixed per annum rate equal to the rate that is otherwise applicable thereto plus five percentage points (5.00%)
(the “Default Rate”). Payment or acceptance of the increased interest rate provided in this Section 2.3(b)
is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice
or limit any rights or remedies of Collateral Agent.


 




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(c)
365-Day Year. Interest shall be computed on the basis of a three hundred sixty-five (365) day year and the actual number
of days elapsed.


 


(d)
Debit of Accounts. Collateral Agent and each Lender may debit (or ACH) any deposit accounts, maintained by Borrower or
any of its Subsidiaries for principal and interest payments or any other amounts Borrower owes the Lenders under the Loan Documents
when due. Any such debits (or ACH activity) shall not constitute a set-off.


 


(e)
Payments. Except as otherwise expressly provided herein, all payments by Borrower under the Loan Documents shall be made
to the respective Lender to which such payments are owed, at such Lender’s office in immediately available funds on the
date specified herein. Unless otherwise provided, interest is payable monthly on the Payment Date of each month. Payments of principal
and/or interest received after 12:00 noon Eastern time are considered received at the opening of business on the next Business
Day. When a payment is due on a day that is not a Business Day, the payment is due the next Business Day and additional fees or
interest, as applicable, shall continue to accrue until paid. All payments to be made by Borrower hereunder or under any other
Loan Document, including payments of principal and interest, and all fees, expenses, indemnities and reimbursements, shall be
made without set-off, recoupment or counterclaim, in lawful money of the United States and in immediately available funds.


 


2.4
Fees. Borrower shall pay to Collateral Agent:


 


(a)
Facility Fee. The Facility Fee, which shall be due on the Effective Date, to be shared between the Lenders in accordance
with their respective Pro Rata Shares;


 


(b)
Final Fee. The Final Fee, when due hereunder, to be shared among the Lenders in accordance with their respective Pro Rata
Shares;


 


(c)
Lenders’ Expenses. All Lenders’ Expenses (including reasonable attorneys’ fees and expenses for due diligence,
investigation, documentation and negotiation of this Agreement) incurred through and after the Effective Date, when due.


 


2.5
Withholding. Payments received by the Collateral Agent or the Lenders from Borrower hereunder will be made free and clear
of and without deduction for any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments,
fees or other charges imposed by any governmental authority (including any interest, additions to tax or penalties applicable
thereto). Specifically, however, if at any time any Governmental Authority, applicable law, regulation or international agreement
requires Borrower to make any withholding or deduction from any such payment or other sum payable hereunder to the Lenders, Borrower
hereby covenants and agrees that the amount due from Borrower with respect to such payment or other sum payable hereunder will
be increased to the extent necessary to ensure that, after the making of such required withholding or deduction, each Lender receives
a net sum equal to the sum which it would have received had no withholding or deduction been required and Borrower shall pay the
full amount withheld or deducted to the relevant Governmental Authority. Borrower will, upon request, furnish the Lenders with
proof reasonably satisfactory to the Lenders indicating that Borrower has made such withholding payment; provided, however, that
Borrower need not make any withholding payment if the amount or validity of such withholding payment is contested in good faith
by appropriate and timely proceedings and as to which payment in full is bonded or reserved against by Borrower. The agreements
and obligations of Borrower contained in this Section 2.5 shall survive the termination of this Agreement.


 


3.
CONDITIONS OF LOANS


 


3.1
Conditions Precedent to Initial Term Loan. Each Lender’s obligation to make a Term A Loan is subject to the condition
precedent that Collateral Agent and each Lender shall consent to or shall have received, in form and substance reasonably satisfactory
to Collateral Agent and each Lender, such documents, and completion of such other matters, as Collateral Agent and each Lender
may reasonably deem necessary or appropriate, including, without limitation:


 




    	14



    	 	 	 



    


 


(a)
original Loan Documents, each duly executed by Borrower and each Subsidiary, as applicable;


 


(b)
a completed Perfection Certificate for Borrower and each of its Subsidiaries;


 


(c)
duly executed original Control Agreements with respect to any Collateral Accounts maintained by Borrower or any of its Subsidiaries,
other than an Excluded Account;


 


(d)
the Operating Documents and good standing certificates of Borrower and its Subsidiaries certified by the Secretary of State (or
equivalent agency) of Borrower’s and such Subsidiaries’ jurisdiction of organization or formation and each jurisdiction
in which Borrower and each Subsidiary is qualified to conduct business, each as of a date no earlier than thirty (30) days prior
to the Effective Date;


 


(e)
a copy of resolutions of the governing body for Borrower evidencing approval of the Term Loans and other transactions evidenced
by the Loan Documents;


 


(f)
duly executed original officer’s certificates for Borrower and each Subsidiary that is a party to the Loan Documents certifying
as to (i) the incumbency of each Responsible Officer executing each Loan Document and (ii) the documents delivered pursuant to
Section 3.1(d) and 3.1(e), in a form reasonably acceptable to Collateral Agent and the Lenders;


 


(g)
certified copies, dated as of date no earlier than thirty (30) days prior to the Effective Date, of financing statement searches,
as Collateral Agent shall request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated
in any such financing statements either constitute Permitted Liens or have been or, in connection with the initial Term Loan,
will be terminated or released;


 


(h)
a duly executed legal opinion of counsel to Borrower dated as of the Effective Date;


 


(i)
evidence satisfactory to Collateral Agent and the Lenders that the insurance policies required by Section 6.5 hereof are in full
force and effect, together with appropriate evidence showing loss payable and/or additional insured clauses or endorsements in
favor of Collateral Agent, for the ratable benefit of the Lenders;


 


(j)
a copy of any applicable Investors Rights Agreement and any amendments thereto;


 


(k)
[Reserved]


 


(l)
payment of the Facility Fee and Lenders’ Expenses then due as specified in Section 2.4 hereof.


 


3.2
Conditions Precedent to all Term Loans. The obligation of each Lender to extend each Term Loan, including the initial Term
Loan, is subject to the following conditions precedent:


 


(a)
receipt by Collateral Agent of an executed Loan Payment Request Form in the form of Exhibit C attached hereto;


 


(b)
the representations and warranties in Section 5 hereof shall be true, accurate and complete in all material respects on the Funding
Date of each Term Loan; provided, however, that such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations
and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such
date, and no Event of Default shall have occurred and be continuing or result from the funding of such Term Loan;


 




    	15



    	 	 	 



    


 


(c)
in such Lender’s reasonable discretion, there has not been any Material Adverse Change;


 


(d)
no Event of Default or event that with the passage of time would result in an Event of Default, shall exist; and


 


(e)
payment of the fees and Lenders’ Expenses then due as specified in Section 2.5 hereof.


 


3.3
Covenant to Deliver. Borrower agrees to deliver to Collateral Agent and the Lenders each item required to be delivered to
Collateral Agent under this Agreement as a condition precedent to any Term Loan. Borrower expressly agrees that a Term Loan made
prior to the receipt by Collateral Agent or any Lender of any such item shall not constitute a waiver by Collateral Agent or any
Lender of Borrower’s obligation to deliver such item, and any such Term Loan in the absence of a required item shall be
made in each Lender’s sole discretion.


 


3.4
Procedures for Borrowing. Subject to the prior satisfaction of all other applicable conditions to the making of a Term Loan
set forth in this Agreement, to obtain a Term Loan (other than the Term Loan funded on the Effective Date), Borrower shall notify
the Lenders (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon New York City time twelve
(12) Business Days prior to the date the Term Loan is to be made. Together with any such electronic, facsimile or telephonic notification,
Borrower shall deliver to Collateral Agent by electronic mail or facsimile a completed Loan Payment Request Form executed by a
Responsible Officer or his or her designee. The Collateral Agent may rely on any telephone notice given by a person whom Collateral
Agent reasonably believes is a Responsible Officer or designee.


 


3.5
Post-Closing Obligations. Notwithstanding any provision herein or in any other Loan Document to the contrary, to the extent
not actually delivered on or prior to the Effective Date, the Borrowers shall, and shall cause each applicable Subsidiary to:


 


(a)
no later June 10, 2015 (or such later date as Collateral Agent may agree) deliver a landlord’s consent executed in favor
of Collateral Agent in respect of all of Borrower’s and each Subsidiaries’ leased locations;


 


(b)
no later than June 10, 2015 (or such later date as Collateral Agent may agree) deliver a bailee waiver executed in favor of Collateral
Agent in respect of each third party bailee where Borrower or any Subsidiary maintains Collateral having a book value in excess
of Two Hundred Fifty Thousand Dollars ($250,000.00); and


 


(c)
no later than May 26, 2015 (or such later date as Collateral Agent may agree) deliver to Collateral Agent an executed Control
Agreement among Borrower, South Coast Specialty Compounding, Inc., Pharmacy Creations, L.L.C., MUFG Union Bank, N.A. and Collateral
Agent.


 


4.
CREATION OF SECURITY INTEREST


 


4.1
Grant of Security Interest. Borrower hereby grants Collateral Agent, for the ratable benefit of the Lenders, to secure the
payment and performance in full of all of the Obligations, a continuing security interest in, and pledges to Collateral Agent,
for the ratable benefit of the Lenders, the Collateral, wherever located, whether now owned or hereafter acquired or arising,
and all proceeds and products thereof. If Borrower shall acquire a commercial tort claim (as defined in the Code), Borrower shall
grant to Collateral Agent, for the ratable benefit of the Lenders, a security interest therein and in the proceeds thereof, all
upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Collateral Agent.


 


If
this Agreement is terminated, Collateral Agent’s Lien in the Collateral shall continue until the Obligations (other than
inchoate contingent obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than inchoate
contingent obligations) and at such time as the Lenders’ obligation to extend Term Loans has terminated, Collateral Agent
shall, at the sole cost and expense of Borrower, release its Liens in the Collateral and all rights therein shall revert to Borrower.


 




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4.2
Authorization to File Financing Statements. Borrower hereby authorizes Collateral Agent to file financing statements or take
any other action required to perfect Collateral Agent’s security interests in the Collateral, without notice to Borrower,
with all appropriate jurisdictions to perfect or protect Collateral Agent’s interest or rights under the Loan Documents.


 


5.
REPRESENTATIONS AND WARRANTIES


 


Borrower
represents and warrants to Collateral Agent and the Lenders as follows:


 


5.1
Due Organization, Authorization: Power and Authority. Borrower and each of its Subsidiaries is duly existing and in good standing
as a Registered Organization in its jurisdictions of organization or formation and Borrower and each of its Subsidiaries is qualified
and licensed to do business and is in good standing in any jurisdiction in which the conduct of its businesses or its ownership
of property requires that it be qualified except where the failure to do so could not reasonably be expected to have a Material
Adverse Change. In connection with this Agreement, Borrower and each of its Subsidiaries has delivered to Collateral Agent a completed
perfection certificate and any updates or supplements thereto on or before the Effective Date (each a “Perfection Certificate”
and collectively, the “Perfection Certificates”). Borrower represents and warrants that all the information
set forth on the Perfection Certificates pertaining to Borrower and each of its Subsidiaries is accurate and complete.


 


The
execution, delivery and performance by Borrower and each of its Subsidiaries of the Loan Documents to which it is a party have
been duly authorized, and do not (i) conflict with any of Borrower’s or such Subsidiaries’ organizational documents,
including its respective Operating Documents, (ii) contravene, conflict with, constitute a default under or violate any material
Requirement of Law applicable thereto, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction,
decree, determination or award of any Governmental Authority by which Borrower or such Subsidiary, or any of their property or
assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval
from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and
effect) or are being obtained pursuant to Section 6.1(b), or (v) constitute an event of default under any Material Agreement by
which Borrower or any of such Subsidiaries, or their respective properties, is bound. Neither Borrower nor any of its Subsidiaries
is in default under any agreement to which it is a party or by which it or any of its assets is bound in which such default could
reasonably be expected to have a Material Adverse Change.


 


5.2
Collateral.


 


(a)
Borrower and each its Subsidiaries have good title to, have rights in, and the power to transfer each item of the Collateral upon
which it purports to grant a Lien under the Loan Documents, free and clear of any and all Liens except Permitted Liens, and neither
Borrower nor any of its Subsidiaries have any Deposit Accounts, Securities Accounts, Commodity Accounts or other investment accounts
other than the Collateral Accounts or the other investment accounts, if any, described in the Perfection Certificates delivered
to Collateral Agent in connection herewith with respect of which Borrower or such Subsidiary has given Collateral Agent notice
and taken such actions as are necessary to give Collateral Agent a perfected security interest therein (other than Excluded Accounts).
The Accounts are bona fide, existing obligations of the Account Debtors.


 


(b)
The security interest granted herein is and shall at all times continue to be a first priority perfected security interest in
the Collateral, subject only to Permitted Liens that are permitted by the terms of this Agreement to have priority to Collateral
Agent’s Lien.


 


(c)
On the Effective Date, and except as disclosed on the Perfection Certificate (i) the Collateral is not in the possession of any
third party bailee, and (ii) no such third party bailee possesses components of the Collateral in excess of Fifty Thousand Dollars
($50,000.00).


 


(d)
All Inventory and Equipment is in all material respects of good and marketable quality, free from material defects.


 


(e)
Borrower and each of its Subsidiaries is the sole owner of the Intellectual Property each respectively purports to own, free and
clear of all Liens other than Permitted Liens. Except as noted on the Perfection Certificates, neither Borrower nor any of its
Subsidiaries is a party to, nor is bound by, any material license or other Material Agreement.


 




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5.3
Litigation. Except as disclosed on the Perfection Certificate, there are no actions, suits, investigations, or proceedings
pending or, to the Knowledge of the Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries
involving more than Two Hundred Fifty Thousand Dollars ($250,000.00) or a claim for infringement of any intellectual property.
Except as disclosed on the Perfection Certificate, there are no actions, suits, investigations or proceedings pending or, to the
Knowledge of the Responsible Officers, threatened in writing by or against Borrower or any Subsidiaries involving challenges to
the validity of the Intellectual Property.


 


5.4
No Material Adverse Change; Financial Statements. All consolidated financial statements for Borrower and its Subsidiaries,
delivered to Collateral Agent fairly present, in conformity with GAAP, in all material respects the consolidated financial condition
of Borrower and its Subsidiaries, and the consolidated results of operations of Borrower and its Subsidiaries. Since December
31, 2014, there has not been a Material Adverse Change.


 


5.5
Solvency. Borrower and each of its Subsidiaries, when taken as a whole, is Solvent.


 


5.6
Regulatory Compliance. Neither Borrower nor any of its Subsidiaries is an “investment company” or a company “controlled”
by an “investment company” under the Investment Company Act of 1940, as amended. Neither Borrower nor any of its Subsidiaries
is engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal
Reserve Board of Governors). Borrower and each of its Subsidiaries has complied in all material respects with the Federal Fair
Labor Standards Act. Neither Borrower nor any of its Subsidiaries is a “holding company” or an “affiliate”
of a “holding company” or a “subsidiary company” of a “holding company” as each term is defined
and used in the Public Utility Holding Company Act of 2005. Neither Borrower nor any of its Subsidiaries has violated any laws,
ordinances or rules, the violation of which could reasonably be expected to have a Material Adverse Change. Neither Borrower’s
nor any of its Subsidiaries’ properties or assets has been used by Borrower or such Subsidiary or, to Borrower’s Knowledge,
by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than in material
compliance with applicable laws, except where such failure to be in material compliance could not reasonably be expected to have
a Material Adverse Change. Borrower and each of its Subsidiaries has obtained all consents, approvals and authorizations of, made
all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their
respective businesses as currently conducted in the ordinary course of business.


 


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.


 


5.7
Investments. Neither Borrower nor any of its Subsidiaries owns any stock, shares, partnership interests or other equity securities
except for Permitted Investments.


 


5.8
Tax Returns and Payments; Pension Contributions. Borrower and each of its Subsidiaries has timely filed all required tax returns
and reports, and Borrower and each of its Subsidiaries, has timely paid all foreign, federal, state, and local taxes, assessments,
deposits and contributions owed by Borrower and such Subsidiaries in an amount greater than Fifty Thousand Dollars ($50,000),
in all jurisdictions in which Borrower or any such Subsidiary is subject to taxes, including the United States, unless such taxes
are being contested in accordance with the next sentence. Borrower and each of its Subsidiaries, may defer payment of any contested
taxes, provided that Borrower or such Subsidiary, in good faith contests its obligation to pay the taxes by appropriate proceedings
promptly and diligently instituted and conducted. Neither Borrower nor any of its Subsidiaries is aware of any claims or adjustments
proposed for any of Borrower’s or such Subsidiaries’, prior tax years which could result in additional taxes becoming
due and payable by Borrower or its Subsidiaries in an amount greater than Fifty Thousand ($50,000) Dollars. Borrower and each
of its Subsidiaries have paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans
in accordance with their terms, and neither Borrower nor any of its Subsidiaries have, withdrawn from participation in, and have
not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan
which could reasonably be expected to result in any material liability of Borrower or its Subsidiaries, including any material
liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental Authority.


 




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5.9
Use of Proceeds. Borrower shall use the proceeds of the Term Loans 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.


 


5.10
Full Disclosure. No written representation, warranty or other statement of Borrower or any of its Subsidiaries in any certificate
or written statement given to Collateral Agent or any Lender, as of the date such representation, warranty, or other statement
was made, taken together with all such written certificates and written statements given to Collateral Agent or any Lender, contains
any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates
or statements not misleading (it being recognized that projections and forecasts provided by Borrower in good faith and based
upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections
and forecasts may differ from the projected or forecasted results). 


 


6.
AFFIRMATIVE COVENANTS


 


Borrower
shall, and shall cause each of its Subsidiaries to, do all of the following:


 


6.1
Government Compliance.


 


(a)
Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of organization
and maintain qualification in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material
Adverse Change. Comply with all laws, ordinances and regulations to which Borrower or any of its Subsidiaries is subject, the
noncompliance with which could reasonably be expected to have a Material Adverse Change.


 


(b)
Obtain and keep in full force and effect, all of the material Governmental Approvals necessary for the performance by Borrower
and its Subsidiaries of their respective businesses and obligations under the Loan Documents and the grant of a security interest
to Collateral Agent for the ratable benefit of the Lenders, in all of the Collateral.


 


6.2
Financial Statements, Reports, Certificates; Notices.


 


(a)
Deliver to Collateral Agent and each Lender:


 


(i)
as soon as available, but no later than forty-five (45) days after the last day of each quarter, a company prepared consolidated
and consolidating balance sheet, income statement and cash flow statement covering the consolidated operations of Borrower and
its Subsidiaries for such month certified by a Responsible Officer and in a form reasonably acceptable to Collateral Agent;


 


(ii)
as soon as available, but no later than ninety (90) days after the last day of Borrower’s fiscal year or within five (5)
days of filing with the Securities and Exchange Commission, audited consolidated financial statements prepared under GAAP, consistently
applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm
acceptable to Collateral Agent in its reasonable discretion;


 




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(iii)
as soon as available after approval thereof by Borrower’s board of directors, but no later than the earlier of ten (10)
days after such approval and sixty (60) days after the last day of Borrower’s fiscal year, Borrower’s annual (A) financial
projections and (B) budget, in each case, for the entire current fiscal year as approved by Borrower’s board of directors;
provided that, any revisions to such projections and/or budget approved by Borrower’s board of directors shall be delivered
to Collateral Agent and the Lenders no later than seven (7) days after such approval);


 


(iv)
within five (5) days of delivery, copies of all non-ministerial statements, reports and notices made available to Borrower’s
board of directors, security holders or holders of Subordinated Debt;


 


(v)
within five (5) days of filing, all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission;


 


(vi)
as soon as available, but no later than thirty (30) days after the last day of each month, copies of the month-end account statements
for each Collateral Account maintained by Borrower or its Subsidiaries (other than an Excluded Account), which statements may
be provided to Collateral Agent and each Lender by Borrower or directly from the applicable institution(s);


 


(vii)
prompt delivery of (and in any event within five (5) days after the same are sent or received) copies of all material correspondence,
reports, documents and other filings with any Governmental Authority that could reasonably be expected to have a material adverse
effect on any of the Governmental Approvals material to Borrower’s business or otherwise could reasonably be expected to
have a Material Adverse Change;


 


(viii)
prompt notice of any event that (A) could reasonably be expected to materially and adversely affect the Borrower’s Intellectual
Property and (B) could reasonably be expected to result in a Material Adverse Change;


 


(ix)
written notice at least (10) days’ prior to Borrower’s creation of a New Subsidiary in accordance with the terms of
Section 6.10);


 


(x)
written notice at least (30) days’ prior to Borrower’s (A) adding any new offices or business locations, including
warehouses (unless such new offices or business locations contain less than Two Hundred Fifty Thousand Dollars ($250,000.00) in
assets or property of Borrower or any of its Subsidiaries), (B) changing its jurisdiction of organization, (C) changing its organizational
structure or type, (D) change its legal name, (E) changing any organizational number (if any) assigned by its jurisdiction of
organization, or (F) registering or filing any Intellectual Property;


 


(xi)
upon Borrower becoming aware of the existence of any Event of Default or event which, with the giving of notice or passage of
time, or both, would constitute an Event of Default, prompt (and in any event within three (3) Business Days) written notice of
such occurrence, which such notice shall include a reasonably detailed description of such Event of Default or event which, with
the giving of notice or passage of time, or both, would constitute an Event of Default;


 


(xii)
immediate notice 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;


 


(xiii)
notice of any commercial tort claim with an expected value in excess of Fifty Thousand Dollars ($50,000) and of the general details
thereof;


 




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(xiv)
if Borrower or any of its Subsidiaries is not now a Registered Organization but later becomes one, written notice of such occurrence
and information regarding such Person’s organizational identification number within seven (7) Business Days of receiving
such organizational identification number; and


 


(xv)
other information as reasonably requested by Collateral Agent or any Lender.


 


Notwithstanding
the foregoing, documents required to be delivered pursuant to the terms hereof (to the extent any such documents are included
in materials otherwise filed with the Securities and Exchange Commission) may be delivered electronically and if so delivered,
shall be deemed to have been delivered on the date on which Borrower posts such documents, or provides a link thereto, on Borrower’s
website on the internet at Borrower’s website address.


 


(b)
Concurrently with the delivery of the financial statements specified in Section 6.2(a)(i) above but no later than thirty (30)
days after the last day of each quarter, deliver to Collateral Agent and each Lender:


 


(i)
a duly completed Compliance Certificate signed by a Responsible Officer;


 


(ii)
an updated Perfection Certificate to reflect any amendments, modifications and updates to certain information in the Perfection
Certificate after the Effective Date to the extent such amendments, modifications and updates are permitted by one or more specific
provisions in this Agreement;


 


(iii)
copies of any material Governmental Approvals obtained by Borrower or any of its Subsidiaries;


(iv)
written notice of the commencement of, and any material development in, the proceedings contemplated by Section 5.8 hereof;


 


(v)
written notice of any litigation or governmental proceedings pending or threatened (in writing) against Borrower or any of its
Subsidiaries, which could reasonably be expected to result in damages or costs to Borrower or any of its Subsidiaries of Two Hundred
Fifty Thousand Dollars ($250,000.00); and


 


(vi)
written notice of all returns, recoveries, disputes and claims regarding Inventory that involve more than Two Hundred Fifty Thousand
Dollars ($250,000.00) individually or in the aggregate in any calendar year.


 


(c)
Keep proper, complete and true books of record and account in accordance with GAAP in all material respects. Borrower shall, and
shall cause each of its Subsidiaries to, allow, at the sole cost of Borrower, Collateral Agent or any Lender, during regular business
hours upon reasonable prior notice (provided that no notice shall be required when an Event of Default has occurred and is continuing),
to visit and inspect any of its properties, to examine and make abstracts or copies from any of its books and records, and to
conduct a collateral audit and analysis of its operations and the Collateral. Such audits shall be conducted no more often than
twice every year unless (and more frequently if) an Event of Default has occurred and is continuing. Notwithstanding the foregoing,
upon request of any Lender, Borrower agrees to permit such Lender to communicate with Borrower’s accounting firm with respect
to the consolidated financial statements delivered hereunder.


 


6.3
Inventory; Returns. Keep all Inventory in good and marketable condition, free from material defects. Returns and allowances
between Borrower, or any of its Subsidiaries, and their respective Account Debtors shall follow Borrower’s, or such Subsidiary’s,
customary practices as they exist at the Effective Date.


 


6.4
Taxes; Pensions. Timely file and require each of its Subsidiaries to timely file, all required tax returns and reports in
an aggregate amount greater than Three Hundred Fifty Thousand Dollars ($350,000) and timely pay, and require each of its Subsidiaries
to timely file, all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower or its
Subsidiaries in an aggregate amount greater than Three Hundred Fifty Thousand Dollars ($350,000), except as otherwise permitted
pursuant to the terms of Section 5.8 hereof, and shall deliver to Collateral Agent and each Lender, on demand, appropriate certificates
attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation
plans in accordance with the terms of such plans.


 




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6.5
Insurance. Keep Borrower’s and its Subsidiaries’ business and the Collateral insured for risks and in amounts
standard for companies in Borrower’s and its Subsidiaries’ industry and location and as Collateral Agent may reasonably
request, including, but not limited to, D&O insurance reasonably satisfactory to Collateral Agent. Insurance policies shall
be in a form, with companies, and in amounts that are reasonably satisfactory to Collateral Agent and Lenders. All property policies
shall have a lender’s loss payable endorsement showing Collateral Agent as lender loss payee and waive subrogation against
Collateral Agent, and all liability policies shall show, or have endorsements showing, Collateral Agent, as additional insured.
The Collateral Agent shall be named as lender loss payee and/or additional insured with respect to any such insurance providing
coverage in respect of any Collateral, and each provider of any such insurance shall agree, by endorsement upon the policy or
policies issued by it or by independent instruments furnished to the Collateral Agent, that it will give the Collateral Agent
thirty (30) days’ prior written notice before any such policy or policies shall be materially altered or canceled (other
than cancellation for non-payment of premiums, for which ten (10) days’ prior written notice shall be required). At Collateral
Agent’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments. Proceeds payable
under any policy shall, at Collateral Agent’s option, be payable to Collateral Agent, for the ratable benefit of the Lenders,
on account of the Obligations. Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is continuing,
Borrower shall have the option of applying the proceeds of any casualty policy within 90 days of receipt thereof up to Two Hundred
Fifty Thousand Dollars ($250,000.00) with respect to any loss, but not exceeding Two Hundred Fifty Thousand Dollars ($250,000.00),
in the aggregate for all losses under all casualty policies in any one year, toward the replacement or repair of destroyed or
damaged property; provided that any such replaced or repaired property (i) shall be of equal or like value as the replaced or
repaired Collateral and (ii) shall be deemed Collateral in which Collateral Agent has been granted a first priority security interest,
and (b) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy
shall, at the option of Collateral Agent, be payable to Collateral Agent, for the ratable benefit of the Lenders, on account of
the Obligations. If Borrower or any of its Subsidiaries fails to obtain insurance as required under this Section 6.5 or to pay
any amount or furnish any required proof of payment to third persons, Collateral Agent and/or any Lender may make (but has no
obligation to do so), at Borrower’s expense, all or part of such payment or obtain such insurance policies required in this
Section 6.5, and take any action under the policies Collateral Agent or such Lender deems prudent.


 


6.6
Operating Accounts.


 


(a)
Borrower shall provide Collateral Agent ten (10) days’ prior written notice before Borrower or any of its Subsidiaries establishes
any Collateral Account (other than an Excluded Account). In addition, for each Collateral Account (other than an Excluded Account)
that Borrower or any of its Subsidiaries, at any time maintains, Borrower or such Subsidiary shall cause the applicable bank or
financial institution at or with which such Collateral Account is maintained to execute and deliver a Control Agreement or other
appropriate instrument with respect to such Collateral Account to perfect Collateral Agent’s Lien in such Collateral Account
in accordance with the terms hereunder prior to the establishment of such Collateral Account, which Control Agreement may not
be terminated without prior written consent of Collateral Agent. The provisions of the previous sentence shall not apply to Excluded
Accounts.


 


(b)
Neither Borrower nor any of its Subsidiaries shall maintain any Collateral Accounts except Collateral Accounts maintained in accordance
with Section 6.6.


 


6.7
Protection of Intellectual Property Rights. Borrower and each of its Subsidiaries shall: (a) protect, defend and maintain
the validity and enforceability of its Intellectual Property that is material to its business; (b) promptly advise Collateral
Agent in writing of a challenge to the validity, or material infringement by a third party of its Intellectual Property; and (c)
not allow any Intellectual Property material to its business to be abandoned, forfeited or dedicated to the public without Collateral
Agent’s prior written consent.


 




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6.8
Litigation Cooperation. Commencing on the Effective Date and continuing through the termination of this Agreement, make available
to Collateral Agent and the Lenders, without expense to Collateral Agent or the Lenders, Borrower and each of Borrower’s
officers, employees and agents and Borrower’s Books, to the extent that Collateral Agent or any Lender may reasonably deem
them necessary to prosecute or defend any third-party suit or proceeding instituted by or against Collateral Agent or any Lender
with respect to any Collateral or relating to Borrower.


 


6.9
Landlord Waivers; Bailee Waivers. In the event that Borrower or any of its Subsidiaries, after the Effective 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 receive the written consent of Collateral Agent and, in the event that the Collateral at any new location is valued in excess
of Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate, at Collateral Agent’s election, such bailee or landlord,
as applicable, must execute and deliver a bailee waiver or landlord waiver, as applicable, in form and substance reasonably satisfactory
to Collateral Agent prior to 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.


 


6.10
Creation/Acquisition of Subsidiaries. In the event any Borrower or any Subsidiary of any Borrower creates or acquires any
Subsidiary after the Effective Date, Borrower or such Subsidiary shall promptly notify Bank of such creation or acquisition, and
Borrower or such Subsidiary shall take all actions reasonably requested by Bank to achieve any of the following with respect to
such “New Subsidiary” (defined as a Subsidiary formed after the date hereof during the term of this Agreement):
(i) to cause such New Subsidiary to become either a co-Borrower hereunder, if such New Subsidiary is organized under the laws
of the United States, or a secured guarantor with respect to the Obligations; and (ii) to grant and pledge to Collateral Agent
a perfected security interest in 100% of the stock, units or other evidence of ownership held by Borrower or its Subsidiaries
of any such New Subsidiary which is organized under the laws of the United States, and 65% of the stock, units or other evidence
of ownership held by Borrower or its Subsidiaries of any such New Subsidiary which is not organized under the laws of the United
States.


 


6.11
Further Assurances. Execute any further instruments and take further action as Collateral Agent or any Lender reasonably requests
to perfect or continue Collateral Agent’s Lien in the Collateral or to effect the purposes of this Agreement, including
without limitation, permit Collateral Agent or any Lender to discuss Borrower’s financial condition with Borrower’s
accountants.


 


7.
NEGATIVE COVENANTS


 


Borrower
shall not, and shall not permit any of its Subsidiaries to, do any of the following without the prior written consent of the Required
Lenders:


 


7.1
Dispositions. Convey, sell, lease, transfer, assign, dispose of (collectively, “Transfer”), or permit any
of its Subsidiaries to Transfer, all or any part of its business or property (including Intellectual Property), except for Transfers
(a) of Inventory in the ordinary course of business; (b) of worn-out or obsolete Equipment; and (c) Permitted Liens, Permitted
Investments and Permitted Licenses.


 


7.2
Changes in Business, Management, Ownership, or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage
in any business other than the businesses engaged in by Borrower as of the Effective Date or reasonably related thereto; (b) liquidate
or dissolve; or (c) (i) any Key Person shall cease to be actively engaged in the management of Borrower unless written notice
thereof is provided to Collateral Agent and each Lender within ten (10) days of such, or (ii) enter into any transaction or series
of related transactions in which (A) the stockholders of Borrower who were not stockholders immediately prior to the first such
transaction own more than 35% of the voting stock of Borrower immediately after giving effect to such transaction or related series
of such transactions and (B) Borrower ceases to own 100% of the ownership interests of a Subsidiary of Borrower. Borrower shall
not, without at least thirty (30) days’ prior written notice to Collateral Agent: (A) add any new offices or business locations,
including warehouses (unless such new offices or business locations contain less than Two Hundred Fifty Thousand Dollars ($250,000.00)
in assets or property of Borrower or any of its Subsidiaries); (B) change its jurisdiction of organization, (C) change its organizational
structure or type, (D) change its legal name, or (E) change any organizational number (if any) assigned by its jurisdiction of
organization.


 




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7.3
Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person,
or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock, shares or property of
another Person. A Subsidiary may merge or consolidate into another Subsidiary (provided such surviving Subsidiary is a “co-Borrower”
hereunder or has provided a secured Guaranty of Borrower’s Obligations hereunder) or with (or into) Borrower provided Borrower
is the surviving legal entity, and as long as no Event of Default is occurring prior thereto or arises as a result therefrom.


 


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


 


7.5
Encumbrance. Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income,
including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral
not to be subject to the first priority security interest granted herein (except for Permitted Liens), or enter into any agreement,
document, instrument or other arrangement (except with or in favor of Collateral Agent, for the ratable benefit of the Lenders)
with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower, or any of its Subsidiaries,
from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or such
Subsidiary’s Intellectual Property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted
Liens”.


 


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


 


7.7
Restricted Payments. Pay any dividends (other than dividends payable solely in capital stock) or make any distribution or
payment in respect of or redeem, retire or purchase any capital stock (other than (i) repurchases pursuant to the terms of employee
stock purchase plans, employee restricted stock agreements, stockholder rights plans, director or consultant stock option plans,
or similar plans, provided in each case that such repurchases and payments do not exceed Three Hundred Thousand Dollars ($300,000.00)
in the aggregate per fiscal year and (ii) payments related to share withholdings for individual taxes related to vested restricted
stock units (RSUs), options and other equity grants made to employees, as permitted under the Borrower’s 2007 Incentive
Stock and Awards Plan, as amended as of the date hereof, and required under certain of the Borrower’s equity grants and
employment agreements, in each case as in effect as of the date hereof, and provided that in each case such payments or distributions
(A) shall only be made with the proceeds of a simultaneous (subject to customary provisions in relation to the receipt of funds)
equity or Subordinated Debt offering and (B) not permit the company’s net cash position (i.e. cash on balance sheet) to
change in connection with such distributions or payments.


 


7.8
Investments. Directly or indirectly make any Investment other than Permitted Investments, or permit any of its Subsidiaries
to do so.


 


7.9
Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate
of Borrower or any of its Subsidiaries, except for (a) transactions that are in the ordinary course of Borrower’s or such
Subsidiary’s business, upon fair and reasonable terms that are no less favorable to Borrower or such Subsidiary than would
be obtained in an arm’s length transaction with a non-affiliated Person, and (b) Subordinated Debt or equity investments
by Borrower’s investors in Borrower or its Subsidiaries.


 


7.10
Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor,
or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to
the Subordinated Debt which would increase the amount thereof or adversely affect the subordination thereof to Obligations owed
to the Lenders without the consent of the Lenders, which consent shall not be unreasonably withheld, delayed or conditioned.


 


7.11
Compliance. Become an “investment company” or a company controlled by an “investment company”, under
the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or
carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of
any Term Loan for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited
Transaction, as defined in ERISA, to occur, if the violation could reasonably be expected to have a Material Adverse Change; fail
to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably
be expected to have a Material Adverse Change, or permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary to
withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect
to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any material
liability of Borrower or any of its Subsidiaries, including any material liability to the Pension Benefit Guaranty Corporation
or its successors or any other Governmental Authority.


 




    	24



    	 	 	 



    


 


7.12
Compliance 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. 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
Material Agreements. Neither Borrower nor any of its Subsidiaries shall, without the consent of Collateral Agent (which consent
shall not be unreasonably withheld, conditioned or otherwise delayed), (a) enter into a Material Agreement or (b) materially amend
a Material Agreement, in each case if such action would materially and adversely affect the interests of the Lenders hereunder.


 


8.
EVENTS OF DEFAULT


 


Any
one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:


 


8.1
Payment Default. Borrower fails to (a) make any payment of principal on any Term Loan on its due date, or (b) pay any interest
or any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day
grace period shall not apply to payments due on the Maturity Date or the date or acceleration pursuant to Section 9.1 (a) hereof);


 


8.2
Covenant Default.


 


(a)
Borrower or any of its Subsidiaries fails or neglects to perform any obligation in Sections 6.2 (Financial Statements, Reports,
Certificates), 6.4 (Taxes), 6.5 (Insurance), 6.6 (Operating Accounts), 6.7 (Protection of Intellectual Property Rights), 6.9 (Landlord
Waivers; Bailee Waivers), 6.10 (Creation/Acquisition of Subsidiaries) or Borrower violates any provision in Section 7; or


 


(b)
Borrower, or any of its Subsidiaries, fails or neglects to perform, keep, or observe any other term, provision, condition, covenant
or agreement contained in this Agreement or any Loan Documents, and as to any default (other than those specified in this Section
8) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within
fifteen (15) days after the occurrence 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 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 cure the default shall
not be deemed an Event of Default (but no Term Loans shall be made during such cure period). For purposes of this Section 8.2(b)
only, “Subsidiaries” shall exclude any single Subsidiary or group of Subsidiaries where such Subsidiary’s revenue
or such group of Subsidiaries’ revenue (in each case in accordance with GAAP) or assets is less than 5.0% of the aggregate
(A) revenue or (B) assets, of the Borrower and all its Subsidiaries, in each case measured on a consolidated basis for the Borrower
and all its Subsidiaries.


 




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8.3
Material Adverse Change. A Material Adverse Change has occurred;


 


8.4
Attachment; Levy; Restraint on Business.


 


(a)
(i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or any of its Subsidiaries
or of any entity under control of Borrower or its Subsidiaries on deposit with any institution at which Borrower or any of its
Subsidiaries maintains a Collateral Account, or (ii) a notice of lien, levy, or assessment is filed against Borrower or any of
its Subsidiaries or their respective assets by any government agency, and the same under subclauses (i) and (ii) hereof are not,
within thirty (30) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise);
and


 


(b)
(i) any material portion of Borrower’s or any of its Subsidiaries’ assets is attached, seized, levied on, or comes
into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower or any of its Subsidiaries
from conducting any part of its business;


 


8.5
Insolvency. (a) Borrower or any of its Subsidiaries is or becomes Insolvent; (b) Borrower or any of its Subsidiaries begins
an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower or any of its Subsidiaries and not dismissed
or stayed within sixty (60) days (but no Term Loans shall be extended while Borrower or any Subsidiary is Insolvent and/or until
any Insolvency Proceeding is dismissed). For purposes of this Section 8.5 only, “Subsidiaries” shall exclude any single
Subsidiary or group of Subsidiaries where such Subsidiary’s revenue or such group of Subsidiaries’ revenue (in each
case in accordance with GAAP) or assets is less than 5.0% of the aggregate (A) revenue or (B) assets, of the Borrower and all
its Subsidiaries, in each case measured on a consolidated basis for the Borrower and all its Subsidiaries.


 


8.6
Other Agreements. There is (a) a default in any agreement to which Borrower or any of its Subsidiaries is a party with a third
party or parties resulting in a right by such 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 ($250,000.00) or that could reasonably be expected
to have a Material Adverse Change; (b) any default under a Material Agreement that permits the counterparty thereto to accelerate
the payments owed thereunder; or (c) a revocation of a Material Agreement which is reasonably likely to cause a Material Adverse
Change.


 


8.7
Judgments. (a) One or more judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate,
of at least Two Hundred Fifty Thousand Dollars ($250,000.00) (not covered by independent third-party insurance) shall be rendered
against Borrower or any of its Subsidiaries and shall remain unsatisfied, unvacated, or unstayed for a period of thirty (30) days
after the entry thereof or (b) any judgments, orders or decrees rendered against Borrower that could reasonably be expected to
result in a Material Adverse Change;


 


8.8
Misrepresentations. Borrower or any of its Subsidiaries or any Person acting for Borrower or any of its Subsidiaries makes
any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered
to Collateral Agent and/or Lenders or to induce Collateral Agent and/or the Lenders to enter this Agreement or any Loan Document,
and such representation, warranty, or other statement, when taken as a whole, is incorrect in any material respect when made;


 


8.9
Subordinated Debt. A default or breach occurs under any Material 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
Collateral Agent or the Lenders, or any creditor that has signed such an agreement with Collateral Agent or the Lenders breaches
any material terms of such agreement;


 


8.10
Guaranty. (a) Any Guaranty terminates or ceases for any reason to be in full force and effect; (b) any Guarantor does not
perform any obligation or covenant under any Guaranty; (c) any circumstance described in Section 8 occurs with respect to any
Guarantor; or (d) a Material Adverse Change with respect to any Guarantor;


 




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8.11
Governmental Approvals; FDA Action. (a) Any Governmental Approval 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 Change; or (b) (i) the FDA, DOJ,
or other Governmental Authority initiates a Regulatory Action or any other enforcement action against Borrower or any of its Subsidiaries
or any supplier of Borrower or any of its Subsidiaries causes Borrower or any of its Subsidiaries to recall, withdraw, remove
or discontinue manufacturing, distributing, and/or marketing any of its products that (i) for each individual product, constitute
trailing twelve months revenues (in accordance with GAAP) to the Borrower and its Subsidiaries of at least $1,000,000, or (ii)
in the aggregate for all such products, constitute trailing twelve months revenues (in accordance with GAAP) to the Borrower and
its Subsidiaries of at least (A) $2,500,000, or (B) 5.0% of the total trailing twelve month revenue for Borrower and its Subsidiaries,
whichever is greater, in each case even if such action is based on previously disclosed conduct; (ii) the FDA issues a warning
letter or Regulatory Action to Borrower or any of its Subsidiaries with respect to any of its activities or products which could
reasonably be expected to result in a Material Adverse Change; (iii) Borrower or any of its Subsidiaries conducts a mandatory
or voluntary recall which could reasonably be expected to result in liability and expense to Borrower or any of its Subsidiaries
of $1,000,000 or more; (iv) Borrower or any of its Subsidiaries enters into a settlement agreement with the FDA, DOJ, or other
Governmental Authority that results in aggregate liability as to any single or related series of transactions, incidents or conditions,
of $1,000,000 or more, or that could reasonably be expected to result in a Material Adverse Change even if such settlement agreement
is based on previously disclosed conduct; or (v) Borrower or any of its Subsidiaries fails to make adequate progress remediating
observations identified in an FDA Form 483 notice of inspection observation to Collateral Agent’s or, if agreed by the Collateral
Agent and Borrower (which agreement by the Collateral Agent or Lenders shall not be unreasonably withheld or delayed), a qualified
third party’s, reasonable satisfaction, within six months of receipt; or (vi) the FDA revokes any authorization or permission
granted under any Registration, or Borrower or any of its Subsidiaries withdraws any Registration, that could reasonably be expected
to result in a Material Adverse Change.


 


8.12
 Lien Priority; Intellectual Property. Any Lien created hereunder or by any other Loan Document shall at any time fail
to constitute a valid and perfected Lien on any material portion of the Collateral purported to be secured thereby, subject to
no prior or equal Lien, other than Permitted Liens arising as a matter of applicable law. Any Intellectual Property material to
Borrower’s business shall cease to be validly owned or licensed by Borrower free and clear of any Liens other than Permitted
Liens.


 


9.
RIGHTS AND REMEDIES


 


9.1
Rights and Remedies.


 


(a)
Upon the occurrence and during the continuance of an Event of Default, Collateral Agent may, without notice or demand,
do any or all of the following: (i) deliver notice of the Event of Default to Borrower, (ii) by notice to Borrower declare all
Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations shall be immediately
due and payable without any action by Collateral Agent or the Lenders) or (iii) by notice to Borrower suspend or terminate the
obligations, if any, of the Lenders to advance money or extend credit for Borrower’s benefit under this Agreement or under
any other agreement between Borrower and Collateral Agent and/or the Lenders (but if an Event of Default described in Section
8.5 occurs all obligations, if any, of the Lenders to advance money or extend credit for Borrower’s benefit under this Agreement
or under any other agreement between Borrower and Collateral Agent and/or the Lenders shall be immediately terminated without
any action by Collateral Agent or the Lenders).


 


(b)
Without limiting the rights of Collateral Agent and the Lenders set forth in Section 9.1(a) above, upon the occurrence and during
the continuance of an Event of Default, Collateral Agent shall have the right, without notice or demand, to do any or all
of the following:


 


(i)
foreclose upon and/or sell or otherwise liquidate, the Collateral;


 


(ii)
apply to the Obligations any (a) balances and deposits of Borrower that Collateral Agent or any Lender holds or controls, or (b)
any amount held or controlled by Collateral Agent or any Lender owing to or for the credit or the account of Borrower; and/or


 




    	27



    	 	 	 



    


 


(iii)
commence and prosecute an Insolvency Proceeding or consent to Borrower commencing any Insolvency Proceeding.


 


(c)
Without limiting the rights of Collateral Agent and the Lenders set forth in Sections 9.1(a) and (b) above, upon the occurrence
and during the continuance of an Event of Default, Collateral Agent shall have the right, without notice or demand, to do any
or all of the following:


 


(i)
settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Collateral Agent
considers advisable, notify any Person owing Borrower money of Collateral Agent’s security interest in such funds, and verify
the amount of such account;


 


(ii)
make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest
in the Collateral. Borrower shall assemble the Collateral if Collateral Agent requests and make it available in a location as
Collateral Agent reasonably designates. Collateral Agent may enter premises where the Collateral is located, take and maintain
possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior
to its security interest and pay all expenses incurred. Borrower grants Collateral Agent a license to enter and occupy any of
its premises, without charge, to exercise any of Collateral Agent’s rights or remedies;


 


(iii)
ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, and/or advertise for sale, the Collateral. Collateral
Agent is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s and each
of its Subsidiaries’ labels, Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade names, Trademarks,
service marks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of,
advertising for sale, and selling any Collateral and, in connection with Collateral Agent’s exercise of its rights under
this Section 9.1, Borrower’s and each of its Subsidiaries’ rights under all licenses and all franchise agreements
inure to Collateral Agent, for the benefit of the Lenders;


 


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


 


(v)
demand and receive possession of Borrower’s Books;


 


(vi)
appoint a receiver to seize, manage and realize any of the Collateral, and such receiver shall have any right and authority as
any competent court will grant or authorize in accordance with any applicable law, including any power or authority to manage
the business of Borrower or any of its Subsidiaries; and


 


(vii)
subject to clauses 9.1(a) and (b), exercise all rights and remedies available to Collateral Agent and each Lender under the Loan
Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to
the terms thereof).


 


Notwithstanding
any provision of this Section 9.1 to the contrary, upon the occurrence of any Event of Default, Collateral Agent shall have the
right to exercise any and all remedies referenced in this Section 9.1 without the written consent of Required Lenders following
the occurrence of an Exigent Circumstance.


 


9.2
Power of Attorney. Borrower hereby irrevocably appoints Collateral Agent as its lawful attorney-in-fact, exercisable upon
the occurrence and during the continuance of an Event of Default, to: (a) endorse Borrower’s or any of its Subsidiaries’
name on any checks or other forms of payment or security; (b) sign Borrower’s or any of its Subsidiaries’ name on
any invoice or bill of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and claims about
the Accounts directly with Account Debtors, for amounts and on terms Collateral Agent determines reasonable; (d) make, settle,
and adjust all claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security
interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate
or discharge the same; and (f) transfer the Collateral into the name of Collateral Agent or a third party as the Code or any applicable
law permits. Borrower hereby appoints Collateral Agent as its lawful attorney-in-fact to sign Borrower’s or any of its Subsidiaries’
name on any documents necessary to perfect or continue the perfection of Collateral Agent’s security interest in the Collateral
regardless of whether an Event of Default has occurred until all Obligations (other than inchoate indemnity obligations) have
been satisfied in full and Collateral Agent and the Lenders are under no further obligation to make extend Term Loans hereunder.
Collateral Agent’s foregoing appointment as Borrower’s or any of its Subsidiaries’ attorney in fact, and all
of Collateral Agent’s rights and powers, coupled with an interest, are irrevocable until all Obligations (other than inchoate
indemnity obligations) have been fully repaid and performed and Collateral Agent’s and the Lenders’ obligation to
provide Term Loans terminates.


 




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9.3
Protective Payments. If Borrower or any of its Subsidiaries fail to obtain the insurance called for by Section 6.5 or fails
to pay any premium thereon or fails to pay any other amount which Borrower or any of its Subsidiaries is obligated to pay under
this Agreement or any other Loan Document, Collateral Agent may obtain such insurance or make such payment, and all amounts so
paid by Collateral Agent are Lenders’ Expenses and immediately due and payable, bearing interest at the Default Rate, and
secured by the Collateral. Collateral Agent will make reasonable efforts to provide Borrower with notice of Collateral Agent obtaining
such insurance or making such payment at the time it is obtained or paid or within a reasonable time thereafter. No such payments
by Collateral Agent are deemed an agreement to make similar payments in the future or Collateral Agent’s waiver of any Event
of Default.


 


9.4
Application of Payments and Proceeds. Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence
and during the continuance of an Event of Default, (a) Borrower irrevocably waives the right to direct the application of any
and all payments at any time or times thereafter received by Collateral Agent from or on behalf of Borrower or any of its Subsidiaries
of all or any part of the Obligations, and, as between Borrower on the one hand and Collateral Agent and Lenders on the other,
Collateral Agent shall have the continuing and exclusive right to apply and to reapply any and all payments received against the
Obligations in such manner as Collateral Agent may deem advisable notwithstanding any previous application by Collateral Agent,
and (b) the proceeds of any sale of, or other realization upon all or any part of the Collateral shall be applied: first, to the
Lenders’ Expenses; second, to accrued and unpaid interest on the Obligations (including any interest which, but for the
provisions of the United States Bankruptcy Code, would have accrued on such amounts); third, to the principal amount of the Obligations
outstanding; and fourth, to any other indebtedness or obligations of Borrower owing to Collateral Agent or any Lender under the
Loan Documents. Any balance remaining shall be delivered to Borrower or to whoever may be lawfully entitled to receive such balance
or as a court of competent jurisdiction may direct. In carrying out the foregoing, (x) amounts received shall be applied in the
numerical order provided until exhausted prior to the application to the next succeeding category, and (y) each of the Persons
entitled to receive a payment in any particular category shall receive an amount equal to its pro rata share of amounts available
to be applied pursuant thereto for such category. Any reference in this Agreement to an allocation between or sharing by the Lenders
of any right, interest or obligation “ratably,” “proportionally” or in similar terms shall refer to Pro
Rata Share unless expressly provided otherwise. Collateral Agent, or if applicable, each Lender, shall promptly remit to the other
Lenders such sums as may be necessary to ensure the ratable repayment of each Lender’s portion of any Term Loan and the
ratable distribution of interest, fees and reimbursements paid or made by Borrower. Notwithstanding the foregoing, a Lender receiving
a scheduled payment shall not be responsible for determining whether the other Lenders also received their scheduled payment on
such date; provided, however, if it is later determined that a Lender received more than its ratable share of scheduled payments
made on any date or dates, then such Lender shall remit to Collateral Agent or other Lenders such sums as may be necessary to
ensure the ratable payment of such scheduled payments, as instructed by Collateral Agent. If any payment or distribution of any
kind or character, whether in cash, properties or securities, shall be received by a Lender in excess of its ratable share, then
the portion of such payment or distribution in excess of such Lender’s ratable share shall be received by such Lender in
trust for and shall be promptly paid over to the other Lender for application to the payments of amounts due on the other Lenders’
claims. To the extent any payment for the account of Borrower is required to be returned as a voidable transfer or otherwise,
the Lenders shall contribute to one another as is necessary to ensure that such return of payment is on a pro rata basis. If any
Lender shall obtain possession of any Collateral, it shall hold such Collateral for itself and as agent and bailee for Collateral
Agent and other Lenders for purposes of perfecting Collateral Agent’s security interest therein.


 




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9.5
Liability for Collateral. So long as Collateral Agent and the Lenders comply with reasonable banking practices regarding the
safekeeping of the Collateral in the possession or under the control of Collateral Agent and the Lenders, Collateral Agent and
the Lenders shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral;
(c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person.
Borrower bears all risk of loss, damage or destruction of the Collateral.


 


9.6
No Waiver; Remedies Cumulative. Failure by Collateral Agent or any Lender, at any time or times, to require strict performance
by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Collateral
Agent or any Lender thereafter to demand strict performance and compliance herewith or therewith. No waiver hereunder shall be
effective unless signed by Collateral Agent and the Required Lenders and then is only effective for the specific instance and
purpose for which it is given. The rights and remedies of Collateral Agent and the Lenders under this Agreement and the other
Loan Documents are cumulative. Collateral Agent and the Lenders have all rights and remedies provided under the Code, any applicable
law, by law, or in equity. The exercise by Collateral Agent or any Lender of one right or remedy is not an election, and Collateral
Agent’s or any Lender’s waiver of any Event of Default is not a continuing waiver. Collateral Agent’s or any
Lender’s delay in exercising any remedy is not a waiver, election, or acquiescence.


 


9.7
Demand Waiver. Borrower waives, to the fullest extent permitted by law, demand, 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 held by Collateral Agent or any Lender on which Borrower or any Subsidiary
is liable.


 


10.
NOTICES


 


All
notices, consents, requests, approvals, demands, or other communication (collectively, “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 facsimile
transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when
delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address,
facsimile number, or email address indicated below. Any of Collateral Agent, Lender or Borrower may change its mailing address
or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10.


 


	If
    to Borrower:	 	Imprimis
                                         Pharmaceuticals, Inc.

        12264
        El Camino Real, Suite 350

        San
        Diego, CA 92130

        Attn:
        Andrew Boll

        Fax:
        858-345-1745

        Email:
        aboll@imprimispharma.com

	 	 	 
	with a copy (which
    shall not constitute notice) to:	 	Morrison
                                         & Foerster LLP

        12531
        High Bluff Drive, Suite 100

        San
        Diego, CA 92130-2040

        Attn:
        Steve Rowles

        Fax:
        (858) 720-5125

        Email:
        srowles@mofo.com

	 	 	 
	If to Collateral
    Agent:	 	IMMY
                                         Funding LLC

        c/o
        Life Sciences Alternative Funding LLC

        50
        Main Street

        Suite
        1000

        White
        Plains, NY 10606

        Attention:
        Stephen J. DeNelsky

        Email:
        steve@lsafunding.com

	 	 	 
	with a copy (which
    shall not constitute notice) to:	 	Latham
                                         & Watkins LLP

        505
        Montgomery Street

        Suite
        2000

        San
        Francisco, CA 94111-6538

        Attn:
        Haim Zaltzman

        Fax:
        415.395.8095

        Email:
        haim.zaltzman@lw.com




 



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11.
CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER


 


11.1
Waiver of Jury Trial. EACH OF BORROWER, COLLATERAL AGENT AND LENDERS UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, ANY OF THE INDEBTEDNESS
SECURED HEREBY, ANY DEALINGS AMONG BORROWER, COLLATERAL AGENT AND/OR LENDERS RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION
OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED AMONG BORROWER, COLLATERAL AGENT AND/OR LENDERS.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT. THIS WAIVER
IS IRREVOCABLE. THIS WAIVER MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING
TO THIS TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


 


11.2
Governing Law and Jurisdiction.


 


(a)
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS (EXCLUDING THOSE LOAN DOCUMENTS THAT BY THEIR OWN TERMS ARE EXPRESSLY GOVERNED BY THE
LAWS OF ANOTHER JURISDICTION) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES that would result in the application of any laws other than the laws OF
the State of New York), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
REGARDLESS OF THE LOCATION OF THE COLLATERAL, PROVIDED, HOWEVER, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN
NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS
AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT.


 


(b)
Submission to Jurisdiction. Any legal action or proceeding with respect to the Loan Documents shall be brought exclusively
in the courts of the State of New York located in the City of New York, Borough of Manhattan, or of the United States of America
for the Southern District of New York and, by execution and delivery of this Agreement, Borrower hereby accepts for itself and
in respect of its Property, generally and unconditionally, the jurisdiction of the aforesaid courts. Notwithstanding the foregoing,
Collateral Agent and Lenders shall have the right to bring any action or proceeding against Borrower (or any property of Borrower)
in the court of any other jurisdiction Collateral Agent or Lenders deem necessary or appropriate in order to realize on the Collateral
or other security for the Obligations. The parties hereto hereby irrevocably waive any objection, including any objection to the
laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing
of any such action or proceeding in such jurisdictions.


 


(c)
Service of Process. Borrower irrevocably waives personal
service of any and all legal process, summons, notices and other documents and other service of process of any kind and consents
to such service in any suit, action or proceeding brought in the United States of America with respect to or otherwise arising
out of or in connection with any Loan Document by any means permitted by applicable requirements of law, including by the mailing
thereof (by registered or certified mail, postage prepaid) to the address of Borrower specified herein (and shall be effective
when such mailing shall be effective, as provided therein). Borrower agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.


 




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(d)
Non-exclusive Jurisdiction. Nothing contained in this Section
11.2 shall affect the right of Collateral Agent or Lenders to serve process in any other manner permitted by applicable requirements
of law or commence legal proceedings or otherwise proceed against Borrower in any other jurisdiction.


 


12.
GENERAL PROVISIONS


 


12.1
Successors and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each party.
Borrower may not transfer, pledge or assign this Agreement or any rights or obligations under it without Collateral Agent’s
prior written consent (which may be granted or withheld in Collateral Agent’s discretion, subject to Section 12.5). The
Lenders have the right, without the consent of or notice to Borrower, to sell, transfer, assign, pledge, negotiate, or grant participation
in (any such sale, transfer, assignment, negotiation, or grant of a participation, a “Lender Transfer”)
all or any part of, or any interest in, the Lenders’ obligations, rights, and benefits under this Agreement and the
other Loan Documents except, unless an Event of Default has occurred and is continuing, and other than to an Affiliate of Lender,
to (i) any Person that sells, markets, manufactures or produces products and services in competition with Borrower, or (ii) any
vulture fund or similar type of investor whose primary investment strategy consists of investments in and purchases of debt of
distressed companies to control and dispose of the assets of such companies, each as reasonably determined by the Collateral Agent.


 


12.2
Indemnification. Borrower agrees to indemnify, defend and hold Collateral Agent and the Lenders and their respective directors,
officers, employees, consultants, agents, attorneys, or any other Person affiliated with or representing Collateral Agent or the
Lenders (each, an “Indemnified Person”) harmless against: (a) all obligations, demands, claims, and liabilities
(collectively, “Claims”) asserted by any other party in connection with; related to; following; or arising
from, out of or under, the transactions contemplated by the Loan Documents; and (b) all losses or Lenders’ Expenses incurred,
or paid by Indemnified Person in connection with; related to; following; or arising from, out of or under, the transactions contemplated
by the Loan Documents between Collateral Agent, and/or the Lenders and Borrower (including reasonable attorneys’ fees and
expenses), except for Claims and/or losses directly caused by such Indemnified Person’s gross negligence or willful misconduct.
Borrower hereby further indemnifies, defends and holds each Indemnified Person harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including the fees and disbursements of counsel for such Indemnified Person) in connection with any investigative,
response, remedial, administrative or judicial matter or proceeding, whether or not such Indemnified Person shall be designated
a party thereto and including any such proceeding initiated by or on behalf of Borrower, and the reasonable expenses of investigation
by engineers, environmental consultants and similar technical personnel and any commission, fee or compensation claimed by any
broker (other than any broker retained by Collateral Agent or Lenders) asserting any right to payment for the transactions contemplated
hereby which may be imposed on, incurred by or asserted against such Indemnified Person as a result of or in connection with the
transactions contemplated hereby and the use or intended use of the proceeds of the loan proceeds except for liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements directly caused by such Indemnified
Person’s gross negligence or willful misconduct.


 


12.3
Severability of Provisions. Each provision of this Agreement is severable from every other provision in determining the enforceability
of any provision.


 


12.4
Correction of Loan Documents. Collateral Agent may correct patent errors and fill in any blanks in this Agreement and the
other Loan Documents consistent with the agreement of the parties.


 




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12.5
Amendments in Writing; Integration. (a) No amendment, modification, termination or waiver of any provision of this Agreement
or any other Loan Document, no approval or consent thereunder, or any consent to any departure by Borrower or any of its Subsidiaries
therefrom, shall in any event be effective unless the same shall be in writing and signed by Borrower, Collateral Agent and the
Required Lenders provided that:


 


(i)
no such amendment, waiver or other modification that would have the effect of increasing or reducing a Lender’s Term Loan
Commitment or Commitment Percentage shall be effective as to such Lender without such Lender’s written consent;


 


(ii)
no such amendment, waiver or modification that would affect the rights and duties of Collateral Agent shall be effective without
Collateral Agent’s written consent or signature; and


 


(iii)
no such amendment, waiver or other modification shall, unless signed by all the Lenders directly affected thereby, (A) reduce
the principal of, rate of interest on or any fees with respect to any Term Loan or forgive any principal, interest (other than
default interest) or fees (other than late charges) with respect to any Term Loan (B) postpone the date fixed for, or waive, any
payment of principal of any Term Loan or of interest on any Term Loan (other than default interest) or any fees provided for hereunder
(other than late charges or for any termination of any commitment); (C) change the definition of the term “Required Lenders”
or the percentage of Lenders which shall be required for the Lenders to take any action hereunder; (D) release all or substantially
all of any material portion of the Collateral, authorize Borrower to sell or otherwise dispose of all or substantially all or
any material portion of the Collateral or release any Guarantor of all or any portion of the Obligations or its guaranty obligations
with respect thereto, except, in each case with respect to this clause (D), as otherwise may be expressly permitted under this
Agreement or the other Loan Documents (including in connection with any disposition permitted hereunder); (E) amend, waive or
otherwise modify this Section 12.5 or the definitions of the terms used in this Section 12.5 insofar as the definitions affect
the substance of this Section 12.5; (F) consent to the assignment, delegation or other transfer by Borrower of any of its rights
and obligations under any Loan Document or release Borrower of its payment obligations under any Loan Document, except, in each
case with respect to this clause (F), pursuant to a merger or consolidation permitted pursuant to this Agreement; (G) amend any
of the provisions of Section 9.4 or amend any of the definitions of Pro Rata Share, Term Loan Commitment, Commitment Percentage
or that provide for the Lenders to receive their Pro Rata Shares of any fees, payments, setoffs or proceeds of Collateral hereunder;
(H) subordinate the Liens granted in favor of Collateral Agent securing the Obligations; or (I) amend any of the provisions of
Section 12.5. It is hereby understood and agreed that all Lenders shall be deemed directly affected by an amendment, waiver or
other modification of the type described in the preceding clauses (C), (D), (E), (F), (G) and (H) of the immediately preceding
sentence.


 


(b)
Other than as expressly provided for in Section 12.5(a)(i)-(iii), Collateral Agent may, if requested by the Required Lenders,
from time to time designate covenants in this Agreement less restrictive by notification to a representative of Borrower.


 


(c)
This Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations
or agreements with respect to such subject matter. All prior agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents.


 


12.6
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, is an original, and all taken together, constitute one Agreement.


 


12.7
Survival. All covenants, representations and warranties made in this Agreement continue in full force and effect until this
Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any other obligations
which, by their terms, are to survive the termination of this Agreement) have been satisfied. The obligation of Borrower in Section
12.2 to indemnify each Lender and Collateral Agent, as well as the confidentiality provisions in Section 12.8 below, shall survive
until the statute of limitations with respect to such claim or cause of action shall have run.


 




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12.8
Confidentiality. In handling any confidential information of Borrower, the Lenders and Collateral Agent shall exercise the
same degree of care that it exercises for their own proprietary information, but disclosure of information may be made: (a) subject
to the terms and conditions of this Agreement, to the Lenders’ and Collateral Agent’s Subsidiaries or Affiliates;
(b) to prospective transferees (other than those identified in (a) above) or purchasers of any interest in the Term Loans (provided,
however, the Lenders and Collateral Agent shall, except upon the occurrence and during the continuance of an Event of Default,
obtain such prospective transferee’s or purchaser’s agreement to the terms of this provision or to similar confidentiality
terms); (c) as required by law, regulation, subpoena, or other order; (d) to Lenders’ or Collateral Agent’s regulators
or as otherwise required in connection with an examination or audit; (e) as Collateral Agent reasonably considers appropriate
in exercising remedies under the Loan Documents; and (f) to third party service providers of the Lenders and/or Collateral Agent
so long as such service providers have executed a confidentiality agreement or have agreed to similar confidentiality terms with
the Lenders and Collateral Agent with terms no less restrictive than those contained herein. Confidential information does not
include information that either: (i) is in the public domain or in the Lenders’ and/or Collateral Agent’s possession
when disclosed to the Lenders and/or Collateral Agent, or becomes part of the public domain after disclosure to the Lenders and/or
Collateral Agent at no fault of the Lenders or the Collateral Agent; or (ii) is disclosed to the Lenders and/or Collateral Agent
by a third party, if the Lenders and/or Collateral Agent does not know that the third party is prohibited from disclosing the
information. Collateral Agent and the Lenders may use confidential information for any purpose, including, without limitation,
for the development of client databases, reporting purposes, and market analysis. The provisions of the immediately preceding
sentence shall survive the termination of this Agreement. The agreements provided under this Section 12.8 supersede all prior
agreements, understanding, representations, warranties, and negotiations between the parties about the subject matter of this
Section 12.8.


 


12.9
Right of Set Off. Borrower hereby grants to Collateral Agent and to each Lender, a lien, security interest and right of set
off as security for all Obligations to Collateral Agent and each Lender hereunder, whether now existing or hereafter arising upon
and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control
of Collateral Agent or the Lenders or any entity under the control of Collateral Agent or the Lenders (including a Collateral
Agent affiliate) or in transit to any of them. At any time after the occurrence and during the continuance of an Event of Default,
without demand or notice, Collateral Agent or the Lenders may set off the same or any part thereof and apply the same to any liability
or obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the Obligations.
ANY AND ALL RIGHTS TO REQUIRE COLLATERAL AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES
THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER
ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY BORROWER.


 


12.10
Cooperation of Borrower. If necessary, Borrower agrees to (i) execute any documents reasonably required to effectuate and
acknowledge each assignment of a Term Loan Commitment or Term Loan to an assignee in accordance with Section 12.1, (ii) make Borrower’s
management available to meet with Collateral Agent and prospective participants and assignees of Term Loan Commitments (which
meetings shall be conducted no more often than twice every twelve months unless an Event of Default has occurred and is continuing),
and (iii) assist Collateral Agent or the Lenders in the preparation of information relating to the financial affairs of Borrower
as any prospective participant or assignee of a Term Loan Commitment or Term Loan reasonably may request. Subject to the provisions
of Section 12.8, Borrower authorizes each Lender to disclose to any prospective participant or assignee of a Term Loan Commitment,
any and all information in such Lender’s possession concerning Borrower and its financial affairs which has been delivered
to such Lender by or on behalf of Borrower pursuant to this Agreement, or which has been delivered to such Lender by or on behalf
of Borrower in connection with such Lender’s credit evaluation of Borrower prior to entering into this Agreement.


 


12.11
Public Announcement. Borrower hereby agrees that Collateral Agent and each Lender may make a public announcement of the transactions
contemplated by this Agreement, and may publicize the same in marketing materials, newspapers and other publications, and otherwise,
and in connection therewith may use Borrower’s name, tradenames and logos.


 


12.12
Collateral Agent and Lender Agreement. Collateral Agent and each Lender hereby agree to the terms and conditions set forth
on Exhibit B attached hereto. Borrower acknowledges and agrees to the terms and conditions set forth on Exhibit B attached hereto.


 


[Balance
of Page Intentionally Left Blank]


 




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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date.


 


	BORROWER:	 	 
	 	 	 
	Imprimis Pharmaceuticals, Inc.	 
	 	 	 
	By:	/s/
Mark L. Baum	 
	 	 	 
	Name:	Mark L. Baum	 
	 	 	 
	Title:	Chief Executive Officer	 
	 	 	 
	COLLATERAL AGENT AND LENDER:	 
	 	 	 
	IMMY FUNDING LLC
	 	 	 
	By:	/s/ Stephen
    J. DeNelsky	 
	 	 	 
	Name:	Stephen J. DeNelsky	 
	 	 	 
	Title:	President	 


 


[Signature
Page to Loan and Security Agreement]


 




    	 



    	 	 	 



    


 


SCHEDULE
1.1



Lenders and Commitments


 


	Term A Loans	 
	Lender	 	Term Loan Commitment	 	 	Commitment Percentage	 
	IMMY Funding LLC	 	$	10,000,000.00	 	 	 	100.00	%
	TOTAL	 	$	10,000,000.00	 	 	 	100.00	%




 

	Term
    B Loans	 
	Lender	 	Term Loan Commitment	 	 	Commitment Percentage	 
	IMMY Funding LLC	 	$	5,000,000.00	 	 	 	100.00	%
	TOTAL	 	$	5,000,000.00	 	 	 	100.00	%




 

	Aggregate
    (all Term Loans)
	Lender	 	Term Loan Commitment	 	 	Commitment Percentage	 
	IMMY Funding LLC	 	$	15,000,000.00	 	 	 	100.00	%
	TOTAL	 	$	15,000,000.00	 	 	 	100.00	%




 



    	 



    	 	 	 



    


 


EXHIBIT
A



Description of Collateral


 


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


 


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


 


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


 


Notwithstanding
the foregoing, the Collateral shall not include: (i) more than sixty five percent (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 the Collateral Agent’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;
(ii) any equipment that is subject to a Permitted Lien permitted under clause (c) of the definition of Permitted Liens and the
loan agreement or lease relating to such equipment forbids any Liens to be attached to such equipment other than a purchase money
security interest and only to the extent so prohibited during the term of such lease or loan agreement; (iii) any lease, license,
contract, property rights, joint venture interests, or agreement to which Borrower is a party or any of its rights or interests
thereunder, in each case, if and only if, and solely to the extent that, the grant of a security interest therein shall constitute
or result in a breach, termination, default, abandonment, unenforceability or invalidity thereunder or thereof (other than to
the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any
relevant jurisdiction or any other applicable law or principles of equity); provided that immediately upon the time at which the
consequences described in the foregoing clause shall no longer exist, the Collateral shall include, and Borrower shall be deemed
to have granted a security interest in, all of Borrower’s right, title and interest in such lease, license, contract, property
rights, joint venture interests, or agreement; (iv) Motor Vehicles for which certificates of title have been issued, and (v) any
“intent-to-use” application for registration of a Trademark filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C.
§ 1051, prior to the filing of a “Statement of Use” pursuant to Section 1(d) of the Lanham Act or an “Amendment
to Allege Use” pursuant to Section 1(c) of the Lanham Act with respect thereto, solely to the extent, if any, that, and
solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability
of any registration that issues from such intent-to-use application under applicable federal law.


 




    	 



    	 	 	 



    


 


EXHIBIT
B



Collateral Agent and Lender Terms


 


1.
Appointment of Collateral Agent.


 


(a)
Each Lender hereby appoints IMMY Funding LLC (together with any successor Collateral Agent pursuant to Section 7 of this Exhibit
B) as Collateral Agent under the Loan Documents and authorizes Collateral Agent to (i) execute and deliver the Loan Documents
and accept delivery thereof on its behalf from Borrower, (ii) take such action on its behalf and to exercise all rights, powers
and remedies and perform the duties as are expressly delegated to Collateral Agent under such Loan Documents and (iii) exercise
such powers as are reasonably incidental thereto.


 


(b)
Without limiting the generality of clause (a) above, Collateral Agent shall have the sole and exclusive right and authority (to
the exclusion of the Lenders), and is hereby authorized, to (i) act as the disbursing and collecting agent for the Lenders with
respect to all payments and collections arising in connection with the Loan Documents (including in any other bankruptcy, insolvency
or similar proceeding), and each Person making any payment in connection with any Loan Document to any Lender is hereby authorized
to make such payment to Collateral Agent, (ii) file and prove claims and file other documents necessary or desirable to allow
the claims of Collateral Agent and Lenders with respect to any Obligation in any bankruptcy, insolvency or similar proceeding
(but not to vote, consent or otherwise act on behalf of such Lender), (iii) act as collateral agent for Collateral Agent and each
Lender for purposes of the perfection of all Liens created by the Loan Documents and all other purposes stated therein, (iv) manage,
supervise and otherwise deal with the Collateral, (v) take such other action as is necessary or desirable to maintain the perfection
and priority of the Liens created or purported to be created by the Loan Documents, (vi) except as may be otherwise specified
in any Loan Document, exercise all remedies given to Collateral Agent and the other Lenders with respect to the Borrower and/or
the Collateral, whether under the Loan Documents, applicable Requirements of Law or otherwise and (vii) execute any amendment,
consent or waiver under the Loan Documents on behalf of any Lender that has consented in writing to such amendment, consent or
waiver; provided, however, that Collateral Agent hereby appoints, authorizes and directs each Lender to act as collateral
sub-agent for Collateral Agent and the Lenders for purposes of the perfection of all Liens with respect to the Collateral, including
any Deposit Account maintained by Borrower with, and cash and Cash Equivalents held by, such Lender, and may further authorize
and direct the Lenders to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise to transfer
the Collateral subject thereto to Collateral Agent, and each Lender hereby agrees to take such further actions to the extent,
and only to the extent, so authorized and directed. Collateral Agent may, upon any term or condition it specifies, delegate or
exercise any of its rights, powers and remedies under, and delegate or perform any of its duties or any other action with respect
to, any Loan Document by or through any trustee, co-agent, employee, attorney-in-fact and any other Person (including any Lender).
Any such Person shall benefit from this Exhibit B to the extent provided by Collateral Agent.


 


(c)
Under the Loan Documents, Collateral Agent (i) is acting solely on behalf of the Lenders, with duties that are entirely administrative
in nature, notwithstanding the use of the defined term “Collateral Agent”, the terms “agent”, “Collateral
Agent” and “collateral agent” and similar terms in any Loan Document to refer to Collateral Agent, which terms
are used for title purposes only, (ii) is not assuming any obligation under any Loan Document other than as expressly set forth
therein or any role as agent, fiduciary or trustee of or for any Lender or any other Person and (iii) shall have no implied functions,
responsibilities, duties, obligations or other liabilities under any Loan Document, and each Lender, by accepting the benefits
of the Loan Documents, hereby waives and agrees not to assert any claim against Collateral Agent based on the roles, duties and
legal relationships expressly disclaimed in clauses (i) through (iii) above. Except as expressly set forth in the Loan Documents,
Collateral Agent shall not have any duty to disclose, and shall not be liable for failure to disclose, any information relating
to Borrower or any of its Subsidiaries that is communicated to or obtained by IMMY Funding LLC or any of its Affiliates in any
capacity.


 


2.
Binding Effect; Use of Discretion; E-Systems.


 


(a)
Each Lender, by accepting the benefits of the Loan Documents, agrees that (i) any action taken by Collateral Agent or Required
Lenders (or, if expressly required in any Loan Document, a greater proportion of the Lenders) in accordance with the provisions
of the Loan Documents, (ii) any action taken by Collateral Agent in reliance upon the instructions of Required Lenders (or, where
so required, such greater proportion) and (iii) the exercise by Collateral Agent or Required Lenders (or, where so required, such
greater proportion) of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of Lenders.


 




    	 



    	 	 	 



    


 


(b)
If Collateral Agent shall request instructions from Required Lenders or all affected Lenders with respect to any act or action
(including failure to act) in connection with any Loan Document, then Collateral Agent shall be entitled to refrain from such
act or taking such action unless and until Collateral Agent shall have received instructions from Required Lenders or all affected
Lenders, as the case may be, and Collateral Agent shall not incur liability to any Person by reason of so refraining. Collateral
Agent shall be fully justified in failing or refusing to take any action under any Loan Document (i) if such action would, in
the opinion of Collateral Agent, be contrary to any Requirement of Law or any Loan Document, (ii) if such action would, in the
opinion of Collateral Agent, expose Collateral Agent to any potential liability under any Requirement of Law or (iii) if Collateral
Agent shall not first be indemnified to its satisfaction against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Collateral Agent as a result of Collateral Agent acting or refraining from acting under any Loan Document in
accordance with the instructions of Required Lenders or all affected Lenders, as applicable.


 


(c)
Collateral Agent is hereby authorized by Borrower and each Lender to establish procedures (and to amend such procedures from time
to time) to facilitate administration and servicing of the Term Loans and other matters incidental thereto. Without limiting the
generality of the foregoing, Collateral Agent is hereby authorized to establish procedures to make available or deliver, or to
accept, notices, documents (including, without limitation, borrowing base certificates) and similar items on, by posting to or
submitting and/or completion, on E-Systems. Borrower and each Lender acknowledges and agrees that the use of transmissions via
an E-System or electronic mail is not necessarily secure and that there are risks associated with such use, including risks of
interception, disclosure and abuse, and Borrower and each Lender assumes and accepts such risks by hereby authorizing the transmission
via E-Systems or electronic mail. Each “e-signature” on any such posting shall be deemed sufficient to satisfy any
requirement for a “signature”, and each such posting shall be deemed sufficient to satisfy any requirement for a “writing”,
in each case including pursuant to any Loan Document, any applicable provision of any Code, the federal Uniform Electronic Transactions
Act, the Electronic Signatures in Global and National Commerce Act and any substantive or procedural Requirement of Law governing
such subject matter. All uses of an E-System shall be governed by and subject to, in addition to this Section, the separate terms,
conditions and privacy policy posted or referenced in such E-System (or such terms, conditions and privacy policy as may be updated
from time to time, including on such E-System) and related contractual obligations executed by Collateral Agent, Borrower and/or
Lenders in connection with the use of such E-System. ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS SHALL BE PROVIDED “AS IS”
AND “AS AVAILABLE”. NO REPRESENTATION OR WARRANTY OF ANY KIND IS MADE BY AGENT, ANY LENDER OR ANY OF THEIR RELATED
PERSONS IN CONNECTION WITH ANY E-SYSTEMS.


 


3.
Collateral Agent’s Reliance, Etc. Collateral Agent may, without incurring any liability hereunder, (a) consult with
any of its Related Persons and, whether or not selected by it, any other advisors, accountants and other experts (including advisors
to, and accountants and experts engaged by, Borrower) and (b) rely and act upon any document and information (including those
transmitted by electronic transmission) and any telephone message or conversation, in each case believed by it to be genuine and
transmitted, signed or otherwise authenticated by the appropriate parties. None of Collateral Agent and its Related Persons shall
be liable for any action taken or omitted to be taken by any of them under or in connection with any Loan Document, and each Lender
and Borrower hereby waives and shall not assert (and Borrower shall cause its Subsidiaries to waive and agree not to assert) any
right, claim or cause of action based thereon, except to the extent of liabilities resulting from the gross negligence or willful
misconduct of Collateral Agent or, as the case may be, such Related Person (each as determined in a final, non-appealable judgment
of a court of competent jurisdiction) in connection with the duties of Collateral Agent expressly set forth herein. Without limiting
the foregoing, Collateral Agent: (i) shall not be responsible or otherwise incur liability for any action or omission taken in
reliance upon the instructions of the Required Lenders or for the actions or omissions of any of its Related Persons, except to
the extent that a court of competent jurisdiction determines in a final non-appealable judgment that Collateral Agent acted with
gross negligence or willful misconduct in the selection of such Related Person; (ii) shall not be responsible to any Lender or
other Person for the due execution, legality, validity, enforceability, effectiveness, genuineness, sufficiency or value of, or
the attachment, perfection or priority of any Lien created or purported to be created under or in connection with, any Loan Document;
(iii) makes no warranty or representation, and shall not be responsible, to any Lender or other Person for any statement, document,
information, representation or warranty made or furnished by or on behalf of Borrower or any Related Person of Borrower in connection
with any Loan Document or any transaction contemplated therein or any other document or information with respect to Borrower,
whether or not transmitted or (except for documents expressly required under any Loan Document to be transmitted to the Lenders)
omitted to be transmitted by Collateral Agent, including as to completeness, accuracy, scope or adequacy thereof, or for the scope,
nature or results of any due diligence performed by Collateral Agent in connection with the Loan Documents; and (iv) shall not
have any duty to ascertain or to inquire as to the performance or observance of any provision of any Loan Document, whether any
condition set forth in any Loan Document is satisfied or waived, as to the financial condition of Borrower or as to the existence
or continuation or possible occurrence or continuation of any Event of Default, and shall not be deemed to have notice or Knowledge
of such occurrence or continuation unless it has received a notice from Borrower or any Lender describing such Event of Default
that is clearly labeled “notice of default” (in which case Collateral Agent shall promptly give notice of such receipt
to all Lenders, provided that Collateral Agent shall not be liable to any Lender for any failure to do so, except to the
extent that such failure is attributable to Collateral Agent’s gross negligence or willful misconduct as determined by a
final non-appealable judgment of a court of competent jurisdiction); and, for each of the items set forth in clauses (i) through
(iv) above, each Lender and Borrower hereby waives and agrees not to assert (and Borrower shall cause its Subsidiaries to waive
and agree not to assert) any right, claim or cause of action it might have against Collateral Agent based thereon.


 




    	 



    	 	 	 



    


 


4.
Collateral Agent Individually. Collateral Agent and its Affiliates may make loans and other extensions of credit to, acquire
stock and stock equivalents of, engage in any kind of business with, Borrower or any Affiliate of Borrower as though it were not
acting as Collateral Agent and may receive separate fees and other payments therefor. To the extent Collateral Agent or any of
its Affiliates makes any Term Loans or otherwise becomes a Lender hereunder, it shall have and may exercise the same rights and
powers hereunder and shall be subject to the same obligations and liabilities as any other Lender and the terms “Lender”,
“Required Lender” and any similar terms shall, except where otherwise expressly provided in any Loan Document, include,
without limitation, Collateral Agent or such Affiliate, as the case may be, in its individual capacity as Lender, or as one of
the Required Lenders.


 


5.
Lender Credit Decision; Collateral Agent Report. Each Lender acknowledges that it shall, independently and without reliance
upon Collateral Agent, any Lender or any of their Related Persons or upon any document solely or in part because such document
was transmitted by Collateral Agent or any of its Related Persons, conduct its own independent investigation of the financial
condition and affairs of Borrower and make and continue to make its own credit decisions in connection with entering into, and
taking or not taking any action under, any Loan Document or with respect to any transaction contemplated in any Loan Document,
in each case based on such documents and information as it shall deem appropriate. Except for documents expressly required by
any Loan Document to be transmitted by Collateral Agent to the Lenders, Collateral Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the business, prospects, operations, Property, financial
and other condition or creditworthiness of Borrower or any Affiliate of Borrower that may come in to the possession of Collateral
Agent or any of its Related Persons. Each Lender agrees that is shall not rely on any field examination, audit or other report
provided by Collateral Agent or its Related Persons (a “Collateral Agent Report”). Each Lender further acknowledges
that any Collateral Agent Report (a) is provided to the Lenders solely as a courtesy, without consideration, and based upon the
understanding that such Lender will not rely on such Collateral Agent Report, (b) was prepared by Collateral Agent or its Related
Persons based upon information provided by Borrower solely for Collateral Agent’s own internal use, and (c) may not be complete
and may not reflect all information and findings obtained by Collateral Agent or its Related Persons regarding the operations
and condition of Borrower. Neither Collateral Agent nor any of its Related Persons makes any representations or warranties of
any kind with respect to (i) any existing or proposed financing, (ii) the accuracy or completeness of the information contained
in any Collateral Agent Report or in any related documentation, (iii) the scope or adequacy of Collateral Agent’s and its
Related Persons’ due diligence, or the presence or absence of any errors or omissions contained in any Collateral Agent
Report or in any related documentation, and (iv) any work performed by Collateral Agent or Collateral Agent’s Related Persons
in connection with or using any Collateral Agent Report or any related documentation. Neither Collateral Agent nor any of its
Related Persons shall have any duties or obligations in connection with or as a result of any Lender receiving a copy of any Collateral
Agent Report. Without limiting the generality of the forgoing, neither Collateral Agent nor any of its Related Persons shall have
any responsibility for the accuracy or completeness of any Collateral Agent Report, or the appropriateness of any Collateral Agent
Report for any Lender’s purposes, and shall have no duty or responsibility to correct or update any Collateral Agent Report
or disclose to any Lender any other information not embodied in any Collateral Agent Report, including any supplemental information
obtained after the date of any Collateral Agent Report. Each Lender releases, and agrees that it will not assert, any claim against
Collateral Agent or its Related Persons that in any way relates to any Collateral Agent Report or arises out of any Lender having
access to any Collateral Agent Report or any discussion of its contents, and agrees to indemnify and hold harmless Collateral
Agent and its Related Persons from all claims, liabilities and expenses relating to a breach by any Lender arising out of such
Lender’s access to any Collateral Agent Report or any discussion of its contents.


 




    	 



    	 	 	 



    


 


6.
Indemnification. Each Lender agrees to reimburse Collateral Agent and each of its Related Persons (to the extent not reimbursed
by Borrower as required under the Loan Documents) promptly upon demand for its Pro Rata Share of any out-of-pocket costs and expenses
(including, without limitation, fees, charges and disbursements of financial, legal and other advisors and any taxes or insurance
paid in the name of, or on behalf of, Borrower) incurred by Collateral Agent or any of its Related Persons in connection with
the preparation, syndication, execution, delivery, administration, modification, amendment, consent, waiver or enforcement of,
or the taking of any other action (whether through negotiations, through any work-out, bankruptcy, restructuring or other legal
or other proceeding (including, without limitation, preparation for and/or response to any subpoena or request for document production
relating thereto) or otherwise) in respect of, or legal advice with respect to, its rights or responsibilities under, any Loan
Document. Each Lender further agrees to indemnify Collateral Agent and each of its Related Persons (to the extent not reimbursed
by Borrower as required under the Loan Documents), ratably according to its Pro Rata Share, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever
(including, to the extent not indemnified by the applicable Lender, taxes, interests and penalties imposed for not properly withholding
or backup withholding on payments made to or for the account of any Lender) that may be imposed on, incurred by, or asserted against
Collateral Agent or any of its Related Persons in any matter relating to or arising out of, in connection with or as a result
of any Loan Document or any other act, event or transaction related, contemplated in or attendant to any such document, or, in
each case, any action taken or omitted to be taken by Collateral Agent or any of its Related Persons under or with respect to
the foregoing; provided that no Lender shall be liable to Collateral Agent or any of its Related Persons under this Section
6 of this Exhibit B to the extent such liability has resulted from the gross negligence or willful misconduct of Collateral Agent
or, as the case may be, such Related Person, as determined by a final non-appealable judgment of a court of competent jurisdiction.
To the extent required by any applicable Requirement of Law, Collateral Agent may withhold from any payment to any Lender under
a Loan Document an amount equal to any applicable withholding tax. If the Internal Revenue Service or any other Governmental Authority
asserts a claim that Collateral Agent did not properly withhold tax from amounts paid to or for the account of any Lender for
any reason, or if Collateral Agent reasonably determines that it was required to withhold taxes from a prior payment to or for
the account of any Lender but failed to do so, such Lender shall promptly indemnify Collateral Agent fully for all amounts paid,
directly or indirectly, by Collateral Agent as tax or otherwise, including penalties and interest, and together with all expenses
incurred by Collateral Agent. Collateral Agent may offset against any payment to any Lender under a Loan Document, any applicable
withholding tax that was required to be withheld from any prior payment to such Lender but which was not so withheld, as well
as any other amounts for which Collateral Agent is entitled to indemnification from such Lender under the immediately preceding
sentence of this Section 6 of this Exhibit B.


 


7.
Successor Collateral Agent. Collateral Agent may resign at any time by delivering notice of such resignation to the Lenders
and Borrower, effective on the date set forth in such notice or, if no such date is set forth therein, upon the date such notice
shall be effective, in accordance with the terms of this Section 7 of this Exhibit B. If Collateral Agent delivers any such notice,
the Required Lenders shall have the right to appoint a successor Collateral Agent. If, after 30 days after the date of the retiring
Collateral Agent’s notice of resignation, no successor Collateral Agent has been appointed by the Required Lenders that
has accepted such appointment, then the retiring Collateral Agent may, on behalf of the Lenders, appoint a successor Collateral
Agent from among the Lenders. Effective immediately upon its resignation, (a) the retiring Collateral Agent shall be discharged
from its duties and obligations under the Loan Documents, (b) the Lenders shall assume and perform all of the duties of Collateral
Agent until a successor Collateral Agent shall have accepted a valid appointment hereunder, (c) the retiring Collateral Agent
and its Related Persons shall no longer have the benefit of any provision of any Loan Document other than with respect to any
actions taken or omitted to be taken while such retiring Collateral Agent was, or because such Collateral Agent had been, validly
acting as Collateral Agent under the Loan Documents, and (iv) subject to its rights under Section 2(b) of this Exhibit B, the
retiring Collateral Agent shall take such action as may be reasonably necessary to assign to the successor Collateral Agent its
rights as Collateral Agent under the Loan Documents. Effective immediately upon its acceptance of a valid appointment as Collateral
Agent, a successor Collateral Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of
the retiring Collateral Agent under the Loan Documents.


 




    	 



    	 	 	 



    


 


8.
Release of Collateral. Each Lender hereby consents to the release and hereby directs Collateral Agent to release (or in the
case of clause (b)(ii) below, release or subordinate) the following:


 


(d)
any Guarantor if all of the stock of such Subsidiary owned by Borrower is sold or transferred in a transaction permitted under
the Loan Documents (including pursuant to a valid waiver or consent), to the extent that, after giving effect to such transaction,
such Subsidiary would not be required to guaranty any Obligations pursuant to any Loan Document; and


 


(e)
any Lien held by Collateral Agent for the benefit of itself and the Lenders against (i) any Collateral that is sold or otherwise
disposed of by Borrower in a transaction permitted by the Loan Documents (including pursuant to a valid waiver or consent), (ii)
any Collateral subject to a Lien that is expressly permitted under clause (c) of the definition of the term “Permitted Lien”
and (iii) all of the Collateral and Borrower, upon (A) termination of all of the Commitments, (B) payment in full in cash of all
of the Obligations that Collateral Agent has theretofore been notified in writing by the holder of such Obligation are then due
and payable, and (C) to the extent requested by Collateral Agent, receipt by Collateral Agent and Lenders of liability releases
from Borrower in form and substance acceptable to Collateral Agent (the satisfaction of the conditions in this clause (iii), the
“Termination Date”).


 


9.
Setoff and Sharing of Payments. In addition to any rights now or hereafter granted under any applicable requirement of law
and not by way of limitation of any such rights, upon the occurrence and during the continuance of any Event of Default and subject
to Section 10(d) of this Exhibit B, each Lender is hereby authorized at any time or from time to time upon the direction of Collateral
Agent, without notice to Borrower or any other Person, any such notice being hereby expressly waived, to setoff and to appropriate
and to apply any and all balances held by it at any of its offices for the account of Borrower (regardless of whether such balances
are then due to Borrower) and any other properties or assets at any time held or owing by that Lender or that holder to or for
the credit or for the account of Borrower against and on account of any of the Obligations that are not paid when due. Any Lender
exercising a right of setoff or otherwise receiving any payment on account of the Obligations in excess of its Pro Rata Share
thereof shall purchase for cash (and the other Lenders or holders shall sell) such participations in each such other Lender’s
or holder’s Pro Rata Share of the Obligations as would be necessary to cause such Lender to share the amount so offset or
otherwise received with each other Lender or holder in accordance with their respective Pro Rata Shares of the Obligations. Borrower
agrees, to the fullest extent permitted by law, that (a) any Lender may exercise its right to offset with respect to amounts in
excess of its Pro Rata Share of the Obligations and may purchase participations in accordance with the preceding sentence and
(b) any Lender so purchasing a participation in the Term Loans made or other Obligations held by other Lenders or holders may
exercise all rights of offset, bankers’ lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender or holder were a direct holder of the Term Loans and the other Obligations in the amount of such participation.
Notwithstanding the foregoing, if all or any portion of the offset amount or payment otherwise received is thereafter recovered
from the Lender that has exercised the right of offset, the purchase of participations by that Lender shall be rescinded and the
purchase price restored without interest.


 


10.
Advances; Payments; Non-Funding Lenders; Actions in Concert.


 


(a)
Advances; Payments. If Collateral Agent receives any payment with respect to a Term Loan for the account of Lenders on
or prior to 2:00 p.m. (New York time) on any Business Day, Collateral Agent shall pay to each applicable Lender such Lender’s
Pro Rata Share of such payment on such Business Day. If Collateral Agent receives any payment with respect to a Term Loan for
the account of Lenders after 2:00 p.m. (New York time) on any Business Day, Collateral Agent shall pay to each applicable Lender
such Lender’s Pro Rata Share of such payment on the next Business Day.


 




    	 



    	 	 	 



    


 


(b)
Return of Payments.


 


(i)
If Collateral Agent pays an amount to a Lender under this Agreement in the belief or expectation that a related payment has been
or will be received by Collateral Agent from Borrower and such related payment is not received by Collateral Agent, then Collateral
Agent will be entitled to recover such amount (including interest accruing on such amount at the rate otherwise applicable to
such Obligation) from such Lender on demand without setoff, counterclaim or deduction of any kind.


 


(ii)
If Collateral Agent determines at any time that any amount received by Collateral Agent under any Loan Document must be returned
to Borrower or paid to any other Person pursuant to any insolvency law or otherwise, then, notwithstanding any other term or condition
of any Loan Document, Collateral Agent will not be required to distribute any portion thereof to any Lender. In addition, each
Lender will repay to Collateral Agent on demand any portion of such amount that Collateral Agent has distributed to such Lender,
together with interest at such rate, if any, as Collateral Agent is required to pay to Borrower or such other Person, without
setoff, counterclaim or deduction of any kind and Collateral Agent will be entitled to set off against future distributions to
such Lender any such amounts (with interest) that are not repaid on demand.


 


(c)
Non-Funding Lenders.


 


(i)
Unless Collateral Agent shall have received notice from a Lender prior to the date of any Term Loan that such Lender
will not make available to Collateral Agent such Lender’s Pro Rata Share of such Term Loan, Collateral Agent may assume
that such Lender will make such amount available to it on the date of such Term Loan in accordance with Section 2(b) of this Exhibit
B, and Collateral Agent may (but shall not be obligated to), in reliance upon such assumption, make available a corresponding
amount for the account of Borrower on such date. If and to the extent that such Lender shall not have made such amount available
to Collateral Agent, such Lender and Borrower severally agree to repay to Collateral Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the day such amount is made available to Borrower until the day such
amount is repaid to Collateral Agent, at a rate per annum equal to the interest rate applicable to the Obligation that would have
been created when Collateral Agent made available such amount to Borrower had such Lender made a corresponding payment available.
If such Lender shall repay such corresponding amount to Collateral Agent, the amount so repaid shall constitute such Lender’s
portion of such Term Loan for purposes of this Agreement.


 


(ii)
To the extent that any Lender has failed to fund any Term Loan or any other payments required to be made by it under the Loan
Documents after any such Term Loan is required to be made or such payment is due (a “Non-Funding Lender”),
Collateral Agent shall be entitled to set off the funding short-fall against that Non-Funding Lender’s Pro Rata Share of
all payments received from Borrower. The failure of any Non-Funding Lender to make any Term Loan or any payment required by it
hereunder shall not relieve any other Lender (each such other Lender, an “Other Lender”) of its obligations
to make such Term Loan, but neither any Other Lender nor Collateral Agent shall be responsible for the failure of any Non-Funding
Lender to make such Term Loan or make any other payment required hereunder. Notwithstanding anything set forth herein to the contrary,
a Non-Funding Lender shall not have any voting or consent rights under or with respect to any Loan Document or constitute a “Lender”
(or be included in the calculation of “Required Lender” hereunder) for any voting or consent rights under or with
respect to any Loan Document. At Borrower’s request, Collateral Agent or a Person reasonably acceptable to Collateral Agent
shall have the right with Collateral Agent’s consent and in Collateral Agent’s sole discretion (but Collateral Agent
or any such Person shall have no obligation) to purchase from any Non-Funding Lender, and each Lender agrees that if it becomes
a Non-Funding Lender it shall, at Collateral Agent’s request, sell and assign to Collateral Agent or such Person, all of
the Term Loan Commitment (if any), and all of the outstanding Term Loan of that Non-Funding Lender for an amount equal to the
aggregate outstanding principal balance of the Term Loan held by such Non-Funding Lender and all accrued interest with respect
thereto through the date of sale, such purchase and sale to be consummated pursuant to an executed assignment agreement in form
and substance reasonably satisfactory to, and acknowledged by, Collateral Agent.


 


(d)
Actions in Concert. Anything in this Agreement to the contrary notwithstanding, each Lender hereby agrees with each other
Lender that no Lender shall take any action to protect or enforce its rights arising out of any Loan Document (including exercising
any rights of setoff) without first obtaining the prior written consent of Collateral Agent or Required Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under any Loan Document shall be taken in concert and at the
direction or with the consent of Collateral Agent or Required Lenders.


 




    	 



    	 	 	 



    


 


EXHIBIT
C



Loan Payment Request Form


 


	Fax
    To:	 	Date:
    _____________________


 


Loan
Payment:


[________________________]




 

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



 


	Principal
    $	 	 	and/or
    Interest $	 



 


	Authorized
    Signature:	 	 	Phone
    Number:	 



 

	Print
    Name/Title:	 	 	 	 


 


Loan
Advance:


 


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


 


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


 


	Amount
    of Advance $	 	 	 	 


 


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


 


	Authorized
    Signature:	 	 	Phone
    Number:	 



 

	Print
    Name/Title:	 	 	 	 



 

Outgoing
Wire Request:


 


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


 


	Beneficiary
    Name:	 	 	Amount
    of Wire: $	 
	Beneficiary Bank:	 	 	Account Number:	 
	City and State:	 	 	 	 



 


	Beneficiary Bank
    Transit (ABA) #:	 	 	Beneficiary Bank
    Code (Swift, Sort, Chip, etc.):	 
	 	 	 	(For
    International Wire Only)



 


	Intermediary
    Bank:	 	 	Transit (ABA)
    #:	 
	For Further Credit
    to:	 	 	 	 


 


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


 


	Authorized
    Signature:	 	 	2nd
    Signature (if required):	 
	Print Name/Title:	 	 	Print Name/Title:	 
	Telephone #:	 	 	Telephone #:	 



 



    	 



    	 	 	 



    


 


EXHIBIT
D



Compliance Certificate


 


	TO:	IMMY
    Funding LLC, as Collateral Agent and Lender
	 	 
	FROM:	IMPRIMIS PHARMACEUTICALS,
    INC., as Borrower



 

The
undersigned authorized officer (“Officer”) of Imprimis Pharmaceuticals, Inc. (“Borrower”),
hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement dated as of May 11, 2015,
by and among Borrower, Collateral Agent, and the Lenders from time to time party thereto (the “Loan Agreement;”
capitalized terms used but not otherwise defined herein shall have the meanings given them in the Loan Agreement),


 


(a)
Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below;


 


(b)
There are no Defaults or Events of Default, except as noted below;


 


(c)
Except as noted below, all representations and warranties of Borrower stated in the Loan Documents are true and correct in all
material respects on this date and for the period described in (a), above; provided, however, that such materiality qualifier
shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true,
accurate and complete in all material respects as of such date.


 


(d)
Borrower, and each of Borrower’s Subsidiaries, has timely filed all required tax returns and reports, Borrower, and each
of Borrower’s Subsidiaries, has timely paid all foreign, federal, state, and local taxes, assessments, deposits and contributions
owed by Borrower, or Subsidiary, except as otherwise permitted pursuant to the terms of Section 5.8 of the Loan Agreement;


 


(e)
No Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits
of which Borrower has not previously provided written notification to Collateral Agent and the Lenders.


 


Attached
are the required documents, if any, supporting our certification(s). The Officer, on behalf of Borrower, further certifies that
the attached financial statements 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 and except, in the case of unaudited
financial statements, for the absence of footnotes and subject to year-end audit adjustments as to the interim financial statements.


 


Please
indicate compliance status since the last Compliance Certificate by circling Yes, No, or N/A under “Complies” column.


 


	 	 	Reporting
    Covenant	 	Requirement	 	Actual	 	Complies
	 	 	 	 	 	 	 	 	 
	1)	 	Financial
    statements	 	Quarterly
    within 45 days	 	 	 	 	Yes	No	N/A
	 	 	 	 	 	 	 	 	 	 	 	 
	2)	 	Annual (CPA Audited)
    statements	 	Within 90 days
    after FYE	 	 	 	 	Yes	No	N/A
	 	 	 	 	 	 	 	 	 	 	 	 
	3)	 	Annual Financial
    Projections/Budget (prepared on a monthly basis)	 	Annually (within
    earlier 10 days of approval or 60 days of FYE), and when revised (no later than 7 days of approval)	 	 	 	 	Yes	No	N/A
	 	 	 	 	 	 	 	 	 	 	 	 
	4)	 	8-K, 10-K and
    10-Q Filings	 	If applicable,
    within 5 days of filing	 	 	 	 	Yes	No	N/A
	 	 	 	 	 	 	 	 	 	 	 	 
	5)	 	Compliance Certificate	 	Monthly within
    30 days	 	 	 	 	Yes	No	N/A
	 	 	 	 	 	 	 	 	 	 	 	 
	6)	 	IP Report	 	When required	 	 	 	 	Yes	No	N/A
	 	 	 	 	 	 	 	 	 	 	 	 
	7)	 	Total amount
    of Borrower’s cash and cash equivalents at the last day of the measurement period	 	 	 	$		 	Yes	No	N/A
	 	 	 	 	 	 	 	 	 	 	 	 
	8)	 	Total amount
    of Borrower’s Subsidiaries’ cash and cash equivalents at the last day of the measurement period	 	 	 	$		 	Yes	No	N/A


 



    	 



    	 	 	 



    

 


Negative
Covenant Compliance


 


	 	 	Negative
    Covenant	 	Complies
	 	 	 	 	 
	1)	 	Dispositions
    (§ 7.1)	 	Yes	No	N/A
	 	 	 	 	 	 	 
	2)	 	Changes in Business,
    Management, Ownership, or Business Locations (§ 7.2)	 	Yes	No	N/A
	 	 	 	 	 	 	 
	3)	 	Mergers or Acquisitions
    (§ 7.3)	 	Yes	No	N/A
	 	 	 	 	 	 	 
	4)	 	Indebtedness
    (§ 7.4)	 	Yes	No	N/A
	 	 	 	 	 	 	 
	5)	 	Encumbrance (§
    7.5)	 	Yes	No	N/A
	 	 	 	 	 	 	 
	6)	 	Maintenance of
    Collateral Accounts (§ 7.6)	 	Yes	No	N/A
	 	 	 	 	 	 	 
	7)	 	Restricted Payments
    (§ 7.7)	 	Yes	No	N/A
	 	 	 	 	 	 	 
	8)	 	Investments (§
    7.8)	 	Yes	No	N/A
	 	 	 	 	 	 	 
	9)	 	Transactions
    with Affiliates (§ 7.9)	 	Yes	No	N/A
	 	 	 	 	 	 	 
	10)	 	Subordinated
    Debt (§ 7.10)	 	Yes	No	N/A
	 	 	 	 	 	 	 
	11)	 	Compliance (§
    7.11)	 	Yes	No	N/A
	 	 	 	 	 	 	 
	12)	 	Compliance with
    Anti-Terrorism Laws (§ 7.12)	 	Yes	No	N/A
	 	 	 	 	 	 	 
	13)	 	Material Agreements
    (§ 7.13)	 	Yes	No	N/A


 


Deposit
and Securities Accounts


 


(Please
list all accounts; attach separate sheet if additional space needed)


 


	 	 	Institution
    Name	 	Account Number	 	New
    Account?	 	Account
    Control Agreement in place?
	 	 	 	 	 	 	 	 	 
	1)	 	 	 	 	 	Yes	No	 	Yes	No
	2)	 	 	 	 	 	Yes	No	 	Yes	No
	3)	 	 	 	 	 	Yes	No	 	Yes	No
	4)	 	 	 	 	 	Yes	No	 	Yes	No



 



    	 



    	 	 	 



    


 


Other
Matters


 


	1)	 	Have
    there been any changes in any Key Person since the last Compliance Certificate?	 	Yes	 	No
	 	 	 	 	 	 	 
	2)	 	Have there been
    any transfers/sales/disposals/retirement of Collateral or IP prohibited by the Loan Agreement?	 	Yes	 	No
	 	 	 	 	 	 	 
	3)	 	Have there been
    any new or pending claims or causes of action against Borrower that involve more than Two Hundred Fifty Thousand Dollars ($250,000.00)?	 	Yes	 	No
	 	 	 	 	 	 	 
	4)	 	Have there been
    any amendments of or other changes to the capitalization table of Borrower and to the Operating Documents of Borrower or any
    of its Subsidiaries? If yes, provide copies of any such amendments or changes with this Compliance Certificate.	 	Yes	 	No
	 	 	 	 	 	 	 
	5)	 	Has Borrower
    or any Subsidiary entered into or amended any Material Agreement? If yes, please explain and provide a copy of the Material
    Agreement(s) and/or amendment(s).	 	Yes	 	No
	 	 	 	 	 	 	 
	6)	 	Has Borrower
    provided the Collateral Agent with all notices required to be delivered under Sections 6.2(a) and 6.2(b) of the Loan Agreement?	 	Yes	 	No
	7)	 	Have there been
    any material updates to the contents of the Perfection Certificate last delivered? If yes, please explain.	 	Yes	 	No



 



    	 



    	 	 	 



    


 


Exceptions


 


Please explain
any exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions.” Attach separate
sheet if additional space needed.)


 


[____________________________]


 


	By:	 	 
	 	 	 
	Name:	 	 
	 	 	 
	Title:	 	 
		 	 
	Date:	 	 



 


	 	COLLATERAL
    AGENT USE ONLY
	 	 	 
	 	Received
by: _________________________	Date: _______
	 	 	 
	 	Verified
by: __________________________	Date: _______
	 	 	 
	 	Compliance Status:           Yes          No